Why is it said that the big change has come?
The essence of the fast-moving consumer goods market is the population economy.
cannot recognize this and will not have a deep perception and understanding of the arrival of the major changes in fast-moving consumer goods products.
The sum of the number of consumer populations in a category multiplied by the average consumption capacity of a single person is the total market capacity of this category. Among the two variables, the "number of consumption" is affected by the total population, population age structure, category consumption willingness, etc.; the single consumption capacity is mainly affected by economic development, income level, consumption behavior, etc.
In fact, the Chinese market is undergoing unprecedented changes in many aspects such as population size, age structure, consumption behavior, and labor income.
1) China's economy has entered Lewis turning point
A consensus view is that since 2013, the surplus labor force in rural China has been basically digested by the industrialization process, and the Chinese economy has also entered the famous "Lewis turning point".
Entering the Lewis turning point means that workers' wage income will inevitably continue to rise, otherwise they will not be able to obtain enough labor. From a realistic perspective, this is also consistent with the operator's actual feelings.
Whether it is a brand enterprise or a dealer, if the salary income today is not quite competitive and maintains continuous growth, the team will be in a state of unstable for a long time. "Hard to recruit people" has become one of the most troublesome problems for dealers at the moment.
Of course, wage income continues to grow, which also means that workers' consumption capacity will continue to improve. It’s just how much these growing consumption can reach you, which is the important question.
2) China's population has entered the era of negative growth
In addition, due to the decline in the birth rate of population that has lasted for many years and the rise in aging, China will officially enter the era of negative growth from low population growth in 2022. Although the population will not show a sharp decline, China's negative population growth is a long-term trend and will basically not reverse in the short term.
Aging and negative population growth mean that the total number of consumers of fast-moving consumer goods will continue to decrease. Although the total market volume will not drop sharply, it has entered the era of stock without incremental growth.
Lewis turning point, production and operation costs continue to rise, and it is difficult to make money by selling bargains and competing at low prices, but high-quality products will be more popular.
After seeing the structural changes in China's population and China's economy, we will find that China's fast-moving consumer goods market will also enter an era of "great changes unseen in a century", and this will also push the Chinese fast-moving consumer goods market into a "new big cycle".
Main trends and competition methods in the new cycle era
Trend one: capacity declines, revenue increases, and "quality growth" has become the main business strategy.
Due to regional differences in various parts of China, low-price competition will still exist for a long time, but it will shrink more and more, and will no longer become the main strategy of fast-moving consumer goods manufacturers. In the new cycle, due to changes in population and structure, most fast-moving consumer goods will experience a decline in total capacity, and beer and liquor are the most typical representatives.
In 2013, China's beer production exceeded 50 million kiloliters for the first time, reaching 50.62 million kiloliters. Since then, it has continued to decline year by year, with 34.11 million kiloliters in 2022, down 32.6% from the historical peak. The same is true for the trend of Chinese liquor. In 2016, China's liquor production reached a historical high of 13.58 million tons, and has also declined year after year. There were 11.98 million tons in 2017, 8.71 million tons in 2018, 7.86 million tons in 2019, and 7.41 million tons in 2020, a decrease of 44% compared with 2016. Although the capacity of
has decreased, its sales revenue has not decreased, and it is even growing rapidly.The sales revenue of China's liquor industry has basically remained stable at around 600 billion yuan; the sales revenue of the beer industry has increased from 147.2 billion yuan in 2018 to 179.4 billion yuan, an increase of more than 20%.
capacity declined and sales revenue increased, which proves that the market has truly entered a new cycle of "quality growth".
Trend 2: Competition in the new cycle is mainly competition in innovation.
The first category is category innovation. For example, from the field of instant noodles, " self-heating food " and "pre-made dishes" have been innovatively upgraded; low-alcohol fruit wine has been innovatively upgraded from the wine category.
The second category is product upgrade innovation. For example, craft beer in beer, raw beer , various flavor beer and alcohol-flavored beverages, etc.
The third category is marketing innovation. For example, the improvement of brand value, the improvement of digital marketing capabilities, innovation of new retail channels, innovation of channel models, etc.
In short, better brands, better products, better prices, more effective marketing, and quality growth are the main trends in fast-moving consumer goods competition in the new cycle.
Two important suggestions for fast-moving consumer goods manufacturers
On September 13, "New Distribution" pointed out in the article "Fast-moving consumer goods calling for "high-level deep distribution"" that the traditional deep distribution model with "coverage" as the core will enter a high-level deep distribution model with "promotion" as the core.
mentioned earlier that the main growth in the new cycle comes from "quality growth". This means that in addition to basic coverage capabilities, the fast-moving consumer goods channel must also learn another core capability, that is, how to sell better brands and products more effectively at better prices in a "promotion" way.
In brand building, brand owners can continue to invest more budgets; in R&D, brands can develop and produce more innovative high-end products. But in the end, channel partners with strong operation and promotion capabilities are still needed to complete the most thrilling jump in the market.
Therefore, allowing fast-moving consumer goods channel vendors to master the promotion and operation capabilities of high-end products in the regional market is one of the keys to becoming a fast-moving consumer goods manufacturer in the future. Therefore, we provide each of the fast-moving consumer goods manufacturers with a key suggestion.
1) Suggestions to manufacturers: build a channel merchant team that faces the future and can win battles in the high-end field.
first, survival of the fittest, openly and flexibly introduce and support high-end operation dealers with willingness, resources and strength.
cannot expect all dealers in our current channel system to grow, but we can select excellent, suitable and strongly willing to operate high-end dealers, and continue to empower and support. The other dealers can still sell our regular waist products and bottom products, and undertake the task of consolidating the market foundation of , .
Second, establish a professional channel empowerment team, organize excellent dealers and continue to empower, and build a platform for continuous learning and progress in high-end operations.
discovers and summarizes benchmark cases of our high-end operations in the national market, and organizes outstanding dealers across the country to continuously communicate, learn and practice. A person’s success is just experience. After the experience is summarized, it becomes knowledge, and after the knowledge is copied and applied, it becomes an organizational ability.
third, be good at using Internet technology and platforms to carry out various online and offline channel empowerment forms.
Through various methods such as online and offline, Internet technology and offline field training and warfare, we continue to organize excellent dealers to communicate, learn and market visits. Specific forms include online live broadcasts, offline salons and in-depth market visits, empowerment training workshops, offline training classes, etc.
At the same time, in addition to the learning platform built within the enterprise, how to integrate external professional forces to create more learning opportunities for distribution is also something that enterprises need to consider.
2) Suggestions to dealers: Keep pace with the times and build several important abilities to adapt to competition in the new cycle.
first, let our trading company move from a traditional company to a modern management enterprise organizational capacity building.
second, let us move from traditional single offline operations to digital marketing capabilities of omni-channel sales, and integrated online and offline operations capabilities.
Third, let our deep distribution model shift from indiscriminate coverage to the ability of precise development and in-depth operation of core terminals.
Fourth, let us move from the function of selling services mainly to the function of joining core terminals to the function of operating high-end customers mainly in depth together.
dealers improve high-end operation capabilities and build a channel system with high-end operation capabilities. These are not a one-day effort, nor are they just to deal with the current business difficulties. It should become the common will of fast-moving consumer goods manufacturers, persistent manufacturer cooperation and efforts, learn and make progress together, and work hard for a long time.
From November 3 to 5, the 7th China Fast Consumer Products Channel Innovation Conference hosted by "New Distribution" will be held in Chengdu. It is reported that for the majority of fast-moving consumer goods dealers, the conference specially launched a special training course for "How dealers can obtain the above four abilities in the new cycle" , which is worthy of attention.
