In the FMCG circle, there is a saying: one festival can account for half a year's sales. What does it mean? Among traditional Chinese festivals, there are two 'big sales festivals': the Spring Festival and the Mid-Autumn Festival. The Mid-Autumn Festival and National Day sometimes fall close together, even on the same day, so they can also bring about major promotions. According to annual sales conventions, the Spring Festival accounts for 50% of sales, the Mid-Autumn Festival 30%, followed by Dragon Boat Festival, Mother's Day, etc., accounting for 20%. But this year's Mid-Autumn Festival was not optimistic, and the National Day holiday was even more sluggish. The 'big sales festivals' that should have had high expectations seemed quite desolate. "In previous years, there was a festive atmosphere a month before the Mid-Autumn Festival, but this year it was unusual. Sales only started 20 days before the festival, shortening the sales period by 10 days. It really tested the boss," said Mr. Li, owner of a community store in Hebei. To this end, New Distribution visited terminal stores and distributors and reviewed several key points to provide actionable reference paths for the upcoming Spring Festival gift box market.
Review 1: 'Extreme cost-performance' has 100% penetrated the gift box market; Review 2: The 'wealth gap' at gift box terminals is widening, either go high-end or go cost-effective;
Review 3: New battlefield in gift box channels, fruit store market sees both supply and demand booming. Narrowing Gift Box Categories Reducing Inventory Pressure from Slow-Moving Stock Walking into Mr. Li's community store, just after the Mid-Autumn Festival, the storefront is clean with no gift box displays. "I no longer have Mid-Autumn inventory pressure; everything was cleared before the festival. I won't put out gift boxes for National Day either; other products are selling normally." Based on Mr. Li's experience, this year's Mid-Autumn Festival was on September 17th. Normally, gift box categories should start moving a month before the festival, around mid-August, but this year they didn't start until the end of August. Mr. Li had already sensed that this year's Mid-Autumn Festival would not be optimistic, and he had learned lessons from last year. Mr. Li admitted: Last year's Mid-Autumn gift box categories were too many and too varied, including mooncakes, fruits, seafood, frozen products, dairy, etc., but sales dropped by about 23%. After adjustments this year, sales increased by 30%-40%. How did he make the adjustments? First, narrow categories and streamline SKUs. Cut out slow-moving gift box categories, keeping only four: mooncakes, fruits, home banquet items, and dairy; then streamline SKUs within each category, from 50+ SKUs last year to 10+. Second, adjust gift box packaging to lower average order value. Durian mooncake gift boxes changed from iron boxes to paper boxes, lowering the average order value, and both sales and profits increased compared to last year. Third, use crab cards as a traffic driver to boost sales of other gift boxes. Why make these adjustments? First, this year's Mid-Autumn holiday was very short, only three days, and too far from National Day, 13 days apart. The large gap will definitely weaken the gift-giving atmosphere compared to last year. Many people won't return home or visit relatives, so it will definitely be worse than last year. Second, consumption is polarizing. Consumers are too rational now, pursuing cost-performance to the extreme. Flashy gift boxes won't sell.
Third, e-commerce gift boxes have a huge impact on offline channels. Before making these adjustments, Mr. Li's team conducted market research and judged that this year's Mid-Autumn gift box market would not be optimistic. He decisively made bold adjustments, and by September 10th, he had already sold out all gift boxes. In the week leading up to the Mid-Autumn Festival, Mr. Li focused on home banquet categories, such as beef and mutton. "Because community stores have a natural advantage in gift boxes. When people return home for the holiday, it's natural for them to buy a carton of milk or some beef and mutton at the store near their home." Mr. Li summarized: The key to this Mid-Autumn Festival's success was first, advancing the sales period. Although this year's Mid-Autumn sales period was only 20 days, I cleared inventory early; second, lowering the average order value to maximize consumer satisfaction with cost-performance. With no inventory pressure for National Day, Mr. Li breathed a sigh of relief. The 'Wealth Gap' Widens The Good Are Too Good, The Bad Are Too Bad Unlike Mr. Li, distributor Mr. Zheng in East China faced sluggish inventory pressure. As a distributor in a county-level city, Mr. Zheng has been deeply involved in special channels for four years. Mr. Zheng admitted: This year, the sell-through rate of gift boxes at terminals was poor, especially in traditional channels. In previous years, the sell-through rate could reach 60%-70%, but this year it was less than 40%. When contacted, Mr. Zheng was reviewing Mid-Autumn gift box sales: "Because this year's Mid-Autumn and National Day are separate, with only a three-day holiday for Mid-Autumn, many people won't return home. They choose to return during the National Day holiday for family reunions, so there will be a small wave of returning home. I'll take advantage of this to do a promotion and clear some Mid-Autumn inventory." How to clear inventory? Mr. Zheng said consumers are increasingly rational and demand higher cost-performance. They value getting more for the same price, so first, create product combinations, such as a box of nuts plus a box of bread, bundling old and new products for sale; second, review stores that sold well during the same period last year and focus on adding more to these stores. In general, use the method of adding more quantity to make consumers feel more value, focusing on high cost-performance. "The manufacturer's logic prefers to subsidize consumers with the money used to handle Mid-Autumn gift boxes, rather than subsidizing distributors or discount stores to clear leftover stock. This way, the damage to the overall gift box price system is not great." As the tide rises and falls, some channels decline, while others grow. Mr. Zheng said the channel with the most growth this year is the fruit store channel, with a sell-through rate of 80%. In the future, he plans to expand distribution in chain fruit stores. Indeed, the author found that compared to traditional gift boxes of cigarettes, alcohol, sugar, and tea, fruit gift boxes are becoming more frequent. Especially during traditional festivals, consumers are willing to pay higher prices for quality fruits, and high-end fruits are the top choice for holiday gifts. With the expansion of other categories, gift boxes of dairy, nuts, and snacks are also adding to the fruit store channel. So what changes have occurred in the gift box market this year? Mr. Zheng emphasized: "Polarization is increasing, with high-end and low-end clearly distinguished." For example, this year, bird's nest porridge sold well, and many channels actively sought this category, indicating that consumers are also looking for high-end gift boxes. This year, bird's nest porridge also brought growth to the fruit store channel. The so-called 'low-end' is not about 'low price, low quality, or low grade.' Rather, it means good products tend toward high-end, and poor products tend toward cost-performance. Mr. Zheng gave an example: This year, the gift attribute of corporate bulk purchases has significantly weakened, shifting to more practical grain, oil, and personal care gift boxes. In previous years, these accounted for only 10% of sales, but this year they accounted for 30%. So for the Spring Festival at the end of the year, he will increase the proportion of personal care gift box sets. When discussing the criteria for selecting gift box products, Mr. Zheng mentioned two points: First, cater to high-end;
Second, low-end, do extreme cost-performance. In Mr. Zheng's view, his county-level regional market is a good market for gift-giving. In his words: The gift-giving atmosphere is better in poorer places. Third- and fourth-tier cities generally sell better than first- and second-tier cities. During holidays, consumer groups from first- and second-tier cities flow to third- and fourth-tier cities, and these groups are accustomed to the quality of first- and second-tier cities. So they either pursue high-end or extreme cost-performance. The only basic requirement is good quality. The Overall Gift Box Market Is Still Growing But Demand Has Changed Clearly, both community store owner Mr. Li and distributor Mr. Zheng have mentioned the same word: extreme cost-performance. One is the owner of a chain of over a hundred community stores, and the other is a snack food distributor with annual sales exceeding 100 million yuan. They represent two important links and roles in the sales channel, and they have the most say in perceiving the consumer market and changes in the gift box market. At the same time, both bosses mentioned Sam's Club. Mr. Zheng said that not only individual consumers are becoming more rational, but corporate bulk purchases are too. They go to warehouse stores, discount stores, or directly give Sam's membership cards. This year, many companies, especially state-owned and foreign enterprises, gave Sam's cards as employee benefits, which took away a lot of sales from RT-Mart shopping cards. Mr. Li said, "They say consumers are reluctant to spend money, but why is Sam's Club still so thriving? Are consumers looking for cheap? No. Many products at Sam's are not cheap, but why is there both supply and demand? Because while the price is reasonable, the quality is also good. That's the consumer's pain point." Yes, one of Sam's biggest advantages is its product selection capability, introducing higher specifications and better materials, leveraging Sam's unique supply chain efficiency and scale to form long-term stable price advantages. It has both the ability to offer good products and the strength to offer cost-performance. So, Mr. Li is adjusting his strategy. Currently, 20% of his store's products are directly cooperated with manufacturers. By the end of the year, he plans to increase this to 60%, doing collective procurement to get the lowest cost price and build a supply chain. Mr. Zheng is focusing on the chain fruit store channel. Currently, the fruit store channel is in a state of both supply and demand booming. As an important part of a healthy diet, market demand for fruits has been steadily growing. This year's growth in this channel has again verified its sustainability, but differentiation strategies in products and innovation are needed. According to iiMedia Research data, from 2018 to 2023, the market size of China's gift economy industry grew from 800 billion yuan to 1.2998 trillion yuan, showing an increasing trend year by year; it is expected to reach 1.6197 trillion yuan by 2027. Clearly, the overall gift box market is still growing, but demand has changed. Big health and cost-performance have become the main themes of the gift box market; compared to flashy packaging, consumers pay more attention to product quality; low price, large quantity, customization, and simplicity are the way to go. When asked, "The market environment has changed, consumers have changed. Do you feel business is easier or harder these two years?" "Easier or harder is relative. I think it should be discussed in stages. I feel it will get easier and easier." "Why?" "This tests the boss's ability in category management, market prediction, and whether he truly understands consumers. The duck in the spring river knows the warmth first. I feel it deeply at the terminal. The overall consumption market is still growing, just at a slower pace. Consumers don't lack spending power; the key is to find their consumption desires and pain points." Where there is demand, there is growth. The next 'big sales festival'—the Spring Festival—is the most critical hard battle in the FMCG circle. Whether it will finally 'live up to expectations' is something New Distribution will continue to observe. We also hope this review can provide reference value for FMCG business owners. During this counter-trend upward period, we wish all FMCG business owners can accurately grasp the market and rise against the trend.