Summary of Key Points
The core message of this speech is that it has become increasingly difficult for companies to grow in the current era of limited resources. The problem is not a lack of market opportunities, but rather the continued use of strategies from the past era of growth (multiple products, multiple channels, extensive distribution). Now, the rules of the market have changed, and businesses need to adopt a new approach: “observe the broader trends, select the right product categories, focus on key products, enter the right channels, and build a strong brand.” In other words, while in the past growth relied on expanding the range of products and distribution channels, today success depends on focusing on a small number of high-quality products that meet specific consumer needs, making them desirable to consumers and attractive to distributors, thereby creating a sustainable brand momentum.
1. Why is it harder to grow despite greater efforts? Using the wrong strategies for the current era
Many companies are facing the following challenges: they are producing more products (displaying a wide range at trade shows), expanding their distribution channels (both online and offline), and increasing their investment in marketing (constant advertising and promotions). However, the results are often counterproductive—sales may increase, but profits do not; more channels mean lower efficiency; too many products lead to a lack of standout offerings; and high marketing costs make it difficult for consumers to remember the brand. The issue lies in applying old growth strategies to a market that is now characterized by limited resources.
2. Changes in the role of distribution channels
Distribution channels are no longer just places where goods are sold; their rules have completely changed:
- In the past: Channels acted like “shelf landlords” – brands had to pay entry fees, display fees, and other costs to get products on the shelves. Brands were willing to pay because shelf space equated with sales.
- Now: Channels have become “product operators.” They no longer focus on the amount of money you spend; instead, they ask whether your products can increase turnover, encourage repeat purchases, generate reasonable profits, and add value to their offerings. For example, supermarkets might once display dozens of soy sauce brands with various options, but now they may only keep 3–5 brands, each with a limited selection of products, as additional inventory and costs reduce efficiency.
3. The new trend of “narrow categories with focused products”
The trend is for channels to offer a wide range of products while focusing on a small number of high-quality options within each category. This approach maximizes efficiency because similar products can be efficiently managed.
In the future, channels will only prioritize a few types of products:
- Brands that consumers specifically request,
- Products with competitive prices (e.g., channel-owned brands),
- Products that are profitable,
- Products that meet new consumer needs or scenarios (e.g., condiments for one-person meals),
- Specialized products for specific demographics or regions.
Products that lack uniqueness, value, or efficiency (e.g., generic soy sauces that are only slightly cheaper) will gradually be phased out. Brands need to ask themselves: if there are only 3 products allowed in a category, why should it be your brand?
4. The role of strategic products
In the era of limited resources, growth is driven by “strategic products” rather than one-time hits. A strategic product:
- Represents a specific consumer segment (e.g., condiments for one-person meals),
- Provides clear reasons for consumers to buy it (e.g., convenience and quick preparation time),
- Ensures good sales performance for the channel (e.g., high turnover and repeat purchases),
- Draws corporate resources (research and development, supply chain, marketing all focused on this product),
- Helps build a strong brand image.
5. A five-step path to precise growth
The speech outlines a practical approach:
1. Observe the broader trends: Avoid competing in declining markets. For example, since young people are becoming more lazy, focusing on “lazy-friendly” foods is a smart move.
2. Select the right product categories: Become a leader in specific market segments, not just the overall industry.
3. Focus on key products: Concentrate resources on one or two products that meet clear consumer needs.
4. Enter the right channels: Start with a small number of well-matched channels (e.g., community supermarkets, instant retail) and prove your product’s success before expanding nationwide.
5. Build a strong brand: Create a sustainable growth model where customer loyalty and channel partnerships support long-term growth.
Conclusion
The era of limited resources does not mean there are no opportunities; it simply means the traditional models of growth (expensive distribution, heavy marketing) are no longer effective. Future winners will be those who specialize deeply in specific market segments. Consumers will choose brands that offer value, and channels will prefer them due to their profitability and efficiency. In short, quality over quantity is key.
The speech also raises five critical questions for entrepreneurs to consider:
- Where lies your unique opportunity?
- Which product category should you represent?
- Which products will drive your growth?
- Which channels can maximize the value of your brand?
- Can today’s sales efforts become the foundation for a strong brand in the future?
By answering these questions, businesses can find a viable path to growth in the current market environment.