Recently, the British research company Euromonitor released its 2019 list of the top 100 global fast-moving consumer goods (FMCG) brands, and many brands we see in our daily lives made the list. Image source: YOUMOU (yellow text indicates Chinese brands) The ranking is based on each brand's global retail sales in fiscal year 2017. The selected brands are mostly packaged food, beauty and personal care, and soft drink brands. Among them, Coca-Cola, Pepsi, and Nestlé took the top three spots; Kangshifu, Mengniu, Yili, Arawana, JDB, Wahaha, and Shuanghui—seven Chinese brands in total—made the list. This list also reveals many fresh phenomena and trends. From the list, soft drinks hold an important position in the FMCG industry, with most listed brands being soft drink brands, and cola dominating. Additionally, with the rise of the pet economy and the beauty economy, many leading brands have begun to appear on the list. Chinese brands also performed impressively. Notably, Kangshifu, the instant noodle giant that had been criticized, and JDB, the king of herbal tea, made strong appearances, showing that old domestic brands are revitalizing. I have selected 5 notable brands or industries from the list to analyze the reasons behind their inclusion and the patterns they reveal. "Happy Water for Couch Potatoes" Still Dominates Globally But It's No Longer What It Used to Be TOP 1: Coca-Cola TOP 2: Pepsi-Cola In this list of the top 100 FMCG brands, Pepsi and Coca-Cola firmly hold the top two positions. As one of the world's three major beverages and the source of joy for "couch potato" groups, cola has held a dominant position in the beverage industry for 130 years since its invention. As cola giants, Pepsi and Coca-Cola have been "loving and fighting" each other for over a century since their inception. From advertising, logos, taste, to packaging, whenever the two companies clash, it always sparks a century-scale war among fans. The most common is the "mutual pinching" of advertising creativity between this red-blue CP. In their century-long "melee," they have repeatedly sparked amazing ideas. Coca-Cola excels at various creative interactions, especially in packaging. You can even take a selfie while drinking a Coke. In 2013, Coca-Cola launched nickname bottles, with nicknames like "rich and beautiful," "naturally cute," "tall, rich, and handsome," etc. Just gently pull the bottle's wrapper, and it folds into a ribbon flower—a pull-flower bottle. Compared to Coca-Cola, Pepsi's advertising is star-studded. From MJ, Madonna, Ronaldo, Beyoncé, Faye Wong... to Andy Lau, Louis Koo, Jolin Tsai, Jay Chou, Show Luo... Pepsi's all-star strategy has covered several generations of young consumers, and the ads featuring these stars have become youthful memories for many. However, glory is not eternal. As more young consumers begin to focus on health, "a thermos in the left hand and goji berries in the right" has become a new normal, and carbonated drinks like cola are gradually being neglected. According to the 2017 financial report, Coca-Cola's net profit attributable to shareholders was $1.248 billion, a year-on-year decline of 81%. At the same time, Pepsi was equally bleak, with net profit of $4.857 billion in 2017, a year-on-year decline of 23.26%. Image source: Public Food Talk As performance continued to decline, Pepsi and Coca-Cola, these two brothers in adversity, began to embark on a transformation path together. In recent years, Coca-Cola has made numerous product innovations around "health," successively launching products like Diet Coke and Coke Zero. From tea drinks to yogurt, from coffee to juice, Coca-Cola's multiple acquisitions in 2018 also conveyed a signal: decarbonation, diversification, and health. Its brother Pepsi, in addition to adopting a similar "low-sugar" route as Coca-Cola by launching "Pepsi Light," has also proposed a health initiative plan. Besides regular carbonated drinks, it will launch a series of "daily nutrition" products by 2025. With the rise of a new generation of consumers, how to attract this generation to the former "happy water for couch potatoes" has become a new challenge for the two giants. L'Oréal, Creator of "Internet Celebrity Li Jiaqi," Continues to Hold the Top Position in Global Cosmetics TOP 5: L'Oréal Paris In the top five of the list, the French beauty brand L'Oréal Paris also made an appearance. Additionally, L'Oréal's other brands—Garnier, Maybelline, and Lancôme—also made the list, ranking 29th, 35th, and 42nd, respectively. For most female fans, these brand names are not unfamiliar. In fact, they all come from the same company: the L'Oréal Group. L'Oréal Group is a French cosmetics company founded in 1907. It is currently the world's largest cosmetics group, owning nearly 500 brands. Among them, L'Oréal Paris, Lancôme, Maybelline New York, YSL Beauty, Armani Beauty, and Kiehl's have all joined the "billion club." In the 2019 Hurun Global Rich List, Françoise Bettencourt Meyers, heir to the L'Oréal cosmetics empire, became the "world's richest woman" in 2019 with a fortune of $49 billion. Image source: Hurun Report In today's "appearance is justice" era, L'Oréal, with a century of history, continues to dominate the cosmetics industry through e-commerce and the Chinese market. With the development of China's skincare and makeup market, in 2015, L'Oréal China became the group's second-largest market globally. Its success in the Chinese market is due, on one hand, to its buy-buy-buy capital strategy (acquiring Lancôme in 1964, Shu Uemura in 2002, and YSL Beauty in 2008), using local brands to capture the local market, and on the other hand, to its full-line layout across high, medium, and low-end products. At the same time, e-commerce is also a major driver of L'Oréal's sales. In 2016, L'Oréal's e-commerce department was established. Currently, more than 35% of L'Oréal China's performance comes from e-commerce channels, and L'Oréal ranks first in the beauty industry in e-commerce. During the 2018 Double 11 shopping festival, it defended its top position in sales rankings. Through e-commerce, L'Oréal also reaches the "small-town shopaholic" segment, thereby penetrating deeper into the Chinese market. The best validation of this theory is the performance of YSL Beauty. In October 2016, a limited-edition lipstick from YSL Beauty, a brand under L'Oréal, flooded WeChat Moments overnight. On a well-known domestic online shopping platform, the price of this lipstick set was even speculated to be up to 20 times the original price. Image source: L'Oréal official Weibo Last year, L'Oréal began to focus on new retail. The rise of online streamer Li Jiaqi is a major achievement of this strategy. Li Jiaqi is currently a BA (beauty advisor) for L'Oréal and one of the top three super streamers on Tmall. Li Jiaqi has created many astonishing data points. This Women's Day (March 8), Li Jiaqi's live stream on Taobao attracted 189,300 views, generated 23,000 orders, and achieved sales of 3.53 million yuan. Image source: Weibo Now, L'Oréal has successfully transformed through e-commerce and new retail, not only revitalizing the brand but also providing viable paths for followers. Kangshifu, the Instant Noodle Giant That Couldn't Sell, Made a Spectacular Comeback TOP 12: Kangshifu Kangshifu is the highest-ranked Chinese brand on the list, ranking 12th globally with a brand value of $8-9 billion. Looking back at Kangshifu's 30-year journey, it is also a magnificent business history. In 1991, Kangshifu was founded. By 1995, with its Kangshifu Braised Beef Noodles, Kangshifu's sales reached 2.45 billion yuan. Image source: Kangshifu official Weibo After the great success of instant noodles, Kangshifu began to enter the beverage industry and produced foods like "Kangshifu Rice Crackers." In 1996, Kangshifu was listed on the Hong Kong Stock Exchange with a market value of HK$140 billion. 2013 became the highlight moment for Kangshifu instant noodles. According to the World Instant Noodles Association, China's annual instant noodle sales reached 46.22 billion packs that year, with Kangshifu accounting for 47.4% of sales. Sitting on a huge instant noodle empire, Kangshifu was slow to perceive and respond to external changes. In its peak year, the food delivery industry developed rapidly like bamboo shoots after rain, gradually capturing market share, and Kangshifu's glory that had lasted for over a decade scattered. According to data from the World Instant Noodles Association, from 2013 to 2016, China's instant noodle demand declined continuously, with annual sales dropping from 46.22 billion packs to 38.52 billion packs. Kangshifu also suffered heavy losses. Its stock price hit a low of HK$6.387 on August 3, 2016, compared to a previous high of HK$22.622 on August 14, 2014. In two years, its market value evaporated by approximately 73.5 billion yuan. By 2016, Kangshifu had experienced three years of revenue decline and four years of net profit decline. At this time, the food delivery industry also faced many pain points, such as food safety hazards and reduced subsidies... Instant noodles returned to the public eye, and the entire instant noodle industry began to gradually recover. In 2017, the overall sales volume of the instant noodle market increased by 0.3%, and sales value increased by 3.6%. Kangshifu, which had been living under criticism, has also been taking various measures to cope with the impact of food delivery. In November last year, Kangshifu launched high-end new products such as EXPRESS instant noodle restaurant, targeting high-end consumers who pursue quality of life, with an average price of about 25 yuan per bowl. Kangshifu also launched diversified instant noodle products like Tomato and Vegetable Noodles, with product layouts ranging from a few yuan, over ten yuan, over twenty yuan, and even higher price points. Recently, Kangshifu also released its "report card" for last year. In 2018, Kangshifu's revenue was 60.686 billion yuan, a year-on-year increase of 2.94%, and instant noodle business revenue was 23.917 billion yuan, a year-on-year increase of 5.73%. In 2018, Kangshifu completed a generational transition, with the old generation of leaders exiting and a new generation of managers entering. In the new retail era, Kangshifu still has a long way to go in innovation. The war between instant noodles and food delivery has officially entered the second half. What kind of answer will Kangshifu and others deliver remains to be tested by time. 50 Million Cat and Dog Owners Arrive on the Battlefield Pet Food Brands Like Pedigree Make the List TOP 31: Pedigree TOP 68: Whiskas Old giants are seeking new paths, and new players are ready. While cola giants face transformation crises, the pet industry is seizing the opportunity. Amid the encirclement of soft drink and packaged food giants, pet care brands such as Pedigree, Whiskas, and Purina Pro Plan successfully made the list. Among them, Mars' Pedigree took 31st place, and Whiskas, also under Mars, ranked 68th. According to rough calculations, one-third of pets globally consume Pedigree and Whiskas pet food daily. With over 50 brands and more than 2,000 pet hospitals, Mars, which seems to make money from Dove chocolate, actually derives its largest profit source from pet services. Just Mars' pet food sales grew from $18.3 billion in 2012 to $20.1 billion in 2017, approximately 140 billion yuan. Behind Mars' billions in sales is the rapid rise of the cute pet economy. According to the "Pet Food Industry Trend Report" released by CBNData, in 2018, there were 22.58 million cat owners and 33.9 million dog owners. In 2017, the average annual consumption per pet in China was 4,248 yuan, and by 2018, this figure increased to 5,016 yuan. Data from the JD platform over the past three years shows that pet consumption has maintained growth of over 100%, with a continuous upward trend. Rather than going hungry themselves, pet owners would rather ensure their feline masters eat well. The love of poop-scoopers for their pets has driven a huge consumption trend. Image source: CBNData Among them, the online pet food market maintains rapid growth, with cat food growing particularly fast. Whether in shopping frequency or spending power, cat food consumers are stronger than dog food consumers. In addition to cat and dog food, pet care is also a large part of pet consumption. More and more pet owners are willing to pay more to provide their pets with a lifestyle more akin to "family." According to the "2018 China Pet Industry White Paper" released by Goumin.com, in 2018, among pet supplies consumption, dog owners spent an average of 1,826.7 yuan per dog, and cat owners spent an average of 1,721.2 yuan per cat annually. Among these, toys, collars, and cat litter were the highest annual spending items for dog and cat owners. Just from these numbers, it is not surprising that pet care brands like Pedigree made the list. Defeating Wahaha and Shuanghui JDB Becomes a Pleasant Surprise TOP 55: JDB Among the Chinese brands on the list, JDB is arguably the biggest pleasant surprise. The "trademark dispute" between JDB and Wanglaoji over the years is a story that evokes mixed feelings. In 2012, Wanglaoji decided to reclaim the right to use the "Wanglaoji" trademark from JDB. Since then, JDB began a long journey of brand replacement, and Wanglaoji also started a five-year litigation journey. From trademark usage rights to packaging to advertising slogans, the two sides have faced off in court more than 20 times, involving amounts exceeding 5 billion yuan. While JDB was entangled in lawsuits, it also faced turmoil in senior management, staff reductions, debt, and production halts. However, JDB still entered the top 60 with a brand value of $4-5 billion, far surpassing Wahaha and Shuanghui. How did JDB gradually force Wanglaoji back? Advertising and marketing are a major weapon for JDB's comeback. "The leading red-can herbal tea is now renamed JDB," "Drink JDB when afraid of getting heaty," "Still the original formula, still the familiar taste." JDB's red-can Wanglaoji was forced to change its name to JDB, but using its years of channel management and marketing experience, it quickly made the name JDB famous. JDB's marketing team not only left Wanglaoji in the dust in advertising copy but also was sharp and precise in placement channels. Wanglaoji's big move was to secure the prime advertising slot before the CCTV News broadcast every evening. But it did not consider the market audience of herbal tea drinks. A market survey once showed that domestic herbal tea drinkers are mainly concentrated in the 18-30 age group. How many of this group like watching CCTV News? Now look at JDB: from 2012 to 2015, it spent 780 million yuan to sponsor "The Voice of China," which was the most popular TV program among young people at the time. The ads were precisely exposed to this audience, and even if viewers watched reruns, because of the sponsorship, they would hear the host's voice repeatedly announcing JDB's advertising slogan throughout the program. In addition to frequently appearing on popular programs on major TV stations, JDB also spared no effort in sports marketing, sponsoring major sporting events such as the 2012 London Olympics and the 2014 Brazil World Cup. Coupled with sponsoring the Spring Festival Gala, donating another 100 million yuan after earthquakes, and crazy advertising investment on TV and the internet, various brands imitated concepts like "ten cans, seven are..." and "sales leader for consecutive years." In the five-year battle between Wanglaoji and JDB, although JDB lost the lawsuit over the red-can appearance patent, it managed to revive with the gold can. Image source: Weibo Unexpectedly, during the five years of mutual fighting between Wanglaoji and JDB, the entire herbal tea industry hit a growth bottleneck. Coupled with JDB's own multiple difficulties, the traditional "burn money" marketing model became unsustainable, and JDB began seeking new paths. In March 2018, JDB proposed to go public within three years to gain more financial support. Now the past is gone with the wind, and who is the true leader in herbal tea no longer matters. The market is watching how the reborn JDB will drive its own innovation and brand operations, capture the new generation of consumers, and once again sit on the throne of a national brand. Final Thoughts Compared with other countries, only 7 Chinese brands made the list, which is relatively few in number. However, Chinese brands show two characteristics: first, they have been established for a short time. Compared with many American brands that are over a century old, Chinese brands are basically within 30 years; second, in terms of sales regions, brands like Yili and Mengniu are mainly sold domestically or in the Asia-Pacific region, leaving a large gap in the international market. For domestic brands, continuously going global and achieving brand globalization and internationalization is of strategic importance for brand growth and expansion. Among the domestic brands that did not make the list, there are also excellent companies like Daliyuan and Liby, which still have unlimited growth potential and may be among the next top 100. Sources: Marketing Officer "Global Top 100 FMCG Brands: 6 Chinese Brands Selected, Kangshifu First", CBNData & Tmall "2019 Pet Food Industry Trend Report", Successful Marketing "E-commerce, Small-town Shopaholics, 2.5-dimensional, Men's Makeup... L'Oréal's Growth Path", E-commerce Online "L'Oréal's 22nd Year in China, Starting from New Retail", International Finance News "60 Billion! Kangshifu's Revenue is Nearly 3 Times That of Uni-President! Why is the Gap So Large Between the Former 'Instant Noodle Duo'", Daily Economic News "COFCO Packaging Resumes Partial Can Supply, Where is JDB's Listing Path Heading?" Article source: Entrepreneur Bang (ID: ichuangyebang), author: Shiyi -END-