2020 will be the “first year of value” for fast-moving consumer goods. The trend of returning value will bring new opportunities to market segments and stimulate a series of domino effects.
Why 2020 is the “first year of value” for FMCG
Over the past 30 years (1989-2019) in China’s FMCG marketing, the Chinese economy has undergone tremendous changes, and the FMCG industry has also achieved rapid growth. The reason why it does not start from 1978 is because it was the first year of reform and opening up. For FMCG, it was an era of oversupply, so I tend to set the beginning of the era of FMCG marketing in the 1980s. At the end (1989), it was only then that the shift in the center of gravity of the economy was truly felt. Everyone was talking about business and the economy, whether it was in the city or in the countryside, in the neighborhoods or in the countryside.
From 1999 to 2019, the fast-moving consumer goods industry took off rapidly. Among them, 2005-2014 was also known as the Golden Decade. During this period, fast-moving consumer goods manufacturers almost doubled, and the time was exactly the end of SARS. Years later. During that time, we saw the advent of the tens of billions of single-item products. Wang Laoji (Jiaduobao), Nutrition Express, and An Muxi were born.
The rapid development of FMCG products is also a process of continuous premium products. Take liquor as an example. I remember that Maotai was 80 yuan / bottle in 1987, and now it is 2600 yuan / bottle, which has increased by 31.5 times. But is this really the true value of Feitian Moutai products? We all know that Yonghui, China Resources, etc. have launched online App business, and have launched 53 ° Feitian Maotai’s 1499 yuan event. As a result, they were sold out in less than one minute. What principles and standards do these prices follow?
Return of value
Is it value? Obviously not. It is the mainstream price band. This is an invisible hand that can be felt but not sure. In other words, over the past three decades, the price of FMCG has been rising, but it has not really reflected the true value of the product. The Nielsen Alcohol Trends Research Report 2018-2019 shows that the liquor market presents a rational consumption trend, consumers no longer blindly pursue high-end liquor, and value products that are more in line with the needs of the mass consumer lead the market. In other words, consumers no longer blindly pursue high-end liquors, and have shown higher requirements for low-end liquors. Sub-high-end and mid-end cost-effective products have provoked big beams, driving the industry’s growth.
Starting from 2020, the Chinese economy is actually steadily landing and starting to rise. The process of economic rise is also a process of the market returning to rationality, that is, the process of value priceization. The price of the product will truly reflect the original value of the product. The outbreak will accelerate the return of value. After the epidemic, the market may have a transition period of three to six months, or a period of ups and downs, and some parts of consumption will weaken. However, in the long run, consumers will continue to maintain strong spending power. This is unacceptable. Doubtful. Confidence is more precious than gold. We must firmly believe that China’s economy still has the driving force for sustained growth.
Value return brings new opportunities in market segments
The return of value to this trend has brought new opportunities to the market segments of the FMCG industry. Product value is determined by consumer demand. Different types of consumers will have different requirements for the components of product value and the relative importance of various factors. Therefore, consumption will tend to be more vertical and subdivided. It is required that companies must carefully analyze the characteristics of consumer demand, and carry out product development and design based on this to enhance product adaptability.
This will bring the domino effect and stimulate a series of actions, such as Mengniu, Yili, etc., which have now begun to carry out various vigorous promotional activities. However, major brands such as An Mu Xi, Chun Zhen, Jin Dian and other high-end products, which have been cultivated for many years, will not and will not be willing to reduce their prices easily, but they will still be catering to the first year of value and the trend of value pricing. How to do? When a new product is released, the new product will be adjusted from various aspects such as specifications, packaging, and content until it returns to the value itself.
In 2020, it will become the first year of brand value. The value price trend of major brands is inevitable, and the way of value return will also be different. For example, the price of 53 ° Feitian Moutai will continue to rise, but it will not prevent the return of the value of products such as Moutai Prince at 43 °. In this process, brands with a foreign background will go one step ahead. I bought Adidas New Year’s models in a shopping mall some years ago. The same clothes in the third floor shopping mall and the fifth floor of a certain sports actually had two prices, one sold for 349 yuan, the other listed at 699 yuan. Later, I also confirmed The shop upstairs and downstairs is owned by the same owner, and other shops have similar situations. Is it just because of the evaluation level of the shop? (For better marketing, each brand is divided into direct sales and franchised stores into several levels, even if the same product has different discounts due to different levels). Obviously not. In fact, it is these international brands that realized the first year of value earlier than us.
The author officially put forward this new concept in this special period, which is also a good introduction. I also hope that you will be educated by seniors and readers in the FMCG industry. In addition, I have a few guesses about the trend of FMCG in 2020.
The FMCG industry’s trend in 2020
1. Health food is popular, and it is not excluded that drinks and foods with antiviral factors appear. Fresh squeezed, pure green, high concentration will become the mainstream of future development, and the counter-trend growth under the hawthorn tree in 2019 is a good example. Another batch of small tens of billions of products began to incubate, depending on whether the distributors can catch it.
2. The concept of the mainstream price band for drinking water has weakened. As the 3 yuan water era approaches, leading water brands will appear. Unknown companies dare to sell 6-7 yuan / bottle of water, and some big brands will return to the 1 yuan water era, but the core market has transitioned from 2 yuan to 3 yuan.
3. Each enterprise will re-examine the online channels and community channels, and the home business will increase significantly. Channel changes have begun to differentiate. To B, To C, and societies will scuffle this year, but they are by no means micro-businesses. Although fission has not yet formed, corporate marketing will become the most active mode and will welcome Come for more applause and VC!
4. The marketing team, especially the marketing personnel, has become the first choice. The era of “the first year of hard work and the next nine years to eat a year” has basically ended, and no company will keep idle people. The living space of oilseeds and hybrids is gradually shrinking. Those who actively rely on the system, actively learn, accept management and innovate in the local area will continue to win.
5. The new product group is dancing, testing the minds of enterprises and distributors. Should we transform? How to turn? Judging whether the product in your hand is a potential stock or a blue chip, junk stock becomes the hardest thing. It is estimated that the hardest thing for companies and distributors to do in 2020 is to make a choice!
6. The cost of various industries, including raw materials, logistics, and labor costs, will continue to increase. Open source, throttling, and innovation growth will become two major issues that test marketers.
The concept of the first year of value will be an important guide for the overall marketing work and overall marketing strategy of the company in the next 5 to 10 years. Opportunities always exist, but opportunities always favor those who are prepared. If you haven’t prepared enough before, but just feel that the opportunity is coming, you must do it when you see the big money coming. That’s the same as Evergrande making water, and the result is obvious. We need to consolidate the existing re-expansion and new development, and at the same time, we need to organize the team. People are important at any time, especially this year. People are the ultimate goal of management. To sort out people, you must allocate resources from the terminal to the system, and from the storage to the terminal. Once the connections are in place, the enterprise becomes.