快消行业发展分析报告-Bain贝恩咨询

5
2
FMCG companies in China need to be good at managing multiple RTM models at the same time
PRELIMINARY • Full control over POS display and activation • Large initial investment in infrastructure and team • Higher cost to serve • Control over POS display and activation • Distributors with right logistic capabilities for drop size economics • Relatively high cost to serve
6• For many FMCG companies,
there is a large size of the prize from successfully managing the complementary indirect selling model
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
3• The most successful
MNC and Chinese FMCGs tailor direct and indirect selling models to different market and channel/customer priorities, with strong internal capabilities and systems to manage conflicts between models
China FMCG industry RTM and WS development practice
Bain presentation (draft) November 2013
DRAFT
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
SHA
1311- KO wholesale works ... ion v8
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1
FMCG companies in China face a series of challenges in selecting and managing RTM models
• Sheer size of opportunity, universe of outlets
Own
Direct selling & distribution
(KO: DSD)
Direct selling, indirect distribution
(KO: DSS)
• Can have varying levels of control over Indirect selling distributors/WS, and POS execution (KO: Semi-controlled, • Quality of WS) distributors/WS can vary • Typically lower cost to External serve
Sell
External Own
Distribution
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent SHA 1311- KO wholesale works ... ion v8
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
- Management tools and detailed playbooks to manage pricing transparency, margin pool, transshipment, optimize cost to serve etc. - WS reps dedicated to recruiting, setting targets, incentives, upgrading/training W/S, increasing loyalty and occasionally restructuring - Fully integrated with sales systems
- Adapt to market dynamics e.g. urbanization, industry consolidation, channel mix evolution - Optimize costs with increase in scale and internal capabilities, without sacrificing control
• Some implications for KO
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent
process. Successful FMCGs continuously evolve their models along with different stages of development
5• Many FMCGs invest in building
dedicated internal capabilities and systems for each model. For indirect selling: wholesaler management capabilities and systems critical but so are network of scaled, capable and loyal WS
2• Most successful
FMCG companies in China need to be good at managing multiple RTM models at the same time as a sustainable competitive advantage. There is no „one size fits all‟ approach
This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent SHA 1311- KO wholesale works ... ion v8
- Direct selling (controlled model): Core strength of some MNCs (including KO) for organized and even fragmented trade but Chinese FMCG players increasingly adept at this model - Indirect selling: commonly utilized by Chinese FMCG players given speed, reach and lower cost but many models with varying roles and levels of control
SHA
1311- KO wholesale works ... ion v8
3
Agenda
• Managing multiple RTM models in China
• Key success factors for managing indirect selling models in China
wenku.baidu.com
• Complexity of managing different markets and channels
- Different drop size and economics - Managing pricing is particularly difficult in China - Constantly evolving market and competitive dynamics
Summary of key messages (1/2)
1• FMCG companies
face a series of challenges in selecting and managing RTM models when they pursue growth in China
- Sheer size of opportunity (universe of outlets) - Managing pricing is particularly difficult in China, because Chinese shoppers are “repertoire” and because of complexity of markets/channels - Need to balance execution effectiveness, and cost to serve with increasing reach
SHA
1311- KO wholesale works ... ion v8
2
Summary of key messages (2/2)
4• Managing hybrid models (combination of direct selling and indirect selling) is a dynamic
• Large and fragmented network of distributors/ wholesalers to manage; size & capabilities vary significantly • Evolving internal capabilities and costs pressures No “one-size-fits-all” model. Need to balance between execution effectiveness, and cost to serve in extending reach