30+ industry experts, 100+ B2B platform founders, and 800+ manufacturer friends gather in Fuzhou to discuss the internet transformation path of the FMCG industry.

With the rise of the internet and higher consumer demand for shopping convenience, China's retail landscape is undergoing profound changes. For FMCG, besides premium supermarkets and convenience stores, vending machines are opening another window for enterprises with their convenience and 24-hour service.

According to Kantar Consumer Index, when per capita GDP reaches $10,000, consumer demand for vending machines will see an explosion. As of 2015, areas covering 390 million people in China had reached this level. In the next five years, the domestic vending machine channel will become a major emerging market for FMCG retail.

Rapid Development: 15-Fold Increase in 5 Years, Market Nearing 100 Billion in 4 Years

The origin of China's vending machine channel can be traced back to 1994, when Japan's Suntory Company first introduced vending machines to China. Two years later, two major American cola companies also participated in building the vending machine channel, introducing hundreds of machines to China. Around 2000, the vending machine channel entered a period of exploration and market introduction.

After more than a decade of exploration and imitation, by 2013, the vending machine channel experienced explosive development. Domestic independent R&D and innovation systems for vending machines gradually formed. In 2013, mobile payment technology was introduced to vending machines. In 2015, the vending machine channel opened the Internet+ era.

As of 2015, the number of vending machines nationwide was approximately 150,000, a 15-fold increase in five years. In the United States, the ratio of vending machines to convenience stores is 30:1. If vending machine development reaches the US level, the total number of vending machines nationwide would approach 1.38 million.

In the last five years, the average annual sales growth rate of the vending machine channel has exceeded 100%. The average monthly output per vending machine is gradually increasing with economic and living standards. It is estimated that by 2020, a single vending machine will achieve monthly sales of 6,000 RMB, and the annual sales of the vending machine channel will approach 100 billion RMB.

In terms of geographical distribution, vending machines are currently mainly concentrated in coastal areas. The Yangtze River Delta and Pearl River Delta regions are currently the areas with the deepest penetration and most mature market development, with about 60% of equipment installed there. The number of vending machines in the Bohai Rim region is also gradually increasing.

Beverage Giants Like Wahaha and Nongfu Spring Enter the Fray, Sending Two Major Signals

With economic development and changes in domestic consumption concepts, vending machines have become an emerging market for FMCG layout, attracting many beverage companies, even giants, to join.

It is understood that as of the end of August 2015, Nongfu Spring's vending machine fleet exceeded 5,000 units; Coca-Cola currently has about 5,000 vending machines in China; Master Kong piloted about 300 units in Shanghai in 2015, and the market has begun to take shape.

Recently, Wahaha confirmed that it has established Zongsheng Intelligent Technology Co., Ltd. specifically for vending machine layout, planning to invest 2 billion yuan and deploy 100,000 vending machines, aiming to build a national intelligent retail terminal network with high channel profits. Wahaha's entry has also drawn more industry attention to the development of vending machines.

Seizing the market potential of the vending machine industry. Compared with developed countries like Japan and the US, which have market capacities of over 5 million units, the current domestic vending machine market of less than 150,000 units is only in its infancy. In this trend, beverage giants, leveraging their brand, product, and channel advantages, will significantly reduce operating costs and extensively mobilize social resources to promote industry development, which will become inevitable.

In this regard, Zongsheng Intelligent Technology Co., Ltd. General Manager Zong Zehou said: "With the substantial rise in domestic human resources and commercial space costs, especially the rapid development of the mobile payment industry and the exciting interactive experience marketing it brings, the future of China's intelligent vending machine industry will surely usher in a wave of explosive development. Facing this market opportunity, Wahaha, based on its own products, will firmly grasp industry resources in the future and complete the channel sinking of multiple products."

Seizing key channels in first- and second-tier cities. The involvement of large FMCG companies is precisely because they see the strong coverage and influence of vending machines on retail terminal channels. Since the main channels for vending machines are in first- and second-tier cities, this market is favored by major giants. However, vending machines are characterized by being placed in smaller spaces, and generally, two vending machines cannot be placed simultaneously in one channel, so seizing the channel is particularly important. Currently, vending machines are mostly located in shopping malls, hospitals, parks, schools, stations, and factory sites.

Market Feedback: Channel Profits Reach 30%, After-Sales Service Is Key

In recent years, major beverage companies have laid out vending machine channels, and their overall market share has gradually increased. So what is the actual market effect of vending machines? During our investigation, many regional distributors reported that vending machines sell well in special channels, and product profits are relatively high.

Since last year, Nongfu Spring has been deploying vending machines in the terminal market. Tu Dongping, general manager of Jinyang Fushi in Anji County, Zhejiang Province, said when talking about the local market: "Vending machines are mostly consumed by young people. I have deployed 6 Nongfu Spring vending machines in the station channel, which only stock Nongfu Spring series products. The convenient and fast purchase method also makes the product price relatively high. Daily product sales can reach about 200 bottles, with profits around 30%. "

While vending machines are developing rapidly, terminal machine inspection and repair, as well as channel after-sales maintenance and restocking, are particularly important. When talking about after-sales maintenance of vending machines, Ou Feixiang, general manager of Jiangsu Sikaile Trading Co., Ltd., said: "In the local market, I think Coca-Cola has done a very good job in deploying vending machines. They have many years of operating experience, and in the later stage, they arrange professional teams for machine repair and product restocking. They can provide dedicated repair within 48 hours after a machine failure. I think few companies and operators can achieve this, and they have a certain market advantage in short-term competition."

Shen Zheming, deputy secretary-general of the China Self-Service Vending Industry Alliance, said: "Currently, the domestic vending machine industry is in a special development period. Externally, China is entering an aging society and economic restructuring; internally, a new generation of consumer groups is rising, and channel changes triggered by internet technology are deepening. Self-service vending, as a special intelligent retail service channel, has both room for innovation and upgrading and cost advantages. Therefore, major brand companies are entering the market one after another. Only by accurately grasping channel development trends and continuously doing well in after-sales market maintenance can they ride the vending machine wave to achieve product sales growth and channel sinking."

Partial data source: Kantar Consumer Index

Article source: Food Board

New Food Era · New Distribution —— 2016 China "FMCG + Internet" Summit Forum ——

This is a grand event focused on how FMCG industry channels will transform under the trend of Internet+

Conference Agenda

09:00-09:30 Registration 09:30-09:35 Host opening 09:35-10:05 2016 China FMCG Industry Trend Analysis Report - Zhao Bo 10:05-10:25 FMCG Enterprise Transformation Strategy and Path - Liu Chunxiong 10:25-10:45 Opportunities and Challenges Brought by FMCG Channel Changes - Waiqin365 CEO Liu Zhao 10:45-11:25 Alibaba Retail Link Full Empowerment - Alibaba Retail Link Guo Kunkun 11:25-12:00 Roundtable Forum - Brand Transformation: Improvement vs. Reconstruction? (Guests TBD) 12:00-13:30 Lunch 13:30-14:00 Dealer Transformation: City Distribution Trends - Weijie City Distribution CEO Wang Qi 14:00-14:30 Roundtable Forum - Why Should Dealers Transform into Logistics? 14:30-15:00 Detailed Explanation of Zhongshang Huimin's One Machine, Two Wings Strategy - Zhongshang Huimin Vice President Su Xiaoxin 15:00-15:30 Detailed Explanation of Zhanghe Cloud Factory Strategy - Zhanghe Tianxia Yang Lixiang (Speech content TBD) 15:30-16:00 Supply Chain Finance: Lubricant for B2B Driving Traditional Business - 51 Order CEO Chen Xian 16:00-16:30 2B Investment Principles and Approaches - ZhenFund Founder Xu Xiaoping (Guest TBD) 16:30-17:00 Small Retail, Big Business Opportunities: China's Retail Transformation and Upgrading - Yurun Group E-commerce Division General Manager Wang Jianfeng 17:00-17:30 Roundtable Forum - Who Is the King of FMCG B2B Models? (Guests TBD) 18:00-20:00 Dinner

For manufacturers and friends who want to transform, this grand event is not to be missed. Interested friends can long-press the QR code below or click "Read Original" to register.

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