In the fast-evolving FMCG market post COVID-19 outbreak, winning brands will have to stay ahead of changes in consumer demand for health, convenience and pleasure, and ride the wave of digitalisation to win the omnichannel battles that lie ahead. Both established and insurgent brands in Chinese Mainland have opportunities to further grow their consumer footprint by transforming their innovation and go-to-market strategies.
Chinese Mainland
In 2020, local brands continued to lead China’s Top 10 most chosen brands list. Yili remained in the top spot, reaching the most households, and has been chosen the most times for the sixth consecutive year. The concept of “a cup of milk every day will give you a strong body” is deeply rooted in the Chinese consumer’s mindset while, more recently, advice from experts on how drinking milk and eating eggs can improve your immune system to help defend against coronavirus mean that dairy categories are now consumed by most households on a daily basis. This has enabled Yili and Mengniu to win more than 1 billion consumer reach points each.
Haday and Shuanghui have witnessed the fastest growth in consumer reach points among the top 10 brands, driven by their strategy of penetrating lower tier markets and the outskirts of cities.
Master Kong In third place behind the two dairy manufacturers is Master Kong, a leading Chinese food and beverage brand, famous for its instant noodles and ready to drink tea. Master Kong showed strong agility during the COVID-19 pandemic, ensuring its production, supply and food safety were tightly controlled and maintained. As we entered the ‘new normal’ Master Kong’s variety of price tiers, flavours and pack sizes have allowed the brand to reach many shoppers and occasions. With the launch of new instant noodle flavours and low sugar low calorie tea, the manufacturer is keeping up with the latest trends and staying relevant to consumers.
Hearttex Ranked in seventh place is Hearttex, with more than 383 million consumer reach points in 2020. The brand has now appeared in the Top 10 most chosen brands for two consecutive years. The only non-food brand among the top 10, Hearttex dominates the paper industry. COVID-19 stimulated demand for hygiene and health products, and Hearttex’s sterilising wipes rode this trend and delivered strong growth for the brand. In addition, Hearttex has expanded into other categories such as cotton tissue, floor dust cleaning tissue, masks and laundry, allowing it to capture more consumers and new occasions.
Increased penetration has been a major driver for the fastest growing brands, with many seeing a double-digit increase in consumer reach points in 2020. More in-home cooking occasions led to rapid growth for leading sauce brands Chu Bang and Haday. Jinluo and Shuanghui have seen increased demand for sausages, which provide a convenient in-home protein meal. Self-indulgent snacking occasions at home also saw a rise, which benefited the carbonated soft drinks and savoury snacks categories, and brands such as Coca-Cola, Pepsi and Lays.
Eighth fastest-growing brand Panpan has entered the Chinese Mainland Top 50 for the first time, with an 8% growth in consumer reach points. Panpan, originated in Fujian as a processor of agricultural products, offers products across many different categories, such as soft cake, savoury snacks and packaged bread, fulfilling a diverse set of occasions and needs. In order to ensure food safety and taste, Panpan uses only high-quality materials.
Rio A ready-to-drink ‘alcopop’ brand which emphasises its fresh and fruity flavours. Very different from China’s traditional spirits, Rio looks to attract younger consumers who are seeking lighter alcohol content and tasty flavours. Rio has created a new self-indulgent drinking occasion for people who want to reward themselves during their ‘me’ time. As a result we see from the Kantar Worldpanel data that its 21.3% CRP growth has been driven by young couples and singles.
Milkground A leading brand in the cheese category which dominates the ready-to-eat cheese market with its lollipop cheese targeted towards families with kids. Its significant 98% CRP growth has been driven by innovation in new variants such as fruit and vegetable, high calcium and baking cheese. Meanwhile the brand has continued to increase penetration within lower tier cities, distributing through small format channels and cooperating more closely with CVS, mother and baby stores and bakeries. Milkground has also invested heavily in media, in both traditional TV and outdoor channels, as well as working with KOLs (Key Opinion Leaders) to capture more consumers.
Chu Bang A leading condiment brand which appears on the list of fastest growing food brands for the second consecutive year. Chu Bang has rapidly expanded into the East and West of Chinese Mainland, as well as further penetrating county-level and county cities. Growth has come from soy sauce, and the brand has also witnessed rapid buyer recruitment for its ketchup and oyster sauce products.
Dettol Dettol, which originated in British hospitals 80 years ago, is becoming a key player in the antiseptic and sterilisation markets in Chinese Mainland. The brand achieved a 33% growth in CRP, and is ranked as the fastest growing brand in the home care sector, mainly driven by its household and laundry disinfectant. Dettol was very well placed to meet the hygiene needs of consumers during the pandemic. A portfolio that offers products which provide longer-term antiseptic benefits as well as milder products with botanical additives allows the brand to reach consumers across different age groups and with different needs.
Bluemoon Bluemoon offers products across several homecare categories including hand wash and laundry detergent. This brand saw a 24.4% CRP increase, which was mainly driven by its omnichannel strategy: cooperating with major key accounts, distributing into hypermarkets and supermarkets, and strengthening co-operation and marketing with e-retailers. Bluemoon has also innovated well through its deep understanding of consumers’ cleaning requirements, for example launching amino acid hand wash and antibacterial foam hand wash for babies and children.
Winning young consumers and leading the health trend with its ‘three o’s’ product
Genki Forest is China’s fastest growing local beverage brand, with significant CRP growth of +202% compared with last year, and reaching more than 20 million Chinese households in 2020.
Genki Forest’s huge success lies in its core product, Genki Forest Sparkling Water, a product with the mix of three Zero's: zero sugar, zero fat and zero calories. It is winning through a strategy that focuses on a combination of the use of healthy ingredients and youth-oriented marketing. Youngsters are now the most dominant consumer group within the food & beverage market, and are highly concerned with their own physical health. Genki Forest anticipated their needs and entered the category with a very relevant product that has stylish packaging, healthy ingredients and a taste that is better than many other sugar-free products.
As for media touchpoints, Genki Forest has had high levels of exposure on a variety of digital community platforms including Little Red Book, Douyin and Weibo, in addition to sponsoring hot TV shows that are viewed by younger consumers, helping the brand to rapidly grow its popularity amongst its key target group.
Spokesperson Ren Song, CEO of Milkground
1. In your opinion, what makes Milkground stand out in the cheese industry? When we started to build the brand, we came up with a winning model – the Five Forces Model – to elevate our impact in the cheese industry. The model is composed of brand power, product power, channel power, competitiveness, and integration power. Brand power will not work unless you win customers with competitive products. Over the past few years, we have focused on enhancing product power to facilitate the development of Milkground. Our products, particularly the lollipop cheese, are popular among consumers, especially kids. We invest a lot in brand building, hoping to impress consumers and win their trust and favour, which leads to repurchase. We have well-defined industrial and segment positions, and have put in place an omnichannel brand communication matrix. Since 2019, Milkground has been working with the popular media to boost brand impact and lead the market. We will continue to perfect the brand communication matrix and take advantage of new media to further promote our brand. We also use channel power, and have achieved good results by penetrating lower tier markets. We believe it is important for consumers to see our products, having easy access to them, and being willing to repurchase them, are the foundation which let the Milkground brand stand out.
2. What were the biggest challenges and successes for Milkground in 2020? COVID-19 put everything on hold, and Milkground was not immune to that. From the external side, the biggest challenge was the decrease in purchasing power due to the slow economic growth. During the pandemic the whole country operates with low efficiency and lockdown measures also made shopping inconvenient. For example, logistics and distribution were greatly affected in some places, which had an impact on the overall consumption environment. However, we achieved growth despite the suffering we experienced. During the pandemic, there was enormous demand for nutritious and delicious products, and our brand building efforts ensured that the nutritional value of cheese was recognised by consumers. We responded to demand actively by creating online sales channels, and this contributed to our growth in 2020. Within Milkground, the biggest challenge was going back to work. We needed to put the health of our employees first, which made the whole thing a long process. We took measures to help our employees overcome fear – the key obstacle to returning to work – and get everyone back together quickly.
3. What do you think is the biggest opportunity for Milkground? We have a clear focus on cheese. According to Kantar Worldpanel, cheese has grown into a booming segment from a niche one. Yet its penetration and recognition among consumers is still at early stage in Chinese Mainland, while cheese is an indispensable part of daily life in developed countries. Milkground believes that every family can enjoy cheese. This is the fundamental guarantee for our future success.
4. Where will China’s FMCG market go in coming years? How will shopping behaviours change? Looking back at the evolution of Milkground, we found that consumers are looking for more nutritious, convenient and delicious food. And cheese is the right product to meet their needs. That’s why the segment has developed so fast. Shopping environments have become more diverse, as consumers’ shopping behavior evolve. On the back of this evolution, we have followed the trend and are turning to new channels like e-commerce, O2O, and Community Group Buy These channels make shopping easier and meet consumers’ needs for a convenient life. However, while we plan to strengthen these online channels in the future we will still bring a relentless focus on traditional offline channels as our main routes to market.
