---
title: "Top 10 Keywords in the FMCG Industry for 2023"
description: "The recovery of the global economy, the coexistence of consumption upgrading and downgrading, and the explosive growth of the online economy have brought unprecedented challenges and opportunities to the FMCG industry in 2023. New Distribution has compiled the top 10 keywords for the FMCG industry in 2023, interpreting industry trends from multiple perspectives to help FMCG companies review key information and better grasp market changes and development directions."
author: "杨玉琳、冯瑶"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-12-18"
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---

# Top 10 Keywords in the FMCG Industry for 2023

> The recovery of the global economy, the coexistence of consumption upgrading and downgrading, and the explosive growth of the online economy have brought unprecedented challenges and opportunities to the FMCG industry in 2023. New Distribution has compiled the top 10 keywords for the FMCG industry in 2023, interpreting industry trends from multiple perspectives to help FMCG companies review key information and better grasp market changes and development directions.

By Feng Yao

The recovery of the global economy, the coexistence of consumption upgrading and downgrading, and the explosive growth of the online economy have brought unprecedented challenges and opportunities to the FMCG industry in 2023.

New Distribution has compiled the top 10 keywords for the FMCG industry in 2023, interpreting industry trends from multiple perspectives to help FMCG companies review key information and better grasp market changes and development directions.

**Snack Hard Discount: Rapid Expansion!**

Snack hard discount refers to the application of the hard discount business model in the snack industry. It achieves cost reduction by extreme product selection and compressing supply chain links, eliminating all unnecessary actions, to serve mass consumers. The common bulk snack stores are a form of hard discount.

According to the "China Snack Hard Discount White Paper (FMCG Industry Insights 2023)" released by New Distribution, the bulk snack track has accelerated store openings since 2022, with the total number of stores nationwide growing from about 250 in 2021 to nearly 8,000 in 2022, and expected to reach 22,000 to 25,000 in 2023, with total sales scale expected to reach 70 billion to 80 billion yuan. The industry is accelerating expansion from the southern region to the whole country.

The rapid development of the snack hard discount track has prompted many leisure snack brands to join. In August, Weilong sold approximately 371,800 boxes of products through snack bulk channels, a month-on-month increase of 38.1%.

Yanjinpu also mentioned in its semi-annual report that it has deepened cooperation with popular bulk snack brands such as Snack Busy, Snack Youming, Haoxianglai, and Laopo Daren. The rapid development and expansion of snack specialty channels and e-commerce sales channels have contributed to the company's revenue.

For leisure food, with changing consumer demands, the snack hard discount model has become the new favorite in the industry. Leveraging its high cost-performance advantage to target lower-tier markets, it will become the main battlefield for major leisure snack brands in the future.

**New Distribution Comment:**

Since 2021, with capital injection and franchisee promotion, bulk snack stores have shown explosive growth.

But bulk snacks are not new; they have been around for 13 years since 2010 and are a proven business model. It achieves cost reduction through extreme product selection, compressing supply chain links, and eliminating unnecessary actions to serve mass consumers.

The three elements of "low gross margin - high turnover - large scale" are the flywheel for snack hard discount success.

The core modules corresponding to these are its system profit setting, supply chain, operations, site selection, and franchise expansion model.

Seeing snack stores are hot and rushing in to do it yourself, but if your understanding of hard discount stays at the level of "low price," "product assortment," "decoration," and "atmosphere," without studying the core model, it will be very dangerous.

**Hard discount selects SKUs carefully, omitting all unnecessary links, bringing an efficiency revolution.** This efficiency revolution will inevitably impact the current channel system, affecting brand owners, distributors, and terminals in the chain. Inefficiency being squeezed and replaced by efficiency is an irreversible trend.

**Distributor Transformation to B2B:**

**The Path to Large-Scale Distribution under Supply Chain Revolution**

Although the FMCG industry B2B has rarely been reported by the media in the past two years, its development has been very rapid. While many early B2B players are profitable, a batch of distributors in regional markets have transformed to B2B and are also profitable, with their businesses being very successful in local markets.

According to New Distribution's field research, many traditional distributors have already successfully implemented regional B2B models. For example, Tangshan Yihe Commerce's Dianjiatong has become the largest B2B supply chain platform in Tangshan in 3 years, and Chengdu Rongcheng Yigou has annual sales exceeding 400 million yuan.

From the current development trend, distributors doing B2B is a natural progression. Most small store owners have already developed the habit of ordering on online platforms. B2B platforms simplify the procurement process and provide delivery services, reducing procurement costs.

Moreover, distributors themselves are doing localized business, with in-depth understanding and knowledge of local markets and consumers, and have complete logistics and supply chain systems, which can leverage their own advantages to promote B2B development.

According to New Distribution's research, there are about 50 regional distributors that have transformed to B2B platforms. In terms of amount, most of these regional platforms have reached a GMV of over 100 million yuan in a single city, with a few approaching 1 billion yuan.

These platforms have an advantage: they are generally in a relatively closed market environment with limited total retail traffic. Once a platform is established and quickly lowers the minimum order quantity, the barrier for latecomers becomes very high.

This does not include platforms that distributors have transformed and built themselves but have not disclosed, which New Distribution has not found. Conservatively estimated, there are at least 20-30 more not counted. Currently, the total GMV of normally distributed B2B in China should exceed 120 billion yuan in 2023, and it is still growing rapidly.

**New Distribution Comment:**

New Distribution has been reporting on B2B since 2015 and firmly believes that the B2B model is the inevitable direction for distributor transformation.

Of course, B2B is the best choice for distributor transformation, but not the only choice. From the perspective of business path, business capability, and resource endowment, distributors doing B2B is, in a sense, a natural progression.

Why is distributor transformation to B2B significant?

**From the distributor's perspective, the B2B model opens up new development opportunities:**

In the past, with physical stores as the main focus, distributors faced fixed customer groups and circulation channels, limiting development. The B2B model gives distributors a new digital marketing channel.

By building their own B2B platform, distributors can more intuitively understand customer needs and customize products and services. At the same time, use big data to optimize supply chain management, effectively improving procurement and distribution efficiency.

This not only reduces operating costs but also enhances the distributor's service capability, making small store customers more satisfied. It is beneficial for distributors to accelerate the transformation from channel providers to service providers.

Moreover, the B2B model gives distributors a broader development space, not limited to their own region; distributors can serve registered users nationwide and earn business.

So if distributors actively promote B2B transformation and fully utilize digital technology, they can not only change themselves but also lead the transformation of the entire industry!

**Instant Retail: Internet Platforms Accelerate Layout**

According to the "2022 China Instant Retail Development Report" released by the China Chain Store & Franchise Association, the instant retail industry grew at a compound annual growth rate of 81% from 2016 to 2021 on a low base of tens of billions, and is expected to break through the trillion-yuan market scale threshold by 2025 with a compound annual growth rate of 51% on a high base of hundreds of billions after 2021.

With such broad market prospects, instant retail has naturally become a track where industry giants accelerate their layout. Whoever can seize more market share first will share more profits and gain higher value.

In August, Meituan cooperated with SF City, Shansong, and UU Paotui to integrate third-party logistics systems and build a win-win instant delivery industry ecosystem. In mid-October, Douyin E-commerce's Hourly Delivery service gained an independent entrance. Subsequently, JD.com officially launched the "Happy Three Kilometers" model for instant retail. Taobao, Tmall, Hema, and others also increased their "hourly delivery" services this year.

The increase in consumer demand has driven the rapid development of instant retail, and internet platforms are competing fiercely. From the investment and development trends of major head enterprises, instant retail is a powerful tool to expand the user base.

However, in the process of expanding territory, platforms must not only pay attention to user experience but also focus on the development of enterprise technology, achieve rapid fulfillment, ensure efficiency, provide good service, and achieve full-chain collaborative development to remain invincible.

**New Distribution Comment:**

From the industry trend, the instant retail model will be a major trend for the sustainable development of the retail industry:

First, with the development of e-commerce and circulation formats, consumer demand is becoming more personalized and immediate. Consumers want shopping to be more convenient and faster.

Second, the cost of product visibility is reduced. Supply chain and logistics capabilities continue to improve, supporting small-amount short-distance delivery and meeting small-batch refined orders.

Finally, manufacturers prefer more efficient operations and a return to core business. Instant retail provides additional platform support.

**With the maturity of core technologies and changes in consumption scenarios, in the future, platforms will further optimize models based on user habits and connect online and offline. Manufacturers will also refine operations to benefit more industries and regions with instant models.** This will achieve leapfrog development for the entire retail industry and lead to more derivative applications.

**Zibo Barbecue: Emotional Value**

**Is the Driving Force for Consumption**

This summer, Zibo barbecue became an internet sensation. The soulful way of eating "skewers + pancakes + dipping sauce" and the immersive experience of one table with one stove greatly increased the unique ritual sense for tourists, creating a differentiated advantage. It can be said that consumers "rushing to Zibo for barbecue" are not just going for the barbecue, but for the sentiment.

As the popularity of Zibo barbecue continues to rise, it has driven surrounding consumption to new highs and injected new vitality into related industries.

According to New Distribution's field research in May, the strong presence of barbecue not only drove consumption but also attracted fierce competition in the beer and beverage industry. To stand out in the market, various brands adopted different strategies to attract consumers.

Many brand salespeople proactively delivered goods to merchants, beverages were directly placed in freezers, and brands gave away products at train stations and store entrances. Major FMCG head brands joined in, using this heat to enhance brand awareness and increase consumers' purchase desire.

In the first quarter of 2023, Tsingtao Brewery's revenue increased by 16.27% year-on-year to 10.706 billion yuan, breaking the 10 billion yuan mark for the first time in a single quarter. Although it did not disclose beer sales performance in Zibo, according to New Distribution's interviews, benefiting from the barbecue heat, some terminal stores doubled their beer purchases, showing the obvious driving effect of Zibo barbecue on the beer industry.

The success of Zibo barbecue is not only due to the government's active response and providing a good consumption experience, but also the strong participation of various industries, paying full attention to consumer needs, integrating local culture, seizing market opportunities, jointly promoting economic development, and achieving a win-win situation.

**New Distribution Comment:**

The success of Zibo barbecue brings new inspiration to FMCG companies.

**In today's market environment, successful marketing strategies need to balance emotional and experiential dimensions, giving products deeper emotional value to better attract consumers.** Continuously innovate and expand business areas and consumption scenarios, increase product exposure through offline themed activities, and provide more diversified consumption choices.

Pay attention to internal and external brand management, leverage the communication effect of social media for immersive promotion, use big data analysis for scientific planning, and continuously optimize to achieve more efficient market expansion. At the same time, effectively integrate various supporting resources, deeply integrate FMCG brands with local culture, absorb local elements, reflect local cultural characteristics, and focus on multi-angle marketing with experience to achieve long-term brand improvement.

**Co-branded Marketing:**

**Breaking Homogeneous Product Competition**

On September 4, Moutai and Luckin Coffee co-branded to launch "Sauce-flavored Latte," which immediately sparked widespread discussion among netizens upon its release. The single product sold over 5.42 million cups on the first day, with sales exceeding 100 million yuan.

Image source: Luckin mini-program

"Sauce-flavored Latte" achieved category innovation of "coffee + liquor," breaking homogeneous product competition and targeting consumers seeking novelty, allowing Luckin Coffee to stand out in the fiercely competitive environment.

But brand co-branding is not a new tactic. Tea beverage brands, as the ceiling of co-branded marketing, are even more creative. In May this year, Heytea partnered with luxury brand FENDI to launch a special drink, selling over 1.5 million cups in 3 days. Naixue's Tea co-branded milk tea with Fantacy sold over 1.46 million cups on the first day, and the co-branded thermos sold 100,000 sets.

But the heat of co-branding is ultimately temporary. After "Sauce-flavored Latte," Moutai immediately announced a co-branded liquor-filled chocolate with Dove on September 16, which attracted a wave of attention but quickly faded. Heytea also needs to launch a co-branded product every one or two months to continuously attract consumers.

**Although co-branded marketing captures the traffic code, to maintain brand value, the product is still fundamental. Clarifying the purpose of co-branded marketing and gaining consumer recognition can better enhance brand competitiveness.**

**New Distribution Comment:**

Co-branded marketing, by introducing resources from well-known brands in different fields, can evoke consumers' pursuit of novelty and gain widespread attention, helping brands stand out in fierce competition, such as "Sauce-flavored Latte," which set new records in first-day sales volume and revenue.

However, the heat of brand co-branding is difficult to sustain. Excessive co-branding may easily give consumers the impression that joint marketing is just short-term traffic generation, affecting brand value construction. Co-branding needs to balance innovation and sustainability to truly enhance brand value.

**In the future, brands can combine their own positioning to find cooperative brands with high compatibility, and achieve secondary innovation in category innovation and awareness enhancement through product or experience linkage.** And pay attention to user experience evaluation and follow-up services after co-branding, converting the traffic brought by co-branding into real brand fans. This will be the way to success for co-branded marketing.

**Traditional Supermarkets vs. Warehouse Membership Stores**

**The Change of the Times**

Data shows that from January to June this year, Carrefour closed 106 stores. However, store closures continue. On October 13, Carrefour announced that its last store in Chengdu, the Shuangqiaozi store, officially ceased operations, meaning this large supermarket chain, which had been in Chengdu for 24 years, officially exited the Chengdu market.

Not only Carrefour, but Bubugao, known as the "first stock of private supermarkets," closed 139 stores in 2022 and is facing a delisting crisis this year. Financial report data shows that as of the third quarter of this year, Bubugao's loss reached 650 million yuan.

**In contrast to the bleak situation of traditional supermarkets, warehouse membership stores are accelerating expansion.**

Walmart is closing traditional supermarkets while accelerating the layout of Sam's Club. As of July this year, Sam's Club has 45 stores in the Chinese market, covering 25 cities, basically achieving entry into first- and second-tier cities in China.

In April this year, RT-Mart opened its first "M Membership Store" in Yangzhou, Jiangsu. Hema launched its warehouse-style membership store brand "Hema X Membership Store" in 2020 and opened its first store in Shanghai, now with 10 stores in Shanghai, Beijing, Suzhou, and other places.

Currently, consumers have a strong demand for high cost-performance products and quality services. Warehouse membership stores integrate online and offline shopping scenarios, meeting consumers' needs for products, services, and life convenience.

The past hypermarket model cannot compare with the experience brought by Hema's new retail format, nor can it compare with Sam's Club and Costco, which have taken prices to the "extreme." Under the profit dilemma, the prelude to supermarket transformation has begun.

**New Distribution Comment:**

The new pattern represented by warehouse membership stores poses a great challenge to traditional supermarkets. Traditional supermarkets need to deeply study how to carry out systematic model transformation. This will become an important topic in the future retail industry.

**Warehouse membership stores provide more cost-effective products through bulk shopping and low-cost operation models, promoting the rapid development of the O2O shopping model.**

Compared with traditional supermarkets, warehouse membership stores are also more flexible and can quickly adjust business layouts according to market changes. In the future, traditional supermarkets may combine with the warehouse membership store model by opening warehouse areas in existing stores, but to achieve cross-domain competition, major reforms are still needed.

Of course, there is still the possibility of the two models coexisting in the market. But the warehouse membership store model, while saving energy and space, improves shopping efficiency and will become the mainstream trend in the future. Traditional supermarkets need to accelerate adjustments to maintain market share.

**Prepared Dishes: Industry Development**

**and Food Safety Conflict**

On February 13, 2023, the Central Document No. 1 proposed for the first time "cultivating and developing the prepared dishes industry." The prepared dishes industry received support from the Central Document No. 1 for the first time, which is a driving force for the industry to move towards standardization and normalization, bringing new opportunities for industry development.

Driven by policy normalization, the demand of young people for convenient ready-to-eat food, and the trend of restaurant chainization, the domestic prepared dishes industry has developed rapidly. In 2022, the total output value of China's prepared dishes industry exceeded 400 billion yuan. Some institutions predict that in the next four years, the prepared dishes industry is expected to become the next trillion-yuan catering market.

In recent years, the heat of prepared dishes has continued. With the rapid development of the industry, more and more consumers are worried about food safety issues. In September this year, a news story about prepared dishes entering schools sparked heated discussion, with parents expressing dissatisfaction, pushing prepared dishes to the forefront again.

The prepared dishes industry still has problems such as cutting corners, poor taste, and questionable quality. Consumers even believe that it is difficult to guarantee nutritional needs and worry about food health. There has been continuous debate over the use of prepared dishes in chain restaurants, fearing that the development of prepared dishes will become an irreversible trend. How to ensure the safety of food on the tip of the tongue will become the core of the future development of the prepared dishes industry.

**New Distribution Comment:**

The greater the opportunity, the greater the challenge and risk. The conflict between the development of the prepared dishes industry and food safety will exist for a long time.

First, the production process of prepared dishes may involve food additives such as additives and preservatives. Second, the processing of prepared dishes involves multiple links, including ingredient procurement, processing, storage, and transportation. In addition, the packaging and storage of prepared dishes also affect food safety.

To resolve these conflicts, the prepared dishes industry can use technologies such as blockchain and the Internet of Things for source tracing and information tracking. Allow small-scale enterprises to adopt more convenient and mature management models to develop regional brands, formulate differentiated standards, and improve regulatory efficiency and transparency.

Conduct standardized education and public opinion guidance for consumers, while improving their own development level, researching and developing high-quality, low-cost new products, new processes, and new materials, promoting the integration of prepared dishes with green farming, environmentally friendly packaging, and other industries, and improving the industrial chain.

**Prepared dishes enterprises need time and the joint efforts of the industry to create a sustainable development environment.** Only by formulating long-term development ideas and continuously adjusting and improving based on the actual situation of the industry can the coordinated and high-quality development of the prepared dishes industry be ensured.

**Rise of White-label Products: Penetration of New Consumption Channels, Value Highlighted**

With the rise of new consumption channels such as community group buying and live-streaming e-commerce, the consumer market environment is constantly changing, and the roles of distributors and retailers are also changing. They are no longer channel movers but must become brand cognizers to obtain brand premiums.

In this process, white-label products have risen, gradually entering consumers'视野, becoming a force to be reckoned with.

**White-label products usually have no brand premium, so prices are relatively low, meeting the price-sensitive needs of some consumers.**

At the same time, as consumers' quality requirements increase, white-label manufacturers also pay more attention to product quality, attracting consumers with high-quality, customized products to meet diversified needs.

White-label is not a generic brand, but not all non-first- and second-tier brands can be called white-label. White-label can also be famous brands; they are brands established by channel providers' own systems, with a certain degree of awareness and reputation in specific channels and markets. The rise of white-label is a phenomenon of commercial profits shifting from brand owners to channel providers, an inevitable trend in the development of the consumer market.

In the new consumption environment, white-label products will occupy a more important position in the market. This means that white-label manufacturers need to continuously innovate, improve quality, flexibly respond to market changes, and adjust and optimize business strategies. Some powerful white-label manufacturers may begin to focus on brand building and gradually develop towards branding to remain invincible in this fiercely competitive market.

**New Distribution Comment:**

From the perspectives of brand manufacturers and channel providers, the development of white-label products brings both opportunities and challenges:

**Opportunities:**

Brand manufacturers can enhance their influence in new channels through cooperation, and channel providers can use white-label to enrich product lines and customer resources, jointly develop new users and channels, and achieve win-win results.

**Challenges:**

Brand manufacturers face pressure from price and positioning competition. How to effectively control costs and maintain competitiveness in such a market environment is a question worth pondering.

The development of white-label products proves that the strength of channel providers is increasing, and accordingly, the difficulty of supply chain management also increases. Therefore, channel providers are required to continuously improve their market insight and business capabilities, enhance management levels, and ensure product stability and quality consistency.

**Overall, brand manufacturers can bring new marketing ideas and enhance influence through cooperation with white-label products; channel providers can limit brand autonomy through white-label products.**

For the common development of both parties, brand manufacturers and channel providers should jointly respond to the development of white-label with an open and cooperative stance: reveal differentiation and complementarity, jointly explore user needs, deepen value chain collaboration and resource integration, and promote industrial chain upgrading.

**Japan's Nuclear Wastewater Discharge:**

**Causing Chain Reactions in the Retail Industry**

On August 24, the Japanese government launched the plan to discharge nuclear wastewater from the Fukushima Daiichi Nuclear Power Plant into the sea. According to reports, Japan will need at least 30 years to discharge about 1.3 million tons of treated nuclear wastewater.

Image source: XueShi.com

Japan's nuclear wastewater discharge has become a fait accompli. China's General Administration of Customs decided to fully suspend imports of aquatic products (including edible aquatic animals) originating from Japan from August 24, 2023 (inclusive).

Not only seafood is affected; the public's fear of nuclear wastewater discharge has spread to multiple industries such as food and daily chemicals. After the incident, many people hoarded salt, and "salt panic buying" occurred in many places. At the same time, calls to boycott Japanese imported food grew louder. Japanese restaurant sales halved, facing closure risks, and some chain brands have even closed several stores. Japanese cosmetics sales also showed a straight downward trend.

The public's resistance to Japanese products stems partly from concerns for their own safety and partly from dissatisfaction with the Japanese government's actions. The discharge of nuclear wastewater, disregarding people's personal and food safety, will inevitably cause unavoidable impacts on Japanese enterprises.

**New Distribution Comment:**

Affected by the Japanese nuclear wastewater discharge incident, the decline in sales of Japanese imported food and daily chemical products has already affected some Chinese FMCG companies. The public's sensitivity may spread to products from other countries, having a certain impact on consumer sentiment. However, this also brings opportunities for domestic substitute products, benefiting related enterprises to expand their layout.

Domestic brands can seize the opportunity for brand marketing and promotion, ensure product quality and safety, reduce dependence on trade with Japan, expand new channels, and move towards the international market.

**ChatGPT: AI Assists**

**Accelerating Enterprise Digitalization**

With the explosion of ChatGPT, various industries have begun to discuss who will be replaced by AI in the future. In this wave, fast-moving consumer goods companies that reacted quickly have already used it to develop products, from packaging design to target audience to advertising slogans to product pricing, using ChatGPT to "offer advice" in all aspects. With the advent of the ChatGPT era, enterprise digitalization faces new opportunities and challenges.

First, ChatGPT can improve enterprise production efficiency, such as data collection, organization, and analysis, getting rid of the disadvantages of low manual efficiency, saving labor costs while accelerating enterprise development.

Second, provide users with more personalized services and improve customer service quality. With ChatGPT, analyze user data, intelligently recommend relevant content, increase user stickiness, and improve user satisfaction.

With the continuous development of artificial intelligence technology, ChatGPT has received widespread attention and will continue to promote the acceleration of digitalization.

**New Distribution Comment:**

As a powerful AI tool, ChatGPT provides excellent customer service and product development support. Through deep learning and natural language processing technology, it can quickly identify user pain points, propose optimization solutions, and promote rapid product iteration and upgrading. Analyze user behavior patterns, recommend personalized content, and improve user experience and stickiness.

At the same time, it can optimize supply chain efficiency and reduce cost losses. Through deep integration with enterprise CRM, ERP, and other systems, it promotes workflow automation and improves overall operational efficiency.

Its application scenarios are not limited to customer service and product development; it can also develop related applications to expand AI application scenarios, comprehensively promoting enterprise digital transformation.

**In short, ChatGPT can play the role of an "enterprise digital assistant," supporting comprehensive digital transformation and intelligent upgrading of enterprises.**


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