Introduction: Returning to growth has given way to new growth. On the evening of December 5, Xinhua News Agency released a major announcement: With the weakening of Omicron's pathogenicity, the普及 of vaccination, and the accumulation of prevention and control experience, China's epidemic prevention and control faces new situations and new tasks. The hardest period has passed!

Growth cures all ills We have now entered the post-pandemic era. After a period of adjustment, life will gradually return to normal. Marketing must also shift from emergency pandemic marketing back to normal marketing. It may take two to three months to fully return to normal operations.

So, can marketing return to the normal state of late 2019 and early 2020?

The most likely scenario: Those who planned to make up for lost time after the pandemic will find that:

  • Old methods are ineffective, new methods are immature;
  • Old products have no incremental growth, new products are still being cultivated;
  • Offline is involutionary, online is even more so;
  • Low-end is shrinking, high-end cannot be conquered;
  • The old normal of marketing can never return!

Just like our aging faces, no matter how much beauty treatment we undergo, we can never go back to how we were.

Over the past three years, the market has undergone significant changes. However, during those three years, attention to the pandemic overshadowed attention to market changes.

Because returning to growth has given way to new growth. What is new growth?

The disrupted rhythm of new growth If there had been no three-year pandemic, what would the mainstream marketing be now? Since 2013, when FMCG industry sales hit a ceiling, marketing entered an adjustment period, shifting from scale growth to structural growth. Even if sales decline, growth can still be achieved, as seen in baijiu. Structural growth is growth led by high-end products. There is a timeline for the high-end growth trend that I find credible. 2008: High-end budding period: small capacity. In developed regions, it was just emerging, dominated by international brands, with high-end being niche. 2009-2014: High-end growth period: fast growth, expanding capacity. Domestic brands entered first-tier and provincial capital cities. 2014-2019: High-end development period: accelerating growth. Penetration into second-tier cities, with domestic brands growing rapidly. 2019-2025: High-end explosion period: faster growth, sharp increase in share. Spreading to county-level and above cities, high-end becomes the main growth point. New growth mainly comes from high-end growth, and profits mainly come from new growth. After 2025: High-end maturity period: growth slows, gradually becoming mainstream. According to the normal rhythm, 2020 should have been the high-end explosion period. However, the pandemic changed the rhythm. During the pandemic, there were two rhythms: one was the normal market change rhythm, such as the high-end growth rhythm, which is the main theme of consumption upgrading; the other was a passive rhythm driven by the pandemic, which not only disrupted the normal rhythm but even partially went against it. For example, some concluded there was "consumption downgrading." Consumption upgrading and downgrading coexist, which some call "consumption stratification." In the second half of 2022, during the worst of the pandemic, I traveled the market and visited some companies, hearing two voices. One voice spoke of pandemic difficulties, mostly from small and medium-sized enterprises. They were already surviving on the edge, and the pandemic made it impossible to even stay on the edge. Another voice was weaker, or rather, they acted without speaking. They were affected by the pandemic but still grasped the mainstream marketing rhythm, the premiumization rhythm. Traditional growth focuses on scale and quick money; new growth focuses on structure and big money. A 10% increase in scale, 30% increase in sales revenue, and 50% increase in profit. That is new growth. The manifestation of new growth is that scale does not increase, but profits rise significantly. 2020 was supposed to be the explosion period for high-end consumption, but the pandemic disrupted the rhythm. Returning to growth is not about returning to the 2019 growth rhythm, but about the new rhythm of high-end explosion compressed by the three-year pandemic.

Every industry has a "new world" The core of growth is finding incremental space. This is the route issue for growth. Growing in a saturated market with intense involution will only lead to more involution. The insight of "Beer's New World" provided China Resources with growth space in the beer industry dominated by giants: "New World" is growth space. Regarding marketing premiumization, Hou Xiaohai, CEO of China Resources Beer, proposed it internally in 2021, and in early November 2022, his speech on "Beer's New World" at the "7th China FMCG Channel Innovation Conference" held by New Distribution in Chengdu became widely known. Hou Xiaohai's "New World" is not just about beer; every industry has a new world. This new world is the new world of premiumization. Here are excerpts from Hou Xiaohai's views:

  1. "Consumption upgrading has fundamentally changed the price tiers of beer, all moving toward premiumization and tier elevation."
  2. "The elliptical structure, or spindle structure, is the basic consumption structure for beer. In the past, it was a pyramid. The '20th National Congress' document proposed building a spindle-shaped social structure."
  3. "Where does the momentum for China's consumption upgrading come from? It comes from the rapid growth of the Chinese middle class, the continued progress of urbanization, and the further integration of major economic zones."
  4. "Some say premiumization will decline after the pandemic. Indeed, there is a decline, but it is not in beer or beverages."
  5. "The capital market has forgotten the 'ization' in the premiumization of baijiu and beer, only remembering 'premium.'"
  6. "Three characteristics of premiumization: Elongation: the bottom shrinks, the price band moves up, and the spindle extends; Wave-like: layer-by-layer upgrading, hitting the top; Leapfrog: cross-generational, clustered." Hou Xiaohai's "Beer's New World" and "Last Battle" show China Resources' determination in premiumization. I believe that the more resolute one is in premiumization, the more intense the involution in the mid-to-low end will be in the future. The substantial profits from premiumization will certainly be used for fierce competition in ordinary products. The era of scale in China's FMCG industry has ended. Overall, there is no scale increment; increments will mainly come from structure. In the past five years, baijiu's scale has nearly halved, but the industry has grown very fast. China Resources Beer and the beer industry are benchmarks. During the pandemic, China Resources Beer did not delay its premiumization process and still grasped the mainstream direction of marketing, which is commendable. Every industry has a new world. The typical feature of the "new world" is premiumization. All successful Chinese brands in the past were brands of the scale era, bearing the imprint of mass and scale, whether in brand awareness or brand value. Truly high-value brands will only form in the premiumization era. Without product structure upgrades, there is no growth. High-end products cannot just be a relatively high-priced product; they must be a broad, efficient price band and a high-end product group. Returning to growth after the pandemic is essentially new growth. The pandemic has already delayed three years; we must make up for the time lost in new growth. What growth route to take is a battle over the route. The route battle determines who will be the final victor. Scale growth only makes mid-term victors; the structural battle determines the final winner. Hou Xiaohai's "Last Battle" makes a lot of sense.

New growth and new marketing Traditional marketing certainly cannot capture new growth. To have a place in the new world, three issues must be addressed: 1. Establish a new strategic route for premiumization Should we seek growth in the old world or the new world? This is a strategic route choice for enterprises. It must be recognized that the traditional price band has no incremental space, and forced squeezing growth is not cost-effective. Moreover, as the traditional price band becomes low-end, advantageous enterprises in that band will face the danger of being positioned as low-end by consumers. 2. Establish a new 2C organization for premiumization Traditional marketing also talks about high-end, but it is only mass high-end. Now it still appears to be scale-oriented mass. The traditional deep distribution organization for FMCG is sufficient. The traditional organization is a 2B deep distribution organization, with the core work goals of distribution rate and sell-through for mass products. High-end product sales face two major issues: one is communication; the other is channels. Communication, cognition, and brand issues are all the same issue. Mass media has lost its communication power, and IP-based content emotional fission is not suitable for high-end communication. We are in an era of fragmented media, therefore, solving the high-end cognition problem requires three aspects:

  1. The higher the product's premium, the higher the cognitive threshold, so the importance of experience and scenarios in cognition becomes more evident;
  2. Media fragmentation requires an integrated marketing communications (IMC) system;
  3. A 2C-oriented cognitive organization needs to be established. Currently, we see many companies have established agile 2C organizations, such as flying teams, flying tiger teams, and assault teams, mainly focused on scenario-based experience for 2C cognition. Without 2C brand cognition, 2B products placed on shelves will not sell. The reason 2C is called an agile organization is that 2B organizations are routine, while 2C organizations only undertake phased tasks, especially suitable for mobile warfare. Once the scenario-based experience cognition process is formed, the rest can be left to 2B. 3. High-end 2C marketing tools and efficiency The premiumization process is the process of high-end consumers going from low density to high density. When high-end consumers are already high density, it means the high-end price has formed and the opportunity is lost. Mass products can be assessed by distribution rate, but high-end products can only be assessed by precision rate. How to achieve user precision, terminal precision, and media precision? Data support is needed. Therefore, obtaining user, terminal, and scenario information online, precise scenario experiences offline, and establishing precise online connections—these three major links of scenario, experience, and connection require new marketing tools. The world does not lack new marketing tools, but it lacks people who recognize the value of new tools. Therefore, a 2C marketing team that masters new marketing tools constitutes a new force for premiumization. The FMCG industry already has a large 2B deep distribution team, and now it needs to build a 2C team, so using new internet tools to improve efficiency is very important. Recently, I had many exchanges with Teacher Fang Gang during market visits. He discovered a tool that uses internet information to precisely acquire users and scenarios, which is very effective and easy to use. The user connection in offline scenario experiences is what I proposed as bC integration, which is highly efficient in promoting high-end products.

Liu Chunxiong, advocate of new marketing, dean of the Marketing Digitalization Research Institute. Currently an associate professor at Zhengzhou University, author of the new marketing trilogy: "New Marketing," "New Marketing 2.0: From Deep Distribution to Three-Dimensional Connection," and "New Marketing 3.0: bC Integrated Digital Transformation."

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