After Over a Decade in FMCG Sales, It's Time to Shift from Channels to Scenarios!

When it comes to channels, I think many practitioners first think of hypermarkets (KA), community supermarkets, grocery stores, and the like—channels that have dominated the market for years. In recent years, so-called online channels have emerged, such as community group buying, O2O delivery platforms, various e-commerce platforms, and livestream selling. However, their sales share is relatively limited, and as frontline salespeople, these channels are difficult to directly reach, or the scope we can influence and serve is limited. But this doesn't mean our frontline business can only operate in traditional channels like hypermarkets and grocery stores, and that sales growth can only come from these. I don't think so. These "standardized" channels contribute the majority of sales, but we must still seek and discover new channels in our daily work—where there are people, there is business. Regarding channels, today I want to discuss from a different perspective: looking from the consumer demand side, what lies behind channels? How can salespeople find growth from "hidden channels"?

-01- Step Out of Channels, Shift to Scenario Thinking FMCG products generally fall into two categories: food (snacks, beverages, alcohol) and daily necessities (personal care, household paper). Although both are daily needs, they are fundamentally different. Snacks and beverages are not strict necessities compared to daily chemical and paper products. Relatively speaking, consumers can skip snacks and drinks, but they cannot do without daily chemical and paper products. Therefore, food has greater elasticity, while daily chemical and paper products do not. Consider two sets of data: China is one of the countries with the lowest paper consumption per capita, at 40-50 rolls per person per year, while developed countries use 120-130 rolls per person per year. The difference is only about three times. In beverage consumption, for example, Mexico's per capita annual consumption of Coca-Cola is 728 bottles, while China's is 40 bottles—an 18-fold difference. For coffee, China's per capita annual consumption is 5-6 cups, while the US, Japan, and South Korea consume 200-400 cups—a 40-fold difference. From these examples, we can see that different foods show significant consumption differences across countries and regions, indicating high elasticity. So, FMCG food companies think daily about how to get more consumers to buy and enjoy their products, while daily chemical companies think about how to get consumers to buy more of their products rather than competitors'. How to get consumers to buy more products? There are usually two approaches: one is to create new demand, and the other is to create new scenarios. Creating new demand, such as developing low-sugar, functional, or dietary fiber products, caters to consumers' pursuit of quality of life; creating new scenarios, simply put, means getting consumers to drink beverages in places where they previously didn't. Creating new scenarios, for example, in the past, there was no habit of drinking beverages at restaurants, but now it's very common; another example is drinking Red Bull while driving—these are consumption scenarios created by FMCG food companies. In short, we used to think of channels as pathways, but as practitioners and professionals, we should know that behind channels are actually consumption scenarios.

-02- Discover New Scenarios, Match New Demands After understanding consumption scenarios, let's look at how salespeople can discover new scenarios and match new demands. Let me start with a case from my own practice. When I was a frontline sales representative, internet cafes were just emerging. Around 2005, internet cafes were mostly individually operated. Consumers went there mainly to chat on QQ, watch movies, or play games. Internet cafes basically didn't sell products, occasionally selling cigarettes secretly. Internet cafes had many people, but no beverages were sold. While on my route, I discussed with my supervisor and manager, proposing the idea of selling beverages in internet cafes. Coincidentally, the company's channel department was also researching this, so we hit it off and formed a special team to investigate and develop the internet cafe scenario. Although selling beverages and snacks in internet cafes is now an important revenue source, many owners were resistant when we first developed this channel. They thought internet cafes were for surfing the web, not selling goods, and selling goods required a food business license. Besides, how much profit could beverages bring? Internet access cost 3-5 yuan per hour, while a bottle of beverage only earned a few cents—not worth it. To persuade the owners, I did the math for them: a bottle of beverage yields 1 yuan profit, and since it's a closed venue, we could raise the price by 0.5 yuan, making 1-1.5 yuan profit per bottle. Selling seven or eight cases a day would bring in about 100 yuan, or 2000-3000 yuan a month. Although it was "small money," it was enough to cover a network administrator's monthly salary. Eventually, the owners agreed to try selling. After more than a decade of development, internet cafes have gradually become chains, some renamed as "cyber cafes," selling not only beverages and snacks but also freshly made tea drinks and coffee. Internet cafes have gradually placed food operations on par with their main business. Looking back at the development history of internet cafes, perhaps we changed their business model, or perhaps we were just walking on the path of their business model iteration. Of course, discovering a scenario is only the first step; matching the scenario is the second. For the internet cafe scenario, product selection needs appropriate adjustments. First, product specifications: between 700ml and 300ml. Too large makes one-handed operation difficult (the other hand is needed for the computer), and too small is not suitable either, as internet sessions typically last at least an hour. Second, packaging: glass bottles or cans are not suitable. In the past, keyboards weren't very waterproof, and gamers might knock them over in excitement. Now, except for energy drinks, most are PET bottles. In terms of product structure, SKUs should not be too many. Consumers online usually don't go to the counter to buy; they either order on the computer or call the attendant. They don't have much time to choose, so only the most common SKUs are placed. This is the success image for the internet cafe scenario, and salespeople then replicate this image in more internet cafes. In the past, FMCG food companies basically didn't consider scenarios; they simply handed products to distributors and ended there, leaving selling and better selling to the distributors' wisdom. Today, more and more companies are going deeper to the retail level, finding consumption scenarios, designing corresponding success images, and planning business strategies. Even if manufacturers cannot reach the end scenarios themselves, they must teach distributors. The core purpose is to get consumers to buy corresponding food and beverages in more scenarios.

-03- How to Create New Incremental Growth? Whether you are a salesperson or a city manager, you have sales targets that grow every year. But many seem trapped in a vicious cycle, only increasing sales from existing channel scenarios, and these sales are mostly snatched from competitors, at a high cost. Besides grabbing sales, I think every practitioner should spend time thinking about whether there are other possibilities for incremental growth, and behind that growth is the exploration of scenarios. Take dining as an example. In the past, we simply divided dining into mid-to-high-end and traditional. But in reality, dining has changed dramatically and cannot be summarized by just two categories. For instance, noodle shops: typical noodle shops are traditional dining, with no private rooms or waitstaff, per capita spending of 10-20 yuan, usually located on the ground floor of residential areas, like Lanzhou Lamian or Sha County snacks. But now many noodle shops have opened in shopping malls, with a bowl of noodles costing 30-50 yuan. Should we define them as traditional or mid-to-high-end? I think neither; they are a new scenario. The consumers behind them are young people and white-collar workers from nearby office buildings. They are not very price-sensitive. Traditional dining was about quick and cheap, but now the requirements are cleanliness, hygiene, and good taste. It's okay if it's a bit more expensive; price is not too sensitive. In this new scenario, consumers' beverage needs are different. They are happy to spend 5 or 8 yuan on a drink. If a bowl of noodles costs 50 yuan, an 8-yuan drink is acceptable. But at Sha County snacks, where a bowl of noodles costs 10 yuan, an 8-yuan drink would hardly sell. This is the price anchoring effect. When exploring scenarios, besides price, product specifications also need attention. For example, food delivery has become a mainstream scenario, but the products matched are different. Attentive practitioners will notice that large-packaged beverages are rare in delivery orders. This is not because consumers don't need them, but because 500ml+ bottles are hard to pack for delivery; 300ml or 330ml cans are more suitable for packing. When dining near a community and ordering drinks for a gathering, it's likely to be large sizes of 1L or more. But in shopping mall restaurants, ordering large-size drinks is rare. Even for a gathering of 3-5 people, it's likely one bottle per person. Young consumers are independent and have their own tastes—some drink tea, some coconut juice, some Coke Zero—each follows their own preference, and they might even split the bill. So even for the same dining occasion, needs vary completely across different scenarios. Therefore, whether you are a salesperson or a city manager, when discovering or finding a new scenario, you must consider the consumption needs in that scenario, then design a corresponding success image, and match appropriate categories, products, and promotional tools.

Conclusion: In the past, when we talked about marketing, we discussed the 4Ps (Product, Price, Place, Promotion), with product usually first. But for salespeople, distributors, and city managers, you don't have decision-making power over the product; you sell whatever the manufacturer gives you. Products are "dead," scenarios are "alive." We should start from the market and scenario perspective, considering what scenarios are suitable for selling what products. In the past, the market structure was simple, and one or two methods sufficed for terminal sales. But today's scenarios, both online and offline, have undergone earth-shaking changes; one or two methods won't work. To achieve more growth, we must shift from a single channel mindset to a scenario mindset. Changing the terminology is not for the sake of change, but to encourage more practitioners to abandon old fixed thinking. Besides considering channels, we must also think about matching consumer needs behind them, especially in today's environment of frequent new products and rising prices—not every channel can sell new products!

About the author: Pan Lihua, Sales Operations Manager at Swire Coca-Cola, student of Dedao University's 0th cohort. Over 15 years of sales management experience at Coca-Cola, familiar with FMCG market layout, strategy formulation, and team management. Skilled in market insight and team motivation.