60 million GMV, millions invested in Xiaohongshu: How do new brands layout new traffic platforms?

At present, the pet smart products track has entered the blue ocean market. This article takes two pet product brands as examples, and tells how the brands transform, what the trump cards are, and how to break through bottlenecks. It also gives suggestions on how new brands should layout in the new traffic platform. Let's take a look!

With the expansion of the urban pet-keeping population and changes in pet-keeping concepts, smart pet products have become an emerging and high-potential track.

More and more young people would rather treat themselves badly than give their cats better food, better toys, and more money. A netizen once said: After upgrading the staple food for his cat, he thought that drinking water was also important for the cat, so he bought a 300-yuan smart water dispenser online; after that, he replaced the cat bed and cat litter one by one... After this wave of upgrades, his Huabei account soared to nearly 10,000 yuan.

As more people are willing to spend a fortune to buy pets, a niche market - the smart pet products market - has become a blue ocean.

According to the "Overview of China's Smart Pet Products Industry in 2022", the penetration rate of smart pet products in China has increased from 40.3% in 2019 to 52.9% in 2021, and the scale of the smart pet products market is expected to grow to 9.81 billion yuan in 2026. In this vast market space, more than 12 smart pet hardware companies received a total investment of more than 100 million yuan in 2021 alone.

In terms of user portrait, smart pet products are mainly aimed at this group of consumers: young people aged 18-35 living in first- and second-tier cities. They are willing to try new products and have a certain degree of tolerance for new technologies.

More startups are also beginning to emerge.

In May, Kas communicated with Zhang Junhan, co-founder of Niaoyuhuaxiang, and Liang Bin, general manager of Mi'ao, and discussed in detail the opportunities and pain points in the pet supplies track.

The similarities between these two brands are that, through launching new products, polishing products, and laying out shelf e-commerce, both Niaoyuhuaxiang and Mi'ao have gone through the stage of "from 0 to 1", but from 1 to 100, the road ahead is still long. Facing the advent of the era of global operations, they also face challenges such as talent reserves, channel building, and traffic delivery. They have their own thoughts on how to quickly adapt to the rules of the new traffic platform and complete the "critical leap" of the brand.

1. Shifting from shelf e-commerce to global e-commerce amid traffic anxiety

Wang Yonglai, the founder of Birds and Flowers, graduated from Jiangsu Animal Husbandry and Veterinary Vocational and Technical College. He has opened offline pet stores and also worked in online e-commerce. He founded Birds and Flowers in Shanghai in 2019. Before 2021, Birds and Flowers produced many popular non-smart products. In order to seek long-term value, Wang Yonglai chose the category of smart products with a certain threshold and a positive trend, and officially started his journey in the smart product end in 2021.

In March 2022, Zhang Junhan joined Niaoyuhuaxiang as a co-founder. This young man born in the 1990s with 5 years of work experience in the pet industry has injected fresh energy into the brand and driven its online business to further improve.

At present, the main products of Niaoyuhuaxiang are pet smart feeder mini/light, natural wind pet smart drying box, magic cube smart cat toilet, cat toys, gravity feeding and watering machine. They are characterized by innovative product appearance, structure and functional design, so they have become popular.

In 2022, the annual GMV of these popular products will exceed 40 million yuan, and the annual GMV of the entire product line will exceed 100 million yuan. In this plate of more than 100 million yuan, it is divided into offline, online and cross-border businesses. Offline, Birds and Flowers mainly cooperate with some chain and large-scale pet stores, and online self-operation accounts for about 50%, which is an important performance growth point for Birds and Flowers in 2022.

Some of the products of Birdsong and Flowers

Compared with Birdsong and Flowers, Mi'ao is a younger brand.

In August 2021, Mi'ao was established in Guangzhou. meoof is a combination of the calls of cats, meow, and dogs, woof. The Chinese brand Mi'ao, in addition to the similar sounds, is looking for a place, and there is warmth in the place. It is an expression of warmth and comfort in the scene of people and pets living together.

The four members of Mi'ao's founding team all came from CVTE Group and are pet owners. After leaving their original platforms, their restless hearts brought them together again, and together with two other like-minded senior players in the pet industry, they formed the current entrepreneurial team. CVTE Group is a listed company that develops LCD display main control boards and interactive smart tablets, which also gives them certain advantages in smart product design, R&D, and supply chain when entering the field of pet supplies.

In 2022, this newly born brand achieved sales of 15 million, making it the fastest growing brand in the industry. Its sales target for 2023 is 40 million. Currently, Mi'ao's main products are vacuum food barrels, Gulu pet bowls, cat litter boxes, and cat climbing frames. Among them, the sales of vacuum food barrels this year are roughly 80,000 to 100,000, and the sales of Gulu bowls are 30,000.

Mi'ao's vacuum food storage bucket and gulu bowl

" In the past few years of the epidemic, the trend of pet keeping has become even more intense. People are forced to spend more time with their pets. The rapid development and promotion of the industry have also accelerated the improvement of awareness among pet owners, and people have higher requirements for the quality, functional effectiveness and aesthetics of pet products, providing a lot of room for development for brands like Mi'ao ." Liang Bin said.

In the early stages of development, Niaoyuhuaxiang and Mi'ao mainly focused on JD.com and Tmall. However, due to the obvious competitive advantage of Tmall pet products overseas brands, small and medium-sized brands have been looking for development opportunities on other platforms under high pressure competition. "At present, the competition in the industry has intensified, and we have also fallen into the bottleneck of too expensive traffic and difficult sales growth, so the layout of off-site traffic has become an urgent matter for us at the moment." Zhang Junhan said frankly.

What Niaoyuhuaxiang and Mi'ao have in common is that they mainly use shelf e-commerce as their main battlefield, while also expanding into new traffic platforms such as Douyin and Video Number.

Zhang Junhan told Kasi that Niaoyuhuaxiang achieved a breakthrough in performance in 2022 and gained a foothold in the smart products category. The core reason was that the brand transferred marketing expenses from shelf e-commerce to new traffic platforms . "Because we have no foundation on the site, and the smart products category is a category with a long-term decision-making cycle, we chose to start with content platforms such as Douyin and Xiaohongshu, increased the promotion efforts outside the site, and synchronized our operational advantages on the site. With a two-pronged approach, we exploded in the two nodes of 618 and Double 11, and hit the three categories of feeders/drying boxes/cat litter boxes."

At present, Niaoyuhuaxiang's positioning on Tmall and JD.com is to undertake the search traffic of the entire category. It needs more exposure and seeding outside these two platforms, strive to gather more A3 people (seedling users) , and try to achieve closed-loop transactions to reduce bounces. As a private domain position, Video Account will pay more attention to the service of consumers. These customers are high-quality A4 and A5 people (users who purchase and repurchase), and are also the cornerstone of the brand's longevity.

2. Get higher GMV while maintaining ROI

Mi'ao and Niaoyuhuaxiang have achieved initial results in operating new traffic platforms such as Douyin, Video Account, and Xiaohongshu.

Douyin has become the first stop for brands to test the new platform. The Douyin Pet Products Industry Report released by Chan Mama shows that in the past year, the concentration of the pet products market has dropped to 17%, and the competition is particularly fierce. However, from the fourth quarter of 2022 to the first quarter of 2023, the number of new brands has slowed down, giving many small and medium-sized brands room to develop. The competition between brands also shows the vigorous vitality of the pet products track. From the second quarter of 2022 to the first quarter of 2023, the overall growth of Douyin's e-commerce pet products industry reached 189%.

By learning the details, Kas felt the difficulty for small and medium-sized brands to get started, and also saw the opportunities in the pet supplies track more intuitively - product innovation that truly hits the pain points can help brands quickly launch popular products and gain a place in the market.

In the second half of 2022, Niaoyuhuaxiang and Mi'ao began to try to make efforts on Douyin, but in the process of self-exploration, they did not quickly open up the "Ren and Du Meridians", and the progress was not as fast as expected. The brand was eager to obtain the underlying logic and business methods of the new traffic platform, which led to our meeting in the founder growth strategy class.

Now, Mi'ao has laid out influencer distribution and brand self-broadcasting on Douyin.

In mid-March this year, Mi'ao officially started operating Douyin e-commerce, mainly promoting vacuum grain storage barrels. Through the method of "top influencer endorsement + influencer referral + brand matching and investment", it took one month to become one of the top ten short video sales of Douyin pet supplies influencers, and it was also the product with the highest customer unit price . According to Kas, the price of this product when distributed by Douyin influencers on a daily basis is the same as that of the Tmall flagship store, which is 299 yuan.

Douyin expert recommends Mi'ao grain storage barrel

It is worth noting that in the Douyin e-commerce pet track, the majority of products purchased by users before were still cat food, cat litter and other products, and the sales volume of smart products was relatively small. To achieve such results, Mi'ao can be said to have made a good start.

Liang Bin told Kas that in terms of influencer distribution, Mi'ao's experience is to serve influencers well, first using high-quality product experience to convince influencers to recommend products, while making them feel "comfortable" during the cooperation process and not placing too many restrictions on the content. This will not only help influencers create bigger hits, but also help influencers refer other people to help the brand bring products.

In early May, Mi'ao began to cooperate with a third-party agency to try to operate an official live broadcast room. It is currently testing anchors, scenes, and words. In June, Mi'ao expects to achieve a sales ratio of 1:3 between short video sales and brand self-broadcasting, that is, the monthly short video sales GMV will reach 400,000, and the brand self-broadcast will reach 1.2 million.

Screenshot of Mi'ao Douyin brand live broadcast room

Since Mi'ao has only been on Douyin for a short time, and its main product (grain storage barrels) has not seen significant repurchase, which is also a common phenomenon in the sales process of durable goods. The core factor that makes the agency more confident in taking on this business is that it values ​​Mi'ao's product potential.

Take the vacuum grain storage barrel as an example. This is Mi'ao's first hit product that has gained high reputation and high GMV in the market, and has withstood the test on Tmall and Douyin. In terms of function, it can detect the pressure changes in the barrel in real time, replenish the air in real time, keep the barrel in a vacuum or negative pressure state, slow down the oxidation reaction time of pet food, and ensure the freshness of pet food to the greatest extent; in terms of appearance, the design is simple but memorable, which is adapted to the aesthetic needs of urban youth; in terms of details, a groove is set for the cat food shovel for easy access.

Why was Mi'ao the one that made the grain storage bucket a big hit? Liang Bin concluded that the talent density in the pet products industry is not high at this stage, and the ability to make good products needs to be improved, so if you can make good products down to earth, you will most likely succeed. "Compared with water dispensers and feeders, grain storage buckets are not core products in the industry and are not that popular, but we felt that there was obvious room for improvement, so we made it in a relatively solid way."

Regarding Xiaohongshu, Mi'ao and Niaoyuhuaxiang both regard it as an important link in the grass-planting chain and are prepared to increase investment.

In July 2022, Mi'ao began to update the brand's original content on Xiaohongshu. Currently, the official account has the highest likes-to-fans ratio in the pet smart products industry, which means the least investment and the best results. In terms of influencer promotion, Mi'ao chooses Zhenxuan KOC to cooperate in the form of product replacement, focusing on controlling influencer matching and content quality, attaching importance to the consistency of content and brand tone, and ensuring quality rather than quantity.

In 2023, the importance of Xiaohongshu will be further recognized by brands. Liang Bin mentioned the development plan of Xiaohongshu, "Xiaohongshu is the main battlefield for long-term brand asset accumulation. Currently, it is under-invested and operated part-time. We have decided to recruit a dedicated person to be responsible for it."

Niaoyuhuaxiang is more generous and is more willing to cooperate with the top pet bloggers on Xiaohongshu. The products it promotes are mainly feeders, drying boxes, and cat litter boxes.

Xiaohongshu blogger recommends the bird-song and flower-scented drying box

Zhang Junhan revealed, "Last year, our advertising volume on Xiaohongshu was in the millions, ranking top 3 in the pet smart products category. The overall exposure and interaction data were also very good. We believe that Xiaohongshu is a platform with a relatively high-quality customer base and long-term grass-seeking capabilities, so we will invest here for a long time. In the future, we will increase our advertising and strive to achieve full penetration of the category on Xiaohongshu."

Niaoyuhuaxiang has also taken some actions for the video account. "After listening to Hao Ge's course, we started to build a content middle platform and a self-broadcasting team. Next, we will input the content into the video account and simultaneously have a self-broadcasting plan, using our basic private domain fans to leverage more public domain traffic of the video account.

3. Product development + after-sales service

For consumer brand startups, after relying on hot products to gain market recognition, what is tested is the team's continuous product development capabilities. Especially in the field of durable goods, it is necessary to increase consumers' repurchase rate by filling in the scenarios.

At the product development level, both Niaoyuhuaxiang and Mi'ao chose to expand their product lines and increase SKUs.

Today, Niaoyuhuaxiang's products cover pet smart life, non-smart durable products, cleaning and personal care, toys, etc. Since its establishment, it has launched more than 20 self-developed products and launches 4-6 new products every year.

Zhang Junhan believes that the pet industry is a long-term high-speed growth track. The current industry scale can at least grow 2-3 times in the next 5-10 years. There are many opportunities in each category of the pet industry, and it is a track that is worth investing in for the long term. The future plan of Niaoyuhuaxiang is to continuously optimize the product line and products in various price segments, acquire more customers through the product matrix, and consolidate the moat through innovative research and development. However, in the next 3-5 years, it will not consider opening offline self-operated stores.

"The advantage of Niaoyuhuaxiang over its competitors is that we currently have our own in-house team for product development. Although we have not been doing this for long, we are able to launch new products quickly and continuously iterate based on market demand."

Mi'ao claims that the team is relatively "Buddhist". Currently, there are less than 20 SKUs, and they focus more on upgrading and optimizing existing products. In June this year, Mi'ao will launch new products such as feeders, ice pads, pet toothbrushes and toothpastes. Their goal is to "ensure that as many people as possible can use our products at a price they can accept while ensuring basic aesthetic requirements."

At the user service level, some consumers still have doubts about smart pet products, mainly due to concerns about quality, safety, and ease of use.

Liang Bin shared Mi'ao's solution: "When people feel that there are quality problems, there is another hidden reason, which is actually the way and ideas of the brand or manufacturer to deal with after-sales problems, which often amplifies the negative effects of quality problems. Therefore, we pay special attention to after-sales service, whether it is communication experience or the timeliness and effectiveness of problem handling, we invest resources."

Not only in China, but also in overseas channels, Mi'ao and Niaoyuhuaxiang are gradually increasing their investment.

Zhang Junhan introduced that Niaoyuhuaxiang chose to develop cross-border e-commerce, mainly selling non-smart pet products on Amazon. "For the Asia-Pacific and Americas regions, we have our own sales and BD teams."

At the end of May, Liang Bin participated in a pet products exhibition in South Korea, and the feedback he received on site gave him greater confidence. "The consistent feedback was that the product was very good and the design was great. We talked to potential local partners, and they were very clear that they wanted to build this product into a high-end local brand."

To occupy the minds of consumers, brands have to fight a protracted war. "The brand war is no longer a 100-meter race, but has been upgraded to a marathon. Brands that are able to complete the race will become people's final choice," said Liang Bin.

Whether it is customization, convenience, high appearance, or diversification, the consumption upgrade of pets stems from the increasing demand of pet owners for smart pet care. If brands want to do a good job in pet business, they must first do a good job in marketing to people.

Through interviews with front-line practitioners, Kas learned about the three major opportunities in the pet smart products track: large market capacity, stable growth rate, and high development potential (the penetration rate of pets in China is 25%, and it can reach 50%+ in mature countries).

We have also seen the three major pain points of this track: products cannot truly solve user problems (solving one problem brings new problems); most products on the market have strong functional attributes but weak aesthetic attributes; product quality is uneven (product texture, functional stability).

Currently, the types of mainstream smart products are very limited (taking cats as an example, there are roughly 6-7 models), and the product functions are highly homogeneous. There is a lot of room for innovation both in the scalability of product types and in the functional differentiation of segmented scenarios.

Brands that can seize opportunities and solve pain points will undoubtedly have a ticket to the smart pet products market. However, for a market that has not yet matured, brands still face many challenges.

Author: Kas Data

Source: WeChat public account "CaasData (ID: caasdata6)"