On August 28, Alibaba's Retail Link (零售通) unveiled the 'W Plan' to fully open its digital operating system to the 1.5 million community retail stores it covers. Notably, this year's Retail Link 828 strategy conference did not continue the previous years' theme of 'Combining trees into a forest, merging streams into the sea,' but instead changed to 'Renewing ten thousand stores, starting from zero.' Here, 'zero' refers not only to the millions of retail stores scattered across the country but also to Retail Link itself. Lin Xiaohai, Vice President of Alibaba Group and General Manager of the Retail Link Business Unit Lin Xiaohai, Vice President of Alibaba Group and General Manager of the Retail Link Business Unit, told New Distribution that previously, Alibaba Retail Link mainly focused on the perspective of brand owners, helping them optimize distribution channels. However, this year's strategy conference takes the perspective of small stores, focusing on promoting their digital transformation and developing the small store economy. 'We will use new supply, new products, and new operational capabilities to give millions of small stores a new way of life.' So, what exactly is the 'W Plan'? Why did Alibaba launch the 'W Plan'? And what changes will the implementation of the 'W Plan' bring to millions of retail stores? **-01-**Alibaba Retail Link Launches the 'W Plan' As the largest FMCG B2B platform in China, to date, Retail Link has covered 1.5 million offline retail stores nationwide and has established sustainable development relationships with over 95% of well-known FMCG brands. On the backend, Retail Link, together with Cainiao, has built a strong and stable supply chain system. Alibaba's warehouses now cover 210 cities and 83% of streets nationwide, with a promised on-time delivery rate of over 96%. Undoubtedly, Retail Link has become one of the most important forces driving the digital transformation of traditional small stores. After four years of development, Retail Link has moved from expanding scale and improving efficiency to a new stage of creating value for small stores. On the other hand, after the pandemic, the survival situation of retail stores, which exist as the 'capillaries' of China's commerce, is not optimistic. According to public reports, in the first half of 2020, total retail sales of consumer goods nationwide fell by 11.4% year-on-year. Because small stores are at the very downstream of the entire FMCG supply chain, they face high procurement costs, a single product structure, difficulty in ensuring quality, and the weakest ability to resist risks. Many retail stores were forced to close during the pandemic due to the sudden impact. In April 2020, Lin Xiaohai, Vice President of Alibaba Group and General Manager of the Retail Link Business Unit, proposed giving millions of small stores a new way of life. The launch of the 'W Plan' is a concrete action by Retail Link to find a new way of life and create value for millions of small stores, and it is also a continuation of Alibaba's 'Spring Thunder Plan.' The Spring Thunder Plan refers to Alibaba leveraging its digital capabilities to help small and medium-sized enterprises not only survive the immediate 'crisis' but also find future 'opportunities.' The 'W Plan' is Retail Link's move to open its digital store operating system, including POS machines, to the 1.5 million small stores it covers, along with 10,000 new products exclusively for small store channels. It also provides financial support policies such as interest-free credit purchases, compensation for slow-moving goods, and compensation for expired goods. Additionally, it connects Alibaba ecosystem resources such as Alipay, Taobao, Ele.me, and RT-Mart to help small stores attract traffic and increase revenue, creating more stores with daily sales of over 10,000 yuan. 'Through the digital operating system, 1.5 million small stores are connected together, like 'lonely boats' forming an 'aircraft carrier,'' said Lin Xiaohai, Vice President of Alibaba Group and General Manager of the Retail Link Business Unit. The scale of digital stores is expected to bring enormous commercial, strategic, and social value. **-02-**Why Alibaba Retail Link? The confidence for 1.5 million small stores to collectively 'go cloud' comes from the past five years, during which Retail Link, relying on Alibaba's digital economy, built a universal digital distribution channel for the offline retail industry. Moreover, digitally transforming small stores requires strong ecosystem capabilities, technical strength, and financial resources: it requires long-term high investment without considering profitability, as well as close coordination of cloud computing, logistics, finance, payment, and other ecosystems. Digital distribution is a revolution against traditional distribution—intermediate links are compressed, supply and demand are efficiently connected, and efficiency improvements are immediate. 'In the past, brands had to go through layers of dealers and distributors to reach retail stores, taking about 45 to 60 days; but through Retail Link, brand new product launches take only 3 days,' Zuo Mozhi, a senior expert at Retail Link's Industry Center, told reporters. The revolutionary aspect is even more evident: after 1.5 million small stores 'go cloud,' offline consumption big data can be accumulated on a large scale, promoting the implementation of the C2B2M model in the offline retail industry—store owners use the Retail Link digital operating system for product selection, pricing, and assortment; brands and source factories, guided by big data, develop high-quality, high-margin exclusive products for small stores. Creating more stores with daily sales exceeding 10,000 yuan has become a goal of the Retail Link 'W Plan.' An optimized supply chain, cost-effective 'store-exclusive' products, and precise marketing guided by big data leave maximum profit margins for small stores, giving them stronger competitiveness; brand owners, in turn, increase the coverage of controllable points of sale, especially penetration in lower-tier markets. **-03-**Building Networks and Gaining Momentum: Full Coverage of Instant Consumption Scenarios 'In the past decade, with the large-scale development of e-commerce, the market share of small stores has not declined but has remained relatively stable,' said Lin Xiaohai. Offline retail stores are the highest-density type of store, and the digital combination of 1.5 million small stores will become a powerful commercial organization. Calculating based on each digital store serving 200 consumers per day, the 1.5 million small stores will bring 300 million in offline foot traffic. This is a huge offline traffic flow and also a new operational front. 'The most direct way to operate and monetize offline traffic is community group buying,' an industry insider told reporters. According to reliable sources, Retail Link has established an innovation department, and one of its business directions is community group buying, closely coordinated with RT-Mart's fresh food supply chain. FMCG and fresh food have relatively low e-commerce penetration rates, with offline as the main consumption channel, which aligns with the new trend of instant consumption. The value of offline is being re-evaluated and enhanced, and small stores have become the main battlefield in the offline market. The 1.5 million Retail Link stores 'going cloud' will transform into 'millions of light cavalry,' forming an online-offline FMCG matrix together with businesses such as Hema, Tmall Supermarket, RT-Mart, and Ele.me. Within Alibaba's digital economy, in terms of service radius, RT-Mart covers 10 kilometers, Hema creates a '3-kilometer living circle,' and millions of Retail Link stores fill the gap in between, achieving full coverage of offline instant consumption scenarios. Retail Link also continues to promote the integration of small stores into the Ele.me delivery platform, creating an online-offline 'community business circle' that extends the 'legs' of small stores beyond 300 meters. **-04-**Digital Empowerment to Promote a 'Lively' Small Store Economy What offline small stores cannot be replaced is their social value. China's more than 6 million community retail stores are neighbors to community residents, providing daily necessities to hundreds of millions of consumers every day and involving tens of millions of jobs. The 'small store economy' is a small entry point into the urban economy, but it is an important micro-force supporting the economic fundamentals. This year's government work report pointed out that it is necessary to stabilize the over 100 million market entities and do their best to help enterprises, especially small and medium-sized enterprises and individual businesses, overcome difficulties. The 'Notice on Carrying out the Action to Promote the Small Store Economy' jointly issued by the Ministry of Commerce and six other departments proposed the idea of 'large enterprises driving small ones' to promote win-win development. Core measures include: e-commerce platforms providing digital services such as wholesale, mobile payment, data analysis, and software systems to small stores; logistics companies providing supply chain services such as centralized warehousing, joint distribution, and cold chain to small stores; and brand suppliers opening product and channel resources. Retail Link's fully open digital operating system integrates resources from e-commerce platforms, logistics companies, commercial enterprises, and brand suppliers, forming a one-stop digital empowerment solution to promote the 'small store economy.' The 1.5 million small stores 'going cloud' will still retain their individuality, full of human touch and the warmth of everyday life. New Distribution Commentary: After years of continuous development and trial and error, B2B platforms with different genes have finally found their own development paths. Retail Link's platform characteristics and rich product industry ecosystem have built strong barriers for its rapid development. As the core of Retail Link's assistance for small stores to 'go cloud,' the Ruyi POS plays a crucial role in Alibaba's digital store process. As the implementation tool for Alibaba's big data capabilities, information capabilities, marketing capabilities, and e-commerce operation capabilities, the Ruyi POS also integrates functions such as big data product selection, pricing, assortment, inventory management, and food delivery, which will undoubtedly become a core tool for retail stores to improve operational efficiency. The entire B2B industry, after a new round of elimination, mergers, and integration, is bound to have a promising future. Tips will be paid 400-2000 yuan once adopted.