In the era of shrinking volume, manufacturers and distributors share a common anxiety: how to achieve growth? Research shows that during economic crises, stronger brands demonstrate greater operational resilience. Companies need to build brands, and growth must also come from channels and scenarios with incremental opportunities. As the leading elevator media platform in China, Xinchao Media serves most of the outstanding FMCG brands in China, acting as a barometer for the industry. They have the deepest understanding of brand power and know how companies can effectively build brands in various environments. On August 20, 2024, at the main forum of the 6th China FMCG Conference hosted by New Distribution, Ms. Ruan Penghua, Partner and Vice President of Xinchao Media Group, delivered a keynote speech titled "In the Era of Stock Economy, How Do Companies Build Brands?" which resonated deeply with over 2,000 manufacturers and distributors present, sparking lively discussion.
New Distribution is pleased to report the highlights of her speech for our readers.
The Era of Stock Economy Will Communities Be a New Opportunity for FMCG Brands?
First, let me share some insights and thoughts on the current situation and marketing.
In recent years, online business has become increasingly difficult. Revenue from the 2024 618 Shopping Festival fell by 7% compared to last year.
Meanwhile, leading companies in the cosmetics industry show the importance of offline business: although offline revenue accounts for only 30%, it contributes 80% of profits.
Small and medium-sized enterprises are being eliminated at an accelerating pace, with resources gradually concentrating among leading companies. In the industry, it is expected that only 40% of companies will survive, of which 20% may perform slightly better, and the TOP 3 customers will have greater advantages. Consumer demand for affordable alternatives is rising, as seen in Japan after the economic bubble, where brands like Muji, Uniqlo, and 7-Eleven seized new development opportunities. China's retail channels have undergone tremendous changes, becoming more diverse and complex. These trends deserve careful consideration when formulating marketing strategies.
In the current environment, both online and offline are exploring the next generation of traffic dividends. From the 1500-meter track to 5000 meters and then 10,000 meters, companies need to reflect: Do we have the courage, perseverance, and strength to remain competitive?
Since 2020, the state has issued multiple policies to support the community economy, promoting the return of consumption to communities. It is expected that 70% of residents will meet their work, life, study, and leisure needs within their communities.
Offline retail store channel construction has begun to focus on communities. According to GeoData brand data, among chain convenience stores, community stores account for the largest share at 75%. Mall stores and hybrid stores each account for 6%, while office and school stores each account for 4%.
These trends indicate that communities are becoming an important battleground for retail. Companies need to adapt to this change to remain invincible in fierce competition.
In recent years, O2O channels have shown a trend of sustained high growth.
From 2015 to 2019, the instant retail market grew from zero to 75 billion yuan, taking five years. From 2020 to 2022, it took only three years for the market to rapidly expand to 320 billion yuan.
The explosive growth of O2O is attributed to the rise of the "new generation" in communities. The convenience of instant retail has increased demand for non-essential scenarios. As consumers gradually become accustomed to fast delivery of food services, they also expect home delivery for daily consumer goods.
According to the "2023 Instant Retail Development Trends White Paper," it is projected that by 2030, the instant retail market will grow to 3.6 trillion yuan, equivalent to 6% of total retail sales of consumer goods in the same period. This trend indicates the broad prospects and enormous potential of the market.
From the above data, it is certain that communities connect important consumption scenarios and are key traffic entrances for brands.
The demographic dividend in communities still exists, and community consumption is expected to grow.
According to relevant data, in 2023, 61.3% of the community population was aged 16-59, the primary consumers of FMCG products.
At the same time, consumer expectations for household spending increased by 45%. These trends indicate that the community consumer market has broad growth potential.
In the past, television was the centralized media, but now, on one hand, TV media's startup rate fell from 70% in 2016 to only 17.7% in 2023; on the other hand, elevator smart screens have grown from 200,000 units in 2016 to 1.5 million units now, covering approximately 300-400 million middle-class people, becoming the new offline centralized media.
As channels and traffic become increasingly fragmented, companies need to rely more on centralized media to build brands and improve the efficiency of channel and traffic usage. Creating big products around communities has also become a must-consider issue for companies.
How to Build Brands and Create Big Products Around Communities?
Here we share several excellent marketing cases.
First is the well-known Hsu Fu Chi, which consolidated its big product through product upgrades, breaking out from an extremely competitive category. In 2023, it became the "Most Popular Chinese New Year Candy Gift Box Brand" on the iiMedia Golden List, with New Year candy sales increasing 57% year-on-year. How did they do it?
First, they used a catchy song with addictive lyrics, ignited through Xinchao Media's community screens, achieving nationwide centralized media exposure. Second, they used targeted location selection, with terminal channel information exposure to drive purchases. Through LBS-based location selection, they did targeted traffic diversion within 3 kilometers around channels, using the lower screen to divert traffic to Meituan and Ele.me, exchanging platform resources for exposure.
Third, they conducted offline themed elevator event marketing, with secondary communication igniting both online and offline simultaneously.
During the Spring Festival, they used Xinchao elevator media to divert traffic to Meituan for purchases, setting a single-day historical sales record on the Meituan platform. By collaborating with platforms and retailers, they achieved triple-digit growth.
Xiaokuihua's big product adopted the FMCG model, using channel traffic diversion and igniting around communities. They used screen content to divert traffic to channels and utilized Xinchao's lower-screen advertising resource exchange strategy to achieve terminal displays and promotional activities.
This method effectively enhanced the brand's influence and sales efficiency in communities.
OPC's approach of using Xinchao's lower-screen resource exchange is very mature. For example, Tsingtao Beer uses the lower screen to divert traffic to Meituan O2O; Yanjing focuses on diverting traffic to its own community O2O, Liquor Express, SF, etc.
Nowadays, hot topic tracking has expanded from living room TVs to mobile phone analysis and communication, even covering smart screens that go out and enter homes, showing a trend of multi-screen linkage centered on the home.
For example, Nestlé launched a "Raging"-themed coffee during the hit drama "Raging," with the slogan "Nestlé Pure, even chewing is fragrant."
Additionally, they launched Nanjing Auntie's same coffee, on one hand, guiding consumer behavior by mining hot drama topics, and on the other hand, tracking and grasping social hotspots and emotions to achieve effective conversion.
In the recent Olympic marketing, Yili must be mentioned. They successfully "ambushed" competitors by innovatively, borderline, and maximally using Olympic elements, with full media coverage online and offline, blocking the elevator media track, and successfully creating the image of "Paris Olympic sponsor."
Additionally, there is Dongshen Special Drink, which precisely targeted emotions such as winning championships and gold medal counts, linking emotional value with brand spirit during "energy moments" of soaring attention, resonating with consumers.
From the above cases, it is not difficult to see that these excellent brands have all chosen elevator smart screens as one of their traffic entrances.
Relevant data shows that currently, the number of brands choosing in-elevator smart screens is 3.5 times that of brands using out-of-elevator LCD screens. Among the BRANDZ Top 100 Most Valuable Chinese Brands, 80 have chosen Xinchao Smart Screens.
This fully demonstrates that smart screens have become the first traffic entrance for elevator media and have become the first choice for brands.
When industries pursue innovation, with slight technological adjustments, they will find enormous demand in segmented tracks.
For example, David Mop stood out in a relatively weak category. Since 2019, David Mop has on one hand, spread through online media, and on the other hand, chosen Xinchao Smart Screens for ignition offline. In 3 years, they achieved 5-fold growth, becoming the number one brand in the category.
Due to experience-supported premium pricing, during the entire 618 period, David Mop's profits and revenue both grew.
Including Huang Tian'e, which introduced the standard for edible raw eggs and created a new category. As a weak brand in a weak category, through multi-screen interaction from TV to elevators to supermarkets, they reached the top in the edible raw egg category.
Bright Dairy, with innovation at its core, launched low-temperature yogurt Mosilian. Tetra Pak packaging had a disruptive impact on the industry pattern of China's dairy industry; the lower screen diverted traffic to channels, expanding nationwide.
The Pioneer of In-Elevator Smart Screens Xinchao Has Become the No.1 Community Elevator Media in China
Scientific statistics show that when listening and watching simultaneously (video), 3-day memory retention is 75%; when only listening without watching (newspaper), it is 25%; when only listening without watching (radio), it is 15%. Therefore, if brands want to be remembered, they must invest in video advertising.
As the pioneer of in-elevator smart screens, Xinchao Media's smart screens have five major advantages:
1. The vertical screen effect better matches the viewing habits of consumers in the digital media era, becoming the "Douyin" with sound inside elevators; 2. One screen per elevator, with reasonable terminal layout, efficiently reaching all groups in the building; 3. Combination of dynamic and static, with the upper screen using video TVC for brand exposure to attract attention, and the lower screen focusing on static brand core appeals or purchase channels; 4. Active viewing, with media positioned in front of the elevator car (usually front-left), facing users directly in a closed environment, making it easier to cultivate active viewing habits;
5. High-frequency reminders, with 15-second brand ads shown every 4 minutes, 300 times per day, and on average, seen every 1-2 elevator rides.
Currently, Xinchao Media covers 150+ cities nationwide, reaching 180 million urban middle-class people. It offers five major product packages, including Brand Ignition, Tagged Location Selection, Jingchao Plan, LBS, and Anti-Forgetting Package, providing different solutions for different pain points of enterprises.
Xinchao Media always pursues the craziest dreams with the most down-to-earth attitude, focusing on community media platforms for household consumption, doing valuable things, persisting long-term, and waiting for the rewards of time.
PS: For those interested in the on-site speech content, please follow the recent posts on the WeChat official account of New Distribution. We will compile and publish the guest's speech for our readers.
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