China Washing Investigation Report - Nanning

The annual growth rate of the daily chemical industry is double-digit, and experts predict that this year will become a key year for China's daily chemical market. The gap between Chinese brands is rapidly expanding, and the market competition threshold is getting higher and higher. The competition in the daily market has entered a fierce stage of determining life and death. In the next three years, local Japanese companies will face a life of nine deaths. When the entire industry encounters multiple attacks, what methods should Chinese companies use to break through? How to survive in the restructuring of the industry market? It is a big advantage to carry out intensive cultivation with the China Merchants Express Train.
Organized by this newspaper, the “China Merchants Express Train” hosted by Guangdong 360-degree Communication Advertising Co., Ltd. was held in Nanning, and a group of staff began market research and interview work in Guangxi. This market analysis was based on the content of this group of staff who went to the Guangxi market for one month and the 300 questionnaires that were collected. The survey report cost a lot of manpower and material resources. The high reference value and market value can be used by various Japanese companies or practitioners in the country to understand the daily market in Guangxi.

Overview of Guangxi Province
Guangxi is located in the south of the motherland, on the southeastern edge of the Yunnan-Guizhou Plateau. It has few mountains and is a subtropical monsoon climate zone. Its main features are long summer time, high temperature, high precipitation, short winter time and dry and warm weather. The annual average temperature is 21.1 °C. The hottest month is July, the average monthly temperature is 23-29 °C; the coldest month is January, and the monthly average temperature is between 6-14 °C. It faces the Beibu Gulf in the south and faces Hainan Province across the sea. It borders Guangdong in the east, Hunan in the northeast, Guizhou in the northwest, Yunnan in the west and Vietnam in the southwest. At the end of 2003, Guangxi had a total population of 48.57 million, ranking 10th among provinces, autonomous regions and municipalities. The population density was 205 people per square kilometer, 70 more than the national average. Among the total population, the urban population is 14.11 million, accounting for 29.1%; the rural population is 70.9%.
Guangxi has the geographical advantages of coastal, border and riverside. At the same time, it is at the intersection of the eastern, central and western regions of China's mainland. It is the junction of the South China Economic Circle, the Southwest Economic Circle and the ASEAN Economic Circle. It is the most southwestern and even the northwestern region. Convenient access to the sea is also an important channel connecting Guangdong, Hong Kong, Macao and the western region. Especially with the establishment of the China-ASEAN Free Trade Area, Guangxi is the hub connecting China's southwest, south China, south central and ASEAN markets. It has two large markets in the Pan-Pearl River Delta Economic Circle with 530 million people and ASEAN and 540 million people. In the middle, it will play an important strategic role of the Ministry of Integration.
The unique geographical strategic advantage has enabled the rapid development of the economy in Guangxi Province, and the daily chemical industry has also experienced vigorous development. The increase of urban population has made more and more people have certain economic ability and ability to pay for consumption. They are paying more and more attention to the appearance of dressing, which has huge consumption potential. Experts believe that Guangxi daily market has broad development potential. The growth point of the future daily market.
Characteristics of Nanning's Consumer Market Nanning, the capital city of Guangxi, is an emerging modern industrial and commercial city with developed urban transportation, complete infrastructure such as communication, water and electricity, commercial prosperity and financial activity. The total economic output of Nanning in 2006 reached 86.194 billion yuan, a year-on-year increase of 15.1%, ranking first in the cities of Guangxi.
1. In 2006, there were many highlights in the consumer market in Nanning. The market sales were prominent. The retail sales of consumer goods in the year was 23.941 billion yuan, a year-on-year increase of 15.12%, the fastest growth rate since 1997.
2. Statistics show that the consumption structure of residents in Nanning has escalated, and hot commodities have continued to sell. From the perspective of retail sales of classified commodities above designated size, mobile phones and other communication equipment increased by 53.68% over the previous year, automobiles increased by 23.5%, household appliances and audio-visual equipment increased by 33.82%, and cosmetics increased by 44.98%.
3. The holiday economy will stimulate the growth of the consumer market. In the month of major festivals or major events, there will be a wave of consumption boom. The total retail sales of New Year's Day and Spring Festival will increase by 28.58%. At the same time, the holiday economy has created huge business opportunities for enterprises, which has changed people's consumption concepts and expanded market space.
4. Consumer prices rose moderately. The total consumption price of households rose by 1.5% over the same period of the previous year.
The rapid economic growth of Guangxi Province has also promoted the rapid growth of income of urban and rural residents, and the demand for washing cosmetics continues to be strong. Among them, Nanning's high, medium and low-end skin care and hair care products are showing a growing trend. The growth rate of high-end skin care products is the most gratifying. From the large-scale shopping malls such as Beijing Hualian, Shenzhen Nancheng Department Store, Wal-Mart Shopping Center, Wangfujing Department Store, and Nanning Department Store, the retail sales of each retail company has a double-digit growth rate. In terms of brand awareness, regardless of skin cleansers or skin care products, L'Oreal, H2O, Maybelline, Olay, Avon, Clinique, Lancome and other foreign brands account for the main consumer status. The national brands such as Dabao and Longliqi are also highly recognized. Generally speaking, the basic factors such as moderate price, product function and brand reputation have become the key factors for consumers to consider when purchasing daily chemical products. The influence of advertisements and other people's recommendations will generally have a greater effect on consumers' decision-making, especially It is the influence of advertising, which is slightly stronger than the power of others.
Nanning Daily Chemical Market Status Nanning's department store industry is relatively developed, with more department stores and supermarkets. The more famous Beijing Hualian, Shenzhen Nancheng Department Store, Wal-Mart Shopping Center, Wangfujing Department Store, Nanning Department Store, Dream Island, Likelong Supermarket, Large retail enterprises such as Chaoyang Commercial Plaza and Parkson Famous Store. The strong driving force of these leading commerce companies has been continuously enhanced. The introduction of new formats such as supermarkets and chain stores and the acceleration of foreign retail enterprises entering China have made the circulation field a new life. At the same time, it shows that the competition in the consumer goods market will come. The more intense it is.
Nanning's daily chemical wholesale market has not formed a scale for the time being, but it is scattered in the trading market, and along the Huaxi Road area, there are about 30 large and small daily chemical firms. After walking into some shops, the reporter found that the types of products vary greatly, from domestic large and small brands to well-known foreign brands. Procter & Gamble and Unilever's products are placed in prominent positions. The reporter interviewed some business owners, local well-known brand carving, Libai, Langqi, Dongyang flower, poetry and other washing cosmetics have a price advantage, is the main consumption of low-income families or urban and rural suburbs. Although the daily chemical wholesale market did not form a scale, the transaction was very active. When it was noon, many shops were in the market.
Analysis of business situation: The coexistence of multiple models shows that due to the large-scale development of the department store industry in Guangxi Province, the main business model of distributors in Guangxi Province is supermarket supply, with a ratio of 28%; 26%; Guangxi dealers and distributors in other provinces in the country are more focused on retail, accounting for 18% of retail sales; as for self-opening franchise stores and shopping malls, the proportion is the same, 5%. In these business models, many dealers choose multi-model operation, and at the same time supply supermarkets, franchise store delivery, mall counter delivery, wholesale and retail, multi-mode operation brings a lot of benefits. (figure 1)

In addition, due to various reasons, the geographical scope of dealers' operations is concentrated in prefecture-level urban areas and county-level urban areas; the dealers in the Nanning region of the provincial capital supply are more than the business scope of the townships and rural areas, and the residents' consumption power is The main cause.
The scale of Guangxi dealers is generally small, many of which are small businesses and small businesses. The larger dealers include Nanning Dexin Cosmetics, Sunshine Rain Trading Co., Ltd., Yuchun Department Store, etc.; Liuzhou Zhiye Trading Co., Ltd., Qipeng Trading, Zhengcheng Trading Co., Ltd., Jiachun Company, etc.; Yulin The city's Tiancheng Tianhong commerce and so on, these companies have a large scale of operations. The data shows that the monthly turnover is between 10,000 yuan and 50,000 yuan, accounting for 20%; the ratio of 50,000 yuan to 200,000 yuan is 40%; the ratio of 500,000 yuan to 1 million yuan is 30%; The proportion of 500,000 yuan is 10%.
As the global economic environment improves, China's economy continues to grow, and sales in all walks of life are on the rise. Compared with 2004, the sales of Guangxi's distributors in 2005 were mainly on the rise. Many dealers increased their investment in 2006; some dealers' operations were basically flat. A very small proportion of the decline in operating conditions. The main factor affecting sales performance is the reason for the competition wife, and partly because of the changes in the way the dealers operate and the management reasons.
Analysis of management methods: There are many ways to pursue product profit success. In the course of business, each operator has its own means and methods. Guangxi dealers will promote some products during their operations. When choosing the main product, 32% of the products are sold because of the higher profit margin of the product, followed by manufacturers providing 29% of the products and products, 23% of the products that can drive the store atmosphere, and more backlogs. The proportion is 16% (Figure 2). Dealers have taken a prominent position on the display shelves in the main push products, and the hiring of guides to carry out promotional activities is also favored by dealers. The question of the expenses involved in the promotion, who should pay it, is the enterprise or the distributor, and it is hoped that the manufacturer will support 63% of the discretionary support; 34% of the manufacturers are expected to support it all, and it is considered that the dealers who only do not care are only responsible. 3%.

Another set of data also shows that in the process of operation, 32% of dealers have encountered many similar products in the market at the same time, and 18% of agents have encountered subordinate dealers suddenly requesting promotional support. 18% of dealers have experienced the phenomenon of manufacturers raising prices, and 32% of dealers have encountered counterfeit and shoddy products hit the market.
Characteristics of Guangxi Washing Products Washing cosmetics are fast-moving consumer goods, shampoo, skin care products, toothpaste, shower gel, and the best selling products are: the price of shampoo is 10-18 yuan; skin care The price of the product is between 20-40 yuan; the price of toothpaste is 3-6 yuan; the price of shower gel is between 15-20 yuan. This set of data reflects that the consumption power of daily chemical products in Guangxi market is similar to that of other inland provinces in China.
In shampoo, 63% of dealers believe that shampoo between 10-18 yuan is best sold, followed by 19-30 yuan, accounting for 25%. Within 10 yuan and 31 yuan or more are 8% and 4% respectively. (image 3)
In terms of skin care products, the price of 20-40 yuan sells best, accounting for 50%, followed by 20 yuan, accounting for 30%. 40-60 yuan accounted for 15%; 60 yuan or more accounted for 5%. (Figure 4)

In terms of toothpaste, the most popular products for consumers are whitening and fresh breath, each accounting for 33%, anti-caries accounting for 20%, and solid toothing only accounting for 14%. The price of toothpaste is concentrated between 3-6 yuan, accounting for 45% of the market share, products below 3 yuan and 6-10 yuan account for 25% of the market share, while products with price above 10 yuan account for 5% . (Figure 5)

The best-selling price of shower gel products is between 15-20 yuan, accounting for 54% of the total, followed by 10-15 yuan products, accounting for 33% of the market, and products between 5-10 yuan accounted for 13%. There are almost no markets for products below $5 and above $20.
Guangxi dealers choose the characteristics of new products Every year, dealers must select new products to improve product structure and eliminate products without profit or low profits. Continuous improvement, increase your own strength, is crucial to the selection of appropriate new products, the right choice of products, business will be half successful. When selecting new brands, Guangxi dealers pay most attention to product positioning in line with local consumption levels, accounting for 37%; paying attention to the profit margin given by manufacturers, accounting for 25%; 22% focusing on corporate strength and technological advantages, brand awareness and advertising The strength is 16%. (Figure 6).
For the way to choose a new brand, Guangxi dealers mainly choose new brands through four channels, 36% of new brands are selected through large-scale industry exhibitions, 30% participate in corporate ordering, and 20% pass media advertising information. The sales of the company's salesmen accounted for 14%. When choosing a new brand, one-third of the dealers are trying to increase profits, and one-third of the dealers are trying to increase the number of business categories, increasing the number of new brands and increasing the reputation of consumers. A total of one third.
In 2007, 51% of new brands will be added, and 43% will be between 3-6. Only 9% of dealers are preparing to add 7-10 brands, and only 11 of them are only 7%. At the same time of choosing a new brand, dealers will generally eliminate some old brands. When eliminating old brands, the lack of support from manufacturers will be the first to be eliminated by 40% of dealers; when sales are difficult, 36% of dealers will automatically Give up; in the face of brands with low product profits, 16% of dealers admit that they will change their brands, and brands that have been eliminated for other reasons account for 8%. (Figure 7).
Characteristics of Guangxi's daily consumer market The competition in the Japanese industry is becoming more and more fierce. 45% of dealers believe that the local market in Guangxi is relatively stable and has only a small amount of liquidity; the same 45% of dealers believe that the local market enters and exits this industry. There are many businesses and the market is very unstable. Only 10% of dealers said that the local dealers are very stable and those who distribute them are those. Because the threshold for entering the daily chemical industry is low, more and more people choose to invest in the daily chemical industry, and the competition among various businesses is becoming more and more fierce. 36% of dealers believe that the local market competition is very fierce, and the market share changes more; 62% of dealers believe that although the competition is fierce, the market share is relatively stable. Only 2% of dealers believe that competition is not intense and market share is stable.
The vicious behaviors in the competition process include: 33% of similar products are dropped; 25% of counterfeit products are shocked by the market; A products are 3% lower in advertising advertisements, and 39% are dealers. I have encountered the problem of snatching customers with interest rebates.
In a survey of “local dealers looking for manufacturers to OEM”, 45% of dealers said that OEM production is rare in the local area, and they are doing the manufacturer's brand; 30% Dealers believe that many businesses want to OEM but they dare not do it; another 15% of dealers believe that there are many miscellaneous small cards in the local market, because many dealers OEM their own OEM production. Only 10% of dealers believe that the dealers with complete downstream terminals have made their own brands. (Figure 8)
55% of distributors in Guangxi washing cosmetics believe that the local purchasing power is balanced and the consumption level is stable; 22.5% of dealers believe that local purchasing power is increasing and consumption is good; while 22.5% of dealers believe that local The purchasing power is weakened and the consumption is not optimistic.
In terms of factors that consumers change brands, 30% are affected by advertising, 24% are due to friend recommendation and promotional offers; 11% of brands are replaced because new features and currently used products are not satisfactory. (Figure 9).
The purchase of products by local consumers is more susceptible to TV advertising, accounting for 34%; followed by outdoor advertising 27%, newspapers 27%, broadcasting 1%, car 10%, Internet 1%.