---
title: "In a Stock Market with Product Homogenization and Channel Fragmentation, What Should Marketing Focus On?"
description: "As 2025 begins, reviewing the growth rate of total retail sales of consumer goods from January to November 2024, retail sales excluding automobiles reached 397,960 billion yuan, up 3.7%. Overall, the FMCG market saw fluctuating declines in consumption growth in 2024, reflecting economic pressure and uncertainty, which may continue into 2025. In such uncertain times, clear direction is crucial. This article explores three dimensions: seizing market share in a stock market, focusing on service amid product homogenization, and integrating fragmented channels."
author: "Cici"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2025-01-09"
language: "en"
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# In a Stock Market with Product Homogenization and Channel Fragmentation, What Should Marketing Focus On?

> As 2025 begins, reviewing the growth rate of total retail sales of consumer goods from January to November 2024, retail sales excluding automobiles reached 397,960 billion yuan, up 3.7%. Overall, the FMCG market saw fluctuating declines in consumption growth in 2024, reflecting economic pressure and uncertainty, which may continue into 2025. In such uncertain times, clear direction is crucial. This article explores three dimensions: seizing market share in a stock market, focusing on service amid product homogenization, and integrating fragmented channels.

Cici2025 has arrived. Reviewing the year-on-year growth rate of total retail sales of consumer goods from January to November 2024, retail sales of consumer goods excluding automobiles reached 397,960 billion yuan, an increase of 3.7%. Overall, the FMCG market in 2024 saw fluctuating declines in consumption growth, reflecting certain economic pressures and uncertainties. The economic environment in 2025 may continue the situation of 2024.
National Bureau of Statistics The more uncertain the economic environment, the more important it is to have clear direction. In a stock market with intense competition and limited growth, companies are forced to fight for survival, falling into a vortex of involution. However, involution should be about adapting to social development, not blindly following the crowd and wasting resources. This article will consider how to better adapt to the social environment from three dimensions: "stock market, focus on share," "product homogenization, focus on service," and "channel fragmentation, focus on integration." **Stock Market, Focus on Share** The domestic market is now mostly a stock market, **the cake won't grow bigger, and may even shrink. In a limited cake, it's about who grabs more.** In this process, big fish eat small fish, and fast fish eat slow fish. How do you know if you're a big fish or a fast fish? Market share is an important measure. 26% market share: If your share is below 26%, even if you're the market leader, you're not "safe"—competition is too fragmented, and the landscape can change at any time. As long as competitors invest money and resources, they can easily become number one, relegating you to second place. 42% market share: This is a key value for gaining competitive advantage. Reaching this share means a relative monopoly advantage, and the industry is likely to form oligopolistic competition, with you as the leader and benchmark for others. 74% market share: This indicates absolute monopoly and ultra-high bargaining power, but it also carries risks. The stronger your bargaining power, the more unfavorable it is for upstream and downstream players. Since companies pursue profits, over time, upstream and downstream will seek opportunities to support emerging brands to break the balance. What does the competitive landscape look like at each market share level? Fragmented: Low entry barriers, high substitutability, no strong moats, or emerging markets. Examples include candy, ice cream, electric breast pumps, etc. Triopoly/Duopoly: National players like Yili and Mengniu in ambient milk, Pepsi and Coca-Cola in China, etc. Relative monopoly: One company dominates, like Moutai with over 50% share in high-end baijiu, Master Kong with 45% in instant noodles, etc. Absolute monopoly: China Tobacco holds an absolute dominant position with over 74% share. The above data can serve as a reference not only for national market share but also for city managers and distributors to calculate their own market share based on local market size, determining the competitive landscape of their category locally. **Once you know your market share, how do you determine whose share you can take?** The concept of "firing range" is an indicator to measure the relative strength of competitors in a market. It reflects the relative position by calculating the ratio of market shares. For example, if Brand A has 34% share and Brand B has 20%, the ratio is 34%÷20% = 1.7 (note: divide the larger by the smaller), which exactly hits the threshold. When the ratio is greater than 1.7, it's beyond firing range. Brand A is in a strong position, Brand B is weak, and even if B is the local number two, it shouldn't directly confront A but should consider flanking tactics. When the ratio is less than or equal to 1.7, within firing range, competition is intense. The market landscape is unstable, and any party can change the share comparison through effective marketing, product innovation, or channel optimization. For example, in the bottled water market, Nongfu Spring and C'estbon, when their share ratio hasn't exceeded the "firing range," emphasize water source and quality in products. On price, Nongfu Spring launched a low-price green bottle. Facing Nongfu's low-price impact, C'estbon chose to cut prices at different levels in different market segments, grabbing more share while maintaining brand image and avoiding excessive damage to brand and profits from price wars. On channels, strengthen refined channel management, improve distribution rates and market penetration. If you're a regional brand manager or distributor, you can also use the "firing range" to calculate your local strength and adjust key strategies based on share. Image source: Internet **Product Homogenization, Focus on Service** China has shifted from a seller's market to a buyer's market. Products are highly homogenized, prices are transparent, so consumers naturally think whether this product is more expensive than other platforms or at a normal price. Free gifts and discounts are less popular because consumers automatically calculate if the expense is worth it. Since products are homogenized, focus more on service. **Service is measured not only by price but also by the value customers feel—on one hand, practical value; on the other, emotional value.** Starbucks' "Third Space" concept integrates practical and emotional value into the café. Coffee provides practical value (beverages), while the space offers emotional value (a comfortable place for consumers).
Image source: Internet
Service is an opportunity to increase offline sales amid product homogenization. The offline sales formula is: **Customer base × Penetration rate × Conversion rate × Repurchase rate × Average order value**. From this formula, repurchase rate and average order value are the easiest to change. Start with what's easy: increase repurchase rate and average order value. Understand your customer groups to focus on target customers, provide good service, build trust, and increase repurchase rate and average order value. **Target customer groups are divided into origin group, core group, and peripheral group.** Origin group: Your existing stock, potential heavy consumers, most easily guided to consume; they lead to bulk consumption and are a trust force. Core group: Your increment; this user group greatly helps product development and volume-profit scale. Peripheral group: Your variable; customers other than core and origin groups, typically with potential to buy this product but low loyalty. A best-selling drug for a chronic disease has a purchase price of 52 yuan, sold at 49 yuan, losing 3 yuan per pack. Asked why the boss makes a loss-making deal, he said his main customers are old customers and nearby residents. On the surface, it's a loss, but it strengthens the stickiness of old customers and nearby residents, actually enhancing his origin and core groups, and attracting peripheral groups to buy. After attracting traffic with low prices, other family medications are naturally bought at the pharmacy. The premise of good service is understanding your key groups and providing targeted service to increase average order value and repurchase rate, fully leveraging the unique advantages of offline channels, to survive long-term in the industry. How to determine your target groups? [Look at industry] Industry data shows consumption trends; keep up with industry report characteristics. [Look internally] Store data shows consumer profiles; make detailed labels for precise customer management. How to serve your target groups? Be more professional than your target groups. The "Customer Understanding Checklist" is used by mother-and-baby stores to reduce consumer distrust of salespeople, ensuring recommendations are based on facts, not performance. That is, provide professional services to build trust. Make your target groups more worry-free. A beer distributor directly supplies 2,000 terminals, but due to limited energy, key accounts were neglected. After adjustment, they layered customer management, directly supplying only the top 30% of stores; the remaining 70% were distributed through secondary distributors, and problematic stores were collected and resolved before handing back to secondary distributors. This change improved service quality for direct-supply stores, timely issue resolution, and satisfaction for both store and distributor customers. Make your target groups feel they've gained. A pharmacy sells two specifications of Lipitor. 28-tablet pack: original price 205 yuan, member price 169 yuan. 7-tablet pack: original price 49.8 yuan, member price 46.8 yuan. Non-members buying the 7-tablet pack quickly calculate that buying four 7-tablet packs at original price is cheaper than the 28-tablet original price. So they feel secretly pleased, thinking they saved money. Members, when buying, calculate that the 28-tablet pack is slightly cheaper than the 7-tablet member price, feeling comfortable about the discount. Asked why the design, the boss said: "First, the original and member prices make buyers compare, creating a sense of discount and attracting membership. Second, Lipitor is for chronic disease requiring long-term medication. Those who buy long-term are mostly members, while 7-tablet buyers are usually temporary, not my main consumer group. But they also feel they've gained." Through clever price design, consumers feel they've gained, naturally willing to visit the store. **Channel Fragmentation, Focus on Integration** Channel fragmentation divides consumers across various channels, bringing opportunities but also problems. [Price chaos] Each platform or channel has its own pricing algorithm; low prices on platforms disrupt market pricing, harming distributors and offline stores. [Increased management costs] Channel fragmentation requires managing more channels, increasing operational complexity and costs. [Scattered data] Each channel may have its own data collection system, leading to data silos, hindering a comprehensive understanding of customer needs and market trends. To solve these problems, manufacturers and retailers need to focus on channel integration, picking up the fragments of consumer groups from various channels to piece together a complete consumer profile and seize every growth opportunity. A prime example of online-offline integration is Hema Fresh. As a new retail enterprise, Hema Fresh cleverly integrates supermarket shopping, dining services, and logistics. Through seamless connection between its online APP and offline stores, it achieves online-offline integration. Consumers browse and order on the APP, choosing in-store pickup or home delivery. Additionally, physical stores use the APP to attract more customers, effectively boosting sales. This online-offline model makes shopping more convenient and personalized, while also improving operational efficiency and market competitiveness. For mother-and-baby stores, online-offline integration has become an important approach. Offline stores drive traffic, in-store consumption increases average order value, and stores then guide customers to the mini-program, making pregnant mothers part of their private domain. Mutual traffic between online and offline turns one-time customers from single-product redemptions into repeat stable customers. In conclusion, this article offers suggestions from three dimensions: "seize share, seize service, seize integration" as directional references. In 2025, I hope everyone can seize growth opportunities and become the best among the best in the intense competition. The above dimensions are references from SMI. If you have better development directions, feel free to interact in the comments section for discussion.
**【New Order · Symbiosis】**
**The 10th China FMCG Innovation Conference**
**Time: March 17-19, 2025**
**Location: Chengdu, China**


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