For FMCG products like beverages, cost and sales volume directly determine product fate. How to have channels you can control in the 'high-cost' terminal market is an urgent problem for companies to solve. Vending machines, known as 'super salespeople who never clock off,' offer advantages such as genuine products, zero staff, and mobile payment, making them a scarce resource for FMCG companies to layout future markets. In the terminal market, consumers are no strangers to vending machines. Although not yet reaching the prosperity of the Japanese and American vending machine markets, after more than a decade of exploration, operators in first- and second-tier cities are beginning to taste success. The products sold in vending machines are no longer limited to beverages; more and more machines are being deployed for fruit snacks, and even clothing and shoes, showing a trend to compete with convenience stores! Such market potential naturally attracts a large number of companies to join the industry competition, including beverage giants and well-known cross-industry investors. Main Force: Vending Machine Operators According to the current domestic development, the vending machine industry has been in a cultivation period for over a decade, and the entire industry is in the startup phase. Based on foreign development experience, the vending machine market can be divided into startup, growth, and maturity periods. In mainland China, the startup period should have at least 100,000 machines deployed, with an annual production value of 1 billion RMB. The growth period should have at least 500,000 machines, with an annual production value of 10 billion RMB. The maturity period will reach 3 million machines, with an annual production value of 60 billion RMB. In the domestic market, the main force remains vending machine operators. As the effects of early accumulation begin to show, operators have an absolute advantage in deployment rates, which is insurmountable for beverage companies new to the industry in the short term. For example, Ubox, a leading vending machine operator in recent years, has completed 600 million RMB in financing and deployed a large number of machines in shopping malls, office buildings, and other crowded places in first- and second-tier cities. In 2011, Ubox's revenue was about 20 million RMB, and in 2012 it surged to over 200 million RMB. With the effects of early accumulation showing, Ubox CEO Wang Bin expects revenue to reach 800 million RMB this year. New Force: Beverage Giant Nongfu Spring Channel competition has always been 'first mover wins, latecomer suffers,' especially in a field still in the cultivation period. If you don't act early, by the time the industry enters the growth period, the investment costs will be a different story. Nongfu Spring, a giant in the drinking water industry, has taken the lead in nationwide deployment.
It is understood that as of the end of August 2015, Nongfu Spring's vending machine scale exceeded 5,000 units. Zhong Shanshan's goal is to deploy a total of 30,000 units by the end of 2016. Through the transformation and upgrading of traditional channel partners, Nongfu not only developed mutual relationships but also further enhanced overall market share. New Force: Beverage Giant Wahaha Wahaha has been active in cross-industry investments in recent years, and although the success rate is low, it does not affect the fighting spirit of this beverage giant. Recently, at an important business meeting, Wahaha clearly announced that it would fully enter the vending machine field. At the same time, sources confirmed that the vending machine business company invested by founder Zong Qinghou and his younger brother Zong Zehou, Zongsheng Intelligent Technology Co., Ltd., has been officially registered. As soon as the new company was established, it recruited a senior management team of elite professionals with over ten years of experience in the vending machine industry. Zongsheng will rely on Wahaha's strong brand and channel advantages, using vending machines as a carrier, to build a million-unit, nationwide intelligent retail terminal network within the next decade. It seems that this time, Wahaha is determined to seize the future channel market of vending machines! The intervention of FMCG giants may accelerate the development of the vending machine industry, but it also intensifies competition. Product quality is the eternal principle in any industry competition. The convenience, intelligence, and connectivity with internet products of vending machines are the key points for future product competition. Whether they can seize market opportunities and occupy advantageous positions remains to be tested by the market! This article is original by Food Economy, first published on Food Business Network, author: Mao Xin, copyright belongs to the original author.
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