Will white labels
replace brands one day？

Renee Zhang
Title

“Brands” are one of the most important factors influencing purchase decisions, as indicated by consumer testing results across nearly all categories. Over the past two years, declining consumer confidence in China has posed significant growth challenges for major brands.  In contrast, “white labels” — small manufacturers that produce unbranded goods — has defied the trend and reaped substantial profits.

Are consumers lying? We: “Why brands?” Consumers: “Because no other option offers same level of functionality, experience, or philosophy.” We: “Why white labels? ” Consumers: “Because the unbranded products are almost as good as the branded ones, yet only for a third of the price.” When there is little difference in product quality and functionality, 57.2% of the Chinese consumers prefer affordable alternatives. White label’s intensely focus on achieving swift profits through traffic on livestreaming platforms by competing in product quantities, livestream duration, and offering the “lowest price across the internet”. In contrast, brands strive to build recognition and connection at every consumer touchpoint: identifying consumers’ true needs, offering differentiated value at reasonable prices, and building trust through long-term commitment.

Consumers aren’t lying. Brands still matter in their purchase decisions, but the way they perceive brands has evolved. They no longer blindly trust brand labels or pay extra for products when affordable alternatives are available. Instead, they are willing to spend more on differentiated value — whether it’s cutting-edge driving technology, visible skincare efficacy, a uniquely crispy texture, or an irreplaceable sense of happiness. This is how today’s Chinese consumers define a Brand.

Take Coca-Cola as an example. Its differentiated value is no longer solely tied to its secret recipe but to a promise: “No matter how the world changes, your happiness is always my priority.” Coca-Cola brings “happiness” to life by transforming it into a tangible experience through its name, iconic red color, ribbon logo, music, stories, and new flavors — allowing consumers to see, hear, taste, and continually feel it. The value of brand differentiation stems from the brand’s intent, which incorporates a vision that goes beyond mere profits, embodies an innovative spirit to redefine categories, and demonstrates the resilience to navigate economic cycles with confidence.

Amid fierce competition, brands must continually innovate to align with their intent—for better, be better, and achieve better. White labels rise and fade, but their first step toward transitioning from short-term victory to long-term success is to define their brand intent and prepare for a protracted game. In the business world, there’s never a lack of opportunistic winners — but enduring legends remain rare. We believe white labels won’t replace brands, but they can evolve into brands. And real brands? They have no affordable substitutes.

Sources：
1. 2024McKinSey&Company China Brief: The Truth About Chinese Consumption
2. CBNDATA 2024 New Health Consumption Lifestyle Trends Report