---
title: "Anxious Distributors and Confused Second-Generation Business Owners: Will You Venture into This Blue Ocean?"
description: "Anxious distributors and confused second-generation business owners: Old Chen, though only 40, has been a beverage distributor for over 20 years and is now facing immense pressure. Meanwhile, 'Young Master,' at 23, is reluctant to take over his family's FMCG business due to low profits. The article explores the sources of their anxiety and suggests that the hair health industry, with its high growth potential, could be a promising 'second battlefield' for distributors, exemplified by the brand 'Black Mystery' (黑奥秘)."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-08-14"
language: "en"
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# Anxious Distributors and Confused Second-Generation Business Owners: Will You Venture into This Blue Ocean?

> Anxious distributors and confused second-generation business owners: Old Chen, though only 40, has been a beverage distributor for over 20 years and is now facing immense pressure. Meanwhile, 'Young Master,' at 23, is reluctant to take over his family's FMCG business due to low profits. The article explores the sources of their anxiety and suggests that the hair health industry, with its high growth potential, could be a promising 'second battlefield' for distributors, exemplified by the brand 'Black Mystery' (黑奥秘).

**Anxious Distributors and Confused Second-Generation Business Owners**
Old Chen is not actually old; he just turned 40 in August. He is called 'Old Chen' because of his seniority. Having been a beverage distributor for over 20 years, he has dedicated his youth to the FMCG industry. In this city, Old Chen is considered a veteran in the beverage industry; any new brand wanting to enter this city must first visit Old Chen. Another reason for the nickname is that Old Chen is bald.
In people's minds, T-shirts, sandals, and bald heads are typical of programmers, but the easygoing Old Chen seems to have taken on that look. Of course, he doesn't know how to code; his baldness is due to stress.
In today's fiercely competitive FMCG industry, as a major distributor in this city, Old Chen is respected by many peers, but he also faces enormous pressure. With increasing annual targets from first-tier brands, constant lobbying from second- and third-tier brands, price wars among peers, and consumers increasingly valuing health products, Old Chen is growing more anxious.
Looking at the warehouse piled high with inventory and the daily collection calls from manufacturers, Old Chen sighs at the difficulty of life. He has thought of giving up this business many times but finds it hard to let go. Watching housing prices rise, he helplessly rubs his bald head.
'Young Master' is only 23. He got this nickname because of his family's business. His family is a major local FMCG distributor specializing in daily chemical products, with annual sales exceeding 100 million yuan. Hence, his friends call him 'Young Master.'
Recently, 'Young Master' has been feeling frustrated because his father wants him to take over the business.
But Young Master is reluctant. He knows the hardships of being a distributor. As a child, he grew up in the warehouse—sweltering in summer and freezing in winter. His parents had to work every day, so they left him in the warehouse to play alone.
Another reason is that he knows profit margins for distributors are shrinking. Despite annual sales of over 100 million yuan, the actual profit is not much.
There are many distributors like them. For example, a distributor for a leading dairy beverage brand invested over 50 million yuan in operating funds in 2018, yet the annual profit was only a little over 1 million yuan. The distributor complained bitterly, 'The return is even lower than bank deposit interest.'
**The sources of anxiety stem from the following:**
1. Low entry barriers in FMCG lead to intense competition and increasing costs.
2. Heavy investment: people, vehicles, goods, and warehouses all require capital; without millions, one cannot represent a decent brand.
3. Increasing capital occupation and decreasing turnover. Manufacturers push inventory, terminals owe payments, and market expenses are prepaid, putting growing pressure on cash flow.
Many distributors like Old Chen are increasingly anxious. As their hair thins, they have thought about change. Although they have funds, after experiencing the ups and downs of the FMCG industry, they dare not easily try again.
**There are also many second-generation business owners like 'Young Master' who are full of confusion. Though young and promising, they cannot see their future. They want to take over the business but fear living a busy life like their parents. They want to switch to other industries but find it hard to shake off the shadow of being a distributor.**
**Hair is not only a big problem but also a big market**
Among the topics we care about in life, hair often receives little attention. However, according to iResearch data, China has 200 million people with hair loss, 300 million with issues like perming, dyeing, dandruff, and oily scalp, and 420 million with gray hair. Nearly 500 million people nationwide have sub-healthy scalps. If we look closely, among distributors themselves or their relatives and friends, on average, one in three people has hair problems.
Programmers and distributors are among the groups most severely affected by hair problems.
With the upgrading of consumption concepts, the beauty market for facial care has already exploded, and the hair sector is now ushering in its biggest opportunity for growth.
According to data from the National Health Department, China's hair health industry will grow at an annual rate of 260% over the next 10 years. The number of urban residents spending on personal head care is growing rapidly at 30% annually, far exceeding the growth rate of our current FMCG industry.
In the 'CBNDate 2019 Anti-Hair Loss Consumption Insight Report,' Tmall data shows that the number of consumers purchasing anti-hair loss products online has been expanding for three consecutive years at a rate of 40%.
**Where there is demand, there is a market. Just as China's FMCG market is seeing high-end products gain broad development space with the rise of young consumer groups, opportunities in blue ocean markets often lie outside our usual focus. Hair health is one of the biggest blue ocean markets currently. The unprecedented expansion of national hair care demand will give rise to a 500-billion-yuan hair care blue ocean market.**
Perhaps many FMCG distributors will say, 'New Distribution is a new media focused on the FMCG industry. What does this have to do with us?' Don't worry; let me explain slowly.
**Distributors' Transformation Should Look to the 'Second Battlefield'**
A report released by New Distribution in March 2019 showed that among over 3,000 FMCG distributors surveyed, 93% believed transformation was urgent, up 16 percentage points from the 2018 survey.
**Transformation is necessary, but where to turn remains the question.**
As everyone knows, the FMCG business has been particularly difficult in recent years. From a business perspective, FMCG is increasingly not a good business.
Moreover, the agency business for FMCG has lower gross margins, is tiring to operate, and has complex management, making distributors exclaim 'heart fatigue.' But can they give up the main battlefield of FMCG? It's not that easy.
Distributors in the FMCG industry know that when a category reaches market saturation, we often look for the next category. Of course, after being distributors for a long time, we might also want to switch industries.
**But switching industries is not that easy.**
Who says it isn't? Interestingly, many ice cream and frozen food distributors I previously contacted have entered new industries. Interestingly, most of them have chosen health-related industries.
Not long ago, I chatted with a distributor who had transitioned to essential oils. When asked why he chose an unrelated industry, he told me that big health is the future trend and the profit margins are high.
Of course, some distributors will ask, 'I only understand the FMCG industry; what if I don't understand other industries?' What I want to say is that no matter the industry, as long as it involves sales, it's all interconnected. It's just a different scenario. Isn't it?
In fact, the 'second battlefield' mentioned today does not mean distributors should abandon their original business, but rather try new industries. It won't require millions in investment like manufacturers forcing inventory.
**When choosing a 'second battlefield,' we should follow these points:**
**1. The 'second battlefield' must be a blue ocean market.** Ten years ago, FMCG was a blue ocean; finding the right brand could allow you to rise with the trend. But today, FMCG is not just a red ocean; it has become a blood ocean. Being already in a blood ocean, opening up another blood ocean market is tantamount to self-destruction.
Therefore, the first principle for choosing a 'second battlefield' is to select a blue ocean field. The typical characteristics of a blue ocean field are high gross margins, fast growth, great potential, low competition, and low brand concentration. But such blue ocean markets are often not in our usual areas of focus; we need to consciously search and discover them.
**2. The 'second battlefield' must differ from the main battlefield in characteristics.** The FMCG business is typically a 'three highs and one low' business: high investment, high management difficulty, high capital occupation, and low gross margins. Therefore, the 'second battlefield' should choose projects with low investment, light management, good cash flow, and high gross margins.
Market projects with the above characteristics often appear in some service sectors. From the economic development and consumption trends in recent years, the proportion of service consumption expenditure is increasing. Especially projects with a certain technical threshold that improve consumers' quality of life are growing rapidly.
**3. The 'second battlefield' should be within one's means, allowing flexibility, and not a gamble.** The 'second battlefield' is subordinate; the main battlefield of FMCG should be where distributors focus their main energy.
Therefore, when choosing a 'second battlefield,' one must not choose projects that consume too much energy. Once you choose a project that requires full commitment, you will inevitably neglect either the main battlefield or the second, or even fail at both.
In other words, projects with 'light investment, light management, high gross margins, low competition, great potential, and good cash flow' are suitable as a distributor's second battlefield.
And hair health is a good project.
Is it about selling shampoo? Of course not.
Then what is it?
**'Black Mystery' Hair Therapy: A Good Choice for Distributors to Open a 'Second Battlefield'**
'Black Mystery' hair therapy is the upgraded brand of the well-known hair health chain 'Start Again' (再出发). It has been in the hair therapy field for 15 years and has over 600 chain stores nationwide.
**What advantages does 'Black Mystery' have?**
**1. Core technical capabilities.**
In the hair health field, product technology is the core. Products without efficacy cannot survive in this field.
In 2015, Black Mystery established a cooperative relationship with Japan's Ito Chu Shibasaki Research Institute to develop products that activate hair follicle cells.
In 2016, it established a joint laboratory with Sichuan University's Polymer Science and Engineering College to develop polymer products to promote hair regeneration.
In 2018, Black Mystery established the Scalp Management Academy. In the same year, it established the 'Tokyo Scalp Environment and Hair Regeneration Research Center' in Japan.
In 2019, while undergoing digital upgrades, Black Mystery also fully upgraded its brand VI and SI to 'Black Mystery' and invited the ageless goddess Zhao Yazhi as spokesperson, leading the industry and opening a new era of hair therapy.
Currently, Black Mystery's national chain system has annual sales exceeding 500 million yuan, and it invests no less than 8% of costs in technology research and development each year. Black Mystery's technology has evolved from the first-generation 'raw material remedies,' to the second-generation 'plant extracts,' to the third-generation 'polymer cell-level' technology applications.
Black Mystery products now hold over 20 various exclusive patented technologies. Over 15 years, Black Mystery has brought hair health to over 1 million customers with hair problems. Among its 600+ franchise stores, over 70% of franchisees were converted from store customers.
**2. Unique and strong brand advantages in the hair health industry.**
On May 28, 2019, the hair therapy brand 'Start Again,' which had focused on hair growth and blackening technology for 15 years and had 600 franchise stores nationwide, officially upgraded its brand to 'Black Mystery.'
At the same time, Black Mystery officially announced the endorsement plan of ageless goddess Zhao Yazhi, launched a new brand slogan 'Good hair, not old,' and released a new store image system.
Zhao Yazhi at the Black Mystery endorsement launch event
Newly upgraded Black Mystery store image
Jiang Nanchun, founder of Focus Media, speaking at the Black Mystery brand launch event
Black Mystery signs strategic cooperation agreement with Focus Media
Black Mystery's brand upgrade initiative is unique in the hair health field. This move elevates Black Mystery's original scale advantage to the brand level. With brand momentum, it will have a huge and sustained impact on brand building and store traffic in the national market.
**3. Low investment, light operations, and a strong store empowerment system built with digital systems and training supervision systems.**
Black Mystery's single-store investment is very small, around 400,000 yuan. After operations begin, there is almost no capital investment because store customers are prepaid members. At the same time, to solve management issues after franchisees open stores, Black Mystery has built a powerful store empowerment system using digital systems and training supervision systems.
Black Mystery established the industry's first Scalp Management Academy, which can provide standardized course training both online and offline, with over 50 offline training sessions annually.
After a store opens, store employees and managers will go to the Beijing headquarters for 10-20 days of systematic training, learning a complete set of courses from theory to practice. At the same time, Black Mystery regularly dispatches professional regional managers and store supervisors to inspect stores, preventing 'a thousand stores with a thousand faces' and ensuring service consistency.
To increase store sales revenue, Black Mystery uses digital empowerment to reconstruct people, goods, and scenes, improving the operational efficiency of all stores in terms of personnel efficiency and floor efficiency.
**4. Are FMCG distributors suitable for this?**
**1) Hair therapy orders have high gross margins and high customer unit prices, are not labor-intensive, and will not affect distributors' energy investment in the main battlefield.**
According to Black Mystery store operating data, customers spend an average of about 10,000 yuan per year at Black Mystery stores. Serving 400 customers a year can create profits of no less than 2 million yuan. It does not require huge labor or management investment.
**2) Black Mystery's store business model is customer prepayment, so cash flow is good, initial investment is low, and risk is small.**
**3) In the hair therapy field, the core barrier lies in brand and product technology, not in heavy operational investment, thus saving distributors management difficulty.**
**4) Distributors have unique advantages in doing big health projects.**
Distributors' marketing experience and network resources can maximize value in hair therapy projects. Having been in FMCG for many years, distributors are experts in market promotion, but in the low-margin, high-competition FMCG field, this capability is often offset by competitors and cannot be converted into profits. However, in the hair therapy field, this capability can easily give distributors a market promotion advantage.
Therefore, as FMCG distributors, they are very suitable for the Black Mystery project.
**5) Is there still a market to enter now?**
Let me tell you quietly: after the brand strategy upgrade, Black Mystery has also proposed a '2000 stores' plan for 2021 and is currently opening up franchise recruitment in multiple regions nationwide.
Opportunities only come to those who are prepared. Whether you are a distributor in anxiety or a second-generation business owner hesitating to take over, the emergence of Black Mystery may provide a choice for your confused future.
When the blue ocean comes, we not only need ships to set sail but also helmsmen to grasp the future. That helmsman might be you.
**Distributor friends who are interested in the Black Mystery project can contact us in the following ways:**


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