Though strong growth in online purchases, supermarkets and hypermarkets are still the major distribution channels for personal care products in China. Hu Yuwan, a project manager at Daxue Consulting, stresses: “Not only geography but also the level of the city, is important to consider because the purchasing power and shopping behavior vary among the locations and regions.” Thus, it is crucial for a business operating in the sector to choose suitable strategies in different provinces to be able to outperform competitors.
The client asked Daxue Consulting for help to succeed in the more competitive environment
Daxue Consulting’s client, a multinational consumer products company, is offering its personal care products in China for many years already. However, recently it was facing fierce competition from local as well as international brands. Therefore, the client approached Daxue’s research team to analyze the retail environment in China to be able to increase visibility in its offline channels.
How Daxue conducted a Shoppability and Share-on-shelf Analysis of personal care products in China
The consultants prepared a detailed study of the Chinese super and hypermarkets with regards to personal care products in China. Daxue Consulting organized the setting of the Store Checker App, a uniquely designed app by Daxue Consulting, allowing for efficient, and reliable data collection in-store, tailor-made to the needs of Daxue’s clients. The research team, therefore, screened, recruited and trained relevant participants for the store-checks to check the brand-selling performance which covered the following aspects:
- Brands findability: including, for instance, the average time and the ease to find the brand compared to other players in the respective sector
- Brand coverage: calculating the shared shelf ratio and identifying key competitors as well as sub-brands in-store
- Existence and behavior of store clerks and brand-sellers towards the client’s products
- Promotional activities: to identify which methods work best, for instance, upsizing, direct discounts, bundle packs, or free gifts
- Communicational activities: to define which brands pursue which strategy, such as eyecatchers on the shelf, posters in store, or individual displays of the brand
- Shopping experience: comprising the willingness to and the reasoning for the purchase of the brand
For the study, the participants were instructed to make pictures and recordings in-store. Daxue Consulting also considered various store sizes, and store types, such as hyper- and supermarkets, and aspects such as timing (weekend or weekday) as well as different provinces and city tiers.
Daxue Consulting presented actionable recommendations to the client
After analyzing the data, the research team provided the client with a detailed overview of the retail environment of personal care products in China. The report also encompassed recommendations on processes and positioning. Clement Mougenot, Head of Research at Daxue Consulting, explains: “We could gain a clear picture of the share of shelf. Also, we could advise the client with directions on how the company could learn from its competitors in low performing regions or enhance its competitive advantage in high-performing ones with regards to brand visibility and brand shoppability.”