Introduction: China's FMCG market has shifted from channel and brand-driven to brand and product-driven. With the easing of pandemic restrictions, many companies are setting aggressive growth targets for the coming year, partly due to the lifting of controls and partly because three years of pandemic have created a need for high growth to boost confidence. However, in conversations with business owners, there is a consensus that the Chinese FMCG market post-pandemic is no longer the same as before. For companies, growth cannot be pursued with the old inertial thinking, nor can past strategies be applied to future business. From a macro perspective, the development experience of the past 20 years in China's FMCG industry is no longer valid. 2023 requires entirely new ways of thinking.

First, here are eight visible social phenomena affecting the FMCG industry post-pandemic:

  1. The first batch of the post-2000s generation has officially entered the workforce, becoming a mainstream consumer group with immense consumption potential and consumption concepts vastly different from previous generations.
  2. In 2022, China's population officially entered a phase of negative growth, gradually moving into a deeply aging society. Absolute quantitative growth in the consumer market has ended, and the market has entered a stage of squeezed and structural growth.
  3. Three years of pandemic have drained people's savings, leading to a clear trend of consumption polarization: rational consumption, face-saving new consumption, and penny-pinching on platforms like Pinduoduo.
  4. Consumers in high-tier cities have fully adapted to online ordering, with O2O home delivery becoming one of the most important shopping channels alongside offline retail and B2C.
  5. Home-delivery B2B has developed rapidly and become an important distribution channel; according to incomplete statistics, there are now nearly a hundred B2B platforms in China.
  6. Short videos and live streaming have become major forms of entertainment and shopping. Douyin stores are rising quickly, and it's only a matter of time before they surpass Tmall.
  7. The lifting of pandemic controls has had a significant short-term impact on the gift and catering markets, but the long-term outlook is positive.
  8. The pandemic has deepened the national saving mentality, so revenge spending is unlikely in the short term; consumption will remain restrained. However, with the gradual introduction of national economic policies and increased market liquidity, the long-term outlook for consumer goods is positive.

Based on these changes, we can abstract four major structural changes:

  • Population structure changed: China's population has entered negative growth, with the rise of the new generation (post-2000s) and the aging population bringing about fundamental changes in consumer attitudes and concepts.
  • Channel structure changed: With offline + online, omni-channel + private domain, short video + live streaming, and the fragmentation of channels due to short video and O2O, the channel landscape has become more complex and diversified compared to the previous traditional offline + B2C model.
  • Supply-demand relationship changed: The market has moved from relative surplus to overall surplus. There are no longer any traffic depressions or blue ocean markets; the era of efficiency competition has given way to an era of quality competition.
  • Consumption capacity changed: The polarization of consumption concepts and capacity forces us to rethink the underlying logic and purchase motivations behind consumers' choices of our products.

Based on these four structural changes, we can conclude that China's FMCG market has shifted from channel and brand-driven to brand and product-driven.

Sovereignty Transfer Zhao Bo, General Manager of Beijing Shidai Yuanli Information Technology Co., Ltd., founder of the WeChat public account "New Distribution," and a senior marketing expert in the FMCG industry.