This article's viewpoint may not be accepted by many. But acceptance is not what matters most—it is still worth reading carefully. Recently, many articles and videos about the difficulties and pressures faced by manufacturers and distributors have caused great resonance and response in the industry. Many distributors have said that seeing the entire industry facing the same huge challenges has helped vent a lot of emotions and provided some comfort. But after venting, the question of what the future holds and what to do remains "noodles overcooked, all in a mess." Today's sorrow is but the prelude and overture to a new world Our confusion and sorrow mainly stem from too many changes, too fast and too short, like a tide coming in, leaving no time for rational analysis and calm response. Mr. Zhao Bo, founder of New Distribution, once said: In an era with too many and too fast variables, the most effective approach is not to counter speed with speed, trying to catch every 'variable,' but to grasp the changes that will affect the 'constants' in the future. Changes involving 'constants' are long-term, fundamental, and even irreversible, and they are the foundation of various changes. Grasping this foundation gives us the possibility of calm planning and effective response. From this perspective, all the difficulties we face today and the various sorrows we experience are but a short prelude and overture to the new world. So, among the various complex changes, which ones involve 'constants'? First, the FMCG industry will definitely be in an era of shrinkage in the next decade. We have already argued many times about the arrival of the era of shrinkage. The total population is unlikely to return to growth; this is an inevitable law of economic development and a high-probability event in the next decade. On the basis of population trends, plus the fact that FMCG penetration has basically peaked, the overall shrinkage of FMCG is also a basically certain result. Of course, overall shrinkage does not mean that sub-categories have no growth. On the basis of excellent quality, products that can provide more emotional value have new growth space and opportunities. The value of goods is shifting from a core of use value to a foundation of use value, with spiritual value such as aesthetics and emotion as the core. Second, growth in the era of shrinkage is involution-style growth where one rises and another falls. In the coming competition, there are only two mainstream means: differentiation and involution. Differentiation is actually more difficult; whether in product or marketing, the freshness period of innovation often does not exceed one month. In contrast, involution seems more mainstream. As long as you achieve total cost leadership, or you are ruthless enough, or you just don't want to lose, whether active or passive, you have to participate in involution. If one brand grows, some brand must decline; if one distributor's business grows, some distributors in the same city must lose. Before more than 60% of production capacity disappears and 70% of distributors exit the market, this involution war will continue. This is a helpless thing. Therefore, Mr. Ren Wenqing of the New Distributor Academy suggests: Distributors should seriously consider whether to participate in this endless involution or to exit gracefully and cash in on the fruits of years of hard work. Third, involution-style growth competes on operational quality, optimizing cost and efficiency. For the same product, if others can't sell it but you can, that's marketing capability; for the same low price, if others lose money but you can still make a few points, that's operational quality. The term 'operational quality' is not simply low cost, but the optimization of cost and efficiency, and it is the basic skill of a brand or distributor. This basic skill covers almost all aspects of company operations. How is your digital capability? What are your management concepts and levels? Where does your team's combat will and ability rank? Is your supply chain level high? Does a distributor's front-end plus back-end, the entire system, have sufficient advantage compared to peers? The answers to these questions determine who ultimately has the final say in this market. In other words, in the future new world, the thresholds for brand manufacturers and distributors are getting higher and higher, and only manufacturers with strong strength and system capabilities can qualify for continued survival and development. The so-called era of shrinkage is actually just a competition, with the rules being involution, and the era merely acting as a ruthless referee. Who is qualified and how should they traverse the era of shrinkage? We firmly believe that the future will still be a great era of heroes. But to become a hero, you must survive the current 'era of shrinkage.' Therefore, 'traversing the era of shrinkage' has become the most important historical task for all manufacturers today. From August 20-22, 2024, the 6th China FMCG Conference will be held in Shanghai, with the theme 'Traversing the Era of Shrinkage.' But who is qualified to traverse the era of shrinkage? And how can one traverse it? Since the reform and opening up, China's FMCG industry has been growing. We have never experienced a real economic cycle, so we have no ready-made experience in traversing the era of shrinkage. But we can look back to history: in past industry changes, which type of brand and which type of distributor ultimately succeeded in transformation, came from behind, and even rewrote the industry landscape? Many of them were not the most powerful at the time, nor necessarily the smartest, nor even the most experienced, but they had several key traits that made them the winners in that transformation. We have reason to believe that manufacturers with these excellent traits will likely still be the winners in successfully traversing the era of shrinkage. First, they must be firm optimists. Pessimists are often right, but only optimists succeed. Our objective world is one, but in the eyes of pessimists and optimists, it is two completely different worlds. In the most difficult moment of 2020, the vast majority of distributor companies could only close and stay home, which was a helpless but correct approach. But Zibo Haochunte Company actively applied for city supply guarantee procedures, using the company's vehicle capacity to organize teams to deliver eggs, vegetables, fresh meat, rice, flour, oil, and other daily necessities to communities for sale. Not only did they contribute to the city, but they also helped the company and all employees smoothly get through the difficult period. Complaining about hardship is the easiest and not wrong. But such people cannot control their own destiny. Only optimistic brands and distributors firmly believe they can create different results. With such a belief, they see not only difficulties but also the opportunities behind them. Only optimistic people can see the hope and opportunities of the new world and have enough mental strength and resilience to traverse all the hardships and challenges of the era of shrinkage. Second, they must be open and learning action-oriented people. Blind optimism is not true, scientific optimism. Scientific optimism is often a group of 'realistic idealists' who see the ideal future but do not underestimate reality. Instead, they face and handle real challenges more rigorously and cautiously. In addition, they love learning and are more humble. They believe others have better experience but do not blindly follow; they are confident but not stubborn, not going down a path to the end. The 'China FMCG Conference,' as the core industry event of New Distribution, has been successfully held five times so far and is one of the landmark annual events in China's FMCG industry. Our research found that FMCG manufacturers who have participated in the 'China FMCG Conference' several times have had very good survival and development momentum in the past few years. These action-oriented people go to each conference to understand trends, learn from advanced practices, exchange experiences, and discuss business opportunities. They will find that many things they hadn't thought of have already been thought of by others; things they thought of but didn't do, others have practiced and even achieved results. At the conference, they understand trends, establish direction and strategy based on their own situation, and practice advanced experience in their own enterprises according to local conditions. This allows them to maintain a relative advantage from cognition to method in competition with peers in the same city and category. Although this era of shrinkage is destined to be the sorrow of many distributors, for those optimistic, actively learning and practicing action-oriented manufacturers, they have just sounded the overture to success. From August 20-22, 2024, the '6th China FMCG Conference & 3rd China FMCG Hard Discount Conference & 3rd China FMCG Distributor Conference' with the theme 'Traversing the Era of Shrinkage' will be held in Shanghai as scheduled. For three consecutive days, over a hundred heavyweight guests and thousands of FMCG practitioners will gather in Shanghai. A main forum, a hard discount conference, a distributor conference, and multiple sub-forums and closed-door meetings will be held as scheduled. If you are an optimist, learner, and action-oriented person who firmly believes the future is in your hands, and you are still determined to win, then you must not miss this FMCG conference themed 'Traversing the Era of Shrinkage'! Recommended Reading