The current focus of corporate marketing transformation should be on studying channel changes

This article discusses the marketing transformation of China's fast-moving consumer goods market in the current environment. Faced with the stratification of the consumer market and the diversification of the channel structure, the traditional marketing model is no longer applicable. The article will analyze the main driving factors of market changes and provide strategies to help companies adapt to the omni-channel market and achieve innovation in marketing models.

At present, China's fast-moving consumer goods market has undergone great changes. How can enterprises achieve marketing transformation in response to market changes?

The traditional FMCG marketing model is derived from a single offline channel marketing system. The basic path of the traditional marketing model is: first, there is the product, then the brand is formed, then the channel is found, and then the user is reached.

However, as China's fast-moving consumer goods market gradually prospers, market competition becomes more intense, and the market gradually changes from a supply-side market to a demand-side market; as the channel structure of China's fast-moving consumer goods market undergoes major changes, from a single offline channel to an offline + online omni-channel, from a relatively "few channels" both offline and online to "multiple channels" both offline and online, the traditional marketing model can no longer fully adapt to the current market environment and changes in market structure. It is necessary to reconstruct a new marketing model as soon as possible in response to market changes.

The current Chinese consumer goods market is mainly influenced by two major factors:

First, the significant impact of changes in the stratified structure of the consumer market:

The National Bureau of Statistics released data: In 2023, the national residents were divided into five income groups: the per capita disposable income of the low-income group was 9,215 yuan,

The per capita disposable income of the lower middle income group is 20,442 yuan.

The per capita disposable income of the middle income group is 32,195 yuan.

The per capita disposable income of the upper middle income group is 50,220 yuan.

The per capita disposable income of the high-income group is 95,055 yuan.

The huge income gap determines the huge difference in consumer demand.

From this set of data, we can basically see that the current Chinese consumer market has become a highly stratified market structure.

If we add gender, age, cultural, regional factors, etc., China's current consumer market is a highly stratified and deeply diversified market.

In such a consumer market, there are many different demands. In addition, China has formed a market scale of 47 trillion yuan in total retail sales of social goods, and China's consumer goods market has become a very special market.

Overall, the changes in many product markets are mainly due to the changes in the market stratification structure. On the one hand, many upgraded high-end demands have not been fully met, and on the other hand, some popular, mid- and low-end demands are gradually shrinking due to the changes in the stratified market structure.

Second, the impact of significant diversification changes in channel structure:

China's retail market has become the most innovative market in the world, not only online but also offline.

The most important feature of the changes in China's retail market is omni-channel, which means it has become an offline + online omni-channel market. And it is still continuing to complete rapid online iterations.

Data monitored by Nielsen IQ showed that fast-moving consumer goods as a whole showed a positive growth trend in the first half of 2024, with the online channel growing by 9.6% and the offline channel growth slowing to -2.2%, which together drove the growth rate of all channels to 1.9%.

According to the National Bureau of Statistics, in 2023, the national online retail sales reached 7099.1 billion yuan, a year-on-year increase of 9.8%. Among them, the online retail sales of physical goods reached 5959.6 billion yuan, an increase of 8.8%, accounting for 25.3% of the total retail sales of consumer goods.

Nielsen’s research data shows that in the field of fast-moving consumer goods, the market share of offline and online has reached 42:58.

What should we do in the face of such an omni-channel change?

– Should we actively grasp the future omni-channel change trend and actively integrate into such omni-channel changes? Or should we continue with the traditional single offline channel marketing thinking and continue to stick to the traditional offline model?

– Should we treat omni-channel as a unified market and make unified market planning, or continue to treat offline and online as two opposing and separate markets and manage them separately?

- In the face of the omni-channel market structure that has already been formed, how should we make changes in various aspects such as products, channel models, and marketing systems to adapt to such omni-channel market changes, or should we continue to maintain the traditional offline product system and marketing system unchanged to passively respond to such omni-channel market changes?

Another very important aspect is that the current changes in China's retail market and channel market are not just simple omni-channel changes, but continue to present multi-format, diversified and multi-form model innovations.

First, let’s look at the changes in offline retail formats:

While offline retail formats continue to occupy an important market share in hypermarkets and supermarkets, new retail formats and forms have been constantly innovating in recent years, gradually occupying a larger market share and playing a more important market role. For example, specialty stores, discount stores, boutiques, etc., which have grown rapidly in recent years, have gradually become important retail channels in related categories.

Driven by the vitality of innovative development and because China's consumer market is large enough, the retail channels of China's consumer goods market will continue to show innovation in the future, and more new retail formats and forms will emerge.

The online market has also undergone tremendous changes in recent years, from traditional e-commerce to new e-commerce forces, from single home e-commerce to instant retail, community group buying and other new e-commerce models.

In the future, driven by technology and continuous innovation of models, more new online e-commerce models will inevitably emerge.

In the current marketing of fast-moving consumer goods, it will definitely not work if you don’t study the omni-channel carefully and find an accurate omni-channel model. There will definitely be no future for you.

This direction should be able to achieve unified planning of offline and online, and to organically integrate offline and online to form a marketing entity, which is the main direction of future market development.

In the current fast-moving consumer goods marketing, if you don’t pay attention to the diversified changes in channels and don’t find an accurate marketing model that adapts to the diversified changes in channels, it will definitely not work and there will definitely be no future.

China's fast-moving consumer goods market has become a critical period where consumption determines the market and channels determine success or failure. If our products cannot accurately position the target customers, and if we cannot find reasonable channels to accurately reach the target customers, such marketing goals will be difficult to achieve.

In fact, the changes in consumption in recent years are highly consistent with the changes in channels. Due to the structural changes in consumption, many upgraded demands have not been well met, which has promoted the rapid innovation of channels. Whether it is offline or online channel model innovation, it is an iteration around better meeting consumers' new and upgraded demands.

The current marketing transformation of fast-moving consumer goods companies needs to focus on studying major changes in channels, especially to deeply grasp the accurate trends of channel changes in future product categories.

Formation: Define the target customers of the enterprise accurately and define the demand scenarios of the target customers accurately. On this basis, choose the most reasonable channel system and reconstruct a new marketing model so that the product can reach the target customers more efficiently.

Otherwise, no matter how good the product is, if the target customers are not accurately defined, the scenarios are not clearly defined, and the most effective and reasonable channels cannot be found, it will be difficult to achieve the established marketing goals.