21 Fast Moving Consumer Goods (FMCG) companies reached over 100 million urban households. P&G and Yili led the race, reaching over 160 million families. Nongfu Spring, Haday, and Dali are fastest growers.

21 FMCG companies reached over 100 million urban households during the 52 weeks ending October 5, 2018, with P&G and Yili being the first to hit the 160 million milestones, according to report from Kantar Worldpanel.

The duo reported 92.4% and 90.9% penetration rates respectively, enjoying the widest consumer base in China. In terms of growth rate, Nongfu Spring, Haday, and Dali are the top three performers, reporting over 5% increase in the total number of buying families year-on-year.

Winning over millennials

Despite China’s aging population, winning the love of millennial consumers (meaning post-80s and post-90s generations in China) is critical for brands to thrive. With more disposable income and need to express their individuality, young consumers offer great opportunities to unlock future growth.

For the companies that grow penetration ahead of the market average, most of them saw noticeable advances in young families. For example, Nongfu Spring managed to grow its shopper base amongst young singles/couples by 30% in the last 12 months through its phenomenal success of Victory vitamin water, which rode on the massive popularity of reality show “Idol Producer”.

The company also launched the NFC juice brand 17.5° to cater to younger middle consumers’ aspiration for authenticity and freshness. Similarly, Coca-Cola in China grew its penetration through the smaller pack and new lines such as “Sprite Fiber Plus” to balance young consumers’ needs for both nutrition and indulgence.

Liby, an established player in the home cleaning sector, has actively used sponsorship and film stars to refresh its brand image and won 1.5 million young single/couple families.

Combination of innovation and go-to-market

Almost one new product is launched every three minutes in China in 2017, and consumers in China are facing cluttered shelves with new products trying to grab their attention. However, only 6% of the new launches managed to bring incremental buyers. Brands that succeed in China’s formidably competitive marketplace will have to stand out by offering unique innovation and having go-to-market excellence.

P&G, with its powerful house of brands line, has been leading the FMCG market in terms of penetration for five years in a row. In recent years, P&G has stepped up the innovation pipeline by launching a series of sophisticated and differentiated products, e.g. Whisper Pure Cotton, Always Infinity, Rejoice Micellar Water shampoo as well as Olay and SK II premium range.

In the latest 52-week period, P&G also grew their physical availability, particularly leveraging the strength of social and e-commerce platforms.

Dali, a well-entrenched food conglomerate, reported strong buyer gains in the latest year through its launch of Doubendou, a soy milk product riding on the concept of “natural and GMO bean free”.

Backed up by Dali’s established distribution network to ensure its wide availability and in-store presence, Doubeidou was a blockbuster success and brought 13 million new buyers to Dali Group in the first year after it was launched.

Offline penetration remains paramount

E-commerce has been a game changer in the last 10 years in China, transforming the way brands connect to consumers. In the “New Retail era”, brands will have to adopt a holistic omnichannel view to win consumers at every possible touch point.

Offline stores, especially in lower-tier cities, remain crucial to building trial and engagement through their interactions with millions of shoppers on daily basis. With the expansion in data integration and logistic capabilities, consumers are now able to choose multiple ways to shop and the boundary of online and offline channels are increasingly blurring.

Successful companies in growing shoppers are those who achieved a balanced penetration gain across both online and offline channels. Yili, as a leader in food & beverage, grew its online and offline buyers by 4 and 6 million respectively.

Offline distribution channels brought more shopper growth for companies like Mengniu, Hengan, and Dali. Even for P&G, it managed to add 2.4 million incremental buyers through brick-and-mortar stores. Consequently, the partnership with offline retailers remains essential for brands to keep up the omnichannel footprint.

Read more: Insights of China internet users in lower-tier cities

This post was originally published on Kantar.com.

Interbrand recently released their 2016 ranking of the Global Top Brands; Apple ranks first with $178,119 million brand value, followed by Google, Coca Cola, Microsoft, and Toyota.

Technology is, not surprisingly, the most dominant sector, with four brands in Top 10: Apple, Google, Microsoft, Samsung. It also features some of the Top Growing Brands, with Facebook (+48%) as the Top Growing Brand in 2016, followed by Adobe (21%), Huawei (18%), Samsung (14%) and SAP (+13%), and number 2 ranked Google at (+11%).

Do You still remember the “nickname bottle” that Coca Cola launched last summer? Such an impressive case was not so long ago, now Coca Cola has shifted its focus from bottle to cap, joining up with WeChat. 

Caps are beverage manufacturers’ favorite widget for doing promotion, other than bottles. Such as the most popular “one more bottle” printed on caps in previous years, used to be a common promotion way for many manufacturers. As consumers get used to marketing strategies like “free taste”, “special sale” and “different bottle packaging”, beverage manufacturers are forced to search for new strategies.

Coca Cola tried some creative marketing activities for many years in China. They set up ICOKE platform in 2005, combining traditional marketing with internet platform. By holding iCoke events and communicating with young consumers, Coca Cola successfully built an online community and strengthened their brand awareness.

In the past year, Coca Cola launched a brand new packaging specially for Chinese young consumers. They printed dozens of internet nicknames on the bottle packaging, including popular nicknames such as “Chi huo” (meaning foodie), “Xiao qing xin” (people like indie pop) and “Bai fu mei” (white rich beautiful woman). By carrying out various marketing tactics, the nickname bottle won much attention and became a distinguishing brand marketing case in 2013.

Coca Cola, in cooperation with WeChat, launched a promotion activity named “3PM drink and win Coca Cola” on March 3 in 2014. The activity was jointly organized by Coca Cola, WeChat and Yixun. For getting the chance of “seckilling”, consumers just need to join the Coca Cola Interactive Platform on WeChat, and input the Pincode on the cap. Coca Cola prepared 990 million Coca Cola, Sprite and Fanta with WeChat logo printed on the bottle for the activity. A special 15-second advertisement was on TV since March 3 and the creative information about the activity was also spread on social media.

It was the first time that Coca Cola tried to do exchange promotion on mobile; and WeChat created a new channel to interact and promote on mobile. The activity provided a true sense of retaining consumer relationship management, and an excellent marketing opportunity. Here are some noteworthy points of this cooperation:

• Traditional beverage giant initiated a cooperation with WeChat, trying new O2O interaction mode. WeChat is no doubt significant for branding, attributed to its high penetration rate on mobile. While Coca Cola has been testing water in mobile marketing, WeChat will positively help it improve consumer participation, get closer to the young and boost sale.
• For the first time, the manufacturer uses a combination of Pincode and mobile internet to pull offline consumers to online, then retains and interacts with them. When participating in this activity, consumers need to follow the official Coca Cola account on WeChat, so consumers are retained and might become die-hard fans of Coca Cola. It increases the consumer stickiness, as well as the feedback value of Pincode.
• The tripartite cooperation (Coca Cola, WeChat and Yixun) inspires other enterprises with innovation and creative ideas of WeChat marketing. WeChat is more than an information carrier; WeChat marketing is not only a single pattern of information push, fans interaction, customer service or online transaction, but a combination of sources for marketing. In this way conversion will be easier. Many FMCG enterprises are expecting a cooperation opportunity, however not all brands have the chance to cooperate with WeChat and Yixun.

How to do WeChat marketing? There have been many representative cases, but Coca Cola gave us an inspiration. The primary user group of WeChat is the young, coinciding with the younger brand image of Coca Cola. Online shopping, WeChat interaction and “seckill”, these tactics are all preferred by young consumers, helping Coca Cola get close to the young people. “3PM drink and win Coca Cola” integrate the online and offline advertising sources, and WeChat utilized its advantage on mobile to offer marketing and service scenario. It brings branding and promotion closer and provides other brands a reference for mobile marketing. “WeChat and Didi” and “WeChat and Red Envelope” both caught people’s eye, now “WeChat and Coca Cola” would very likely to be popular with consumers and becomes a typical crossover marketing case in 2014.

Coca Cola has been cooperating with Sina Weibo to promote its customized bottles using Weibo Wallet. It costs about 20 yuan a bottle. So, how was the online sales?

• The first day, 300 bottles sold out in one hour
• The second day, 500 bottles sold out in half an hour
• The third day, 500 bottles sold out in five minutes
• The fourth day, 300 bottles sold out in one minute

What’s the secret behind this best-selling? As we all know, Coca Cola launched its “nickname bottle” incorporating internet buzzwords into its branding. In this new marketing campaign, Weibo played an essential role in it. Celebrities and opinion leaders showed off their customized bottles with their names. It soon became popular among consumers making their own bottles to satisfy their wish to be like a star, some said they would use the bottle to express their feelings.

When Coca Cola knew the need of the consumers, they immediately worked together with Sina Weibo to attract more  consumers to customize their bottles in the vast Chinese market. In order to test Weibo Wallet, Coca Cola only charged delivery fees. Consumers can choose the nicknames they like to be printed on the bottle, and their own names, then pay for delivery fees via Weibo Wallet. It is as simple as any online shopping procedures.

After the first day’s sale on Weibo, consumers shared their bottles with their friends on social media, which explained why Coca Cola’s customized bottle sell better and better day by day. This is the power of social media marketing.