Selling pig hooves is dangerous, and selling tiger skin and chicken feet ranks first in the country! Liang Kai: Category is the life of entrepreneurs

“In 2018, I organized two private board meetings, which were very exciting. We were approved from the beginning to the end. The selection of pig hooves was wrong, the channel was wrong, the supply chain was wrong, and even the location of the company was wrong… In addition to keeping the name of Wang Xiaohan, everything started again.”
How did Wang Xiaolan find the category of tiger skin and chicken feet and become a growth miracle of domestic fast consumer goods?
Wang Xiaolan Products
Wang Xiaolan Products
Image source: Wang Xiaoyan’s official website
“Snacks are not just needed, and the convenience of purchase determines its market capacity. If you buy a Wang Xiaoyan chicken claw, you have to wait for several days to place an order online, and the frequency of consumption will decline. If you see the chicken claw when you buy water, you will have a chance to sell more.”
How do online celebrity brands go from online to offline? Why do many dealers in the industry say that Wang Xiaolan has brought about a particularly magical transformation?
With the economy down, how can fast food snacks make a good business? At a time when many online celebrity products have become popular and disappeared, why can Wang Xiaohan brand always occupy the user’s mind and achieve the first sales of tiger skin and chicken claw in China for three consecutive years.
Wang Xiong, the founder and CEO of Wang Xiaolan, visited Chaos and talked about how to define the “one” of the snack track and find new opportunities in the category. Liang Xiong said that he hoped to provide you with an entrepreneurial perspective, or take Wang Xiaohan as a case to provide you with a dimension of entrepreneurial thinking.
The following are the course notes: (The content of this article is only one tenth of the course due to space limitation. Please go to Chaos APP to listen to the full course!)
1、 What is Wang Xiaolan’s “One”
（1） Entrepreneurship is like a dream
In 2016, since I thought of the name Wang Xiaolan, I vaguely thought that it might be a brand. I was not in a very good state at that time. I felt that I had not developed very well in my 30s. It seemed that I had participated in many important events, but in fact, I did not operate completely and personally. I could not find a sense of achievement.
In 2016, the brand registration of Wang Xiaolan was successful. The first pickled product I conceived was pig’s hoof. At that time, many people in Beijing were also making roast pig’s hoof chain stores. At the beginning, we used the way of central kitchen+pre packaging+official account to sell goods, and sold 10000 pig hooves in one hour. I suddenly realized that Internet traffic can make consumer goods sell in more than one store in one day.
But since then, I have entered a long and painful exploration period. After selling the fried pig’s feet, we have been walking along this road. We have not opened Tmall nor made more channels. At the end of 2016, the official account traffic began to decline rapidly, and our business was very difficult to do.
I took my life to see the investors. The investors said that if our offline store model is well done, we will invest in it. So we opened an 80 square meter marinated food store. The offline store is full of details. The relationship between display, lighting, cutlery and waiters should be handled carefully. From 2016 to the middle of 2018, we were basically in the state of losing money.
In 2018, I organized two private board meetings, which were very exciting. Everyone approved us from the beginning to the end. The selection of pig’s hoof is wrong, the channel is wrong, the supply chain is wrong, and even the company’s location is wrong… But after the private board meeting, I am very happy, as if I have been connected with the two channels of Ren and Du. Because I know that as long as I know exactly where the problem is and solve it one by one, things will change. In addition to keeping the name of Wang Xiaolan, everything started again.
After 2019, we have done everything right: finding the category of tiger skin and chicken feet is very efficient; Catching up with the live broadcast bonus, Tmall Store opened in April 2019 and broke through 1 million in the first month; Starting to launch, develop and find talent in the station, the company really entered the fast lane. Now, we have redefined the category of tiger skin and chicken feet, and rely on this category to become a growth miracle of domestic FMCG.
In June 2020, I started to build the company’s offline sales system. By the end of last year, we were all the fastest growing offline food companies, not one of them. Many dealers in the industry say that this is a particularly magical transformation.
By June 2022, due to the impact of the epidemic and economic situation, the raw material for chicken claw increased by 50%. We decided to recruit a research and development team and invest in building a factory. If you want to become a company that still exists decades later, you must have your own factory, so that you can continuously optimize efficiency on large items and continuously provide users with safer and more secure products.
（2） First stage reflection: Why is pig’s hoof not good?
First, the dining experience is poor. The entire pig’s hoof is cut in half and vacuum molded, making it particularly inconvenient to eat in places such as offices.
Second, the repurchase rate of products is low. Because the consumption scenario is very limited, many people will not buy it frequently.
Third, the logistics cost is high. I think it is the only person in China who sells pig hooves with SF shipment. The whole logistics cost is very high.
I think, what is a good product? Even if there are a group of loyal fans, is it a good product that can only sell 1 million products a year? For example, a small number of people like a certain kind of fruit very much, and buy it frequently, but most people don’t buy it. I think it may be a business, but it is difficult to make a real business.
Later, our company formed a definition of good products: good products must be re-purchased with large-scale samples, especially in the field of fast consumer goods.
（3） The second stage of reflection: how to find the category of phoenix claw?
How to find the category of chicken feet
How to find the category of chicken feet
Photo source: official account @ Chaos Academy
After a private board meeting, I learned about the power of data. My choice at that time was not to make fresh braised pig’s feet, but to make braised Dim sum. Through observing Tmall’s merchant consultation data, I found that two of the top ten search keywords for braised snacks are related to chicken feet, namely “chicken feet” and “boneless chicken feet.”. At that time, on the bittersweet track, ducks had already surpassed tens of billions, except for chicken snacks and chicken feet, which had no head brand. I think if the search volume of Phoenix Claw is so large, coupled with the power of social media, the development will be very good.
At that time, we returned to the real user perspective, and verified both in the market and through the private domain group established when selling pig’s feet. What surprised me most at that time? The user said that the tiger skin and chicken feet are 10 times better than the original pig feet. Our survey found that the repurchase rate of 100 people reached 99%.
（4） The third stage of reflection: Why should we focus on the category of chicken feet? ‍‍‍
Why should we focus on the category of chicken feet
Why should we focus on the category of chicken feet
Photo source: official account @ Chaos Academy
1. Internal thinking: the story of 100000 preserved meat stocks
There is a cruel story behind the focus on phoenix claw. The anchor we were looking for didn’t like chicken feet, but felt good about the meat jerky. Let’s prepare 100000 yuan.
In my impression, the final product sold for 7000 yuan, and more than 90000 inventory consumed two or three months. I went to ask private domain users, and the feedback was also very general, and said that they would not buy again. So we decided to cut off the dried meat. Since then, we have a mechanism for Shangpin. If the internal private domain evaluation does not exceed 70 points, Wang Xiaohan cannot launch any new products.
2. External inspiration: successful cases of 1 billion items
Many large FMCG companies have been able to cross from the first curve to the second curve because they have incubated two or more 1 billion single products. Such as Coca-Cola, Nongfu Mountain Spring, Qiacha, Weilong, Wangwang, etc. A melon seed can sell for 34 billion yuan.
How many chicken feet does China eat in a year? This figure is amazing, about 20 billion. I think this is a big category. With such a picture in mind, I am very determined to do things. In 2019, I made a rule that Wang Xiaohan could not promote other products, and resolutely focused on tiger skin and chicken feet, and must break through such a snack as tiger skin and chicken feet.
（5） Summary: Focus on tiger skin and phoenix claw and firmly change the track
1. Category thinking: how to find category opportunities?
What you make may not be a category at all. According to Category Strategy, the deepest thing in your mind that can guide you to make decisions is category.
If you only want to buy a pair of shoes, you probably can’t buy them. What do you want? cotton-padded shoes? Leather shoes? But if you say you want to buy a pair of basketball shoes or sports shoes, you can probably buy them back.
Category is the last level of choice for users. Only those that can be bought back are called categories. In our view, braised meat is not a category. We need to dig a deeper layer in braised meat. Chicken feet, pig feet, and dried meat are categories.
2. Category value model: What is the most worthwhile category?
Category is your life. Which category you choose means which path you will take, whether it is flat or bumpy. If you select a category, you and your organization should have the ability to match that category. For example, the value chain of beverages may be better and more mature, and we cannot deny that it is a good category. But do you have the ability to capture this more competitive category?
How to find category opportunities
Looking for category opportunities
We believe that a good category should have three characteristics: low customer acquisition costs, high repeat purchase rates, and moderate and slightly better gross margins.
Low cost of customer acquisition: put chicken feet, pig feet, chicken gizzards, duck neck, and dried meat into the user pool. Which category is the most likely to be selected? Put it in a broader sample, and you will find that people think chicken feet are not very elegant, but in fact everyone is eating them, even Cantonese eat them every day, which is very easy to choose. At this point, I began to think that good categories should speak with data. We must not only think about ourselves, but also about users and markets.
So we don’t encourage innovation? no I refined a logic at that time. A good category is to make micro-innovation in the verified category. For example, chicken feet sell well, but many people are too hard to eat chicken feet. Can you make a Cantonese dish with tiger skin and chicken feet, fried first and then marinated? Our tiger skin and chicken feet are suitable for all ages. It is actually a micro-innovation in a verified category. Another example is Yuanqi Forest. Many consumer goods companies have been verified to make water, but Yuanqi Forest has made zero sugar, which has made a very valuable micro-innovation, which has broken down the value appeal of users for fear of fat when drinking drinks.
High repurchase rate: I think repurchase rate is the lifeblood of consumer goods. I went to the market and a dealer talked to me. He said that you know why Wang Xiaolan has been growing on the shelf because customers are willing to buy again. I feel particularly encouraged. All our new products now need to be monitored for repurchase rate.
According to the logic of P&G, another key of re-purchase is the market share rate of channels. If you can be seen by others in more channels, the probability of repurchase is greater. But I think the most important thing is the product. If another indicator can be used to replace the repurchase rate, I think it is the NPS index, that is, the user’s recommendation rate.
When we start a business, we can define that we have made so many products. Have we carefully touched the underlying business model data? Maybe it is not a good category at all. For example, we think that dried meat is not a good category. The price war of dried meat is very low, it can not make gross profit, and it is difficult to achieve differentiation. Moreover, the re-purchase is not so high, and the cost of customer acquisition is quite high.
3. Behind the category is the underlying understanding of people’s basic needs
A peer communicated with me, what is a good snack like? There must be a sense of mindfulness in operation. To eat crayfish, you need to concentrate on peeling it. It’s not much meat. You have to pick it out seriously. I like to eat melon seeds myself, but if I eat melon seeds directly, I will feel happy in half.
We are not particularly good at boneless chicken feet, because I have a little obsession, and I think chicken feet need to be operated. The sense of mindfulness in operation can bring some happiness. Snacks have no functional significance in essence. Its core is to make people happy.
Behind the category is the underlying understanding of people’s basic needs
Behind the category is the underlying understanding of people’s basic needs
Photo source: official account @ Chaos Academy
Now we are also doing more taste experiments, similar to spicy and sweet, which make more people feel very cool. The sects of Chinese marinated food include Sichuan marinated food, Chaoshan marinated food and northern soy sauce marinated food. Can we make this kind of limited product? All these have the opportunity to improve its repurchase.
Phoenix claw avoids duck giants. Everyone values Duck Neck very much. There are three listed companies in one duck neck. But I think there is still a great demand for chicken feet, especially for prepackaged chicken feet. A large number of chicken feet are actually consumed by catering channels, not in prepackaged chicken feet. The advantage of pre-packaging is convenience. It brings more eating scenes, so our repurchase rate is higher.
（6） What is one: What is the unique value provided by Wang Xiaolan to users?
I think it is the way of taste. Professor Li Shanyou helped me refine it in the Chaos Academy. I want to frame these four words and put them in the office. It has many implications, but the value that is finally reduced is taste.
First, for me, what I provide to users is food, but the ultimate solution is spiritual needs, which is to bring happiness and pleasure to the people, so I think this is based on taste.
Second, I have been studying food since I was young. Doing food entrepreneurship is also my way. I like to do it. It is also a kind of self experience and improvement.
Finally, we want to become an interesting brand that delivers happiness to people. Is there anything more important in life than happiness? Snack companies are nothing special, but if they bring happiness, they are valuable.
2、 Breakthrough What: How to Find Category Focus
(1) What is the category focus?
A consumer goods company has three battlefields: products, brands, and channels. We have held internal strategy meetings and have been talking about becoming an expert brand.
Product expert: We should be the company with the most complete flavor of tiger skin and chicken feet on the market, and we have the most research and energy on this matter. Many people came to copy us, but last year, as the raw material for chicken claw increased, many competitors withdrew. It has no belief in becoming an expert.
Brand expert: What channels should Phoenix Claw invest in its brand? We trace the origin of users and find that 70% and 80% of users follow dramas and eat chicken feet. So we publicized in last year’s hit dramas such as “The Chinese Dream,” “The Gate to Rebirth,” and “To the Wind,” and everyone remembered Wang Xiaolan. This is one of the scenarios we discovered through user research.
Channel expert: We have the highest market share rate and may be the most professional company in selling chicken feet. I often ask the offline person in charge, what is the word you recommend to the user when he comes to the shelf? What is the most efficient advertising language? This is a very valuable thing that needs to be refined. You should become a channel expert and sales expert, and make yourself the most professional person in selling chicken feet.
To become an expert brand, we must first become a product expert; The second is to become a brand expert in the field of phoenix claw who occupies the user’s mind; Third, we should become the most efficient channel expert with the largest number of outlets. This is our current definition of three battlefields.
（2） How to break through?
We still need to manage the company based on data. We put products