山西老板闯进大山“二次创业” 复购60% 登上品类第一

This article tells the entrepreneurial story of Shi Xujun, a Shanxi-based entrepreneur, who launched the domestic hair care brand Changfa Xiaozhai on his second startup. Leveraging the traditional fermented rice water recipe from Guangxi’s famous "Long Hair Village", the brand has grown to become the top player in its category. Key takeaways are as follows:

1. Core product logic: The brand uncovered the secret behind the long hair of Hongyao ethnic women, finding that peptides and trace elements from traditional fermented rice water nourish the scalp microbiome. It replaces pure water in the formula with 60%-70% high-concentration fermentation liquid, centered on the core concept of scalp nourishment.

2. Growth achievements: The brand’s annual revenue has exceeded 1 billion RMB. It has sold more than 1 million units through a single Douyin product link, once topped Tmall’s scalp care store ranking, boasts a 60% repeat purchase rate, and achieved over 200% year-on-year sales growth on Tmall. It plans to scale in-house livestreaming and celebrity endorsement to upgrade its brand image next.

3. Actionable insights for entrepreneurs: Unlike most new brands that prioritize heavy marketing spending upfront, Changfa Xiaozhai focused first on ingredient research and built an experience center for offline product validation before entering e-commerce. It built high repeat purchase through product strength, making its approach a valuable reference for founders aiming to build long-term brands.

This article shares the differentiated success path of new domestic hair care brand Changfa Xiaozhai, with key insights for brand owners organized below:

1. Consumer trends: Hair care is now the fastest-growing category in China’s cosmetics market. Demand for anti-hair loss and scalp care is outpacing growth of traditional oil control and anti-dandruff segments. Average consumer spending per purchase has risen 60% year-on-year, and shoppers are actively shifting to combined "cleansing + conditioning + nourishment" routines. They now prioritize ingredients and craftsmanship, and demand for natural, traditional hair care methods is rising rapidly.

2. Product R&D: Building a long-standing domestic brand requires centering product strength first. Brands can tap into the hair care principles of local intangible cultural heritage, and translate these into commercial products with modern technology. Like Changfa Xiaozhai, which invested heavily in production lines, it now has an annual capacity of 30,000 tons of naturally fermented products, enough to meet demand for high-concentration fermented goods.

3. Brand building: Brands can adopt the "intangible cultural heritage + technology + cultural tourism" integrated development path. They can first validate product experience through offline cultural tourism scenarios, then expand to online channels, and build user trust through product strength. This approach allowed Changfa Xiaozhai to hit a 60% repeat purchase rate – far above industry average – and carve out a differentiated position distinct from traffic-driven new brands.

This article sorts out current growth opportunities, replicable strategies and risk warnings for sellers in the hair care track, with key takeaways as follows:

1. Industry opportunities: China’s hair care market continues to grow, hitting 55.9 billion RMB in sales in 2023 and projected to exceed 70 billion RMB by 2026. Scalp care is a fast-growing high-growth segment. As consumers grow tired of chemical hair care and increasingly embrace traditional nourishing methods, domestic brands have enormous opportunities for domestic substitution of international brands.

2. Replicable strategies: Changfa Xiaozhai’s approach prioritizes upfront investment in R&D, infrastructure and offline experience validation, then builds online momentum through product strength, resulting in a rare 60% repeat purchase rate in the hair care industry. This model is more suitable for building long-term brands than going all-in on traffic投放 upfront.

3. Opportunity and risk notes: Taobao is a core search channel for consumers seeking upgraded hair care solutions. Focusing on in-store livestreaming and celebrity endorsement can effectively boost brand search volume and drive growth. However, the asset-heavy approach carries the risk of cash depletion in the early stage, so sellers need to make sound financial plans and reserve working capital in advance.

This article sorts out shifting production demand, new business opportunities and insights for brand transformation for factory operators in the hair care industry, with key takeaways as follows:

1. Shifting production demand: Today’s consumers are increasingly focused on scalp care, and have significantly higher requirements for ingredient concentration and craftsmanship for fermented nourishment products. Changfa Xiaozhai replaces pure water in formulations with 60%-70% high-concentration fermentation liquid. High-density fermentation requires much stricter standards for production environment, strain activity and production equipment than traditional products, and the industry now sees widespread demand for large-scale, high-standard fermentation production capacity.

2. Business opportunities: Domestic hair care brands are rising rapidly, and more new brands are pursuing differentiation centered on intangible cultural heritage, natural ingredients and cultural roots. Demand for production capacity dedicated to characteristic raw material fermentation will keep growing. Factories that lay out high-end fermentation capacity in advance will win more collaboration opportunities with high-quality brands.

3. Insights for transformation: For factories looking to expand downstream to launch their own brands, they can learn from Changfa Xiaozhai’s path: first build solid product strength leveraging characteristic local resources, validate product experience through offline scenarios before entering e-commerce, avoid the trap of chasing growth via upfront traffic spending, and achieve long-term development through high repeat purchases driven by product strength.

This article sorts out current development trends of the hair care industry and pain points for brands, with key insights for relevant service providers as follows:

1. Industry development trends: The hair care industry is currently undergoing structural upgrading. Consumer demand is shifting from basic cleansing to scalp nourishment, and average order value is rising continuously. Domestic brands are rising rapidly, and the growth logic for new brands has shifted from early traffic-driven models to product strength + culture-driven models, with less focus on short-term traffic growth alone.

2. Key client pain points: The traditional playbook for new consumer brands concentrates budget on traffic投放 and neglects product development, leaving brands without technical barriers and leading to generally low industry repeat purchase rates. The high-end market has long been dominated by international brands, and most new domestic brands struggle to find a differentiated path to break through.

3. Solutions and opportunities: Service providers can develop new services tailored to the differentiated needs of new brands, such as connecting brands with local intangible cultural heritage resources and building validation scenarios for "cultural tourism + experience". They can also upgrade supply chain production services to meet demand for high-concentration fermentation, helping brands solve core capacity issues and capture the dividends of domestic brand upgrading.

This article introduces the development needs and industry changes of new hair care brands, with key insights for platform merchant acquisition and operation as follows:

1. Brand demand sorting: Brands at different development stages have different needs across platforms. Content e-commerce is suitable for new brands to drive initial volume growth, while search-based platforms like Tmall make it easier to reach consumers seeking upgraded hair care solutions. When brands enter the growth stage, they generally need platform support for in-store livestreaming, brand promotion and other activities to increase brand search exposure.

2. Merchant acquisition opportunities: The hair care industry is currently in an upgrading phase, with fast growth in niche segments such as scalp care and strong momentum for the rise of new domestic brands. Brands like Changfa Xiaozhai, which achieve a 60% high repeat purchase rate through product strength, are high-quality acquisition targets that can bring long-term, stable growth to platforms.

3. Operation management insights: Platforms can provide targeted support for new domestic brands that focus on product strength and integrate cultural IP. Unlike short-lived traffic-driven brands, these brands can deliver long-term transaction volume for platforms. Platforms can also create segmented category rankings to give more exposure to high-quality differentiated new brands and capture the dividend of hair care industry upgrading.

This article presents new trends in China’s current hair care industry and the new business model behind the rise of domestic brands, offering a typical case for industrial research with key insights as follows:

1. New industrial trends: China’s hair care market has now entered a phase of structural upgrading. Consumer decision-making has shifted from price- and brand-oriented to ingredient-, efficacy- and cultural value-oriented. Demand for basic hair care has saturated, while niche demand such as scalp nourishment is growing rapidly. International brands still dominate the high-end market, and domestic brands are seeking breakthroughs through different differentiated paths, which have formed three main routes: technology-focused, big single-product focused, and culture-integrated.

2. Summary of the new business model: Changfa Xiaozhai has created a new "intangible cultural heritage + technology + cultural tourism" integrated business model, adopting an asset-heavy approach to fast-moving consumer goods. It invests first in R&D, infrastructure, cultural education and offline experience validation, then builds online momentum, breaking the conventional new consumer brand playbook of chasing growth via upfront traffic spending.

3. Research implications: The core of domestic substitution for international brands is not a technical issue, but a substitution of cognition and culture. Changfa Xiaozhai’s exploration proves that a approach rooted in local culture and focused on building solid product strength first is a viable new path for domestic brands to break the monopoly of international brands, and it deserves further in-depth research.