In today's consumer market, consumer behavior and mindsets are undergoing significant changes. What opportunities lie behind these changes, and what can businesses do? The following is the full text of the keynote speech: What Consumers Want: Good Products | Safe, Worry-Free, and Excellent Value for Money As consumer awareness has significantly improved, they are becoming more rational and wise in their spending, no longer easily wasting money. During the Chinese New Year, I chatted with my uncle and learned that he bought a "Big Brother" (early mobile phone) for 20,000-30,000 yuan back then. In 1997, the average monthly salary was just over 700 yuan, so even a year's salary couldn't afford one. Now, taking Guangzhou as an example, relevant data shows the average monthly income is over 6,000 yuan. At this point, a phone costing 3,000 yuan can already buy a fairly powerful one. If we simply compare the past (700 yuan salary vs. 20,000 yuan phone) with the present (6,000 yuan salary vs. 3,000 yuan smartphone), consumers are getting enhanced product features while their purchasing power has also increased relative to the past. Therefore, we cannot simply attribute current consumption phenomena to consumption downgrading based solely on the single factor of lower product prices. According to Thinkma, this is more a result of increased production capacity, technological advancement, and enhanced functionality. It's just that people no longer spend over 20,000 yuan on a Big Brother; instead, they calculate how to get more with less from their 6,000 yuan salary. Over the past year, while offline businesses have been complaining about hard times, Sam's Club and Pangdonglai have seen booming business, with consumers queuing to buy and even traffic jams at their doors. Why can they still perform so well during an economic downturn? Pangdonglai is highly praised, largely because they treat employees as people—employees are family, customers are friends. And it's not just slogans; they genuinely pay well and truly practice their corporate culture of freedom and love. In livestreams, hosts shout "family members," but that's not the same as real family. We believe that real family means treating people sincerely from the heart. Business should not be about "cutting leeks" (exploiting customers) but about long-term relationships. Don't deceive family. If you use too many tricks, you'll quickly exhaust the consumers you've worked hard to cultivate. Consumers have their own calculators; they can figure out whether a product is worth the price and whether the merchant is playing tricks. So minimize tricks and be more sincere. Sam's Club's 2024 sales are projected at 100 billion yuan, up 18.62%. As of mid-November 2024, sales reached 90.6 billion yuan. Excluding global sourcing business, Sam's Club China's sales were about 85 billion yuan, with 53 stores, averaging 1.603 billion yuan per store annually. Sam's Club's financial reports in recent years have been impressive, and its popularity is high. But Rome wasn't built in a day; you can't just see them enjoying success without seeing the struggles. Sam's Club entered China in 1996, opening its first store in Shenzhen. By 2025, that's nearly 30 years. For over twenty years in between, it was lukewarm, but it persisted in providing quality products and service experiences, developing step by step at its own pace. This also proves that building a long-term business that wins people's hearts is feasible, but the premise is accepting a slow start until quantitative changes accumulate into qualitative change. Sam's Club eliminated fees such as barcode fees, display fees, and entry fees, saving about 10%-20% overall. These savings are directly reflected in product prices. Coupled with Sam's strong product selection and bargaining power, its regular-priced products can offer consumers 10%-20% or even more savings compared to other supermarkets. Sam's Club just makes consumers feel they're getting a deal; actually, its overall prices aren't cheap. A deal is not the same as cheap; it's about making consumers feel they spent less and got a good deal. Sam's Club helps its target customers pick quality products, so consumers don't need to rack their brains to avoid pitfalls. They trust that Sam's products are of good quality and prices won't make them feel ripped off, saving them extra time and effort. This also helps consumers save a lot of worry. Thinkma believes that Pangdonglai and Sam's Club succeed because they treat people (employees and customers) as human beings, avoid tricks, treat others sincerely, and sell goods sincerely. Such businesses win long-term consumer trust and repeat purchases. So in the future, whether as consumers or businesspeople, we can buy suitable products at reasonable prices. Excellent value for money—that's the first New Year wish for everyone. What Consumers Want More: Diverse Needs | Detailed and Abundant Over the past two to three decades, consumer goods have changed significantly. Going back two decades, demand was extremely strong and supply scarce. Three years ago, demand was still strong with supply-demand balance. In the last two years, demand has been insufficient while supply is oversupplied—this is the so-called "supply-demand reversal," and it should remain this way for the next three to five years. In an era of oversupply and insufficient demand, where should products go? Thinkma believes they should go more detailed. Your biscuits used to be eaten in many scenarios. Your juice could be drunk in many scenarios—playing ball, walking, running, at home. But now it's different. In this era of severe oversupply and insufficient demand, companies can do two things: one is more refined scenarios, and the other is multi-functional products. Refine scenarios. Not long ago, Dongpeng Beverage's "Bushuila" (hydration drink) sold well. It targets just one scenario: sports and hydration. The name tells you how to use it. This single-scenario product achieved over 1.2 billion yuan in revenue in the first three quarters of 2024, accounting for nearly 10% of total revenue. The coffee drink "Dongpeng Daka" also exceeded 800 million yuan in revenue. Fresh coffee is hard to carry, so Dongpeng entered the segmented scenario of packaged coffee, which is easier to carry, allowing coffee lovers to have coffee anytime. These beverages are examples of Dongpeng's more segmented scenarios. Think about it: opportunities still exist, whether in consumer goods or other sectors. But against the backdrop of supply-demand reversal, we need to continuously tap into segmented markets to meet consumer needs and drive consumption. Product functionality. Products with multiple functions can meet the diverse needs of target groups. Taking beverages as an example, many drink caps have multiple functions. Dongpeng Teana's cap not only prevents dust but also facilitates sharing during sales—if you can't finish the drink, you can pour half a cup for someone else using the cap, and it can even serve as an ashtray. A product cap that combines dust prevention, sharing, and ashtray functions—what kind of usage scenarios does that correspond to, and what kind of users would be interested? Coincidentally, this functional beverage's packaging design is highly integrated with these functions, meeting users' multiple needs, making it a bestseller with sales exceeding 10 billion yuan. This also shows that in a market with changing supply-demand relationships, products with multiple functions that meet more consumer needs are more likely to attract purchases. To get consumers to pay, you need to give them enough reasons. Outstanding products can create a product portfolio that connects across multiple scenarios. Carlsberg has a combination product that can serve as a Chinese New Year gift box, be enjoyed at home, or be used for group dining with different flavors. When I returned to Huizhou for the New Year, I brought a box. When I gave it to my family on the way, they felt it was good—it could be drunk at home, given as a gift, or used for small gatherings. It connects to many scenarios, making it more versatile. That's the content of this section, mainly sharing three keywords: supply-demand reversal, more refined scenarios, and multi-functional products. What Consumers Want to Spend Less: Frugal and Calculating | Low Prices Attract Being frugal and calculating has two reasons. First, people's actual income and expectations are not ideal, so they need to spend less. Second, as mentioned earlier, consumers are smarter and won't spend on things that aren't worth it. There are many cars and many shoppers. But when people talk over meals, they all say business is hard this year and there's no money. Bosses say they can't pay wages, suppliers say clients haven't paid, contractors say they can't collect payments from construction sites—everyone has trouble getting money. So the conclusion is that people might not have much money. The number of people with reduced income is increasing, and so is the number of people buying discounted products. Correspondingly, discount stores are growing, such as "Snacks Are Busy" (Lingshi Henmang), which has nearly 10,000 stores, and there are over 20,000 snack discount supermarkets nationwide. Why has snack discount retail developed so fast? Thinkma believes we should view business from two perspectives: your own business perspective and your perspective as a consumer. If you're a businessperson selling seafood on the roadside, you'd want your seafood to sell at higher prices and still have buyers. But from a consumer's perspective, you'd hope to buy something worth 300 yuan for 50 or 60 yuan, achieving the effect of spending less and buying well. Snack discount stores can meet consumers' needs for "more, faster, better, and cheaper." From this angle, you can understand why snack discount retail has grown so fast. But merchants seek profit, and for sustainable development, there must be profitability. During the New Year, some merchants had poor logistics. Some items bought on certain platforms weren't shipped, with merchants showing "preparing shipment," while on JD.com, deliveries mostly arrived. This reflects a very realistic business logic: the price and value of goods need to reach a balance. As a merchant, if the price is too low, profit margins are thin or even can't cover costs, leading to delayed or no shipment. After all, business aims for profit; if there's no profit, merchants won't actively sell. As a consumer, you want to buy products at a reasonable price. This is the current overall consumer mindset. As a result, discount supermarkets are developing on a large scale. And based on Japan's past experience, it's basically certain that in the next two to three years, similar near-expiry food stores and discount supermarkets will continue to expand. With discount supermarkets, there's a big challenge for consumer goods companies. Discount stores only select the highest-traffic, best-selling products. For example, Lay's potato chips normally retail for about 4.8 yuan, but at discount stores they sell for 2.9 yuan. Lay's taro chips, which many supermarkets like China Resources Vanguard sell for 6.9 yuan, can be sold for about 5.7 yuan there. Manufacturers must consider that discount stores only sell the top 1-3 best-selling products; you can't put dozens of products into this channel. The operating logic of snack discount stores is simple: use best-selling products to attract traffic. For manufacturers, the goal is to sell goods; for snack discount stores, they sacrifice profits on some products to attract more customers. Everyone foresees this market will grow rapidly, as "more, faster, better, cheaper" is basic business logic, and it will definitely develop in this direction. In the product system of snack discount stores, best-selling or mainstream items are actually used to sacrifice profits. Whether for the store or the manufacturer, it's hard to make money from these mainstream items. So in this situation, you can only choose to do it or not. If you decide to do it, you can't expect to sell volume and make a profit from mainstream items—that's unrealistic. If you want to sell products and still make a profit, consider launching non-mainstream items, or differentiated, customized products with customized packaging to attract young users. In snack discount stores, we can see small-sized, special-flavor products. Although private labeling is feasible, in reality, many brands are reluctant to do it. Even if they do private labeling, they'd probably prefer to cooperate with Sam's Club because of its large procurement volume. Large supermarkets like Costco and Aldi also do large-volume procurement. Snack discount stores, however, are more about scattered individual packages, which is very unfriendly to many manufacturers—this is the biggest challenge currently. Snack discount stores are developing rapidly now and will continue to do so in the future. Their operating model is clear: first, use mainstream items to attract traffic; second, they must achieve profitability. This is similar to the development model of e-commerce platforms we know: early on, they burn money to capture territory, then they need to profit. To achieve profitability, they need differentiated items. Whether you can provide products that allow both parties to profit determines whether cooperation can last; otherwise, you'll be in trouble. Another situation is when a product has multiple specifications and packages, making it hard for consumers to calculate the unit price, blurring the price concept. So, to achieve business growth, on one hand, you can't ignore these growing channels and stores, as you can't give up these markets; on the other hand, you can't expect to profit from traffic-generating items in these channels. You need to gain sales from these channels while also thinking about how to profit from customized, differentiated, and multi-packaging products; otherwise, business will be hard to sustain. Ultimately, we hope to deliver high-quality products at prices that are fair to consumers in the current business environment. In the future, consumers need to feel they're getting more value; only then will they be willing to pay. If you can't give a reasonable reason, you'll have to rely on discounts and low prices to attract customers—otherwise, why would consumers choose your products? Consumers' mindset changes—buying good products, getting more, not wasting money—mean manufacturers need to give consumers a sense of value, make products or services with detailed scenarios, multiple functions to meet consumer needs, and reasonable prices. Consumers will be willing to pay for that. Besides changes in spending, consumers have also changed significantly in lifestyle and emotions. The next article will discuss trends and opportunities related to these changes.