**Welcome to download the full report via the 'Read Full Text' link at the end of the article. ** Over the past three years, e-commerce traffic has peaked, and interest-based e-commerce has emerged rapidly, driving the differentiation of the domestic e-commerce landscape. Offline channels have seen weak growth but still maintain significant volume; the pandemic has brought new vitality to near-field e-commerce. The "2023 China FMCG Supply Chain Digitalization Research Report" will be divided into several chapters: the current state of FMCG industry development under the new normal, insights into FMCG brand business and supply chain transformation, new digital demands for FMCG brand supply chain operations, maps and cases, and development and summary. This report, standing at the first year after the pandemic, reviews the development of the domestic FMCG market*, and the transformation of brand business and supply chain around omni-channel and one-warehouse inventory management. It focuses on the execution level of the supply chain, interpreting the new challenges and digital demands faced by brand enterprises in supply chain operations and management, with relevant case studies.
Current State of FMCG Industry Development under the New Normal
Fluctuations in residents' consumption levels drive changes in consumption trends and psychology, while the deepening development of the digital economy promotes the expansion of consumption channels. At the same time, the aftermath of the pandemic continues to affect market development, consumption trends, and channel changes. Residents' consumption has become more rational, and product and content platforms provide users with sufficient and comprehensive decision-making information, extending consumers' decision-making paths and prompting brands to explore differentiated product demands and reach strategies from the perspective of customer (user) structure, further diversifying user needs. With the development of the digital economy, e-commerce platforms have also grown rapidly, with live-streaming e-commerce becoming the main incremental market for e-commerce channels in recent years. The scale of online and offline channels has stabilized, and O2O has benefited from increasingly complete infrastructure and mature consumer mindsets, with market size continuously increasing and penetration rates significantly rising in non-food categories such as personal care and home care. ****Insights into FMCG Brand Business and Supply Chain Transformation For FMCG brands, omni-channel layout is no longer a concept but a strategic decision and action plan of "must do" and "how to do it." Brands need to rethink user-centric business and supply chain system design, and coordinate factories (production capacity), channels (sales and operations capabilities), and logistics (fulfillment and delivery capabilities) to achieve effective coverage of target users, digital perception of demand, rapid production, and precise delivery, building a deterministic market response capability in an uncertain market environment. The core of this model is to build an ecosystem upgrade of "omni-channel + one-warehouse inventory + digitalization." At the business flow level, through omni-channel comprehensive coverage, coordinate user demand and stabilize price systems; at the logistics level, coordinate inventory through one-warehouse inventory management, strengthening dynamic control and optimization of goods. The omni-channel layout of brands differs in offline and online strategies and pace, generally divided into four stages: online channel integration and one-warehouse inventory transformation, offline channel cooperation model reform, omni-channel one-warehouse inventory and production coordination.
(1) Online Supply Chain Upgrade Path
From the perspective of online supply chain links, e-commerce traffic has peaked, and platform operations strategies have shifted from "acquiring new customers" to "retaining existing ones." Innovations in user operations and marketing are emerging, and the supply chain system needs to keep up with the various platform playbooks, handling inventory stocking, order fulfillment under various sales rules, and billing management.
(2) Offline Supply Chain Upgrade Path
From the perspective of offline supply chain links, brand offline supply chain management faces the challenge of improving channel sell-through and transaction efficiency while maintaining channel transaction structures, stable price systems, and inventory levels. There are multiple directions for upgrading traditional offline distribution supply chains. Currently, brand offline supply chain transformation can be divided into three types: channel intensive cultivation, distributor inventory data sharing, and distributor physical inventory one-warehouse management.
(3) Omni-channel Supply Chain Upgrade
From the perspective of omni-channel supply chain upgrade, omni-channel one-warehouse inventory requires enterprises to integrate online and offline order entry points in front-end business; in back-end fulfillment, re-examine network structure and inventory layout based on omni-channel orders, and use algorithm engines to match the optimal fulfillment path at the order level. It provides business scenario support for collaboration and innovation around products, prices, inventory, and order lifecycle management under channel integration.
(4) Production and Logistics One-Warehouse Solution
From the perspective of production and logistics one-warehouse management, raw material supply in the production logistics link generally adopts a supply delivery model. As product iteration cycles shorten and production models shift to small batches and make-to-order, the scale and frequency of raw material procurement and supply for factories also change. Brands can integrate inbound logistics needs based on factory raw material supply requirements and supplier systems, relying on the deep warehouse network of the circulation system to create "regional consolidation + inbound delivery" for production links, to a certain extent improving warehouse network utilization, optimizing production logistics costs and delivery efficiency, and further empowering OEM/ODM factories.
New Digital Demands for FMCG Brand Supply Chain Operations
With the diversification of FMCG brand businesses and omni-channel transformation, the boundaries and requirements of enterprise supply chain digitalization capabilities continue to expand. Traditional supply chain system solutions centered on ERP with multiple system deployments are difficult to support collaborative management demands under channel integration and supply chain upgrades. Brands need to address, at the digital level, the issues of demand and order management, resource matching capabilities, and efficiency under multiple transaction rules between brands and channels. They need to establish a supply chain collaborative operations platform to achieve resource collaboration, intelligent matching, and OTC lifecycle management based on omni-channel order demand. This report will interpret online and offline order management from both business process and digital process perspectives.
(1) Online Supply Chain Digitalization Solutions
In online digital supply chain order management solutions, orders will be imported through the platform into the supply chain collaboration platform, synchronized to the order center, inventory center, and reconciliation center. For different channels, promotional activities and product combination rules are configured, and based on product and inventory dimensions, sales order demands are converted into logistics order demands to support logistics fulfillment and delivery. If products have high return/exchange rates, the system needs to set flexible interception rules at order lifecycle nodes to reduce operational investment. At the same time, at the settlement level, it is necessary to evaluate the allocation and refund of order amounts (product, logistics) based on order interception status.
(2) Offline Supply Chain Digitalization Solutions
The core of offline supply chain digital collaboration solutions is to address the challenges brands face during different modes of "one-warehouse inventory" transformation, achieving available inventory and order information sharing among multi-level channels while maintaining existing sales relationships, credit situations, and settlement and profit-sharing mechanisms. In the digital framework, enterprises can establish a multi-level account system to achieve order and inventory data sharing among brands and multi-level distributors, supporting distributor interest protection under innovative fulfillment scenarios. They also synchronize with ERP for distributor account balance and credit limit management, deducting balances and credits based on sales orders. For offline supply chains, in FMCG B2B order fulfillment, channel partners pay more attention to product shelf life, generally requiring consistent shelf life for products in the same order, rather than principles like FIFO. At the same time, the fragmentation of B2B orders drives brands to adopt more flexible approaches in warehouse operations. In settlement and reconciliation, there are also issues such as multiple settlement relationships and multiple pricing and settlement methods, requiring more flexible settlement and reconciliation. (3) Omni-channel Supply Chain Digitalization Solutions For omni-channel supply chain digitalization, the solution needs to integrate online and offline supply chain order lifecycle management requirements, and based on the brand's integrated omni-channel one-warehouse available inventory, perform multi-level logic inventory control, demand matching, and innovative fulfillment delivery services, supporting more efficient and flexible order fulfillment strategy selection. The report also explains the digital full process of different types of online and offline order-level solutions, helping enterprises address new digital demands in FMCG supply chains.
FMCG Supply Chain Digitalization Map and Cases
In addition, the report will summarize the blueprint and map of FMCG supply chain digitalization, and provide typical cases from companies such as Lanxing, Dingtong, and Tongtianxiao Software, hoping to provide readers with a comprehensive view of FMCG supply chain digitalization supply and demand from an operational perspective. **Welcome to click 'Read Full Text' to download the full report. **