---
title: "I Found the Murderer of P&G!"
description: "P&G, once an invincible FMCG giant, is now declining rapidly, especially in China, due to its failure to adapt to the internet era and changing consumer demands. The article argues that P&G's decline is inevitable as it represents an industrial-age model that cannot survive in the age of information and data."
author: "New Distribution"
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published: "2018-05-06"
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---

# I Found the Murderer of P&G!

> P&G, once an invincible FMCG giant, is now declining rapidly, especially in China, due to its failure to adapt to the internet era and changing consumer demands. The article argues that P&G's decline is inevitable as it represents an industrial-age model that cannot survive in the age of information and data.

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Times change, and fortunes shift.
No one can stand at the pinnacle of the era forever.
Alibaba's e-commerce has almost unified the market; wherever Ma Yun goes, everyone knows him and welcomes him.
Even Ma Yun, with his eighteen-core brain, only dares to say that Alibaba's goal is to live 102 years, not forever.
In this world, there are no eternally successful companies, only companies of the era.
Whoever adapts to the times and grasps the pulse of the era has the opportunity to stand at the top; whoever misses the times and fails to see the times clearly will be abandoned by the times.
Even P&G, the FMCG giant that once flourished and was invincible, is being abandoned by the times.

**Fallen from the Altar: P&G's Growth Stagnates, Profits Plunge**
**▼**
The global market is growing, the economy is booming, but P&G is on a continuous decline.
Recently, P&G released its financial report showing that in the nine months ending March 31, 2018, **P&G's net profit fell by 40% year-on-year.**
Revenue also stagnated after reaching $80 billion in 2012, **with 2017 revenue only $65.1 billion.**
Yes, you can hardly imagine that this FMCG giant, invincible worldwide, owning Rejoice, Pantene, VS Sassoon, Head & Shoulders, Safeguard, Crest, Tide, Ariel... **and a host of other famous brands, is declining at an alarming rate, especially in the Chinese market, where it is facing an unprecedented crisis.**
Its global CEO, David Taylor, even lamented helplessly: In China, our second-largest market, no core category is gaining users, and most are even declining.
To save the situation, P&G, which had been aggressively adding brands, now has to start subtracting, selling off massively, reducing its brand count from 200 to only about 65, which is truly unbelievable.
Although a centipede dies but never stiffens, P&G's strength and scale are not fatal, but the trend of decline is unstoppable.

**At Its Peak, Invincible**
**▼**
Founded in 1837 in Cincinnati, USA, P&G started as a small candle-making workshop and grew into a global FMCG giant, with 181 years of history.
It first entered China in 1988, just in time for the best era.
Upon arrival, P&G gave Chinese consumers a shock by pricing a 300ml bottle of shampoo at 19 yuan, astonishing everyone.
At that time, China was still very poor; an ordinary worker's monthly salary was less than 100 yuan, so 19 yuan was equivalent to 300-400 yuan today, outrageously expensive.
But then, China was in the early stages of reform and opening up, with extreme material scarcity and a severe seller's market; as long as there was a product, it would sell.
Who would have thought that such an unreasonable pricing strategy would lead to P&G's great success? Subsequently, P&G launched Rejoice, Olay, Pantene, Safeguard, and many other brands, opening the eyes of Chinese consumers.
Many were surprised to find that FMCG could be played this way; these foreign brands seemed like magic.
Despite the high prices, they were warmly welcomed by Chinese consumers.
Later, **P&G began to enter the low-end market, relying on scale and standardization, quickly selling nationwide, with market share reaching 47%, and over 50% in hair care products. Almost all well-known FMCG brands in the market were P&G products.**
P&G entered an unprecedented heyday.

**Times Change, P&G Falls**
**▼**
However, extremes meet, and prosperity leads to decline.
With China's rapid economic development and the rise of the middle class, the pursuit of quality and individuality became the trend of the times.
FMCG products became commonplace! P&G's overly large market share made it ubiquitous, turning from a fresh and fashionable brand into a synonym for mediocrity and ordinariness.
The big-brand, standardized strategy that once made P&G proud and that countless companies aspired to has now become a burden in the new era.
**P&G, accustomed to low-cost, large-scale production to meet the needs of the majority, cannot adapt to the countless personalized needs of customers.**
In the past, P&G could rely on its strong marketing capabilities and traditional distributor channels to control exclusivity, squeeze out other brands, and dominate stores, leaving consumers with no choice.
Now, with the advent of the internet era, especially the rapid development of mobile internet, e-commerce has reached its peak. China's consumption channels have undergone drastic changes, with online channels dominating, while traditional channels wither and struggle to survive.
P&G was caught off guard; its extensive offline channel layout became a liability rather than an advantage, and under conflicting interests, it became an obstacle to P&G's online expansion.
In addition, as the Chinese market matured, local Chinese FMCG brands that were previously squeezed out by P&G began to fight back, targeting P&G. In the toothpaste market, Yunnan Baiyao and Saky; in the shampoo market, Lafang and Shulei; in the soap market, Liushen and Lux—many brands surged forward. Although they are not under one umbrella and lack synergy, under the siege of a pack of wolves, P&G still finds it hard to cope. With diversified consumer choices, P&G is no longer irreplaceable, and its market decline is not surprising.
**At the critical moment, P&G began to frantically subtract, reducing brands, attempting to concentrate advantages and fight again.**
But it ignored the changes of the times, the shift in consumer demand for quality and personalization, and the transformation of shopping habits and scenarios. **Its one-sided attempt to continue occupying consumer minds and become the preferred brand through large-scale marketing and advertising coverage will only become increasingly ineffective.**
When there are more and more products on the market that meet consumers' pursuit of quality and personalization, P&G's abandonment is only a matter of time.

**Is There Hope for P&G?**
**▼**
But as a miracle that grew with the global consumer economy and the expansion of the middle class in the 20th century, why has P&G's golden brand begun to fade in the 21st century? In response, academia and the business community have offered various plausible diagnoses:
**1. Diagnosis 1: Focusing on the mass market, losing the high-end**
With economic development and rising incomes, consumption is upgrading, and P&G, which focuses on the mass market, can no longer attract consumers. For example, more and more first-tier city consumers are upgrading from Head & Shoulders to L'Occitane, Kiehl's, and Tsubaki.
**2. Diagnosis 2: Brand blur**
P&G has also launched its own high-end products, but they are placed under its mass brands, such as Rejoice Perich, Pantene Pro-V Repair & Care Essence, and Olay ProX. This is a terrible move, a taboo in brand management; consumers simply cannot distinguish. How could P&G make such a low-level mistake!
**3. Diagnosis 3: Multi-brand failure**
This is an old topic. From the beginning, some questioned P&G's multi-brand model, arguing that running hundreds of brands simultaneously would cause management to lose focus and neglect some.
**4. Diagnosis 4: Big company disease**
P&G is a mature, established listed company with complete processes and reporting systems, slow decision-making, and long decision chains, unable to make surprise moves like small companies. For example, the herbal brand "Oriental Season" took two years from R&D to market, which is considered fast for P&G.
**5. Diagnosis 5: Functional advertising no longer attracts young people**
"Dandruff gone, hair more beautiful," "80,000 micro-pores for instant absorption," "One toothpaste fights 7 oral problems"—this kind of unchanging, force-fed functional appeal lacks topicality and does not suit modern young people who seek fashion.
**6. Diagnosis 6: Slow digital marketing**
It is believed that modern consumers have shifted from TV screens to mobile phones and social media, while P&G's marketing methods are too traditional, with advertising still primarily on TV, and internet marketing still following traditional TV ad models, such as pre-video ads, lacking interaction and innovation.
**7. Diagnosis 7: Talent drain**
Richard Deupree, former chairman of P&G, once said, **"If you leave our money, plants, and brands, and take our people, our company will collapse."** This is the opposite of Coca-Cola's story: "If the factory burns down, as long as the brand remains, we can rebuild overnight." P&G is now facing a talent drain, with talents leaving from the US headquarters to Guangzhou P&G.
**8. Diagnosis 8: Market saturation and economic downturn**
This view holds that P&G has been operating in the global market for over a hundred years, with high market penetration, making further growth difficult. Coupled with the global economic slowdown in recent years, P&G cannot remain immune.

**However, I believe that all the above diagnoses fail to grasp the key point and are untenable.**
For example, it is said that P&G missed the consumption upgrade in China. But Liby and Blue Moon, which have taken away a large share of P&G's market, are clearly positioned as lower-end brands than P&G.
For those who think P&G's brand is blurred, look at P&G's competitors, L'Occitane and Kiehl's; they also place many products under the same brand—in other words, these brands that have taken market share from P&G are far inferior to P&G in management, brand, and strategy. —Of course, for P&G, this is indeed a low-level mistake.
Multi-brand failure? This is a cliché. The problem is that consumers are currently "disliking" P&G precisely because they feel P&G has too few brands, not enough, not new, not fashionable enough. So they try new brands beyond the old trio of Head & Shoulders, Rejoice, and Pantene, seeking new stimulation.
Big company disease? If you think P&G's size is a disadvantage, you are completely wrong. The industries of personal care, baby care, and feminine hygiene are precisely those that require time to build trust, and big companies have credibility. Do Chinese consumers dislike Pampers because the company behind it is too big? Can those short-lived small daily chemical companies in the Chinese market reassure consumers in first-tier markets? Do consumers need toothpaste and shampoo that change formulas, packaging, and names every year, quarter, or even week (like Xiaomi's weekly system updates)? Of course not.
Functional advertising too old-fashioned? I want to reiterate that P&G's advertising is still the highest standard in the industry. If you think P&G's ads are outdated, look at the competitors' ads. They are even more rustic. Most are imitating P&G, and some imitate poorly.
Poor digital marketing? I want to say this is a trendy topic, but it is also a false proposition. Every company doing digital marketing can proudly present a series of so-called success cases, saying how many times their internet ads were clicked, how many interactions with consumers, how many reposts, likes, and shares on social media. **But I want to say that so far, no powerful brand in the world has been built on such superficial digital marketing. Building a brand takes time and accumulation.**
**Talent drain? This is a result, not a cause. It is because talents smelled the decline of P&G that they left. Not the other way around.**
Market saturation and economic downturn? This is true; the overall daily consumer market has seen sluggish growth. The problem is that the market share that P&G had penetrated and saturated is being taken by other brands.
I believe that in the face of the current crisis, P&G's experienced and battle-hardened professional managers will surely come up with many good strategies. For example, recruit better talent, develop better products, create more clever interactive ads to spark internet discussions, and engage deeply with young people's social media. P&G also has the ability to further improve its supply chain, enhance distributor management, and continue to reduce operating costs. However, my view is that P&G's decline is inevitable, and P&G will never regain its former glory. These efforts, like Tanchun taking over the Grand View Garden, or Li Hongzhang and Zhang Zhidong launching the Westernization Movement, may bring a brief "revival," but in the long run, they cannot change P&G's fate of inevitable decline.
Because P&G is a product of the industrial era's "mass production + mass retail + mass channels + mass brands + mass logistics," like the Ford Model T, producing a good product at a low price, reaching national consumers through national advertising and national distribution. Consumers did not need other choices. In a sense, companies like P&G and Ford played a historic role in human progress, allocating social resources with the highest efficiency and benefiting society to the greatest extent.
However, now we are transitioning from the industrial era to the information era, and further to the data era. Small and beautiful brands can reach their audiences through online channels. For example, in the past, consumers had an inner impulse to be "different." But in the era without the internet, a young mother in a remote county in China could only see new brands on TV and in supermarkets. Even if she didn't want to use P&G shampoo, she couldn't know that there was a niche shampoo bar brand called Lush in the UK. From the supply side, even if Lush in the UK accurately learned that there were scattered demands in the Chinese market totaling hundreds of thousands of shampoo bars per year (which might be quite impressive compared to the small UK market, possibly making Lush's management laugh with joy), Lush would not have the ability to open an office in China, advertise on CCTV or satellite TV, conduct market research in China, or spread its products across thousands of counties in China, placing a few bars in the largest supermarket in each county.
**But with the internet, everything is different.**
A young mother in a remote county joins an online community of hot moms. Someone mentions that a niche product from the UK or New Zealand is good. She searches on Taobao, and hey, there are daigou (personal shoppers). She places an order. Two or three days later, the product arrives.
P&G, Walmart, these industrial-era behemoths, will inevitably decline, and no matter what, they cannot regain their former glory. No matter how many meetings P&G holds internally, how many talents it hires, how many new products it develops, or how much cost it incurs, it cannot succeed again. This has nothing to do with P&G's management level or the efforts of its employees.
A similar example is CCTV's Spring Festival Gala. In the past, one gala could satisfy the whole nation. Now, no matter how hard the director tries, no matter how many stars are invited, even if there are no content restrictions, and anything can be said, performed, or anyone can appear, the ratings can never return to the past. Opening the gala to the public, having newcomers perform, letting the audience vote on who appears—**no measure will work because the audience has fragmented, and these fragmented needs can be met through the internet. I might add that only through the internet can they be met.** Recall: during the Spring Festival Gala on New Year's Eve, if someone is not watching the gala, what are they doing? They are definitely online! Whether browsing Weibo, WeChat, grabbing red envelopes, or playing Dou Dizhu or games.
In 2009, Ma Yun gave a speech at the APEC summit titled "Small is beautiful." At the time, many people discussed it, thinking that Ma Yun was sour grapes because Taobao couldn't compare to physical malls like Wanda Plaza or B2C brands like JD.com, and because there were few traditional big brands on Tmall at the time. Seven years later, we have to admire Ma Yun's foresight—of course, he also saw too far, so far that people at the time didn't understand him.
P&G's decline is not because it is low-end, nor because it is high-end. Not because it has too few brands, nor because it has too many. Not because its products are too old, nor because they are too novel. In fact, in the future, high-end products, rustic knockoffs, ancient niche products, and bizarre products that iterate daily will all have their markets. All this is because of the internet. In the industrial era, market competition inevitably led to excellent companies like P&G and Walmart defeating competitors through best practices and dominating the market. This outcome was optimal for society, consumers, and even the natural environment. **Now, P&G's market share is declining, not because people no longer like P&G, but because in the industrial era, there was no choice but P&G; now they have infinite choices.**

**▼**
P&G's inevitable decline is a dirge at the end of the industrial era. But P&G need not grieve alone, because looking further ahead, these small and beautiful brands that are now laughing and encroaching on P&G's market will also decline, as consumer needs will further fragment, personalize, and customize. When we reach the era of complete C2B, the current concept of "brand" may no longer exist.
Some might say, according to you, is P&G beyond saving?
Of course, there is hope. I analyze that P&G has many ways out:
> Enter markets where the internet and e-commerce are not yet widespread, such as Africa, where quality industrial-era products are still needed; China's township markets and India also have great untapped potential.
>
> Leverage its strong strength to transform into a holding and capital operation company, specializing in acquiring promising small and beautiful brands, then packaging them for listing and exiting with profits.
>
> Transform into a platform company, incubating daily consumer brands.
>
> Transform into a B2B company, moving from the front stage to the backstage, using its technical expertise to provide raw materials, R&D, and OEM services for various daily consumer brands; this is how many European, American, and Japanese companies now operate, and they are doing well.

Finally, let me clarify: when I say "P&G will inevitably decline," I mean the industrial-era big-brand model, not the company named P&G. Small companies with inferior management can gradually encroach on P&G, while P&G's efforts to improve itself are futile. This outcome may seem tragic, but it is historically inevitable.
**This is the times. This is fate.**

Source: Finance Three Minutes (ID: qgq1818), Business Review Magazine (ID: shangyepinglun)
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