China Food

New consumer brand “on the street”: from bringing doctrine to future ambition

‘s lifestyle of “going to and from work, buying vegetables and chatting” has attracted young people who are looking for “proximity” and more eager new consumer brands.
With the continuous rise of shopping centers and office buildings and the continuous expansion of the area of prosperous business districts and core CBD, urban residents who are used to using the Internet to solve their daily needs are gradually losing their sensitivity to their surroundings. This phenomenon is described by anthropologist Xiang Biao as the disappearance of “proximity”. He pointed out, “the neighbors across the door, the cleaning aunt in the corridor, the security guard at the door of the community, the barber at the bottom of the community… I often see them, but I never seem to know who they are and what kind of life experience they have.”
Even for today’s young people, It is normal to lose “proximity”. However, there are more and more signs that in Shanghai, Guangzhou, Chengdu and other cities, more and more new consumer brands of online students are starting to re-enter neighborhoods and communities from shopping centers. Taking Wukang road and Anfu road in Shanghai as an example, the lifestyle of “going to work, shopping and chatting” has attracted young people who are looking for “proximity” again, It has also attracted more eager new consumer brands.  

New consumer brands that don’t make money
I fell in love with wanghong street
After the germination in 2018 and the rapid growth from 2019 to 2020, new consumer brands living to 2021 strive to explore new growth curves, and pay more attention to offline. In particular, a number of new online consumer brands have finally opened their first store of a single brand after trying various forms such as flash, concept store and collection store. According to the incomplete statistics of cbndata consumer station (hereinafter referred to as station C), from 2020 to 2021, the new consumer brands that opened the first single brand store include three and a half meals, bosie, banana in jiaonei, Shicui, zihi pot, watching summer, Wenxian, Xiaolu blue, BabyCare, etc.
From a theoretical point of view, we can cite the reasons for the offline overweight layout of new consumer brands. For example, from the perspective of consumers, the brand needs to expand its boundaries and jump out of the fan base to attract more potential customers. Their feedback is the “nourishment” for the brand to keep improving; For another example, from the perspective of brand building, they need to change from pure visual attraction to perceptible and experiential omni-directional touch; From the perspective of category, the profit margin and growth space of some online categories with basic functional attributes (such as instant coffee) are close to the top, which requires the brand to actively expand the offline market to open the imagination of the category.
Of course, the most convincing is the data.
According to the National Bureau of statistics, China’s online retail sales reached 11.8 trillion yuan in 2020, an increase of 10.6% over 2019, but the growth rate has declined for three consecutive years; In 2020, after the online retail sales of physical goods historically reached a quarter of the retail sales of social consumer goods in China, the proportion of online retail sales decreased for the first time in 20 years from January to October 2021. The offline retail market still accounts for a large share. At the same time, the experience and social functions brought by offline consumption are more valued by consumers in the post epidemic era. Especially for generation Z, who emphasizes personality sharing and likes to punch in and take photos, offline fills many needs that cannot be realized online.
What happens at the same time as “consumers return to offline” is the offline retail iteration driven by “depression effect”. According to the 2021 global retail development index released by Kearney management consulting not long ago, the areas with the most obvious differentiation of “depression effect” in recent two years are supermarkets and hypermarkets, and their traffic is diverted to small businesses, shopping centers, emerging large businesses, professional stores, etc.
Among all business formats, there is no doubt that wanghong block is the most special existence. Although there are few well-known online red blocks nationwide, many new consumer brands have gathered here, and their emergence has also given new commercial significance to online red blocks. Among all cities, Shanghai has bred the most new consumer brands, and has many intact historical buildings with residential value. The streets where these buildings are located are attracting a steady stream of new consumer brands.
According to the incomplete statistics of station C, there are three and a half new consumer brands, bosie, banana in jiaonei, seesaw coffee, summer view, Wenxian documents and so on, which will land in wanghong blocks such as Huaihai Middle Road, Yuyuan Road, Wukang road Anfu road in 2021. This trend will continue in 2022: yongpu coffee and blue bottle coffee, which are about to open their first store in Shanghai, have chosen a small foreign house in Pianan corner instead of large shopping malls or street shops.
From small restaurants, or convenience stores such as hardware stores and grocery stores, to Western restaurants, boutique cafes and buyer’s stores, and now the influx of new consumer brands with different formats, such as fragrance, fast coffee, beauty collection stores and second-hand bookstores, In the future, these old streets in Shanghai with an average length of only about one kilometer will become offline “training grounds” for more new consumer brands.

New consumer brands choose wanghong block:
Not for Ping effect, but for lifestyle
What attracts new consumer brands to enter the online red block? First of all, profitability is certainly not the primary purpose.
Zhang Yan, the manager of “quarter coffee”, once revealed to the interface news: “for online brands, the rise speed is so fast that people who have made a lot of money are not rare to make small money (through offline stores), and the ROI of offline stores is not high compared with online stores.”
This can also be proved from the changes of store design and operation mode – Kearney management consulting pointed out in 2021 global retail development index that commodity centered business thinking is turning to experience centered business innovation, and “super big stores”, experience stores, concept stores and other stores that create immersive consumption experience have become popular Store concept, dynamic display and other factors have changed accordingly. The “selling” mission and floor efficiency standard of physical retail stores are a thing of the past.
In the market, there are three main interpretations of the reasons for new consumer brands to settle in online red blocks:
First, online red blocks can allow consumers to punch in and stop wandering, while customers often go to shopping centers with strong purpose and spend less time in a single store. In shopping centers with good passenger flow, brands often have little say in store design and space selection, especially for new consumer brands. However, commercial pedestrian streets, ancient towns and even resorts can also provide the so-called “shopping” demand, which is not the exclusive advantage of wanghong district.
Second, new consumer brands choose wanghong District, perhaps to tell a “more pleasant” story to capital. Among the above-mentioned “on the street” new consumer brands, they all received capital blessings before and after opening their stores. For example, Wenxian documents, a domestic fragrance brand, landed on Huaihai middle road in its first store, and soon won an angel round of financing of tens of millions of yuan; The opening date of the first store of banana in Huaihai middle road is only two months from the brand financing.
Third, where consumers are, the brand will go. The reason why wanghong District attracts brands to settle in is the huge passenger flow, which can not be ignored. During the golden week of 2021, Shanghai Wukang road was hot searched because of the influx of national clock in tourists. According to the statistics of Xuhui District government, the daily passenger flow of Anfu road exceeded 20000 during the national day.
However, we believe that the above three points are not the fundamental driving factors for brands to choose wanghong district.
From online to offline, from intangible to tangible, new consumer brands still hope to exist in the context of young people. This “context” represents an independent description of their ideal way of life in the future.
Taking Shanghai as an example, Wukang road and Anfu road represent the ideal picture of a future urban lifestyle: a community with beautiful environment and full of cultural flavor and elegant atmosphere, smoky vegetable farms, grocery stores and other necessary facilities, as well as pioneering emerging business forms and slow-paced restaurants and cafes. This enlarged “third space” is obviously a perfect place for young people to stop between work and life.
Wuzhong market, jointly signed with Prada, is an ideal life template of “exquisite fireworks” in the eyes of young people. Photo source: visual China
In other words, what people expect is a pluralistic community that can meet the needs of tourism, business and residence, and has a certain cultural heritage at the same time.
The Shamian in Guangzhou and Dongshankou, daijiaxiang and Huangjueping in Chongqing, huaxiba in Chengdu and shihuqiao road in Hangzhou all follow similar patterns. Because of its commercial charm and historical heritage, the urban consumer community form of wanghong block has more reference value.
Although they are outsiders, the new consumer brands stationed in wanghong District maintain a tacit understanding. They not only have no intention to transform the appearance of the block, but spontaneously transform the facade to fit the original temperament of the block.
In the article “going to the streets: a new adventure for top-notch new consumer brands” of China business magazine, it was mentioned that when preparing for the offline flash store activities of designer brands during Shanghai Fashion Week in 2021, the buyer’s shop, looknow, will choose different styles of online red blocks according to different styles of designer brands, For example, rouje, France’s “national online brand”, is arranged to Wukang road with full French style, and a pioneer art brand such as Percy Lau is landed on Anfu road with more inclusiveness.
Even in terms of brand packaging and store decoration, new consumer brands are more willing to land in a new appearance to adapt to the atmosphere and attributes of online red blocks.
After settling in Anfu Road, Santon and a half did not name the store after “Santon and a half”, but adopted the concept of “force flight”. In terms of retail products, Sandun and a half also launched a variety of limited edition and co branded models, such as “Anfu edition 8”, the storage bag launched with the designer brand ntmy, the book blind box issued with the Republic, the clothes and net red slippers cooperated with the northface, etc.
It’s not just a space for three and a half stores, but also a place for retail. The staff responsible for brand store development once told interface news that the site selection is based on the combination of popular urban landmarks and integration into street life.
It can be said that new consumer brands choose wanghong Street precisely because the latter represents a way of life and a community atmosphere. From this perspective, wanghong District represents the opposite direction from the traditional shopping center, and also represents a possibility of urban consumption in the future. At this stage, the brand can give the block far less than the block can give the brand. The intention of new consumer brands to occupy a place in the discourse power of future consumption mode through “zhankeng” online red block is very obvious.
However, the current catering posture of brands does not represent the future. Will more new consumer brands become another kind of “commercial pedestrian street” with the establishment of subnet red blocks?

Problems and future imagination of wanghong block
If the development history of Shanghai’s wanghong block is divided into three stages, the first stage is the historical and cultural relics building complex with the living community as the background; The second stage began around 2000. The entry of boutique coffee shops, buyers’ shops and Western restaurants has made these old streets synonymous with fashionable lifestyles; The third stage began around 2019. New consumer brands landed with the so-called “new middle class temperament” and injected a trace of cutting-edge and fast-paced atmosphere into the neighborhood.
Will new consumer brands completely change the face of online red blocks in the future? Before answering this question, we must answer another question: who is deciding the tide direction of the commercialization of the block?
The biggest difference between blocks and shopping malls and pedestrian streets lies in the absence of the role of “investment attraction”. The reason why blocks can be unique is that most of the business ecology in this area comes from spontaneity, rather than a trade-off between flow and interests between shopping malls and brands. Like the survival of the fittest method in nature, shops open and close in blocks, forming a dynamic balance. In other words, the business ecology here presents a chaotic and primitive state, lacking guidance from external forces and artificially formulated norms, and the experience of brand success is difficult to replicate.
In 2016, before the all-round rise of the online Red economy, real estate statistics showed that 60% of the shops in “Jufu Chang” (a block formed by three streets of Julu Road, Fumin road and Changle Road in Shanghai) were restaurants and bars, and 40% were retail shops, of which fashion, design and creative shops accounted for 70%. Interface news once reported that at that time, most new brands moved here to take into account the relatively low rent cost, but the simple logic of opening a store was changed due to the rise of online Red economy.
Today, more and more tourists come to “punch in” on wanghong street. They punch in and share on xiaohongshu, microblog and other social media, and then attract users to punch in, forming a complete communication chain, so as to keep the brand famous and hot all the time. These young people who only come to “punch in” seem to have little contact with the residents’ community, but unconsciously push up the front rent and squeeze the living space of many ordinary shops without online celebrity qualification, which are closely related to the residents’ life.
For example, there are fewer and fewer affordable small restaurants and vegetable and fruit stores on Wukang road – at the end of April 2021, the ten-year-old store “jiajiawang” on Wukang Road, with a family of only 19 yuan, closed. The more open and prosperous restaurants are western food and cafes with an average per capita of more than 100 yuan. Adjacent to Tianzifang, Jianguo West Road, a new popular punch in place, the rent is also rising. A landlord once told the reporter of the “daily people” that the influx of tenants are mainly online celebrities. The content of the inquiry “doesn’t mention the indoor facilities and surrounding traffic at all. It’s enough to just say how many years the house has history and how many photo spots can produce films on the street. According to his estimation, from June and July 2021,” the overall rent of the house here has increased by 30% to 50%. “
However, even brands that cater to the trend and harvest countless clocks of young people may not be able to become “permanent residents” of online popular neighborhoods. In 2017, farine, known as the founder of Wukang road Internet, was exposed to a food safety scandal. Wiyf ice cream store and Rachel’s hamburger store opened by the same boss also closed down one after another. It was not until more than a year later that the wanghong coffee shop% Arabica was settled that Wukang road became lively again.
%Arabica coffee shop in Wukang road photo source: visual China
The rise of online Red economy has completely changed the commercial development direction of some old blocks, but the essence of “chasing freshness” and “replicability” of online Red economy is doomed that its style cannot be precipitated into real long-term influence. As a bridge between the two, the physical stores of the brand have become a difficult problem in front of many blocks in terms of how to undertake consumers, avoid falling into the trap of “homogenization”, take into account the original diversified ecology of the block, and finally achieve the ultimate goal of “activating the block” while ensuring their own vitality.
It is not easy to achieve this goal. The “super rich and long” have begun to deliberately wash off the online red label. At the beginning of 2021, a “555 project” project organized by non-governmental organizations was held to restore the original life appearance of the neighborhood of “middle Urumqi Road Wuyuan road Wukang road”; Xuhui District government also issued guidance in November 2021 to reduce the online popularity of “Wukang road Anfu road” block and increase the cultural and creative attributes accordingly. However, for most urban blocks eager to be updated, the rapid “little red book” is indeed the best way out at present.
With regard to the future imagination of wanghong block, SOHO District in New York provides a block template that perfectly balances various factors such as residence, business, culture and tourism. SOHO is located in lower Manhattan, New York. It is famous for its artists’ gathering and “hippie style”. Although its total area is only 0.3 square kilometers, it is famous for its complex architectural style, rich industrial configuration and high-density but active urban living space. It has become a consumption punch in place for new Yorkers and young people all over the world.
If it is only known for its art district, SOHO’s uniqueness may not be enough. However, according to the statistics of bright company, in recent years, DTC brands with the characteristics of domestic new consumer brands such as allbirds, warbyparker, everlane and glossier have also landed their first stores in Soho. Now Soho with 500 brand stores is the largest urban retail area in North America. This proves that SOHO has commercial vitality in addition to fashion and artistic sense.
After comparing the DTC brand settled in Soho with the new consumer brand in Shanghai Anfu road block, bright company found that most of the former have been listed or will be listed, while most of the latter are still in the financing stage. Cbndata found that from the perspective of categories involved, SOHO brands cover richer and more subdivided categories, including pets, mattresses, glasses, luxury clothing, medical personnel functional equipment, etc., while the brands in Anfu road block are still dominated by clothing and food. In other words, SOHO has more business forms. Such diversity not only meets the living needs of local residents and gives SOHO more long-term vitality, but also realizes flow complementarity and helps different consumer brands attract new customers. Due to the background color of SOHO art block, all commercial stores in Soho art block pay more attention to taste, style and originality of goods than other blocks – these are not available in domestic online red blocks for the time being.  
The name SOHO was first proposed in 1968, and today’s industrial allocation was completed in the last 20 or 30 years. Reviewing the development history of SOHO, we find that the easily neglected “living demand” is the foundation of the long-term development of wanghong block. Once the block develops to the stage of being unfriendly to the original residents, wanghong block will be at risk of becoming a “commercial pedestrian street”. It is difficult for the business District without residents to maintain its original vitality. At this time, the intervention of the government becomes particularly important.
In the 1950s, SOHO became an empty industrial area after the relocation of the rich. At the same time, a group of artists moved here because they couldn’t afford the high rent. It was this group of people who prevented the demolition action of the New York government at that time. Since then, the New York government adjusted the functional planning of SOHO district to allow artists to live here legally. Then, the government defined SOHO as a historical protection block and prohibited the demolition, reconstruction and construction of highways. According to business, due to the rising rent, SOHO is once again facing the planning of re zoning. The proposal includes allowing more affordable affordable housing and lifting more restrictions on the retail industry. The specific rules will be released in January 2022.
SOHO block in New York source: visual China
It is not difficult to find that in the commercialization process of SOHO, housing demand has been put in the first place. This may give some enlightenment to the vigorous transformation of urban blocks in China: an ordinary living area and office area is a point on the map, and talent is one of the variables to make this point a meaningful and valuable center. For a street, we must first meet the endogenous needs in order to further find characteristics and establish regional influence. For new consumer brands on the street, playing the role of “good neighbor” may be the best solution to survive here.  
reference material:
[1] Wukang road Anfu Road: offline adventure of new consumer brands, Yi magazine
[2] How do young people doing business in Shanghai’s “super rich long” survive and grow in this neighborhood, interface news
[3] “Three and a half meals to go offline, the first coffee shop opened in Shanghai wanghong Street”, interface news
[4] DTC brands in Soho District of New York are all listed, and the brand of Anfu road in Shanghai has just arrived at round C, bright company
[5] “Online celebrities seize the beach, push up the rent, and scare me away”, daily character

Source: first financial business data center (ID: cbndata), reprint has been authorized.



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