Vol.50 Can a Cost-plus-RMB10 Strategy Unlock the Supplements Industry? — A Conversation with 朱萧木
Summary
Nutrition Factory’s core bet is to rewrite a supplements pricing structure built on high gross margins and heavy channel fees with “fully loaded cost + RMB10 per month.” Each product discloses its costs, tariffs, freight and testing records—not so-called black technology, but what 朱萧木 calls “price transparency”: if the way money is made is laid bare, users are more likely to believe the ingredients and accountability chain are transparent too.
NMN crowdfunding delivered the earliest PMF: the factory would only start production after 10,000 bottles were committed, and one post from 凯文 filled the order in a day. The team calculated fully loaded monthly costs at just over RMB70, versus market prices ranging from RMB600 to several thousand or even over RMB10,000—“the price felt a little insane.” It then crowdfunded one new product a week, quickly expanding to more than 30 SKUs.
The industry’s price gaps are not limited to NMN; fish oil replicates the same logic in a mass-market category. Nutrition Factory’s rTG fish oil tested at 99.1% purity by IFOS and sells for RMB69, while 朱萧木 says fish oil at that quality typically sells for RMB200–400. At the other end, traffic acquisition takes roughly 40% and主播 commissions around 30%—“70% is gone”—leaving brands to raise prices or cut product costs.
The low-price model has produced rare organic-growth signals, but has yet to be tested through large-scale paid acquisition. Promotional spending is below 5% of GMV, while roughly 30% of sales come from user-initiated referrals. 朱萧木 also says repeat purchases and same-day repeat purchases are not low, though he has not separated the relationship between referrals and repurchases; overall, the business is “growing steadily without losing volume.” The constraint is that current profits cannot support Douyin-, Tmall- or JD.com-style buying, and the model would change once paid traffic became the primary channel.
The failure of Age-Defying Coffee showed that category recognition matters more than product novelty. The coffee used coating technology to pack more than a dozen dietary supplements into each serving, and the taste was handled well, but even access to 交个朋友’s resources could not eliminate the need for sustained customer education. 朱萧木 judged that building a new category might require tens of millions of yuan and six months of promotion with no certainty of success, so the team shifted to supplements that required no category education. Once the coffee was placed in the supplements assortment, it sold better than before.
The supply-side strategy is overseas compliant manufacturing, mature single-ingredient products and batch-by-batch testing—not chasing the frontier. 朱萧木 says some research uses dosages above China’s domestic production limits, so the team introduced overseas factory products through cross-border channels. Selection is driven mainly by directions validated in academic papers and by major brands, covering NMN, fish oil, CoQ10, AKG and Urolithin A, among others; the single-ingredient market totals roughly 30–50 SKUs.
The growth options for 2025 are overseas expansion and AI health recommendations, but 朱萧木 is deliberately avoiding a hard growth plan. The team currently numbers only in the teens. Its AI concept combines supplements, exercise, diet, sleep and mood into a single recommendation engine. 朱萧木 is more concerned about the hiring pressure and peer hostility that would come with “selling too well,” so he is holding off on Tmall and JD.com and focusing first on proving the model—his shift from the rush of the e-cigarette era to “doing the small businesses and small trades we can actually handle.”
Deep dive
1. Becoming No. 1 was not a choice; capital put 朱萧木 in the driver’s seat
朱萧木 says he had long played the “strategist and support” role, with no ambition to become the person in charge. In his view, China’s education system is better at producing people who work methodically than entrepreneurs, while entrepreneurship is “very unknown and terrifying.” Around 2017–2018, he was already in his 30s—“old enough,” as he put it, but psychologically nowhere near ready.
Smartisan Technology ultimately “didn’t work commercially,” but it left behind a group of talent that capital still valued. The standard path for the previous cycle of hot money was for the US to validate a model first, after which Chinese investors would fund hundreds of companies to burn cash collectively until the winner took all. E-cigarettes happened to be a sector that had just begun developing in the US and caught Chinese investors’ attention.
Investors wanted someone who had built hardware, understood products and could market them. 朱萧木 checked almost every box. “The investors said I could do it, so I must have been able to… Then I started hallucinating too.” Several institutions assembled the team and funding, and he was pushed into his first startup.
The e-cigarette team peaked at more than 500 people, including channel sales and ground promotion, and launched Flow, a product that sold well. The cash burn was “spectacular.” But the project ultimately could not continue for “the reasons everyone knows.” His postmortem was not to blame competition alone, but to acknowledge that startup outcomes are always shaped by too many variables.
2. Livestreaming turned “Isn’t this just a scam?” into a second career
The e-cigarette startup and the livestreaming project briefly ran in parallel. During the pandemic, 李佳琦 and 薇娅 had already emerged, while Douyin was preparing to build out livestreaming. 朱萧木 says 罗永浩 mainly wanted to do livestreaming at the time, largely to repay debt, and that Douyin was not the only platform approaching him.
朱萧木 had only seen fragments of livestreams. His first reaction was, “Isn’t this just a scam?” and he was deeply biased against livestream commerce. What changed his mind was 罗永浩 asking, “萧木, do you want to join me in overturning this industry?” They imagined turning livestreams into product launches: explain other people’s products seriously while keeping brands, consumers and主播s satisfied.
Although he had appeared at Smartisan launches, he still got nervous and stumbled over his words. The first livestream needed someone to play off 罗永浩, keep the conversation moving and share the content load, making 朱萧木 the natural choice. He admits that talking about his own products was entirely different from selling outside products; only after going live did he discover he might have a talent for it, and he gradually came to enjoy livestreaming.
Douyin provided unusually heavy support, including splash-screen placements. 朱萧木 qualifies this as something he “heard”: after the stream started, users were almost certain to enter the room. The peak he personally witnessed was 3.3 million concurrent viewers, while unique viewers “may have exceeded 100 million.” He says no e-commerce livestream had broken that record, aside from the possibility that entertainment livestreams later did.
3. Livestreaming became an invisible asset for low-cost customer acquisition
Massive exposure meant 朱萧木 was recognized on the street, but often as “someone people had seen without knowing his name.” Some could not even distinguish which of the 2主播s was 罗永浩. He later realized he might genuinely have a talent for livestreaming, and enjoyed the classic middle-aged-male style of “teaching people and expressing opinions”—“This is why this is so good; follow me and buy it.”
He now mainly covers liquor and tea, while also livestreaming full-category products with 罗永浩 on the main account, which has roughly 20 million followers. He can explain 3C products, appliances and beauty devices; women’s apparel is clearly not a fit. 交个朋友’s matrix is still mainly female, while 罗永浩’s early male-heavy audience represented a scarce entry point into the market.
Peak baijiu seasons include the New Year shopping festival, Singles’ Day and 618. 朱萧木 may stream 4 times a week during peak periods and roughly 2–3 times otherwise. He says that when he goes live, he is “either No. 1 or No. 2” among Douyin’s baijiu livestreams. That IP and conversion experience later gave Nutrition Factory the foundation to launch without massive buying.
4. Age-Defying Coffee proved that even a good product can die on education costs
Age-Defying Coffee originated with 凯文, who had invested in many biotech companies and wanted his mother to take nutritional supplements. She refused, so he secretly broke them up and mixed them into coffee. The team then realized it could use coating technology and other methods to put more than a dozen dietary supplements into coffee while preserving a good taste.
朱萧木 stresses that they never viewed it as a competitor to ordinary coffee powder or freeze-dried coffee. The actual proposition was, “Take your supplements while drinking coffee.” After the e-cigarette business ended, he still wanted to build a brand and was dissatisfied with selling other people’s products indefinitely, so he and 凯文 quickly aligned.
His conclusion was blunt: “The assessment is definitely a failure.” Even with 交个朋友’s sales resources, users first had to understand the new category. Building it through market education might require tens of millions of yuan and 6 straight months of promotion, with no certainty even after that. It was not a model the team was willing to bet on at the time.
After shifting to more than 30 supplement SKUs, the team added the coffee to the assortment, where it sold better than before. 朱萧木 does not attribute this to a fundamental change in the coffee formula; the improvement simply showed what the business shift did for the product.
5. One social-media post delivered the cheapest possible PMF test
The lesson from coffee was to start with products consumers already understood, then look for the most extreme pricing contradiction. The team chose NMN, a supplement they had taken for years whose market price was exceptionally high. 朱萧木 says NMN initially cost more than RMB10,000 per month.
After surveying factories, the team found that fully loaded monthly costs—including the product, tariffs and freight—came to just over RMB70. The factory did not sell to individuals and could not produce only 1 or 2 bottles, so 凯文 proposed: “Let’s pool our orders. Once we reach 10,000 bottles, we’ll start production.”
The test began with a social-media post. There was no sophisticated sales system or paid promotion; after the message was forwarded through groups, the 10,000-bottle order filled in a day. 朱萧木 saw it as the earliest PMF: users trusted the 2 founders, then saw the huge price gap and only needed to ask, “Are you credible? Have you lost your minds?” No explanation of the category itself was required.
The team then tested other supplements and found that extreme markups were not unique to NMN; only the degree of excess varied. The project evolved from a single crowdfunding product into Nutrition Factory, which began crowdfunding 1 new product a week and steadily expanding its assortment.
6. Part of the high price of supplements comes from channel economics
朱萧木 does not classify every expensive brand as deliberately exploitative. His channel math is straightforward: Douyin buying may take roughly 40% first, followed by around 30% in主播 commissions. About 70% of sales is already gone before the brand pays for its team and products, leaving “either cutting corners or setting an extremely high average order value—there is no third option.”
Fish oil is the clearest horizontal example. Nutrition Factory uses the rTG structure, sends the product to IFOS for testing, and highlights Peruvian small fish, deep-sea fish and IFOS 5-star certification. 朱萧木 says fish oil at this level typically sells for RMB200–400 per month. Nutrition Factory charges RMB69—without NMN’s “2 missing zeroes,” but still several times lower.
He also tells a production-line story: in a batch of 1 million capsules, another老板 took the first 800,000 and split them across 4 brands priced at RMB600, RMB2,000, RMB5,000 and RMB20,000 per month. Nutrition Factory took the remaining 200,000. According to him, the 4 products were “exactly the same.” The RMB20,000 product sold best because some affluent users assume that “something that expensive can’t possibly be worse.”
7. “Cost plus RMB10” turned single-product testing into a platform
The model contains no supply-chain black technology and does not even qualify as deep integration. “That’s simply the price out of the factory.” The team itemizes every cost and charges RMB10 per month for service. 朱萧木 says the real difference is the “playbook”—deliberately giving up the gross-margin room conventional brands rely on.
Nutrition Factory already has more than 30 SKUs. Adding another 5–10 would cover most mainstream single ingredients. The total single-ingredient market is roughly 30–50 SKUs, while the supplements industry may add only 1 or 2 products a year; it is not a consumer category that needs infinite new launches.
The assortment runs from familiar mass-market products such as fish oil, CoQ10, liver-support supplements, vitamins and active B vitamins to more cutting-edge ingredients such as AKG and Urolithin A. 朱萧木 does not want to “randomly mix everything together,” nor does he chase the newest concepts. The team mainly follows mature research and products already launched by major brands.
WeChat stores currently cannot normally list standard supplements. Gift boxes can only be listed by using a medicine box as the entry point, while coffee can be sold directly. 朱萧木 sees Tencent’s conservatism as a channel constraint but accepts the fairness of “if you can’t do it, nobody else can either.” The real home market remains Nutrition Factory’s own mini-program.
8. Overseas manufacturing solves dosage constraints, not “fake foreign” packaging
The team chose overseas factories not to disguise itself as a foreign brand. “Everyone knows this is made by us,” 朱萧木 says; there is no need to “pretend to be some fake foreigner.”
His explanation is that China imposes tighter production-dose limits on certain ingredients, while the clinical, human and animal studies the team reviewed used higher doses. He believes doses that are too low are “basically useless,” leaving overseas manufacturing as the only option.
Cross-border commerce rules then allow these overseas products to enter China legally, connecting the dosage and distribution sides. This is a supply-side prerequisite for Nutrition Factory, but the team still relies mainly on academic papers and relatively mature products from major brands rather than chasing unvalidated frontier ingredients.
9. Transparency was designed as a substitute for brand trust
Every product page breaks out product costs, tariffs and freight, then clearly states the RMB10 monthly service fee. 朱萧木 does not hide the profit motive. He wants users to understand, “I’m telling you openly that I make money, but it’s only RMB10,” removing the fear of being harvested through the pricing itself.
The team also discloses factory qualifications and requires factories to conduct their own tests, commission third-party testing, and then have the team commission a fourth party for batch-by-batch rechecks. The reports are not blurry thumbnails on an e-commerce page; they are complete, downloadable documents that can be reviewed page by page, covering ingredient levels, heavy metals, bacterial counts and other indicators.
朱萧木 compares the presentation to a smartphone launch: “List every parameter for you, one after another, then list exactly how each one was tested.” Internet-product-style disclosure became the team’s most direct weapon for entering the traditional supplements industry.
Low prices themselves can create a first impression of “unreliable, like fake medicine.” Transparency is therefore not an extra selling point but a condition for the model to work. His view is that once prices are transparent, users are more likely to believe the brand’s ingredients, testing and accountability may be transparent too—that it is not simply there to harvest them.
10. The core user is clear; category penetration is still early
Current users are mainly people over 30 in first- and second-tier cities, split roughly 50/50 between men and women. The profile fits the early reach through social feeds and podcasts: they can quickly assess fish-oil purity, rTG and testing certifications. The team currently lacks the capacity to reach lower-tier markets.
朱萧木 believes dietary supplements are not a fad that cycles every 2 years, but a long-term trend driven by income, scientific understanding and health awareness. While studying abroad, he saw Americans carrying pill organizers and only later understood that many of the pills were not medicines but everyday dietary supplements.
His macro narrative is that over the 200 years from 1824 to 2024, human life expectancy rose from roughly 40 to roughly 80 years, supported by public healthcare, nutrition and supplements. “Believing in science is the right thing to do” is also why he sees continued room for penetration in China.
He summarizes demand for NMN as “asking heaven for more time.” People in gaming, venture capital and Web3 cannot buy a 25th hour in the day; they can only seek more years of high energy. 朱萧木 says he and people around him found NMN genuinely useful, while stressing that Chinese factories have driven down raw-material costs over 10 years even as retail prices remain anchored to their old paths.
11. Growth comes from repurchases and word of mouth, not buying
Nutrition Factory has kept promotional spending below 5% of GMV while continuing to grow without “losing volume.” In a market heavily dependent on Douyin and Xiaohongshu seeding, 朱萧木 treats the ratio as an efficiency metric: every yuan of user spending is being reallocated among the product, the channel and paid promotion.
Roughly 30% of sales comes from user-initiated referrals. 朱萧木 also says both the repeat-purchase rate and same-day repeat-purchase rate are not low: some users place a first order, think about it, then return the same day to buy other SKUs. He has not further separated the sales contribution of referrals from repurchases.
庄明浩 notes that Nutrition Factory appears frequently on business, technology and even specialist healthcare programs, and believes that accepting this kind of exposure requires substantial confidence. 朱萧木 says strict testing, sufficient dosages, good inputs and low prices give him the confidence to discuss the business on podcasts.
The model cannot currently absorb conventional performance advertising. If the company aggressively bought Douyin traffic and paid high commissions to influencers, the existing average order value would inevitably stop working. “No paid promotion” is therefore both an efficiency achievement and a scale constraint; it does not yet prove the model can be replicated frictionlessly across every channel.
12. 凯文 turned long-termism from a slogan into a gross-margin constraint
庄明浩 provides the background: 凯文’s gaming company received investment from Matrix Partners as early as 2009 and had submitted A-share listing materials by 2014. According to the 2024 ranking he found, the company was No. 24 among Chinese mobile-game publishers globally, next to No. 25 XD and ahead of No. 29 Zhaoxi Guangnian and No. 30 Jingji Shijie.
The company was already profitable when it took the investment, and “never touched a cent” of Matrix’s money. The relevant fund was also evergreen. 朱萧木 adds that 孙正义 once wanted to invest but was turned down by 凯文. 庄明浩 believes this meant the investor and entrepreneur did not need to obsess over short-term conventional returns, giving 凯文 room to turn his personal interest in biotech, anti-aging and health into a new project.
Their relationship spans the Smartisan and e-cigarette periods. 凯文 invested in Smartisan as well as 朱萧木’s e-cigarette startup. 朱萧木 describes him as “completely unworldly”: he would suddenly propose ideas that were extremely difficult to execute, while using “inhumanly demanding” first principles to force the team to keep its commitments.
凯文’s repeated question was not how much more gross margin they could add, but “Can we make users feel moved?” 朱萧木 admits every entrepreneur knows user satisfaction is an axiom, but operations gradually drift away from it. The role of a partner is to keep pulling the line tight: “As long as we make users overwhelmingly satisfied, this business will work.”
13. No hard plan for 2025: first prove the model, AI and overseas expansion
朱萧木 does not want to set rigid annual targets at the early stage of a startup. Past plans always “either went unfinished or exceeded expectations” and never tracked reality precisely. Nutrition Factory currently has only a team in the teens, and he still defines it as an early-stage project whose value lies in being lean, flexible and continuously validated.
The team may try AI nutrition recommendations. When users ask, “What should I take in this situation?” the system would answer using a large research database and combine supplements, exercise, diet, sleep and mood into a single framework. 朱萧木 believes standardized consulting of this kind “should not be done by people,” but describes it as an exploration rather than a finished product.
Overseas expansion is a new growth option and could also help the company avoid domestic infighting. He even worries about “selling too well”: rapid growth would mean hiring pressure and resentment from peers. Different users are still willing to buy products priced at RMB600, RMB2,000 or RMB20,000, so for now he prefers to keep the waters separate.
The team is holding off on Tmall and JD.com and is not rushing to compete publicly on price with major brands. It will first prove the mini-program model. 朱萧木 contrasts this with the e-cigarette era, when he was already crisscrossing the country and holding distributor conferences as a freshman in high school: when the road is wrong, doing more only makes the outcome worse. Now he prefers to “advance steadily,” urging entrepreneurs not to do things “ordinary people have no business doing,” but to build the small businesses and small trades they can actually handle.