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How do Chinese brands carry out "package attacks"
War is brutal, and commercial warfare is even more ruthless. Although there are no actual battles, bloodshed, or sacrifices in business competition, the struggle between brands can be just as intense. When a brand faces attacks from competitors, it risks stagnation or even decline.
The "package attack" strategy is primarily aimed at brands that are not positioned as the "Boss Brand" or the "Second Brand" within a category. These brands are typically those that follow or imitate the market leaders. In any given category, long-term competition often narrows down to two dominant players, and the rest are left struggling for visibility.
The best focus of a package attack is to explore new categories, challenge the "Boss Brand" and "Second Brand" with innovative tactics, and then shape a new market landscape with fresh products. The core principle behind this approach lies in identifying and subdividing emerging markets, differentiating categories, and creating fertile ground for new brands to thrive. Many companies lack the opportunity to grow in saturated markets, where competitors are too strong to compete against effectively.
In fact, the more mature a market becomes, the greater the potential for niche opportunities. A well-established category can actually provide more chances for new brands to emerge through strategic differentiation. The key is whether a company can identify and carve out these new subcategories.
Take the Guangdong rice wine market, for example. With over a thousand brands competing, it's a fiercely competitive space. Yet, one brand—Red Rice Wine—managed to rise by tapping into new categories and redefining market segments. It became one of the "Guangdong Three Musketeers."
Guangdong rice wine belongs to the musk-type liquor category. The leading brand is Jiujiang Double Steamed Wine, with over 200 years of history, while Yu Bing represents the second-tier brand. Red Rice Wine, however, stood out by focusing on the unique properties of its ingredients—specifically, using red rice, which holds high value among older generations in Guangdong. By creating a new subcategory around red rice wine, it was able to target and challenge the existing market leaders. Today, Hongyi brand dominates much of the Guangdong market.
Mining new categories and segmenting markets is an opportunity for new brands to reshape the industry. Even powerful second-place brands may struggle to adapt to new trends.
The second principle of a package attack involves leveraging the appeal of a specific category, not just creating a new one. The success of a new category depends on how it resonates with consumers' minds. Without consumer recognition, even the most innovative idea will fail.
In practice, the package attack is often executed through tactical moves, and the appeal of the category serves as a sharp tool. For instance, the Grain Dojo brand challenged the instant noodle giants like Master Kong and Unification by introducing a non-fried category. Initially, the established brands were caught off guard and couldn’t respond effectively.
A true new category must align with consumer perceptions. If it doesn’t, the effort is wasted. When a new category emerges, it naturally attracts attention and creates a gap that can be exploited.
After the SARS outbreak, public awareness of health and hygiene increased. This led to the development of chlorine-free disinfectants, which attacked the traditional disinfectant market by offering a more pleasant alternative. This shift created a new market dynamic, separating chlorine-based and chlorine-free products.
The third principle of the attack is building a strategic front line. Many brands succeed in their initial attack but fail to sustain their position. The Grain Dojo case is a good example—without a solid financial foundation or strategic planning, it eventually fell to COFCO.
Wang Laoji, on the other hand, used a smart approach. After launching a campaign focused on "fire prevention," it faced counterattacks from Coca-Cola and Pepsi. Instead of fighting directly, it built a strategic defense line, concentrating on specific channels and regions first. This allowed it to maintain its position despite strong competition.
Many Chinese companies are influenced by Sun Tzu’s "Art of War," favoring indirect strategies. However, they often overlook the importance of building a real strategic defense. Unlike war, where victory brings peace, business competition is continuous. Competitors are always present.
Many Chinese firms see strategy as complex and difficult to implement. But in reality, strategy is simple: focus your resources on your strongest advantage.
Steps to launch a package attack:
1. Identify a new category by either uncovering flaws in the existing market or finding untapped gaps in consumer needs.
2. Focus on the appealing characteristics of the category to break through consumer perception barriers.
3. Build a strategic defense line to protect your position and prevent competitors from retaliating.
4. Adjust your competition strategy once you become a leader in the new category, maintaining stability and guiding the market forward.
A successful package attack isn't just about attacking—it's about creating, defending, and evolving. Just as military generals are remembered for bold strategies, brands can establish themselves through clever and effective attacks.