“Design in China”​ e06 -Xiaoxiandun 小仙炖 – Fastest-Growing Bird’s Nest Brand in China

This series of articles named “Design in China” will provide a snapshot of new DTC Chinese brands. I’ll review emerging brands in China and outside of China. But all these brands are designed and created from China.

What does going Direct-to-consumer (DTC) mean? Selling direct-to-consumer, commonly referred to as DTC or D2C, means you’re selling your products directly to your end customers. Sellers bypass any third-party retailers, wholesalers, or any other type of middlemen to deliver their products.

Recognizable examples of DTC brands include Casper, Warby Parker, and Dollar Shave Club. However, there are now thousands of sellers undertaking this unique approach. These DTC brands are leveraging mobile and digital channels that are bypassing traditional sales models.

DTC brands are usually sold exclusively online or specialize in a specific product category. However, top growing brands are expanding to other channels like their own storefront or exclusive partnerships with other retailers.

Branding over Sales Performance

China consumption has evolved already. Many start-ups from mainland China experienced new way of purchasing clothes but also electronic accessories and food for years. They’ve already generated high volume of online sales and are now developing more sophisiticated and creative product and online ad campaign to elevate their brand. From a strong product positioning they are creating strong brand to retain existing users and attract new consumers. I’ll comment on the one I found interesting and worth sharing with followers here. #ChineseCulturalConfidence

These brands understand why brands are so important? #为什么要做品牌

“The most important thing really, is this notion that the consumer has changed, and really a lot of retailers are way, way, way behind the curve,” said Paula Rosenblum, co-founder of retail advisory firm RSR Research – source CrunchBase

Xiaoxiandun – Fastest-Growing Bird’s Nest Brand in China

While most startups focus on creating something new, some look back to the past. The Chinese company Xiaoxiandun makes freshly stewed bird’s nest, a staple of traditional Chinese medicine. It’s the company’s sole product, launched in 2014, and has seen tremendous growth. Today, it’s the best-selling bird’s nest brand in China, where the ancient concept of health and beauty snacking is making a comeback. Founded by Lin Xiaoxian, the company took the consumer-to-manufacturer (C2M) model by providing fresh products to customers directly. It eliminated layers of logistics that add delay from the time the product is made and the time the consumer uses it.

Since its inception, Xiaoxiandun has seen remarkable growth, thanks partly to large funding rounds from local investors. After initial investments from Hongtai Fund, it raised Series A funding from Zhou Hongyi, the founder of 360. Perhaps the most famous investor behind the company is actress Chen Shu, who went from being a customer to a financial backer for this woman-led business. Of course, much of the credit goes to the quality of the product as well, which doesn’t use many additives but water and rock sugar. The founder managed to allocate freshly stewed bird’s nests a category on its own, separate from bird’s nest products, making it stand out from the rest of the products in the market. The company uses specialty machines to stew bird’s nest, which is essentially crafted from bird saliva and provides various health benefits.

Lin Xiaoxian has tapped into a section of the health and beauty market that has only local competitors. Coming from a family with a history in Chinese medicine, she applied her knowledge in creating a product of high quality. The freshly stewed bird’s nest is sourced from traceable origins in China and other countries like Malaysia and Indonesia. Furthermore, the products undergo extensive testing to ensure quality, which the existing products on the shelves lack.

But what makes Xiaoxiandun highly successful is bringing bird’s nest to a new market segment, the Millenials, and to some extent, even Gen Z. Beauty snacking may be an ancient Chinese practice, it’s experiencing a renaissance with new and improved products. Xiaoxiandun even collaborated with an ice cream company, Chicecream, to create a popsicle filled with bird’s nest. It’s bringing a product that’s historically been used by the elderly to the country’s young population with more buying power and an active interest in health and wellness.

Xiaoxiandun’s journey to the top has many lessons. First and foremost, it shows the massive potential in recreating traditional Chinese products that are exclusive to the country. Secondly, it shows how investing in a product’s quality can set it apart. Lastly, it’s evidence of how social media and friendly celebrity/influencer faces can make traditional products attractive to the young generation.