This is an era of innovation; if P&G remains stagnant, it can only be a giant of yesterday. After all, heroes age and beauties grow old. P&G is no longer what it used to be. Recently, American fashion luxury group Ralph Lauren announced that Patrice Louvet, former president of Procter & Gamble, will succeed Ralph Lauren's former CEO as the new president and CEO, and will join the board, reporting directly to 77-year-old Executive Chairman and Creative Director Ralph Lauren. It must be said that P&G is indeed a great place for cultivating professional managers. Especially in China, it can be said that P&G trained the earliest batch of professional managers, bringing advanced brand management methods and standardized incentive mechanisms to other companies. Since its founding in 1837, P&G has established branches in over 80 countries, operating more than 300 brands, including beauty, grooming, home care, and food and beverages, making it one of the world's largest daily chemical consumer goods companies. Having spanned nearly two centuries, P&G has become an elder in the daily chemical consumer goods industry. Since it is an 'elder,' it may be somewhat out of step with this constantly innovating world. Now, with the rise of local brands and the siege of European, American, Japanese, and Korean brands, P&G not only faces threats from competitors but also faces obstacles in future corporate transformation due to its own product rigidity. The position of daily chemical giant is shaky. Looking back a few years, the shampoos we used most were Rejoice, Pantene, and Head & Shoulders; toothpaste was Crest; laundry products were Tide and Ariel... At that time, people's lives were inseparable from P&G's products. Now these brands seem less important. Without Head & Shoulders, Crest, or Tide, we can choose Ziyuan, Yunnan Baiyao, Blue Moon, and others. According to P&G's third-quarter fiscal 2017 report, net profit was $2.52 billion, down 4% year-over-year; net sales were $15.6 billion, down 1% year-over-year, marking 13 consecutive quarters of decline, below analysts' forecast of $15.73 billion. Among them, the men's grooming segment saw organic sales decline 6% year-over-year, and shaving care products saw high single-digit organic sales decline. The beauty segment saw organic sales grow 1%, with hair care organic sales flat. Compared to past glory, except for beauty and hair care which are basically stable, other categories are in decline. The beauty segment relies on continued growth of high-end skincare brand SK-II to compensate. Moreover, in the Chinese market, P&G is in an awkward position: well-known brands like Crest, Tide, and Head & Shoulders have become memories from a few years ago. Even in second- and third-tier cities, it's no longer the era of Tide at 1.9 yuan or new Rejoice at 9.9 yuan. Furthermore, with consumption upgrading, middle-class consumers are no longer satisfied with P&G's affordable products in supermarkets. For example, some high-income people, when choosing diapers for their children, no longer choose traditional Pampers but opt for high-quality, higher-priced Japanese diapers like Kao and Unicharm's MamyPoko. Besides the decline in the Chinese market, overseas markets are also not optimistic. It is reported that before the second half of next year, Buffett will clear his remaining 52.8 million shares of P&G, and P&G will use its Duracell battery business to exchange for Buffett's P&G shares. From being one of P&G's largest shareholders in 2005 to continuously reducing his stake since 2008, this indicates Buffett's lack of confidence in P&G's future development. Thus, P&G's glory has faded, and it is on the decline. Its position as a daily chemical giant may be replaced by competitors like Unilever. How did P&G fall from its golden age to mediocrity? In memory, P&G seems never to have been defeated. Will this 178-year-old company have another 178 years? How did the former giant end up in such a miserable state? Overall, there are two main reasons: First: P&G products lack innovation and are replaced by other products. In skincare, OLAY is perceived by consumers as a mother-level brand, and young consumers' skincare brands have been gradually replaced by European, American, Japanese, and Korean brands. Even with the continued growth of high-end skincare brand SK-II, middle- and low-end consumers will not choose such high-end products but instead choose mass-market brands that suit them, such as L'Oréal, Pechoin, and Inoherb. In laundry products, taking China as an example, Tide and Ariel have been gradually squeezed by emerging local brands like Liby, Blue Moon, and Nice. Tide's last innovation was six years ago. In this state of stagnant innovation, merely increasing advertising spending is not enough to win back consumers. Moreover, local brands Liby and Blue Moon have rapidly increased their visibility through popular variety shows like 'I Am a Singer,' 'The Song of China,' and 'Dad, Where Are We Going?' Even disposable hygiene products like Pampers and Whisper are losing ground under the siege of new entrants like Kao, Hengan, and Unicharm. Second: In the international market, P&G has failed to capture the needs of consumers in the internet age, especially young people. With the diversification of internet channels, sales entry points have become increasingly fragmented, making it harder for P&G in the new retail model. Additionally, the development of social networks and smartphones has widened the distance between people and television, thus ignoring P&G's TV advertisements. Despite P&G's series of measures in advertising spending and marketing planning to try to enhance consumer loyalty to P&G brands, no one will maintain brand loyalty through fixed consumption entry points and advertisements. Thus, brand aging and the fragmentation of internet sales channels have become important reasons for P&G's slow transformation. To regain consumer attention for these old brands, product innovation is an important way for P&G to return to the public eye. Relying solely on shampoo, P&G will find it hard to return to its peak. According to the 2017 top ten shampoo ranking from the Top Ten Brand Search website, the top three are P&G's Head & Shoulders, VS Sassoon, and Pantene. This proves that P&G's accurate positioning of shampoos, coupled with its unique multi-brand, multi-function approach, has made its shampoo brands household names. At least in China, most people still prioritize P&G brands when choosing shampoo. Each of P&G's shampoo brands has its own features and functions. 'Head & Shoulders' highlights anti-dandruff, 'VS Sassoon' emphasizes styling and post-color care, and 'Pantene' is for daily repair. Whether it's Head & Shoulders, VS Sassoon, or Pantene, P&G highlights the features and functions of its shampoos from an audio-visual perspective (packaging and function introduction). In fact, after Ziyuan launched silicone-free shampoo, silicone-free shampoo has become a direction that major brands are competing to enter. Recently, Rejoice also launched a silicone-free shampoo, reportedly a shampoo that can remove makeup. It introduces Micellar makeup-removal technology from France, popular in Europe and America, into the hair care field, achieving cleansing power while giving the scalp and hair the gentlest care, attracting consumer attention, and endorsed by popular 'storyteller' Xue Zhiqian. Some analysis says: because the cost of silicone-free is too high, Ziyuan has not yet made money. After all, as a brand-new brand, Ziyuan's costs for promotion and terminal sales are risky. In contrast, P&G's choice to use its most popular brand, Rejoice, to enter the silicone-free market has advantages. Although P&G has clear advantages in shampoo positioning, in the era of smartphone popularity and developed internet, for young consumers who like to pursue fashion and social interaction, P&G's products are not only unremarkable but also too mainstream. They may post on social media about the uniqueness of newly purchased niche Japanese or Korean shampoos, but they won't post about how obvious the anti-dandruff effect of newly purchased Head & Shoulders is. Additionally, the middle class is expanding. P&G's shampoo products are affordable, so middle-class consumers may not prefer such products but instead choose international brands like Wrigley, Ryo, and Avalon Organics. Thus, relying solely on stable shampoo development is still difficult to win back consumer loyalty to the brand, let alone secure the giant position. Of course, P&G is also trying different approaches, such as reducing advertising spending and divesting poorly performing brands. In summary, P&G's current direction is increasingly diverging from consumers. Compared to the 'vigorous' P&G of the past, it is indeed gradually aging. If it wants to solidify its position as the world's largest daily chemical giant, it will be difficult. This is an era of innovation; if P&G remains stagnant, it can only be a giant of yesterday. After all, heroes age and beauties grow old. P&G is no longer what it used to be. Source: YI OU -END-