P&G, Johnson & Johnson, Unilever, and L'Oréal, as leading global FMCG companies, unsurprisingly made the Fortune 500 list. Among them, P&G ranked first in the FMCG industry and broke into the top 100 globally at 86th; Johnson & Johnson, Unilever, and L'Oréal ranked 103rd, 147th, and 378th respectively.

Notably, although the above four giants all experienced negative revenue and profit growth, possibly due to relatively resilient rigid demand factors, their rankings all improved.

All Four Giants on the List but with Negative Revenue and Profit Growth

According to the 2016 FMCG list obtained by Nandu reporters (this ranking is mainly based on the companies' total revenue in the fiscal year ending on or before March 31, 2016), compared with 2015, the rankings of these four FMCG companies all improved year-on-year. Among them, L'Oréal saw the largest rise, climbing 17 places; Johnson & Johnson and P&G followed, rising 15 and 14 places respectively; Unilever rose the least, still gaining 6 places.

However, looking at revenue and profit, the situation is less ideal. In the 2016 list, all four FMCG companies saw negative growth in revenue and profit compared with the same period last year. Among them, Unilever had the fastest revenue decline at 8.03%, followed by P&G and L'Oréal at 6.84% and 6.26% respectively, while Johnson & Johnson had the smallest decline at 5.73%. In terms of profit, L'Oréal saw the fastest decline at 43.8%, followed by P&G and Unilever at 39.6% and 20.6% respectively, with Johnson & Johnson again having the smallest decline at 5.6%.

Along with the decline in revenue and profit, total assets also shrank. Taking P&G as an example, its assets peaked in 2014 and have been declining since. Unilever and L'Oréal also saw their assets peak in 2013 and then generally trend downward. Among the four, only Johnson & Johnson began a slow recovery after a decline in 2014.

Increasing Digital Marketing Becomes Industry Consensus

Zeng Xiwen, Vice President of Unilever North Asia, did not comment on this matter involving Unilever globally when interviewed by Nandu reporters yesterday, but regarding the China situation, he suggested referring to Unilever's global stance.

According to him, Unilever CEO Paul Polman recently openly discussed at the Q2 2016 earnings analyst meeting the rapid development of e-commerce in China and the decline of traditional channels, as well as his thoughts and decisions on this phenomenon.

"Based on market changes, Unilever China and globally have already made arrangements in e-commerce and youth-oriented strategies," Zeng Xiwen said.

According to Paul Polman's remarks to international analysts, understanding the Chinese market is very difficult. "I think you will always hear our colleagues talking about China in business, because e-commerce there is developing very fast and is confusing. In addition, e-commerce is rapidly expanding from first-tier cities to second- and third-tier cities." He even said that if you visit China now, you will see, as never before, some hypermarkets and supermarkets with empty shelves.

It is also based on this that the latest information disclosed on Unilever's official website shows that it recently signed documents with Marius W. C. van der Ham, President of Unilever North Asia, and Daniel Zhang, CEO of Alibaba Group, to become strategic partners. This cooperation is the first time Alibaba Group has conducted group-wide, all-channel, all-field cooperation with the FMCG industry. One of the biggest highlights is that Unilever will use Alibaba's "Rural Taobao" to expand into rural markets.

Of course, regarding Paul Polman's remarks, Yu Xueling, Secretary-General of the Guangdong Daily Chemical Chamber of Commerce, holds reservations. In an interview with Nandu reporters, she said that at least in Guangzhou, this situation has not occurred. "E-commerce does have a certain impact on physical supermarkets, but at least in Guangzhou, what we see is that the shelves of daily chemical counters in supermarkets are still fully stocked."

However, among the four giants, more than just Unilever have taken similar measures. Data from Alibaba shows that, taking P&G as an example, after a year of cooperation, its Tmall sales increased by more than 50% year-on-year. This year, Alibaba will become one of P&G's largest channels in China, both online and offline. In addition, P&G is also fully reforming its existing marketing model to cater to the "first year of China's mobile internet live streaming."

Written by: Nandu reporter Ma Jianzhong

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