This is an English adaptation of a FoodBud historical article originally published on June 26, 2022.
Growthbox attributed this 2022 analysis to interviews and discussions with brands including Babycare, BaixiaoT, Saky, effortless, Kongke and moody; third parties EY and Tencent Ads; and investors Mian Capital and Genesis Capital. Its central argument: consumer brands were facing overlapping shocks, and operators needed structural growth choices rather than only harder tactical execution.
The article opens with the 1978 loss of the 261-meter MS Muenchen in the North Atlantic. The ship disappeared three hours after encountering a storm on its way to the United States; 28 crew members were lost, and searchers found only a damaged lifeboat. The cited explanation is a rogue wave, described as constructive interference: separate waves combining into a much larger compound wave. The article says the Muenchen may have faced a wave about 30 meters high.
Growthbox uses that image for the 2022 consumer-brand environment: COVID-19, global inflation, geopolitical uncertainty, consumption stratification, traffic saturation, cooling capital markets and normalized pandemic disruption were no longer isolated problems. They were combining into a larger shock.
The article contrasts two ideas from Michael E. Porter: operational effectiveness and strategy. Its operator-facing framing is that operational growth is necessary but insufficient; structural growth depends on strategic positioning.
Growthbox groups the discussion into three strategy questions:
The article cites Al Ries and Jack Trout on positioning: a brand needs a place in the customer’s mind. It also cites George Miller’s research that people can hold only a limited number of items in mind, and says Trout later argued competitive intensity can narrow a category’s mental shelf to only two brands.
Growthbox argues that once Chinese emerging consumer brands gain attention, they tend to split into two category paths: one brand focused on one category, or one brand spanning multiple categories.
BaixiaoT and Kongke are presented as single-category examples.
BaixiaoT founder Zhang Yong said China’s T-shirt market was worth RMB 200 billion, yet no brand was directly synonymous with T-shirts. He said the name BaixiaoT was chosen because the company did not want to make other categories. He cited Bosideng as a cautionary example: expanding beyond down jackets diluted its brand power and pulled it away from its positioning as a down-jacket specialist.
BaixiaoT was tested after its second-generation product became popular. Users in its WeChat private-domain community asked for jeans, jackets and down jackets. Zhang Yong said the company did try products outside the original T-shirt track, but that diluted brand strength. It then refocused on T-shirts, aiming to use technology to redefine and iterate the category.
Zhang Yong also said category focus does not mean no growth curve. In the future, Thumb Wardrobe could keep BaixiaoT as one focused brand while creating other single-category brands such as BaixiaoNei, BaixiaoShan and BaixiaoYu to meet demand across apparel subcategories.
Kongke co-founder and CEO Wang Yichao said the company was not expanding into multiple categories at that point. It was focused on pasta flavor innovation and convenience occasions. He described Kongke’s goal as becoming the pasta expert brand: when consumers want pasta, they think of Kongke, similar to thinking of Lay’s when they want potato chips. He called the goal “mental pre-sale” followed by directed purchase.
Kongke’s opportunity came from finding new demand inside China’s mature instant-food market. Wang said many instant-food brands were focused on Chinese convenient meals, while Western-style instant pasta was still a gap. Previously, pasta in China followed a dry-noodle logic: consumers had to buy ingredients and cook step by step. Kongke turned pasta into a more instant format by providing prepared sauces and seasonings for a restaurant-level at-home pasta experience.
Babycare is the main multi-category example. Chief Brand Officer Iris said the maternal-and-baby sector made it difficult to equate one category with one brand, so Babycare moved from relatively durable products into fast-moving consumer goods and built a one-stop, full-category system for parents and babies.
Her reasoning had two parts.
First, durable maternal-and-baby products have low repurchase rates. Iris said durable goods and FMCG were roughly equal in market capacity, but products such as cribs, baby carriers and children’s tableware are rarely repurchased in short cycles. Babycare initially grew through designer-led durable goods, but a durable-only focus would have created a growth ceiling.
Second, the founder predicted one-stop buying would become the industry direction. Early user research suggested that from pregnancy to delivery, households need to replace many items, with fragmented and frequent purchasing across stores. Babycare therefore set a one-stop full-category strategy from the beginning. After testing two to three categories on ecommerce platforms, it entered FMCG through wet wipes. Growthbox says this improved both ARPU and store traffic structure.
The article describes Babycare’s strategy as “people first, not product first”: the focus is the maternal-and-baby user group and scenario-based solutions, not a single physical category.
Mian Capital partner Ying Jinfeng argued that category expansion does not cause strategic drift when it follows a clear main line. Not every company needs to “run categories”; expansion, acquisitions and brand incubation usually matter only after a company reaches sufficient scale.
Beneunder is cited as an example. Its expansion logic centered on sun protection. It started with sun umbrellas, a fragmented category where annual revenue of several hundred million RMB would already be strong. Ying said one reason Beneunder reached revenue in the several-billion-RMB range in 2021 was category expansion in 2020 and 2021 into sun hats, gloves, sun-protection masks, sunglasses and other light outdoor products.
Bananain is another example. Mian Capital said its expansion followed the theme of “body-feel technology plus basics,” extending from home underwear to one-kilometer-around-home loungewear and then outdoor scenarios such as sun-protection apparel.
Saturnbird is cited for adjacent-product dependence. Before its representative instant coffee, it spent a long time in coffee-adjacent brewing equipment and other convenient coffee solutions. In 2022 it added convenient companion solutions such as oat milk, coconut milk and spring water. The team began as a brewing-equipment ecommerce company; its hand-pour kettle was an early product innovation. Its original business model had thousands of SKUs, sharply different from the tighter SKU structure after instant coffee succeeded.
Mian Capital said Saturnbird’s tightly related product extensions increased dependence on both the brand and instant coffee itself, making repeat growth easier as consumption volume rose.
The article also notes that category strategy can include acquisitions and incubation. It cites Genki Forest’s channel logic: multiple brands and price bands help occupy shelf space. Perfect Diary, built around private-domain channels, needed to continually update its product matrix. At larger scale, acquisitions can support growth curves, with Nestle and P&G cited as comparable logic.
EY-Parthenon strategy consulting partner Zhang Yichao divided emerging consumer brands into two broad types: consumption brands and experience brands.
Consumption brands usually meet rigid demand, have low average order value, prefer broad penetration channels, require less consumer interaction in the purchase decision, and can often use exposure and promotion to drive repurchase.
Experience brands have weaker rigid-demand attributes and need brand guidance, communication and patience. They often win by capturing specific scenarios and investing long term in user experience and consumer understanding.
Growthbox says most emerging consumer brands in its research were consumption brands. It groups Saky in oral care, Kongke in food and moody in contact lenses as examples of FMCG-like, broad-penetration strategies.
Saky co-founder Zhang Yi said the brand began with toothpaste before mouthwash became its breakout product. China’s toothpaste market was dominated by large players, leaving little room for small brands. Saky’s founding ambition was to “serve oral health for everyone,” but the company lacked the resources to attack the entire mass market at once.
Saky looked for an overtaking opportunity and focused on convenient oral-care occasions. Citing the Fourth National Oral Health Epidemiological Survey, Growthbox says Saky found high rates of gum bleeding, dental calculus and infant tooth decay, with some indicators not improving. One reason given was weak oral-care awareness in China: fewer than 50% of residents brushed twice a day.
Zhang Yi said the essence of FMCG-izing oral care was greatly increasing consumption frequency. Toothpaste and toothbrush habits are fixed, with most consumers brushing at most two to three times per day. Mouthwash creates more usage moments and lowers the action threshold.
In March 2021, Saky set an offline expansion strategy and launched a “thousand cities, million terminals” plan to enter 1.5 million terminal outlets within three years. By May 2022, it had laid out 100,000 offline retail terminals, including Yonghui, Walmart, Hema Fresh and Sanfu; FamilyMart, Lawson, Bianlifeng and 7-Eleven; Watsons and Mannings; KKV, THE COLORIST, Chengxiaocheng and ONLYWRITE; and pharmacy channels such as Nepstar and LBX Pharmacy.
Zhang Yi said Saky’s channel build needed to enter a “complete market state,” meaning mouthwash should be available even in small shops and family-run convenience stores in fifth-tier cities and villages. In 2021, Saky sold more than 20 million large bottles of mouthwash and more than 30 million portable mouthwash strips.
moody co-founder and strategy lead Carter said the team decided not to build a niche business. It wanted to serve a large market with over-specified products, covering more consumer circles and improving quality of life for as many users as possible. He said that if the company could build industry-leading technology, craftsmanship and design, it did not want to turn the product into a luxury item; it wanted more people to use and repurchase it.
moody chose daily disposable color contact lenses from the start. Daily disposables were more expensive than longer-cycle lenses and were treated as a luxury format at the time, but moody saw them as the healthiest lens format and the highest-share format in mature markets such as Europe, the United States and Japan. The article says the industry knew daily disposables would dominate, but incumbents were reluctant to push them because long-cycle products had high margins.
moody paid twice the industry price to secure advanced supply-chain cooperation, then sold products with strong comfort and design at half the industry price to lower trial and usage barriers. Before moody entered the market, daily disposables had less than 30% share. After two and a half years, their share exceeded 60%. The article says one in three color-contact users in first- and second-tier cities was a loyal moody user, and moody reached and maintained the number-one Tmall sales position within one year.
Carter said moody was not pursuing a low-price strategy; top-tier product quality was the basis of growth and retention, while pricing only reduced the usage threshold.
Kongke’s mass-market path was channel-density based. Wang Yichao said channels are tools for reaching consumers. Kongke followed refined mothers and new white-collar consumers across online and offline channels, moving from low cost to high cost and from high density to low density. Offline, Ole and Hema were considered relatively precise channels. Online, Tmall and Douyin had high crowd density. Growthbox says Kongke had been profitable for three years and had reached its channel-penetration target.
effortless, founded at the end of 2018, is the article’s small-and-beautiful example. Founder and CEO Zhou Xiaoqing, also called Ayrton, said startups can enter either an existing market or a new track. effortless entered the existing haircare market, even though the category was no longer “sexy” and had little category dividend. The company aimed to innovate from the bottom layer through product strength and user experience.
In 2018, effortless saw a gap in mid-to-high-end refined haircare between Kerastase and Clear. Because product R&D had barriers, the company spent early money on R&D and did little traffic buying. Ayrton argued that high-end positioning is nearly disconnected from traffic dividends. He also said most consumer brands do not sustain exponential growth; they rise in steps, with each correct move lifting the brand to the next level.
effortless did not do broad channel promotion. It used the Tencent ecosystem to build an online marketing environment, combining the RAPEL recommendation algorithm, product combinations, mini-program customized haircare plans and questionnaire-based free product trials. The WeChat mini-program became the main GMV contributor in its private-domain user pool.
At the time of the article, effortless was only in two online sales channels: its WeChat mini-program and Tmall flagship store. It treated WeChat private domain as a new official site, and the mini-program contributed 70% of sales.
Growthbox connects this to Tencent Marketing Insight’s New Brand Growth Research Report: consumption brands usually rely on traffic dividends and channel marketing early, while experience brands cultivate private-domain stickiness and later use public-domain traffic to feed private-domain lifetime value.
Growthbox describes front-end-driven brands as treating brand as the cause: awareness comes first, then sales. Back-end-driven brands treat brand as the result: supply chain and product capability accumulate first, then reputation and brand effects form naturally.
EY’s Zhang Yichao maps this to a four-capability model. Merchandise power and operating power are visible and belong to the front end. Organizational power and product power are less visible and belong to the back end.
Growthbox says many founders did not view becoming an internet-famous brand as negative. They saw it as the first step toward durable popularity, provided the brand later addressed weaknesses and avoided the “wooden bucket” problem.
Saky’s Zhang Yi said an internet-famous brand can generate a high pulse from one product, but competitors will copy it and the original product’s heat will decline. A durable brand must generate repeated pulses through operating strategy and organizational capability.
Kongke is the front-end example. Its early product strength earned seed users, but its first breakout came through cooperation with a top livestreaming host. It then used precise digital marketing on Bilibili, Xiaohongshu and Douyin, targeting “new mothers” and “urban white-collar workers,” which encouraged UGC and product seeding.
Before the 2022 618 shopping festival, Kongke concluded that precise targeting had become too dependent on platform algorithms. Many consumers detectable by algorithms had already tried Kongke, raising new-customer acquisition costs. To reach people who did not yet have the need for at-home pasta, it used elevator media ahead of the promotion to broaden social communication and create another round of brand breakout.
moody is also described as a front-end breakout brand, rising through online channels and channel dividends.
Tencent Ads beauty-industry lead Wang Yi, also called Janet, argued that channel vitality determines brand vitality. Looking back 20 years in Chinese beauty, domestic brands rose with channel changes: CS-channel brands, Taobao brands, WeChat-commerce brands and newer online-native brands. Each rise came with a channel dividend, and brand attention faded as the dividend disappeared.
Janet said domestic brands rose by entering channels where international brands had not yet entered, such as CS channels, cosmetics specialty stores, WeChat private-domain networks, influencer livestreaming and Xiaohongshu. She said CS-channel brands had survived many shocks because they entered blank channels not occupied by international brands.
She predicted 2022 would be the first year of single-brand stores as a channel trend. Dr. Plant had opened more than 4,000 offline single-brand stores, and Freda was accelerating deployment in that channel.
For emerging domestic brands seeking durability, Janet said they needed to avoid the strongholds of international brands and build core advantages. Otherwise, she warned, 70% to 80% of brands could die after three years, unless they were small-and-beautiful brands. Broad-penetration, low-price substitutes would struggle because international brands had strong product and R&D barriers.
She named three ways to flank stronger competitors:
She added that Tencent’s social DNA gives private domain an important role in trust, user communication, stickiness and user-asset accumulation, especially for experience brands.
Genesis Capital founding partner Zhang Xinzhao argued that both internet-famous and non-internet-famous paths can create evergreen brands. But evergreen does not mean permanently popular. He said sustained explosive popularity is almost impossible; becoming “not popular” is often part of becoming evergreen. Consumers usually buy because they trust a brand and value its product, not because it is internet-famous.
October Rice Field, a mid-to-high-end rice brand invested in by Genesis Capital, is given as a non-internet-famous example. Its GMV exceeded several billion RMB, making it a leading emerging consumer brand. Rice is rigid-demand, high-frequency and basic, but lacks strong communication attributes. October Rice Field’s growth came more from internal brand capabilities and natural growth.
Zhang said category attributes should determine the growth path. Fast category penetration can benefit from the internet-famous path. M Stand, a boutique coffee chain invested in by Genesis, had social communication power because of the coffee category. It could break through as an internet-famous brand, then use brand energy, cross-region standardized chain management and digital user operations to expand nationally and move toward longer-term popularity.
The article also cites public-market national brands that followed non-internet-famous paths:
Growthbox says emerging consumer brands often resemble students with one outstanding subject. They can break through quickly with one advantage, especially on the front end. But after the breakout, stable 1-to-10 growth requires strengthening weaker capabilities.
Babycare is used to show supply-chain capability building. Iris said Babycare’s answer to full-category maternal-and-baby supply chain was that “connection” mattered more than “ownership.” The first layer was cooperation with top international raw-material suppliers, extending quality control to the raw-material side through technology priority and material co-creation. The second was connecting factories, using raw-material upgrades to transform supply chains and break the innovation and quality ceilings of existing production.
Babycare’s “3 countries, 6 companies” diaper combined advanced technologies from six century-old companies across three countries. Growthbox says Babycare entered the Tmall diaper industry Top 3 in only three years. During the 2022 618 period, Babycare’s official flagship-store diaper sales surpassed traditional international giants across Tmall, JD.com and other channels for the first time, ranking first. It also topped Douyin’s diaper brand list. Iris also said Babycare was increasing investment in talent, especially people with user thinking, to strengthen organizational capability, corporate culture and the talent pipeline.
moody is used to show supply-chain barriers. The founder said a brand’s long-term vitality must come from product differentiation, and consumers only pay when the product is excellent. Guided by that view, when moody’s monthly sales in May 2020 were only RMB 2 million to RMB 3 million, it began long-term supply-chain investment, including material R&D and production-technology upgrades.
moody argued that without self-built supply chain, the cycle from R&D to production is too long. With self-built supply chain, products can move from lab to sampling and production faster, production problems can be found in time, production cycles shorten, margin control improves, and supply can be protected even in extreme conditions. The company also argued that high-quality capacity is scarce for the industry over the long term, and self-built supply chain can lift industry craft levels beyond serving its own needs.
The article closes with effortless’s “three fits” philosophy:
Growthbox’s conclusion is that brands need internal conviction, products that do not violate baseline ethics, and unified organizational culture. They must create functional and emotional value whether they choose a mid-to-high-end small-and-beautiful route or a mass-market route. And if a brand becomes famous through a single advantage, it must later fill capability gaps, because evergreen brands are ultimately built from combined strength.
Note: all forward plans, IPO or capital-market references, investment examples and 2022 targets or predictions above are historical figures from the original June 26, 2022 article.