Written by / AI Finance and Economics Agency Liu Xueer
Edited / Sun Jing
Since the beginning of this year, new consumption has been so hot that investors can't afford to invest. Amazingly, many of these traders are closely related to a commercial organization – P&G.
As a global daily chemical giant, in the past, P&G has always been rich in talents, and can be called the fifth largest talent "ticket warehouse" in China's Internet industry, along with Huawei, Microsoft, Google, and Alibaba. For example, former CEO of eLong Cui Guangfu, Mobike co-founder Wang Xiaofeng, Liepin founder Dai Kebin, etc., not to mention the senior management talents of major enterprises.
Nowadays, this talent boom is pouring into the new consumption field, from Liu Shichao, founder of Ximuyuan to Xinxing, founder of PMPM, from Liu Le, co-founder of WonderLab, to Zhao Xiangjun, founder of Plant Professor, from Liu Ruizhi, co-founder of Jane Love Yogurt, to Wang Ying, founder of Yueke e-cigarette, from Huang Jinfeng, founder of Perfect Diary, to Chen Jianqun, founder of usmile, Procter & Gamble has become the "Whampoa Military Academy" of China's new consumer entrepreneurship.
The talent flow behind this benefits from P&G's complete and systematic talent training system over the years, and is also limited by the innovation suppression brought about by the huge structure and the rigidity of internal communication. Along with the flow of people, the mature rules and regulations that P&G has precipitated in the market have also blossomed in various fields. For example, when evaluating Hua Xizi, a Procter & Gamble person who also started a business in the beauty field expressed optimism, on the grounds that the other party was completely P&G's branding.
In the 33 years since entering China, P&G has witnessed the majestic history of China's commercial leap, and after the glory is gone, it has also participated in a new business process in a new way.
The mysterious CMK department
More than 10 years ago, foreign companies were one of the most desirable places for university graduates, and Procter & Gamble has become a talent "harvester" in foreign companies with a perfect training and rotation system. Today, Procter & Gamble is regarded as the Whampoa Military Academy for China's new consumer entrepreneurship, which is also related to the industrial vision and talent training mechanism brought about by this market position.
Recalling joining Procter & Gamble more than 20 years ago, Xie Zhen, founder and CEO of Maitao Parent-Child, still remembers the scene at that time. In 1997, P&G went to Nanjing University, where Xie Zhen was located, to recruit only 7 of the more than 800 people, while P&G recruited a total of 200 fresh graduates that year.
P&G's training method surprised them, first to the Guangzhou headquarters training for 3 months, to learn communication management skills and organizational principles, and then to the field training for a year. Xie Zhen was assigned to Xiangyang, Hubei Province, pulling a tricycle every day, going to the streets and alleys to visit more than a hundred mom-and-pop shops, "the contrast is very large, a group of high-quality students live in a five-star hotel, the monthly income is more than 10,000 yuan, and they go out every day to do physical work, which is very interesting." ”
When asked if he could adapt to this contrast, Xie Zhen told AI Finance and Economics that P&G is also screening talents and tends to choose people with higher goals and tough personalities. "In the past three years at Procter & Gamble, I have developed good professional habits, accumulated some communication skills and contacts, and also helped me to start a business later."
It is precisely with these invincible talent reserves that Procter & Gamble's brands such as Piaorou, Haifeisi, Pantene, Hushubao, Tide, Bilang, Olay, Bangbaoshi, Gillette and so on can always open up the Chinese market rapidly.
(Procter & Gamble brand toiletries Source: Visual China)
However, when it comes to P&G's way of cultivating talents, it has to be mentioned that CMK Market Research Department is like the wisdom brain of the enterprise, responsible for analyzing, monitoring, and predicting consumer behavior and market changes, which in turn gives P&G people strong data and strategic analysis capabilities.
Huang Jinfeng, the founder of Perfect Diary, also wrote a special article "Procter & Gamble CMK in My Eyes", which explained the unique charm of the CMK department, "Even if you are a newcomer, you can get recognition and respect by everyone through analyzing valuable views, which will make you feel the responsibility on your shoulders and improve your business sense of smell and analysis." ”
Zhao Qingping, a brand service provider of Procter & Gamble 10 years ago, told AI Finance and Economics that at that time, P&G was a "god-like existence" in the field of FMCG, absorbing many talents and being at the forefront of consumer trend observation, marketing play, and industry research. When she first came into contact with Procter & Gamble in 2012, she found that the other party was doing consumer market research on the post-90s generation, and the oldest post-90s generation was still on campus.
P&G's talent training system also emphasizes leadership and systematic thinking training. Dai Kebin, the founder of Liepin, recalled that Procter & Gamble taught him to do things with skill, rhythm, and ideas, and formed a closed loop to clarify what to do next, and what is called "this thing is completed".
This kind of unhurried and unhurried, the pursuit of long-term growth of employees, but also to procter & Gamble people in the future life of nourishment and temperature. Qiu Yue joined Shanghai in 2015, when she was only three stories old, and the company held workshops every week, and after she left, she joined VCs and startups, which also continued the system.
"At first the boss thought you were weird, but after two times he found that the atmosphere in the office was a little different, and I was willing to slow down and 'waste time' to do this, which is good for the corporate culture and talent growth." 」 This is also seen by Qiuyue as the second most important change for P&G in addition to enhancing the understanding of the consumer market.
Magnifying this workshop is the P&G (China) Alumni Association. For 20 years, the Alumni Association has held regular events to provide resources and career development opportunities for alumni who have left P&G, and this goal has also linked more than 3,000 P&G alumni, and in 2013, the Alumni Association even established the Procter & Gamble Venture Capital Fund to help new consumer entrepreneurs, especially P&G alumni.
In choosing the direction of entrepreneurship, the forward-looking thinking given by P&G's system plays a role. For example, in 2015, P&G Chen Jianqun sensed the consumption upgrade trend of oral care products, and the pain points of the design of international big-name electric toothbrushes that are not suitable for Asians, found a breakthrough in domestic electric toothbrushes, and created his own brand usmile, becoming a dark horse in the field of domestic electric toothbrushes.
In other FMCG fields, from 2011's Flower Cocot, 2014's HFP to 2019's Ximuyuan, P&G entrepreneurs have captured the demand for natural ingredients and functional skin care; from 2014's Erotic Pie Salad, 2018's Jane's Love Yogurt, 2019's Wonderlab and 2020's Botanical Professor, another group of P&G entrepreneurs have seen the need for functional healthy eating. In the field of beauty, in addition to the perfect diary, Procter & Gamble entrepreneurs have created the twelve yards of the national style brand.
Panda Capital Li Yan shared one of their new findings in 2018, "The portrait of the best wave of entrepreneurs now may be that when they were young, their first job was in a company like Procter & Gamble for five years. Trained by the system and knowing that barbaric growth is particularly good. If the industry he later made matched his previous experience, he still had a wave of original Procter & Gamble brothers and friends who could help, and there were a lot of resources to use. ”
Spend a year explaining to your boss what WeChat is
There's a reason these new brands are outside of P&G's landscape.
As the staff increases and the architecture becomes more complex, communication costs become higher, and P&G's sensitivity to market changes declines, internal innovation becomes difficult. In desperation, countless young people with some ideas began to run away.
According to the "First Finance" report, in the decade after 2000, P&G structure is so large that the reporting relationship becomes complicated, and the new product listing in the Chinese market needs to be approved by the US team before it can land, but the US team cannot understand the rapid development of the Chinese market in time, and spends too much time on communication internally. On the other hand, China's local enterprises and the entire e-commerce Internet channel are rising rapidly.
Qiu Yue still remembers the trigger that prompted her to leave Procter & Gamble within a year. In 2015, Weibo was in the stage of "public knowledge is far away, the future of Internet celebrities", many people complained that the platform was crazy and the activity was very poor, and the WeChat public account was waiting to rise. But Qiu Yue's team spent a year failing to convince the American boss to accept WeChat, directly missing the best delivery channel, and soon after the brand she was responsible for was directly cut.
"He must say that the WeChat public account is benchmarking against foreign countries, but it is not Twitter, nor Facebook, nor is it like Instagram, which did not grow grass at that time, there was no emotional understanding to show him the data, and there was no big KOL at that time, such as the self-media New Age was quite small, so the boss was reluctant to take risks." Autumn Moon Memories.
This incident made her "very painful", grinding back and forth for four quarters, doing PPT over and over again, including a copy of more than 120 pages, just to explain "what WeChat is". The boss couldn't understand that he came to China every four months, and the first thing he did was to eat Ding Tai Feng XiaolongBao, saying that he wanted to understand what Chinese was thinking, "I was speechless about this, he was learning about China in Chinatown in the 80s." ”
Qiu Yue now seems that the problem lies in letting so many people who do not understand China's national conditions do high positions, and according to unwritten rules, "Chinese can hardly reach the band 5 level in Procter & Gamble, almost 4 or above are foreigners, I was level 2 at the time." This thing can't be pushed off for a year, and I can't crawl here all my life. She feels that it is better to go back to the team led by Chinese, "because Chinese do it too fast."
This confidence is also related to the venture capital environment at that time, and the "double creation" in 2014 ignited the major cafes in Beijing and Shanghai, and entrepreneurs poured in from all directions, holding a cup of American style, they could chat with investors about a day's whimsy, or disruptive innovation. A new wave of Internet has come again, and many P&G people have thrown themselves into it, which has further stimulated the rise of new domestic products and indirectly exacerbated P&G's dilemma.
Xie Zhen also saw the difference between this wave of entrepreneurial waves, 20 years ago, their wave of people did not start a business, and the advertising companies and consulting companies that came out were mainly advertising companies, and now the number of entrepreneurship and branding has increased significantly. "The difference is that the infrastructure of entrepreneurship is perfect, such as flat channels, venture capital support, and standardized production links."
Zhao Qingping revealed that the post-70s and post-80s still recognize big brands, but the post-90s and post-00s are more niche and personalized brands. "P&G will also face the challenge of a short and fast new consumption model, large companies are subject to the system, coupled with various involvements between departments, decision-making will be very complicated, when new opportunities come, it is better to come out and start a business and copy the experience to the new brand."
(Source: Visual China)
Sun Lei, CMO of Perfect Diary, once recalled that when she joined the marketing department of Procter & Gamble's skin care brand OLAYA in 2010, she found a trend of reducing the flow of people in the mall, and when she proposed to open up e-commerce channels, the leader only gave her a "small amount of money" to start a business. After realizing that "the bottleneck of e-commerce is not good comes from within Procter & Gamble", Sun Lei left Procter & Gamble in 2013 and then joined Yixian E-commerce to create the rise of the perfect diary of online beauty.
An insider of a domestic skin care brand also told AI Finance and Economics that the founder was unable to push new ideas at Procter & Gamble that year, only to bid farewell to foreign companies that had been staying for more than a decade, and after starting a business, he got hundreds of millions of yuan of financing, and now the product ranks high in the Tmall skin care category.
It can almost be said that no domestic product can compete with the huge Procter & Gamble Group, but they are coming from all directions, layer by layer wrapping P&G's "five facades". In beauty products, there are Winona, Shirjia, Juzi Bio, WIS; on cosmetic products, there are eyebrows; on health care products, there are usmile, Shuke; fabrics and home care, there are Blue Moon, Willus, Libai; in infant, women and home care, there are ABC, implant care, Babycare.
This has indeed had an impact on P&G, with the exception of cosmetic products (such as Gillette shavers) dominating the field, and star products Olay and SK-II stabilization care, other areas are mostly invaded. For example, the report of Guojin Securities shows that in the home clean-up care category, Procter & Gamble's market share in 2019 was 8.6%, only half of the first place Libai.
Eight years lost by Procter & Gamble
"We have gone from the paving stage to the intensive cultivation stage, this era does not belong to P&G, P&G should decisively say goodbye to the times." Qiu Yue said to the point.
In her view, P&G's model is to take the volume, quickly do multiple brands, lay down, but now the information is extremely fragmented, whether it is channels or traffic, it requires precision, P&G to change too difficult, because the amount of walking was once its foundation.
For example, in the channel, the chain of large supermarkets has become a walking paradise for middle-aged and elderly people, you will see Carrefour selling themselves, Wal-Mart continues to close stores, because young people have run to new channels such as online or convenience stores, and many new domestic products will start from online. This means that the chain supermarket channel that P&G was once proud of has lost its advantage.
In terms of marketing, P&G is still keen to talk to users about "product functions", but now it is not the past era of material shortages, young consumers pay more attention to the brand and their own connection, as well as interesting interactions, you will see that the new brand is particularly keen on these, including in the packaging, store design attractive, and P&G seems to adhere to the hard and simple set.
Standing still has also pushed P&G into a whirlpool. From 2008 to 2012, P&G's annual revenue exceeded $80 billion at its peak, and after 2013, global performance began to decline, and global sales even fell to a low of $65.3 billion in 2016, after which performance slowly recovered, reaching $70.9 billion in global sales by 2020, but still more than $10 billion behind 2013. It can be said that P&G has experienced "eight years of loss".
In Greater China, P&G's second largest market, it is subject to the rise of domestic products and the impact of e-commerce, and its development has almost stagnated. According to data from the Southwest Securities Research Report, P&G's net sales in Greater China rose from ONLY $5.91 billion to $6.01 billion from 2013 to 2018.
During the difficult period, P&G adhered to the "two-eight principle" and decided to focus on a small number of blockbusters. In 2014, Procter & Gamble embarked on a drastic brand streamlining campaign, cutting in half of its 6,000 global advertising and PR agencies; in 2015, P&G cut more than half of its sub-brands, and by 2017 there were only 65 global brands left, while at its peak, P&G had more than 300.
P&G's strategy is understandable, because the most valuable will always be a few head brands at the tip of the pyramid, which makes it easier to create ace products, typical of which is that SK-II and Olay achieved double-digit sales growth in 2018 and 2019, becoming a key part of P&G's profit pool.
However, this strategy of concentrating on ensuring "explosive models" also casts a shackle on brand innovation, and it should be known that many new brands and new opportunities come from subdivisions, which may have little impact on overall sales in a short period of time, but may become an important tentacle for Procter & Gamble to understand the needs of young users and seize young consumer groups. To a certain extent, the sticking to the city has curbed internal innovation and forced away a group of people of insight.
It can be said that as one of the earliest foreign companies to enter China, P&G brought some new trends to the market environment at that time, and was an inspiring part of China's business society. Today, with the change of times, P&G is no longer the glory of the past, but in another form, let the mature old Procter & Gamble people stand out independently, it continues to participate in China's new business journey.
(At the request of the interviewee, Zhao Qingping and Qiu Yue are pseudonyms in the text)
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