In 2024, the FMCG industry's channels underwent profound structural adjustments. On one hand, new channels such as snack stores, discount stores, and instant retail are gaining increasing market share. On the other hand, traditional channels are facing growing challenges due to pressure from online e-commerce and offline new channels. In particular, traditional supermarkets have seen severe declines, with Nielsen data showing a -11.4% growth rate for hypermarkets in 2024. However, traditional supermarkets remain a key offline channel that brands and distributors must prioritize. What changes are traditional supermarkets undergoing? What is the underlying logic of their transformation? How should brands and distributors correctly respond to these changes? In the "2024-2025 China FMCG Channel Transformation Research Report" (hereinafter referred to as the report), we conducted an in-depth analysis of channel diversification and also elaborated on the underlying logic of traditional supermarket channel transformation. This report will be publicly released for the first time at the 10th China FMCG Conference & 4th China FMCG Hard Discount Conference & 4th China FMCG Distributor Conference, held from March 17 to 19. This article extracts some content from the channel section to share with you in advance. If you are interested, you are welcome to attend the conference to obtain the full version. Channel Diversification and Differentiation The K-shaped differentiation in the consumer market is driving retail formats to increasingly differentiate in price and value positioning. Retailers have established unique competitive advantages and brand defenses through precise value and price strategies. Convenience stores and community supermarkets focus on immediate consumption, emphasizing convenience and community services; hypermarkets and membership warehouse stores focus on family stockpiling needs, highlighting full-category coverage and economies of scale; E-commerce platforms and social e-commerce create digital shopping environments, combining product diversity with social trust mechanisms; snack bulk stores and discount supermarkets attract price-sensitive consumers with high cost-performance; organic food stores and premium supermarkets meet the needs of consumers seeking high-end, specialized products; and retail O2O models quickly meet families' immediate consumption needs through instant delivery services. This multi-dimensional scenario segmentation not only meets the diverse needs of consumers but also creates differentiated competitive advantages for retailers. Price-Driven Formats For example, snack bulk stores, discount stores, group-buying e-commerce, and community group buying attract price-sensitive consumers by reducing costs through large-scale procurement and simplified operations. Value-Driven Formats Formats such as premium supermarkets, organic food stores, and warehouse membership stores focus on providing high-quality products and unique shopping experiences to meet the needs of consumers with higher demands for premium living. The Logic of Traditional Supermarket Transformation On the evening of March 11, Yonghui Superstores announced that shareholder JD World planned to reduce its holdings by no more than 266 million shares, accounting for 2.94% of total shares. According to the reduction plan, JD World will completely exit Yonghui's shareholder ranks. Traditional supermarkets in China are indeed having a hard time now. According to Nielsen data, hypermarkets, supermarkets, and other formats were in negative growth in both 2023 and 2024, especially the hypermarket format, with a growth rate of -15.9% in 2023 and -11.4% in 2024. China's physical retail market is facing the dual challenges of economic downturn and e-commerce impact, leading to continuous fragmentation and market differentiation in offline retail channels, with the supermarket channel suffering heavy losses. Therefore, we see many traditional supermarkets beginning to seek new transformation and change. The Logic of Traditional Supermarket Transformation In the past, supermarkets mainly relied on the experience and efforts of store personnel to compete, lacking systematic capability building. At the same time, due to lower costs in the early stages, supermarkets did not feel the pressure to reduce costs and increase efficiency, leading to extensive management methods. Now, with accelerated urbanization and increased consumer sovereignty awareness, enhancing product strength and service capability has become the core of supermarket competition. Regional Supermarkets Win Structurally In China, national chain enterprises account for approximately 30%-40% of the Top 100 enterprises, while regional brands account for about 60%-70% of the Top 100 chain enterprises. In terms of the degree of impact, national chain enterprises have generally been more affected, while regional retailers have successfully consolidated their market positions by deeply cultivating local markets, building strong consumer awareness, and leveraging economies of scale and localized service advantages. Supermarket Adjustment Measures:

  1. Strengthen cooperation with supermarkets; 2. Optimize product structure; 3. Improve supply chain efficiency; 4. Reduce costs and improve response speed; 5. Enhance consumer experience; 6. Flexible pricing strategies. Due to space limitations, only some insights on retail transformation are shown here. This report will be released on-site at the 10th China FMCG Conference & 4th China FMCG Hard Discount Conference & 4th China FMCG Distributor Conference, held from March 17-19! At the conference, Wendy Li, Consulting Partner at New Distribution, will provide an in-depth interpretation of the "2024-2025 China FMCG Channel Transformation Research Report." Additionally, on March 17, we will organize a closed-door salon, inviting dozens of brand executives, retailer executives, and regional benchmark distributors to engage in an in-depth dialogue and business exchange around "New Growth Opportunities under Retail Transformation." 【New Order · Symbiosis】The 10th China FMCG Innovation Conference Time: March 17-19, 2025 Location: Chengdu, China