Introduction: This Spring Festival season, will the gift box market be a surprise or a disappointment? With only about forty days until Spring Festival, it's time for the annual gift box sales rush. In recent years, gift boxes haven't sold well. The dismal sales during the first year of the pandemic are still fresh in memory. In the following two years, some manufacturers ran out of stock, some missed opportunities by being too cautious, and others were unprepared or mistimed their actions, leading to serious overstock. How should gift boxes be handled this year? Here are a few of my thoughts. Information Gathered from Market Visits I've been visiting the market frequently lately and communicating with store owners, gathering some information to share with fellow distributors. Store Owner A: Plans to stock up in mid-January after assessing the situation. Won't be swayed by ordering conferences; selling out is more important than making more profit. Store Owner B: Gift boxes in urban areas aren't selling as well as before. Everyone seeks value for money. Putting the same product in a box and charging more doesn't make sense. However, high-end gift boxes should still be stocked in advance as there are regular customers. Store Owner C: This year, everything is later than usual. In previous years, manufacturers would have already visited stores to discuss display positions by now. Except for regular milk special displays, most manufacturers haven't started yet. Store Owner D: The pandemic has affected gift box consumption habits. The tradition of visiting relatives and friends during Spring Festival has weakened; not visiting some is acceptable. Even regular customers' purchase volumes have dropped significantly. Store Owner E: Regular boxed products sell well—just as they do normally. Gift boxes that aren't repackaged are more often bought for personal use. Store Owner F: It's still wise to stock some gift boxes in township areas. During pre-festival market days, we can sell quite a bit. Many manufacturers use township market days to clear old stock. As long as it's still edible, we're willing to help sell it. After visiting many store owners, here's a summary:

  1. Gift boxes are more popular in township markets than urban markets.
  2. The proportion of gift boxes for personal use is increasing.
  3. Gift boxes need to offer value; selling a box at a premium is becoming less viable. High-end gift boxes should be secured early (planned ahead), while low-end ones should be managed flexibly (buy a little as you sell).
  4. Business is tough, many are cautious, and gift box stocking is more conservative.
  5. As only children become mainstream consumers, the phenomenon of "cutting off relatives" is worsening, reducing the "sentimental" value of Spring Festival gift boxes. Overall, the feeling after store owner feedback is that the gift box market will definitely decline compared to pre-pandemic levels, but there's no need for excessive pessimism. Most believe gift boxes can still be sold and profitable, but they won't blindly stock up (tying up money and warehouse space). What's the Outlook for Gift Box Consumption This Year? The biggest differences between Spring Festival and normal times are: First, high population mobility; second, regardless of financial status, people engage in "face consumption," leading to a sudden surge in spending power. How do these two factors relate to Spring Festival gift box consumption? 1. Impact of Population Mobility: Compared to the previous "stay put for the holiday" policy, increased mobility can greatly enhance opportunities for relatives and friends to meet, thus creating more sales space. Let's review the population movement during this year's National Day holiday: According to Ministry of Commerce monitoring, during the first 7 days of the Mid-Autumn and National Day holidays (September 29 to October 5), sales of key monitored retail and catering enterprises increased by 9% year-on-year. According to the Ministry of Culture and Tourism, 830 million domestic trips were made during the holiday, up 4.1% and 71.3% compared to 2019 and 2022 on a comparable basis; domestic tourism revenue reached 753.4 billion yuan, up 1.5% and 129.5% compared to 2019 and 2022 on a comparable basis. Per-capita tourism spending significantly recovered, reaching 97.5% of the 2019 level (calculated from Ministry data), higher than the 84.1% during the Dragon Boat Festival. From a population mobility perspective, it's expected that Spring Festival foot traffic can only increase, not decrease. So from this angle, the outlook for gift box sales is positive. 2. Will "Face Consumption" Lead to a Surge in Spending Power? First, let's examine the five factors affecting spending power:

a. Income Level: Personal income is a key factor. Generally, higher income means stronger spending power. b. Price Levels: Price levels directly affect purchasing power. Rising prices decrease spending power; falling prices increase it. c. Monetary Policy: Monetary policy affects money supply and interest rates, influencing consumer spending. Loose policy increases money supply, lowers rates, reduces borrowing costs, and boosts spending power; tight policy does the opposite. d. Employment Situation: Good employment means stable income and stronger spending power; poor employment means unstable income and weaker spending power. e. Consumer Attitudes: Consumer attitudes and habits also affect spending power. As society develops, consumption concepts change, and demand becomes more diversified. These factors interact and constrain each other, collectively determining consumer spending power. Overall, income levels and price levels haven't fluctuated significantly compared to previous years. Employment is more challenging than pre-pandemic, but monetary policy and improved consumer attitudes have a positive impact on Spring Festival spending power. Implications for FMCG Manufacturers from Holiday Marketing "No business for half a year, but one sale feeds for half a year" was the reality for many FMCG manufacturers. Indeed, for many manufacturers of alcoholic beverages, gifts, plant proteins, apple cider vinegar, etc., sales during the Mid-Autumn Festival and Spring Festival account for over 80% of annual sales. But that's no longer the case; some manufacturers are even on the brink of bankruptcy. Here are a few suggestions: 1. Re-emphasize the Importance of Hypermarkets Kantar Consumer Index has a specific indicator, Shopper Reach Points (SRP), which measures a retailer's influence by multiplying the number of shoppers by their purchase frequency. Research data shows that the five largest FMCG retailers in China—RT-Mart, Yonghui, Walmart, China Resources Vanguard, and Carrefour—account for one-third of total shopper reach points in the market. Their purchase trips far exceed those of other retailers. Of course, these five physical retailers have faced intense competitive pressure in the past year, but for brand business, they remain crucial retail partners. 2. Accelerate Integration of Online and Offline Looking at the online retail market from a development perspective, it has evolved from pure e-commerce to community e-commerce, O2O models, B2B models, and now DTC (Direct-to-Consumer) models. These different models not only coexist but also develop well. For traditional manufacturers, especially those successful in traditional channels, embracing online layout still carries some baggage. But the retail market has moved from the "era of independent online and offline development" to the "era of fierce online-offline competition" and now to the "era of comprehensive online-offline integration." Coupled with the pandemic's impact and the penetration of internet thinking, consumer habits are changing. Manufacturers must quickly learn to adapt and integrate into this transformation. 3. Emphasize O2O Home Delivery Business The three-year pandemic's catalytic effect on direct-to-home delivery is evident. Consumers' O2O shopping behavior is maturing, and the categories purchased will further expand. Look at two sets of data: a. From 2016 to 2020, the home-delivery O2O market grew at a compound annual growth rate of 64%. The overall O2O market reached 2.6 trillion yuan in 2020, with home delivery accounting for 56% (1.4 trillion yuan). b. Target consumer profile: 70% female, 80% married, 53% with bachelor's degrees, 59% white-collar. This profile clearly represents high-net-worth individuals with absolute household purchase decision-making power. These two data sets fully demonstrate that the main consumer group is continuously driving the development of the home delivery business, and its impact will become increasingly profound. For example, consider product experience. In the traditional model, manufacturers need to purchase display positions (floor stacks, end caps, etc.), hire promoters, and then conduct product experiences within space constraints. With O2O home delivery, intermediate steps can be eliminated, allowing brands to connect directly with consumers more efficiently. How to Plan Spring Festival Gift Boxes? This is a common topic. Here's a simple eight-step plan for gift box layout: 1. Market Research: First, distributors need to conduct in-depth research on the target market to understand consumer needs, purchasing power, and preferences. This helps determine gift box categories, price ranges, and design styles. 2. Product Selection: Based on research, distributors should select products suitable for the Spring Festival atmosphere, such as New Year goods, snacks, beverages, health products, etc. Also, pay attention to product quality and taste to ensure consumer satisfaction. 3. Packaging Design: Spring Festival gift box packaging should have festive features, highlighting a joyful and peaceful atmosphere. Use red, gold, and other auspicious colors, and incorporate traditional Chinese elements like "Fu" characters, Spring Festival couplets, and Chinese knots. 4. Pricing Strategy: Distributors should set reasonable prices based on the target market's spending level. Offer products at different price points (especially focusing on the "two ends": high-end and low-end gift boxes) to meet diverse consumer needs. 5. Sales Channels: During Spring Festival, distributors should fully utilize both online and offline channels. Online can include e-commerce platforms, WeChat mini-programs, etc.; offline can include supermarkets, convenience stores, specialty stores, with dedicated counters or promotional activities. 6. Marketing Promotion: To boost sales, distributors can run various marketing activities such as flash sales, discounts, buy-one-get-one offers, etc. Also, use social media and short video platforms for promotion to increase brand awareness and product exposure. 7. After-Sales Service: To ensure consumer satisfaction, distributors need to provide good after-sales service, such as returns/exchanges and consultation. Resolving issues for retail outlets and consumers promptly helps build brand image and reputation. 8. Inventory Management: During Spring Festival, sales are high, so distributors need to ensure sufficient inventory to avoid stockouts. Also, closely monitor inventory levels and adjust purchasing strategies accordingly. Regarding stocking up (pressing inventory), it's a common phenomenon and natural for sales. As long as sales exist, inventory pressure is inevitable. For most FMCG products, market competition is essentially channel competition, and pressing inventory is a competitive necessity. However, the marketing environment has changed, and technology is advancing rapidly. Only by emphasizing systematic success and digital marketing innovation can brands truly press inventory effectively during Spring Festival.