Recently, during market research in first-tier markets such as Henan and Hebei, we visited a number of distributors and city managers and walked the market. In the process, we found many points worth pondering. In the past, New Distribution has been reporting on outstanding distributors, including benchmark distributors with annual sales of 70-80 million in lower-tier cities, as well as excellent large distributors with annual sales of hundreds of millions or even billions in developed cities. These excellent cases have given us an illusion: the trading and circulation market environment seems not bad, and most distributors are doing well. But in fact, during the research, we found that most distributors in the market are not doing well. Especially in many lower-tier cities, under the dual pressure of intensified external market competition and low internal efficiency, many distributors cannot keep up with market changes, and their business is being eroded severely, facing the risk of elimination at any time. For these distributors, if they do not change their current situation, it will be difficult to have a place in the future. This is also the original intention of New Distribution's "New Distribution 100 People Column". We hope to explore more excellent FMCG distributors, record their entrepreneurial experiences, and provide inspiration to more distributors. Today's protagonist is a distributor who started his business in the 1990s: Chen Chuanhai of Meida Trading in Tianmen, Hubei. In a fifth-tier city with a population just over one million, he acts as a distributor for brands such as Yanghe, Uni-President, and Want Want, with annual sales of nearly 80 million. We hope his experience can bring some thoughts to distributor friends. ****From Sitting Merchant to Itinerant Merchant to Digital Distributor: Empowering Business with Data In 1991, Chen Chuanhai started his business in the trading field, making him one of the earliest distributors in China. In his words, he has personally experienced all three stages of the trading and circulation field since its development. The first stage was the 1990s, when distributors were basically sitting merchants. Business was simple: open a stall in a wholesale market, sell goods relying on customers coming to you, and there was basically no shortage of customers. The second stage was after 2000, when distributors gradually transformed from sitting merchants to itinerant merchants. Business had a basic prototype, and they led people to sell and deliver goods door to door. The characteristic of this stage was brand-centric; if you acted as a distributor for good brands, business growth would be fast. The third stage was after 2015, when digital distributors began to become the main players. Business began to develop towards standardization and organization, using data to empower business. The characteristic of this stage is operations-centric; distributors no longer overly rely on brands, but instead rely on channel operation capabilities to drive business growth. Chen Chuanhai told New Distribution that each stage of change is a screening process; some people who cannot keep up will be eliminated by the market. Especially in the third stage, the process of digital transformation is arduous and painful. In the early stage of using digital tools, the first problem faced was strong resistance from employees. Many older employees refused to use mobile tools, citing their age and inability to use them as reasons. But Chen Chuanhai had a clear understanding: if the company did not develop digitally and improve efficiency, it would be difficult to have a future. Therefore, for such situations, there could be no compromise. Salespeople had only two choices: either transfer to the warehouse to move goods, or resign if they could not accept it. After solving the issue of employee acceptance, another major difficulty was data unification. Many manufacturers have their own system tools, such as Uni-President's e-Mall, and JDB and Yanghe also have their own tools, which makes effective data collaboration difficult. To this end, Meida Trading cooperated with Zhoupu Data, adopting a unified data interface approach, so that all business endpoints ultimately converge on the company's own data tools, ensuring data consistency and usage efficiency. After fully implementing digital operations, the changes brought about are also obvious. First, salespeople's visit actions are more effective. For example, in the past, salespeople's visits were entirely based on self-discipline; the distributor did not know whether they followed the original plan every day. Digitalization can effectively avoid this phenomenon. Salespeople's daily visit routes are fixed, and they visit according to the routes planned by the tool. Based on the time salespeople stay at stores, it can be judged whether they have completed the corresponding actions. If they stay too long at a certain store, operations staff can communicate in a timely manner to see if there is an emergency and handle it promptly. Second, store-side account management is more efficient. Many stores with good relationships will give advance payments, and manual bookkeeping often leads to problems in income and expenditure. With the empowerment of tools, the income and expenditure of advance payments are very clear, and there will be no discrepancies in store reconciliation. Third, the financial side's accounts are clearer and more standardized. For example, some employees like to forge IOUs. Obviously, the store purchased goods with cash, but when they come back to report, they submit an IOU, which is actually forged. The reason for this phenomenon is that many stores are familiar with the salesperson, but the distributor and the company are not familiar, so it is impossible to verify authenticity. But now that customers are all entered into the system, there is customer data. When an IOU appears, the finance department can promptly confirm the actual situation with the customer. Fourth, expense allocation reduces "speculative" behavior. When salespeople manually place orders, the phenomenon of "order pooling" is very serious. For example, if a product gives 1 box free for every 30 boxes purchased, and 5 boxes free for every 100 boxes, many salespeople will create false combined orders, sell to customers at high prices, and obtain goods at low prices themselves, causing the brand's investment not to be used for the market. The use of tools makes expense allocation more transparent and more conducive to terminal construction, rather than going into the salesperson's pocket. As Chen Chuanhai said, looking back at 30 years of business experience, he has seen many peers gradually eliminated. The reason is actually insufficient awareness of new things and failure to keep up with the changes of the times. For our generation of distributors, every stage of change requires spending a lot of time and energy to learn and practice. ****Deepening Market Development: Multi-Category Operation, Multi-Brand Coverage In lower-tier markets, market operation is relatively difficult, especially limited by transportation. Many township areas have underdeveloped roads, and the number of stores a salesperson can visit in a day is very limited. Therefore, for lower-tier cities, vehicle sales + visit sales is still a relatively good form of market development. On this basis, Meida Trading has made a slight innovation: when salespeople develop the market, they still adopt the form of vehicle sales. But the purpose of vehicle sales is not to sell goods once, but to have a dedicated vehicle for each brand for vehicle sales, and to make annual business plans with stores. For example, for JDB, they sign an annual contract of 30 boxes with the store at one time. After that, the store only needs basic maintenance and replenishment, without spending too much time and energy. In brand operation, Meida Trading adopts a method of using products to attack channels. In lower-tier markets, the market share of a single category is extremely limited and insufficient to support continuous business expansion. For example, in beverages, in county-level cities, a scale of 20-30 million is already very large. Even if more brands are added, it is difficult to make major breakthroughs. Therefore, Meida Trading operates in multiple categories such as beverages, snacks, and baijiu. The benefit of this, besides expanding the ceiling of business, is ensuring that in different seasons, there are corresponding categories to support sustained profitability. For example, the peak sales season for beverages is summer, while the peak consumption season for baijiu is around the Spring Festival. In different seasons, Meida Trading can focus on different categories to avoid the risk of off-season, making the business more sustainable. At the same time, within a single category, Meida Trading's product selection is also strategic. First, they form a product portfolio with national brands + local brands, covering different price bands to meet different consumer needs. Second, they also open up different channels based on brand characteristics. Taking baijiu as an example, Meida Trading acts as a distributor for Yanghe and Zhijiang. Among them, Yanghe pays more attention to the consumer side and emphasizes investment in banquets, while Zhijiang focuses more on investment in regular dining stores. The key investment directions of the two channels are different, which not only avoids competition but also helps Meida Trading establish advantages in different channels. Through such operation methods, Meida Trading has formed a multi-brand and multi-category operation model including Uni-President, Weiwei, Want Want, Yanghe, etc., as well as a multi-channel coverage model including traditional channels, dining channels, and campus channels. ****Reflections and Summary on Future Business When talking about future development, Chen Chuanhai told New Distribution that he is optimistic about the future of the trading industry. "Food is the first necessity of the people." No matter what changes occur in the market environment, this industry cannot be avoided. What distributors should focus on is not whether the industry has a future, but whether they themselves have a future. Only you can eliminate yourself. We see that many small distributors, unable to keep up with the times during the iteration process, are gradually eliminated. This is also a warning: even if your current business has a certain scale, if you do not innovate or learn for a long time, it is difficult to go far. Therefore, in this era of "big fish eating small fish," distributors must continue to strengthen themselves, and some advantages must be established. First, capital advantage. Is the cash flow healthy? Do a good job of cash flow data analysis, grasp the company's cash situation, provide a basis for decision-making, allocate funds reasonably, and act according to your capabilities. Second, warehousing advantage. Is there a clear sales and inventory management system? Is there a complete chain to query various inventory data? Can it effectively connect with front-end business? Third, distribution advantage. Establish a professional distribution team, or let a professional third-party logistics company operate, optimize distribution efficiency, and establish an absolute advantage in distribution timeliness within the region. Fourth, management advantage. Use data to empower business, establish a sound data management system, and empower distributors' market strategies. -END-