Interpretation of Consumer Trends ｜ ＂Turbulence＂ will become the new normal of consumer market.
21st century business herald reporter Gao Jianghong intern Gu Sicheng reports from Beijing.
June21On the day, Bain Company and Kaidu Consumer Index jointly released "2022China Shoppers Report 2008, which pointed out that,The fast-moving market is in2021In 2008, the overall temperature rose slightly. With the influence of the epidemic in some areas, the situation is this year.three、fourThe month began to change.exist2022yearthreemoon26Day arrivalfourmoon22In the four weeks of June, sales of fast-moving consumer goods increased year-on-year.5.6%, the average selling price dropped.5.7%, the biggest price drop in recent years, reflecting the increasing sensitivity of consumers to prices.
Although the consumer market is facing some unfavorable factors such as the conservative consumption behavior of consumers in China and the obvious improvement of the sensitivity to commodity prices,o2oConsumer channels such as business models and community group purchases have ushered in new opportunities and handed over remarkable transcripts.
Bruno, a senior partner of Bain Company, believes that the turbulent market will become the new normal in the future. In view of this, enterprises have to actively plan scenarios, prepare for various possible outcomes, and closely track the changes in consumers’ psychological level while maintaining the resilience and flexibility of the supply chain.
"In the context of the uncertainty caused by the epidemic, although China consumers have started shopping again, they have shown some new thinking patterns and different consumption behaviors." Bruno said,"Although the market shows signs of recovery, consumers have become more cautious and more sensitive to prices. Brands must work harder to establish contact with consumers and highlight their value proposition. "
Fast-moving market returns to normal track
The FMCG market is in2021The main trend of development in the whole year can be summarized as three stages: strong return in the first quarter, falling back into the doldrums in the second and third quarters, and improving in the fourth quarter.
The data shows that,2021Overall sales growth of China FMCG market in.4.1%This figure continues the growth rate of the fast-moving consumer goods market under the influence of the epidemic.GDPThe trend of growth. In addition to the effective prevention and control of the COVID-19 epidemic, consumers have increased their shopping frequency and recorded4.1%Another major reason for the increase in sales volume is that consumers buy goods in bulk in the promotion activities such as Double Eleven and Double Twelve in the fourth quarter. However, the promotion of the shopping festival has also caused the average selling price to appear to some extent.0.9%The decline. The data shows that,2021Sales growth of fast-moving consumer goods in the first quarter of.10.6%In the third quarter, it declined.1%The fast-moving consumer goods industry experienced a roller coaster performance this year.
From the perspective of consumer goods, accompanied by2021The epidemic situation slowed down in, consumers began to return to normal consumption, beverages, personal care and home care products rose, and packaged food declined. and2020What is different in 2008 is that in the past year, cheese, mouthwash, fragrance and other categories representing emerging lifestyles ushered in new growth points, while foods like instant noodles, ketchup, sausages and so on showed a significant decline. Driven by sales growth, the price fluctuations of different brands have different paces.2021The average selling prices of personal care and home care brands continued to increase in, while the prices of home care categories declined.
The ups and downs experienced by FMCG market are closely related to the trend of economic situation and consumers’ sensitivity to prices. As far as the trend of economic situation is concerned, domesticCPIThe overall control is good, but the inflation of FMCG industry is slightly higher than the overall.CPI. The decline in real prices of most categories has continued the tightening trend in 2020, which is in sharp contrast with the inflation trend of raw material prices, bringing certain profit pressure to enterprises and increasing the possibility of inflation of consumer goods in the future. Consumers are constantly adjusting their consumption behavior in the turbulent consumer market, and their sensitivity to commodity prices is increasing.
The report pointed out that consumers will not pay for the brand’s continuous price increase, but look for cost-effective products and purchase opportunities through bulk purchase or equivalent promotion. The continued growth of small brands and local brands is influenced by the pragmatic attitude of China consumers. Small brands further erode the market share of big brands in most areas, while local brands seize more room for growth from imported brands.
Before the outbreak of the COVID-19 epidemic, fast-moving consumer goods enterprises were able to steadily promote high-end products for five consecutive years. These enterprises are still raising the prices of goods, but consumers’ shopping behavior is changing: they are becoming more cautious and show different buying behaviors for different categories. In the four major areas, beverages are2021The best performance in 2008, a change.2020Annual decline4.1%The decline, made5.9%Growth, while the trend of packaged food is exactly the opposite, sales decline.2%, the average selling price increased.0.8%, the overall sales decline.1.2%. Take instant noodles as an example,2021In, the epidemic in COVID-19 came to an end temporarily, and consumers also reduced their hoarding, resulting in the sales of this category in.2021The year has dropped.9%.
Personal care and home care category in2021Continue to maintain the growth trend in, respectively.4%and6%. Sales of both categories have increased, with personal care category increasing.3.6%, home care category sales growth7.5%. However, the growth of sales volume has been held back by the average selling price. The price of personal care category only increased.0.4%The price of home care category has even dropped.1.4%. In the cosmetics and personal cleaning products industries, enterprises are facing fierce competition, choosing price for quantity, and local emerging brands also seize market share with cheap products. Some categories are outstanding, for example, the shampoo category has achieved more than10%Sales growth.
and2020Similar to 2008, consumers are2022In the short term after the epidemic in, we will continue to hoard packaged food and household care products, and reduce the consumption expenditure on high-priced products such as skin care products and cosmetics. At the same time, travel in major cities is restricted, making families the focus of consumers’ work and entertainment again, and consumption at home will obviously increase. The rise of home consumption will benefit many categories, especially food, beverage and home care. Consumers’ increasing attention to health and hygiene will continue to promote the growth of milk, personal cleaning products and other categories. Consumers will prefer mid-range and mass products when shopping, which opens up the sales space of these two big price points.——China’s brand of new forces is deeply rooted in these two major price points and has achieved excellent performance.
"Bain in?2016The concept of double-speed growth was put forward for the first time in, and the phenomenon of double-speed growth still exists under the epidemic situation. The category representing the new lifestyle is growing rapidly, but other categories are beginning to show different degrees of growth decline. Deng Min, global partner of Bain and chairman of consumer goods business in Greater China, said, "In the new environment, consumer behavior is constantly changing and adjusting rapidly, and brands should also speed up their actions to ensure that they can find out the different needs of consumers in turbulent and stable periods in time."
In 2021, the emerging brands in most categories continue to grab the market share of big brands, but the leading brands in some categories such as conditioner, bottled water, make-up and infant formula have begun to recover lost ground. Similar to previous years,2021year26Local brands in each category have the upper hand in the competition with foreign brands. Local brands pay more attention to sales growth, while foreign brands rely more on high-end growth.
In addition, the consumption trends of cities at different levels also remain quite different. For example, high-end consumption has not changed in first-tier cities, while the fast-moving market in low-tier cities has seen price decline while sales volume has increased.
Community group buying track continues to exert strength.
Second-and third-tier cities in China account for 60% of the overall FMCG market in China, and will show the strongest growth trend in 2021-increasing by 3.7% and 4.1% respectively. However, although the second-and third-tier cities will get rid of the influence of COVID-19 epidemic quickly in 2021 and achieve greater sales growth, they will not be able to push up prices. First-tier cities are the only markets that achieve price growth, and their main source power comes from offline consumption channels. In first-tier cities, the sales volume of FMCG actually decreased by 1.4%, while the average selling price increased by 2.3%. On the whole, the sales of fast-moving consumer goods in first-tier cities increased by 0.8%, which failed to return to the pre-epidemic level in 2019.
Even though the trend of offline sales shifting to online and the rise of O2O business appeared before the COVID-19 epidemic, it is undeniable that the COVID-19 epidemic accelerated the development of these trends. Not surprisingly, e-commerce will become the only channel to maintain growth in 2021. Among other channels, grocery store sales decreased by 12%, hypermarket sales decreased by 4%, and convenience stores were basically flat.
The gradual differentiation of e-commerce platforms is2021A major trend in the domestic FMCG market in: Alibaba’s market share dropped from 60% in 2017 to 44% in 2021. At the same time, the market share of Pinduoduo and interested e-commerce platforms (Tik Tok and Aauto Quicker) has increased significantly in the past two years. It is worth noting that the growth momentum of e-commerce platform has changed from KOL "single engine" to KOL and brand self-operated live broadcast "double engine". Consumers spend more time watching short videos, live broadcasts and shopping on e-commerce websites and other websites. These emerging platforms adopt different styles of play. For example, Tik Tok focuses on brand products, especially in high-tier cities, while Aauto Quicker sells more non-brand products and targets consumers in low-tier cities. In addition, the average age of shoppers in Tik Tok is younger than that in Aauto Quicker. The best-performing enterprises are taking measures to cope with these changes. They re-evaluate their e-commerce channel strategies on various platforms, strive to achieve product portfolio differentiation, and establish professional operation capabilities in order to reach different consumer groups and meet different consumer needs.
It is difficult to generalize the influence of different consumption channels in different levels of cities. Yu Jian, manager of Kaidu Consumer Index Greater China, pointed out that in non-first-tier cities, the lower the level of cities, the greater the price drop of e-commerce fast-moving consumer goods. This is because shoppers switch from Taobao or JD.COM to low-priced retail platforms such as Pinduoduo and Aauto Quicker, or shop from live broadcast and community group buying platforms. After gaining a foothold in low-tier cities, Pinduoduo and Aauto Quicker plan to penetrate into first-and second-tier cities.
In this report, community group buying, a consumer track that has a small outbreak in the near future, has attracted the attention of researchers. After undergoing strict market rectification, the positive role of community group buying began to be recognized by regulators. Community group buying is represented by buying more food and the United States group buying food, relying on the community.“regimental commander"To coordinate orders and distribution, and manage offline pick-up points. This model can provide lower-priced products, but at the expense of convenient delivery experience.——Shoppers must pick up the goods from the community leaders themselves. Compared with vertical e-commerce, the advantage of community team model lies in lower customer acquisition and distribution costs. The leading platform does not need to obtain customers through price subsidies, so it is expected to achieve profitability. In mid-2021, community group buying platforms are faced with strict supervision, which involves all aspects of competition and price. As a result, some smaller platforms are squeezed out of the market by large platforms such as Pinduoduo and Meituan, which leads to a flat sales growth in the second and third quarters of 2021. However, after that, the market became more concentrated, the competition became healthier, and the substantial growth followed.
"The best-performing companies in the FMCG market are taking measures to actively respond to these changes. They re-evaluate their e-commerce channel strategies on various platforms, strive to achieve product portfolio differentiation, and establish professional operational capabilities in order to reach different consumer groups and meet different consumer needs." Yan Jian said, "They also actively use the instant retail model (O2OThe rise of) creates more sales increments. "
Turbulent market: a new normal
The uncertainty caused by the outbreak of COVID-19 in 2020 may be a preview of market turmoil in the next few years. Bruno pointed out that enterprises need to accept the fact that turbulence will become a new normal from now on. To this end, enterprises should take the initiative to practice scenario planning in advance to prepare for various possible results, rather than relying solely on one plan to succeed. For consumer brands, products/Brand combination, supply chain optimization and online and offline integrated market access are three factors that enterprises have to consider in order to achieve steady development.
As far as product mix is concerned, enterprises should not only pay attention to one market segment, but also need to evaluate the opportunities contained in different price and city-level markets and build appropriate product mix based on different product positioning, so as to seize these opportunities.
Under the influence of the epidemic, the challenges brought by logistics problems are becoming more and more severe, and the supply chain impact is the pressure that most enterprises have to bear. Building a flexible and resilient supply chain is an important prerequisite for the normal operation of the business.
To build an online and offline integrated market channel, we need to respond to short-term and long-term development strategies-short-term expansion to emerging channels (such as Pinduoduo, live broadcast, community group buying platform) to achieve channel diversification; Long-term establishment of direct face to consumers (DTC) ability to integrate online and offline channels. Invest heavilyO2OGive priority to the development of small and medium-sized stores and conveniently located stores, while ensuring offline stores and online self-operation.APP, community group buying platform and other horizontalO2OThe platform can bring a consistent shopping experience, focusing on developing some categories with higher probability of success offline than online channels. Deng Min, global partner of Bain Company and owner of consumer goods business in Greater China, predicts the future.O2OIt will break away from the previous barbaric growth and step into a profitable growth stage, helping brands to better grasp consumers and no longer rely on the form of large flow and undifferentiated subsidies. Community group buying will be a supplement to retail channels and an important part of the new normal, entering and taking root in cities.
although2022The rest of the year may be full of turbulence and uncertainty, and consumers will be more sensitive to the price increase of many categories. However, the outside world is still optimistic about the fundamentals of consumer goods in China. Compared with western countries, inflation in China is low, and the energy crisis has been effectively controlled. At the same time, the China Municipal Government is taking various measures to balance the relationship between dynamic zero clearing and economic development. Some leading fast-moving consumer goods enterprises have made preparations for both, and at the same time meet the challenges and market growth opportunities brought about by the turbulent period. prospect2023In 2000, the long-term basic market in China remained stable, and consumers had reason to be optimistic about the healthy growth of the market.