The 2023 China FMCG Industry Annual Report was released

Reporter Li Jaming

On January 13, the "China (Shanghai) Gold Promotion Organizing Committee" supported by various functional departments of Shanghai Municipality, hosted by the Shanghai Federation of Commerce and Shanghai Oriental Century Consumer Goods Development Promotion Center (Oriental FMCG Center), and jointly organized by more than 20 leading retailers and e-commerce companies in China, the "23rd China (Shanghai) FMCG Executive Conference" was grandly held in Shanghai, with more than 150 senior executives from government departments, industry organizations, well-known FMCG brands, distributors and retailers attending the meeting.
To review and prospect the FMCG industry related to domestic demand and people's livelihood, the theme of this year's annual meeting is "Showcasing Gold Products and Launching Shopping Brands"
.

According to the consumer review organized by the organizer, the retail monitoring of more than 4,000 representative supermarkets, stores and convenience stores, the big data statistics of key B2C e-commerce, expert review and functional department review, and selected "2022 Consumer Gold Products", "2022 Best-selling Gold Products", "2022 Classic Gold Products", "2022 High-end Gold Products", "2022 Potential Stars", "2022 Festival Gold Products" and "2022 Online Shopping Gold Products" from many brands and products, and selected on this basis Best-selling Gold Award", the conference announced at the same time, according to the annual survey, the "2022 Benchmark Purchasing Manager (Buyer)" and other annual awards
were produced.

The release of the "2023 China FMCG Industry Annual Report"

At the same time, the "2023 China FMCG Industry Annual Report" was released, revealing the new trends
presented by China's FMCG industry in 2023.

2022 in review

Resilient growth of the industry
.
After nearly three months, the Oriental FMCG Center visited the executives of 110 well-known FMCG companies, and combined with the desk research of more than 200 FMCG companies listed in Shanghai, Shenzhen and Hong Kong, the "2022 China FMCG Industry Annual Report" released showed that 47.
8% of FMCG companies with revenue growth in 2022 accounted for 47.
8%, down 22.
7 percentage points from 70.
5% in 2021, and 29.
3% of the surveyed companies said that their revenue in 2022 was the same as the previous year, with 22.
9% of FMCG companies reported reduced
revenue in 2022.
According to a recent survey by Bain & Company, the sales of FMCG in China in 2022 increased by 5.
9% compared with the same period of the previous year, showing strong resilience
.

Source: Oriental FMCG Centre

Gold is a standout
.
Based on the big data retail monitoring of more than 4,000 stores, supermarkets, convenience stores and specialty stores in the Yangtze River Delta region, as well as major e-commerce platforms such as Tmall, JD.
com, Douyin, Suning.
com and Vipshop, which account for more than 80% of China's B2C retail market, Oriental FMCG Center released the "Big FMCG TOP Gold List"
in its 23rd year this year 。 The list covers nearly 230 FMCG categories, with more than 2,100 brands on the list, with an average value of 69.
3 for CR5 (the sum of the market share of the top 5 brands in the industry) and 81.
6
for CR10 (the sum of the market share of the top 10 brands in the industry).
There were 353 new brands on the list, with a brand turnover rate of 15.
5%.

Among them, there were 199 new brands on the list in offline channels, with a brand turnover rate of 12.
1%; There were 154 new brands on the list through online channels, with a brand turnover rate of 24.
4%.

In the face of various unfavorable external environment, gold brands still maintain strong competitiveness
.
Oreo biscuits, Dettol disinfectant, Tsingtao beer, Arowana cooking oil, Mr.
Tai Le chicken essence, Mr.
Willman household cleaner, radar mosquito repellent products, Wan Chai pier quick-frozen conditioner, Deya imported milk, white cat dish soap, Guangming Youbei fresh milk, Suntory oolong tea, Heyu north and south goods, Damu Khan frozen beef and mutton, Nestle Yiyang adult milk powder, OATLY Oh Maili oat milk, Yanzhong salt soda, Lao Heng He cooking wine, Gu Xin vermicelli, Shuangqiao monosodium glutamate, Xu Fuji candy, Baoding Tianyu Waste Marinade, Lifeng leisure meat (fish) products , Danish crown cookies, Ferrero chocolate, curious baby diapers, Luhua peanut oil, Weiquan 100% fruit juice, Tianwo dried fruit, Haiba hot pot conditioner, Zhang Hua hair dyeing products, paradise lotus powder and other brands are at the top of the "TOP Gold List" in their respective categories; Pepsi Cola, Oriental Leaf Sugar-Free Tea, Jieyun Household Paper, Dabao Skin Care Products, Avino Mother and Baby Skin Care Products, Shibang Lunch Meat, Heng Yuen Cheung Underwear, Lee Kum Kee Soy Sauce, Sanquan Frozen Conditioner, Trensu Milk, Daily Fresh Milk, Ovaltin Brewed Beverage, Anchor Dairy Products, Meganet Skin Care Products, Cocoa Coffee, Pope Specialty Mouthwash, McCorbe Sauce, Zespri Kiwifruit, Dole Fruit, Valentine Imported Beer, etc.
are also at the forefront
of the category "TOP Gold List".

Source: Oriental FMCG Centre

Capital "fever", home scenes and health into hot spots
.
According to the long-term tracking and monitoring of the industry by the Oriental FMCG Center, a total of 363 major capital events of FMCG occurred in China in 2022, a decrease of 15.
4% compared with 2021, involving an amount of RMB78.
557 billion, a year-on-year decrease of 35.
8%; Home scenes and healthy FMCG categories have become hot
spots for capital investment.
The organizer exclusively released the "Top 10 Chinese FMCG M&A in 2022" and "Top 10 China FMCG Financings in 2022"
based on the amount involved in the major capital M&A and financing events of FMCG in 2022.

Source: Oriental FMCG Centre

In 2022, a total of 20 FMCG companies successfully IPOD, including 7 listed on the Hong Kong Stock Exchange, 5 listed on the Shenzhen Stock Exchange, 3 listed on the Shanghai Stock Exchange and 3 on the BSE, and 1 each on the NASDAQ and NYSE
.
Meihua Venture Capital, OneThree Capital, Naixue's Tea, Tomato Capital, Shunwei Capital, Cathay Fund, Evergreen, Jinding Capital, Xiaohongshu and Ruoyuchen will actively invest in 2022 and be selected as one of the "Top 10 Active Investment Companies of FMCG in 2022"
.

The integration of product and effect, hot events, and consumption scenarios lead the "practical creativity"
.
In 2022, FMCG brands will pay more attention to hot events and consumption scenarios, and pursue product and effect integration in marketing under the background of consumer market pressure
.
Based on the annual big data retail monitoring, and through WeChat and online voting, the Oriental FMCG Center selected the "Top 10 Practical Ideas of FMCG in 2022" that will have a greater role in brand enhancement and market sales (in no particular order): Pepsi creates food rivers and lakes, Mengniu World Cup "World Quality, Born to Be Strong", RT-Mart creative poster, Zhongxuegao ×FIRST Youth Film Festival, Babycare for love, redesign, Winona cross-border co-branding, won the Double 11 achievement, Finish lit dish× Mijia dishwasher commercial, Oreo adopts two giant pandas, Meituan Preferred "Tomorrowda Supermarket" and Proya Effect are integrated, and the GMV of "Fried Field" exceeded 70 million
.

Source: Oriental FMCG Centre

Affected by the epidemic, some brands and enterprises have closed or withdrawn
.
More than three years of the new crown epidemic has had a profound impact on China's consumer goods market, with well-known platforms such as Ten Club, Daily Fresh and Yang Wharf shutting down one after another, and multinational brands such as Maybelline and Abbott shrinking or withdrawing from the Chinese mainland market.
And Shuanghui, Unilever's The Laundress, McQuill and others were exposed
because of quality problems.
Based on industry monitoring and relevant public reports, combined with WeChat and online voting, the Oriental FMCG Center exclusively released the "Top 10 Frustrated FMCG (Company) in 2022" (in no particular order) on the same day, Shihuituan closed all businesses, Shuanghui production workshop chaos, Daily Youxian shut down, McQuill pure milk sampling failed to qualify, Yang Wharf encountered a cold winter, "Maybelline" closed all offline stores in China, "Shicui" closed large-scale stores, Unilever's The Laundress was recalled due to the risk of microbial contamination, Abbott withdrew from the infant milk powder market Chinese mainland, and Procter & Gamble's brands detected the carcinogen benzene and other unfortunate to make the list
.

2023 China FMCG preview

After nearly three months, the Oriental FMCG Center visited the executives of 110 well-known FMCG companies, and combined with desk research, summarized and analyzed 10 new trends in China's FMCG industry in 2023:

Policy adjustments to embrace market recovery
.
On December 7, 2022, the Comprehensive Group of the Joint Prevention and Control Mechanism of the State Council to Respond to the Novel Coronavirus Pneumonia Epidemic issued the Notice on Further Optimizing the Implementation of the Prevention and Control Measures for the Novel Coronavirus Pneumonia Epidemic, marking a major change
in China's epidemic prevention and control policies.
On New Year's Day, the market showed signs of recovery, and many FMCG companies responded positively, saying that 2023 will usher in a market recovery and showing a certain optimism
.

Big health FMCG products are favored
.
Consumers are paying more and more attention to health, and "healthier" and "high quality" have become the keywords
for upgrading.
In the post-epidemic era, consumption hotspots are changing rapidly, from the pursuit of individuality, healthy green, to the pursuit of ingredients in subdivided fields, FMCG categories that dominate healthy life are widely favored
。 PepsiCo Sugar-free, Nongfu Spring's Oriental Leaves, Suntory Oolong Tea and other sugar-free products lead the market; Low-salt and low-fat light calorie products such as Lee Kum Kee Thin Salt Light Soy Sauce, Baoding Tianyu Thin Salt Waste Marinade, Zuo One Low Calorie Jelly, Fang Lang Olives Jade Orange Juice, and Costa Costa Light Milk Tea have been widely praised.
Mengniu's main immunity Guanyi Milk Immunity Bottle, Lendit's calcium carbonate, Zespri, Dole fruit and other health products, and Dettol, Mr.
Weimer, Baicat, Jiaan and other disinfection and cleaning products will achieve rapid growth
.

Product innovation, category expansion
.
With the post-90s and post-00s becoming the main force of consumption, product innovation has become an important means for the development of
FMCG enterprises.
Tatole Innovations has launched new recipe-style seasonings and fresh chicken juice, Deya under Pinvor has launched A2β-casein whole milk, Dettol under Reckitt Benckiser has launched laundry beads, and Lendit has launched new vitamin capsules
.

Some FMCG companies have made sufficient articles in category expansion, and Yuyuan Co.
, Ltd.
has vigorously developed pre-made dishes under the brand name "Zhen Taste"; Awatian, a leading brand of brewing beverages, crossed the zero food category and launched Cool Crispy Mood Filled Biscuits; Bright Cold Drink expands the quick-frozen conditioning category, and newly launches the "Quicksand Eight Treasures Rice"; The old north-south goods brand - Min Longda launched the Xiaoshan style crispy macadamia nut series; Hormel has a new tavern Salami casual meat products; The veteran white cat launched foam dishwashing mousse and so on
.

Consumption is polarized and extends
in both directions.
After the epidemic, the polarization of consumption has become more obvious
.
The pursuit of high-end quality has become the pursuit
of some consumers.
Arowana under Yihai Kerry launched Grandma's Township small-pressed traditional freshly squeezed rapeseed oil, Mengniu's Trensu launched desert organic milk, Silver Fern promoted venison products, and Meisu, a subsidiary of Garan Group, launched Space Cream
.
The re-introduction of fresh corn at 47 degrees north latitude targets first- and second-tier cities; General Mills Wan Chai Pier launched a black satin selection series for high-end consumers; Flender launches 0 added high-quality sausages; Lendit High Calcin Powder, specially prepared
for people with calcium deficiency and sedentary office workers.

On the other hand, affected by the epidemic, consumer confidence has declined, and purchasing is more cost-effective
.
Many brands have launched more cost-effective combination or family pack products to adapt to the downgrade trend of consumption
.

2023 Price Expectations Source: Oriental FMCG Centre

Under inflation, there is no price increase, and self-digestion accounts for the majority
.
Many FMCG brands have made cautious judgments
about whether the price of products will increase in 2023.
In the annual interview survey of 100 executives, 25.
70% of executives plan to increase the price of products in 2023, because due to the continuous impact of international factors such as the Russian-Ukrainian war, most of the prices of commodities, raw materials, transportation, and labor costs have increased; 43% of executives believe that there will be no price increase for products in 2023 because the market has shown a weak state and consumer confidence has declined due to the prolonged impact of the epidemic; 31.
30% of executives said they were uncertain, depending on the direction and development of the market and the strategy of competitors
.

Near-fieldization, content e-commerce, membership stores, etc.
are growing
against the trend.
Dr.
Chen Jie, Director of the Oriental FMCG Center and founder of FMCG, said at the annual meeting that offline channels, such as convenience stores and small and medium-sized community supermarkets, have become the highlight
of channel growth due to meeting the convenience and immediacy needs of consumers.
According to a study, sales of small and mini supermarkets increased by 51% year-on-year in 2022, and sales of convenience stores increased by 13%
year-on-year.
In addition, due to the strong selection ability of Sam's, Market Opener, Metro Membership Store, Hema X and other member store channels, cost-effective products will continue to grow
against the trend.

Online channels are in a new stage of stock competition, and content e-commerce led by Douyin and Kuaishou has attracted attention from FMCG brands with a large user scale, attractive content dissemination and closed-loop transaction links
.
Lixiang Guo No.
1 onion oil cake, curious royal pants series baby diapers, charm kitchen chicken soup and other online channels performed well
.

Improvement and reinforcement
of the supply chain.
In the current complex and changeable macro environment, the impact resistance of a single supply chain is weak, and the epidemic has also made many brands accelerate changes and optimize their supply chains, including the senior management of brands such as Pinwo and Lifeng said that in 2023, they will improve the layout and investment of the domestic supply chain, and work with partners to strengthen
the shortcomings of the supply chain.

Live broadcasting, co-branding, grass planting, etc.
enhance brand power
.
2022 is the third year of the continuous epidemic, and live broadcasting, co-branding, grass planting, etc.
have become important means
to enhance brand power.
President Xu Fuji personally went live broadcast, OATLY Oh Mai Li, Seventeen Light Years and other cross-border co-branding, Mondelēz Oreo played two-dimensional, and more brands continued to grow grass through Xiaohongshu and so on, and educate consumers through subtlety, thereby enhancing brand and sales
.

Increase efficiency and reduce costs, and pay close attention to profits and cash flow
.
Affected by the economic environment, the epidemic and other factors, many FMCG products are facing unprecedented challenges and pressures, and choosing to increase efficiency and reduce costs to ensure profits and cash flow has become an important task
for corporate executives.
Dongguan health products executives with brands such as Jieyun and Mia told FMCG that cost reduction and efficiency increase, open source and cost reduction, and organizational and team capability improvement are important tasks
in 2023.
Tyson said it will actively cut costs, improve the operation efficiency of the entire supply chain, and improve the effective transformation of the ecosystem
.

All-round digital intelligence transformation and upgrading
.
FMCG companies will transform more resolutely to all-round digital intelligence in 2023
.
Lawson Convenience empowers operations with digital transformation through "three key points" (front-end customer analysis, back-end supplier influence, and mid-end store operation control) and "two lines" (that is, offline experience upgrading and product optimization, online data optimization, and timely push of suitable products); The local beauty group, Jialan Group, aims to become a fully digitally-driven beauty technology company through marketing digitalization, store digitalization, and middle office digitalization; Mengniu Group aims to promote the digital and intelligent transformation of the whole chain, connect the industrial chain and consumers, promote the transformation of business models, and cross business boundaries, industry boundaries and cognitive boundaries
.

Preliminary review: Li Song Responsible editor: Zhang Jiazhen Review: Peng Zonglu