Recently, I received a community notice: Shanghai's lockdown is expected to be lifted by the end of May, leading to a large-scale "departure from Shanghai" wave. Communities must be highly vigilant, with strict reporting and quarantine for returnees. The next day, I went to a community convenience store and happened to see a salesperson discussing orders. The store owner responded bluntly: worried about returnees from Shanghai causing community lockdowns, he would only accept two days' worth of stock for essential products, preferring to run out rather than overstock; for high-end products in the same category, he would accept none except a few exceptions; and for new products, he would accept none at all. Indeed, retail outlets are the "close contacts" of offline channels with consumers and the first touchpoint of the consumer market. If outlets are in this state, the entire FMCG industry is likely in a similar situation. Everyone wants to create high-volume products, so-called bestsellers, but the result is: weak brands have no sell-through, all categories have no gaps, strong brands lack vitality, promotions cause no ripples, consumption has no demand, companies have no cash flow, teams fail to meet expectations, and channels lack enthusiasm. So, what is the growth logic for FMCG manufacturers amid the pandemic? Let's discuss this today. ****Overall demand changes little, but consumption downgrade has occurred, and growth logic has changed Where there are people, there is consumption—this is an eternal truth. Most FMCG categories are closely related to people's livelihoods, so theoretically and macro-wise, as long as the population doesn't change, total consumption won't fluctuate much. Moreover, the current domestic economic downturn is not severe and won't see drastic ups and downs. It's just that people who previously ate peanut oil now switch to soybean oil, and those who drank 10-yuan beer now drink 4-yuan beer, but the amount of oil used and the number of beer bottles remain largely unchanged. Speaking of consumption downgrade, it's not hard to see around us: the restaurants that survive are mostly the cheap and good Lanzhou noodles and Shaxian snacks; the higher-end, the harder it gets, like Haidilao. Barbershops' main income is now from quick cuts, while high-end perms, dyes, and styling have faded. More and more middle-class people driving 300,000-yuan pseudo-luxury cars are joining ride-hailing services. With rising oil prices, many cars in residential parking lots are gathering dust. The most real economic reality in China today is: the hustle and bustle has thinned; people try not to spend unless necessary. Only when people lack confidence in future income and wealth growth does such an economic phenomenon appear. So even without data, we can truly feel the existence of consumption downgrade. 1. Manufacturers should re-examine: "sell more" or "sell at a higher price"? A simple formula: sales revenue = sales volume × unit price. From the perspective of a company's revenue structure, there are only two choices: "sell more" or "sell at a higher price." The former relies on "volume," the latter on "price." In the long run, it's hard to achieve both; companies must choose one. So how to operate? a. Think about whether you are selling the product itself or its value-added empowerment? If it's the product itself, such as a pack of instant noodles or a ham sausage, then my suggestion is to lean toward "sell more." If it's the value-added empowerment, such as small-can tea or gift-oriented products, then I suggest leaning toward "sell at a higher price." Of course, if you have enough say in a product or channel, you can freely adjust pricing power. b. When you choose "sell more," pay attention to market capacity Take grain and oil as an example: selling a bag of flour or rice, choosing "sell more" is fine. For ordinary people, this is a necessity with high frequency, and the market capacity is large enough with ample room for growth. But when you sell a bottle of olive oil, choosing "sell more" is clearly unscientific; this category doesn't have high market space, and consumer demand frequency isn't high either. c. When you choose "sell at a higher price," pay attention to consumer perception "Selling at a higher price" means "earning more," which involves brand premium. Consumers need to pay for your brand in addition to the product itself. This premium capability must be built on consumer recognition of the product and preference for the brand, requiring long-term brand accumulation, continuous consumer education, and emotional connection. If you haven't done this before, it's best not to lean toward "sell at a higher price" now. 2. Young people's consumption concepts are changing; FMCG manufacturers must keep up Previously, when we mentioned young people's consumption views, we seemed to equate them with "impulsive spending" and "indulging in consumerism," thinking they must buy Nike shoes, Apple phones, and Starbucks coffee. Now, young people are quietly changing, becoming more rational and having more correct and mature consumption views. According to the "China Youth Consumption Report" released by CCTV Finance, the top three consumption areas for young people are education and training, housing, and health and wellness. Nearly 60% of Chinese youth say they only spend on essential needs, and 40% say they want to buy less but better. Additionally, a survey by Xinhua Net found that 22.7% of surveyed youth believe their peers are very rational consumers, valuing quality and practicality more; 55.4% think they shop rationally and compare prices; and 52.6% say they value quality more when shopping. From caring about "what I bought" to gradually caring about "how to buy better," they fear "consumption revenge" more than "revenge spending." Young people are the main force in the consumer market. How should FMCG manufacturers think in this situation? a. Pay more attention to the five words "good goods and cheap" With the popularity of keywords like "big-brand alternatives" and "cost-effective goodies," you'll find that this generation of young people is very pragmatic in shopping choices. They are no longer bound by labels like "blind consumption" or "spending lavishly." They have clear consumption concepts, starting from practicality, buying on demand, with more rational consumption views and a greater focus on cost-effectiveness. Following the consumption philosophy of "saving money without lowering taste, saving money without losing fashion, saving money without reducing dignity," they carefully select the best value for money, balancing savings with the pursuit of a quality life. So times have changed; manufacturers must be more rational with products, pay more attention to controlling total costs, and be more meticulous in selecting product ingredient lists. b. Pay more attention to market competition; comparative consumption is increasingly prominent A real case: A friend who runs an imported food outlet recently told me something he found baffling. His business had been good, but last month sales suddenly plummeted for a week. He didn't notice at first because he'd experienced periodic sales fluctuations before, but after another week, it still hadn't improved. Investigation revealed that his main-selling dried fruit series had been taken by a competitor. Opening the competitor's online store, he found that several consumers who used to buy from him left thanks because the competitor included a one-yuan gift with delivery. Note that a pack costs 40 yuan, yet regular customers would take time to compare and care about a one-yuan trial gift. This is a manifestation of increasingly prominent comparative consumption. Whether online or offline, consumers are more willing to spend time comparing options rather than buying casually as before. So for FMCG manufacturers, on the growth path, they must constantly monitor competitors. Free themselves from the inefficient response mechanism of spending a month collecting competitor information, another month formulating market strategies, then half a month for process approval and half a month for policy promotion. Fully delegate authority, strengthen mid-platform operations, and improve flexibility and agility. 3. At the enterprise level, establish a drainage system for bulk products A few days ago, I visited several large discount food stores in Zhengzhou. Business was booming, and prices were tempting—almost all at about 60% of normal prices, with shelf life around half. Some people drove luxury cars to stock up. Through communication with supermarket purchasing managers: some products are sourced through brand-led cooperation. Their stores are chain operations and prefer signing contracts with brand owners. Local distributors can be arranged for nearby delivery. Some products come from distributor warehouses, some from outlet returns, and some from brand factories' overstock, with cash on delivery. Amid the pandemic, brand owners need to pay more attention to the survival of downstream partners, ease financial pressure on distributors, reduce product pressure on outlets, and appropriately provide consumers with good and cheap products. This will inject vitality into the enterprise and build momentum for growth. ****Multi-scenario and multi-channel efforts: exploring is better than standing still In the post-pandemic era, the younger generation of consumers has gradually formed consumption concepts of "branding, diversification, and personalization," which makes many companies face complex and changing consumer preferences, dispersed transaction volumes, frequent transactions, and smaller single transaction amounts. I strongly agree with a saying: When manufacturer growth hits a bottleneck, opportunities are not front, back, left, or right, but above; expanding channel space is faster than intensive cultivation of the channel plane. How to understand this? First, it's certain that intensive offline channel cultivation remains very important. If a brand has achieved 80 points in offline channels, it means the "meat and soup" of the market is almost eaten up, and growth hits a bottleneck. At this point, instead of spending great effort to perfect offline operations, consider how to lay out online: consider B2B, community group buying, Tmall & JD Super? 1. Multi-scenario customer acquisition and multi-channel selling should be immediately elevated to corporate strategy Affected by the pandemic, most physical stores have suffered severe damage. In this situation, every merchant realizes that relying solely on offline physical sales is very limited, so they all want to build their own online stores and sell through multiple channels! For FMCG manufacturers, they must fully support their outlets. I very much agree with the four scenarios proposed by Teacher Liu Chunxiong; these are industry trends and the growth points for manufacturers. Stores are experiential value and monetization: Terminal outlets should focus on experiential value; only they can satisfy consumers' five-dimensional senses—sight, hearing, touch, smell, and taste—and better integrate with products. Taobao is search and large platform value: Once a product successfully builds brand power, channels to meet consumers' active needs become diversified, and e-commerce platforms like Taobao will help drive performance growth. Group buying is social value and monetization: In the three-dimensional business activities of cognition, transaction, and relationship, the most convenient way to establish relationships is through social value, which will be infinitely amplified in future business models. Douyin is content value and monetization: Scrolling Douyin can make time stand still; young people can easily spend an hour. It can be addictive. Companies should value Douyin-style brand communication, create good content to stimulate consumer interest, and achieve traffic monetization growth. 2. Exploration is better than standing still; executives should activate exploratory thinking Here I only want to talk about some small and medium-sized old enterprises, especially some executives who seem never to have stepped out, still living in the market environment of 10 years ago. This is a tragedy for themselves and for the enterprise. Although during the pandemic, bold exploratory thinking must still be activated to see the path for future growth.