FMCG companies have been exploring channel digitalization in recent years. What exactly is channel digitalization? What positive attempts have baijiu companies made in this regard? We found that Yanghe, a baijiu giant with annual sales exceeding 150,000 tons, has representative experience over the past few years. This article introduces Yanghe's exploration in this area. But before presenting the case, we need to answer a question: What exactly is channel digitalization?
Informatization only lets you know,
Digitalization directly gives you the ability to decide and act
Everyone talks about digitalization, but what exactly is digitalization? What is the difference between digitalization and informatization? I see that in most cases, people explain concepts with abstract concepts, without clarifying the issue. Here I give a simple answer: Informatization only lets you know; digitalization enables you to do—digitalization directly gives you the ability to decide and act. What does that mean? Let me give an example. Suppose you need to drive from the company to an unfamiliar place. How do you get there? You can check a map online, see which direction to go, which streets to take, where to turn, etc. Following the information on the map, you can arrive. Of course, today we don't need to do that because we have mobile navigation. Just enter the destination and follow the navigation to arrive. Looking at a map and using navigation is actually the difference between informatization and digitalization. A map only presents information, letting us know the direction and route. What if there is traffic congestion on the road? What if we take the wrong road? It cannot make decisions for us. But navigation can directly take us to the destination. Why? Because it integrates multi-dimensional, real-time, concurrent data, such as pre-loaded road information, your location, your speed, road congestion, etc., and then directly guides your actions—of course, supported by intelligent algorithms. This example only illustrates: True digitalization must directly guide our decisions and actions, and its premise is to bring multi-dimensional, multi-factor data online. With the concept of digitalization clear, it is easy to understand that channel digitalization must connect the data chain from manufacturer (F), to distributor (B), to store (b), and then to consumer (C). Only with the matching and linkage of live data at each link (F2B2b2C) can companies make better marketing decisions. For example, for a baijiu company, through which distributor does my liquor go to which store, and ultimately to which consumer? Does the manufacturer want this data? Of course! With this data, which liquor sells better? Which region prefers which liquor? What tastes match which groups? Where are my marketing expenses used? How can I improve the return on investment of expenses? These questions will all have answers. But the question is, how do you get this data?
bC Integration:
Connect stores, reach consumers
This is the key to channel digitalization
We must change our perspective! For manufacturers, channel digitalization is about connecting the chain, obtaining data, and guiding decisions. But do the data subjects (distributors, stores, and consumers) care? No. For example, baijiu has emotional attributes. Many distributors rely on their unique resources and capabilities to operate. On one hand, they are not willing to disclose their resources to the brand; on the other hand, their capabilities are not only for one brand. If you want to obtain distributor data, why would they give it to you? The same applies to stores and consumers: why should I provide my data to you? And how can I provide it? Notice that the above questions are all raised from the perspective of the data subjects. From the brand's perspective, it is about obtaining data. But for customers (distributors, stores, consumers), it must be service and experience. That is, you must ensure that customers provide their data while receiving your service and having a good experience. The so-called "digitalization" is the brand's discourse, but to truly achieve digitalization, you must think from the other party's standpoint. From the customer's standpoint, we can ask three questions on their behalf: 1. What to provide? 2. Why provide? 3. How to provide? Answering these three questions well makes obtaining data not a problem. Among these three questions, the first to answer is "how to provide." Why? "How to provide" concerns the tool: what tool do you use to carry services and connect with customers to obtain data? Without appropriate technical tools, digitalization is impossible. Many companies have tried using apps to reach customers and obtain data. But there are many obstacles. The reason is simple: getting your distributors to use an app is relatively easy, but mobilizing hundreds of thousands or millions of small store owners is difficult, and consumers are even less willing to download an app just to buy a bottle of liquor. If you can only reach distributors, at most to terminal stores, but cannot obtain consumer data, F2B2b2C cannot be connected, and channel digitalization is impossible. Connecting terminal small stores and reaching consumers, which we call bC integration, is precisely the key to channel digitalization. This raises a question for brand companies: Can we find a tool that, on one hand, can connect all circulation links and ultimately reach consumers; on the other hand, for them, it is actually a service interface? Let's look at Yanghe's experience.
"One Product, One Code" + Mini Program:
Solving the "How to Provide" Data Problem
Yanghe's CIO, Yu Tengjiang, told us that in the past, they were disconnected from terminal stores. Now Yanghe can grasp information from store receipt, payment, outbound, to consumers, covering the entire series of links. What does this rely on? "One Product, One Code" plus WeChat Mini Program. We are all familiar with mini programs. Their biggest feature is that they require no download, can be used anytime, and provide a native experience. Relying on WeChat's 1.25 billion users, they have effectively become an excellent carrier for connecting users and services. But having a mini program is not enough; you also need a mechanism to trigger customers to use it. That is, in what scenarios will customers use the mini program? The answer is when they need to scan a code. What code? The QR code on the product. Companies provide products and services; products are the touchpoint to connect customers, and the mini program is the tool to carry services. The effective combination of the two can technically achieve that customers provide their data while experiencing services. That is, "One Product, One Code" and mini programs solve the tool problem; the rest is to ensure every circulation link completes the scanning action, connecting data across all channel nodes. This relies on operations. Currently, Yanghe's scan rates across channel links are: distributors 100%, terminal stores 90%+, and consumers 80%+. How did Yanghe achieve this?
Service and Empowerment:
Distributors Experience Good Service
While Providing Their Data
In 2020, Yanghe established its service platform based on WeChat mini programs. "One box, one code": all distributors must scan codes when goods are put into storage, during inventory, and when out of storage. This brings the previously "sunk" product circulation information online, which is the first step in helping the company achieve full-cycle dynamic control of products. The benefits of this action are obvious: On one hand, the company can better control irregular distribution behaviors such as cross-regional sales; on the other hand, it helps distributors accurately grasp their own sales data, manage inventory, and trace downstream outlets. In addition, based on each distributor's inventory situation and combined with market sell-through data, Yanghe can formulate more reasonable production plans. That is, the online availability of downstream channel data helps Yanghe connect the entire value chain. This is significant for the company, but the question is how to make distributors willing to do this? The answer is: serve and empower distributors. Previously, many distributors did not even know how much stock they had. Yanghe provides distributors with an inventory management system (in-out-stock) to help them manage inventory and trace downstream outlets. Clear inventory also promotes Yanghe to optimize quota management, avoiding as much as possible the situation where distributors are forced to stock up due to task requirements. Distributor satisfaction increases, and the company truly grasps real market demand information. Moreover, Yanghe has connected services from more than 30 banks, helping distributors establish relationships with these banks. Through group negotiation, it provides distributors with the most suitable financial services to alleviate capital pressure. When distributors experience good service, they are naturally willing to cooperate with the manufacturer! So, the tool is the foundation, but the key is operations—the core idea behind it is still to provide good service. Of course, to achieve the above benefits, obtaining only distributor data is not enough. Because distributors are only the first link in the channel; the authenticity and validity of data depend on their downstream, that is, terminal stores and consumer data. Only by connecting data from both b and C ends can the entire channel digitalization truly be realized. And the most important here is the terminal store (b). Why?
"CRM Mini Program + Store Assistant"
Connect Small Stores, Reach Consumers
The connection between manufacturers and distributors is very close and can be covered by management systems. Terminal stores are different. The connection between brand and stores is inherently weak, and the store group reaches millions, making it difficult for brands to operate effectively. On the other hand, massive consumers also need to be mobilized through stores. Currently, in the terminal store segment, Yanghe relies on its digital platform to reach more than one million stores, with over 200,000 stores in its membership system. If the hundreds or thousands of distributors can be covered by the company's management system, then mobilizing hundreds of thousands or even millions of stores is impossible without mini programs. Specifically, it is "CRM Mini Program + Store Assistant." The CRM Mini Program is a service interface for store owners; Store Assistant is a standard plugin developed by WeChat, a tool that helps brands achieve effective and precise connection with terminal stores. As long as the reached stores complete the relevant certification required by "Store Assistant," the store and the brand achieve technical binding. The company can quickly incorporate its own stores into the system, and through "One Box, One Code," it can also expand new store resources. Through Store Assistant, brand merchants can scale new product and promotional information to stores. Then the question arises: Why should stores join your system?
Mini Program:
Helping Stores Quickly Access Various
Marketing Scenarios, Brand Accumulates Consumer Data
The answer is: The mini program is a service platform. Joining the system not only enables quick certification and establishes a connection with the brand, but also gives stores the ability to receive goods, get rebates, run marketing activities, and make online payments. When stores receive goods, they need to scan the box code, binding the product to the specific store. Now most of Yanghe's offline activities are carried out digitally. "For example, the two festivals (Spring Festival and Mid-Autumn Festival) promotions are our top priority every year. After the promotion starts, terminal stores can gain benefits by scanning box codes when receiving goods from distributors; and when stores sell, through bottle code lotteries, promotional coupons, etc., they interact with consumers." That is, for activities targeting terminal stores, stores need to scan the QR code on the product and obtain it through the mini program. Promotions targeting consumers are also completed in an online digital manner. For example, after consumers buy liquor, they scan the bottle code and say "one more bottle." When consumers win, terminal stores also receive corresponding rewards, which drives their participation enthusiasm—many stores will spontaneously spread the word in their private domains; at the same time, the activity guides consumers back to the store for consumption, enriching the store's consumer traffic, and greatly increasing terminal store satisfaction. That is, with system operations, a traffic loop is further formed. And combined with online payment functions, terminal stores "doing business" becomes simpler: the brand's market investment can be quantified, and the store's own revenue status becomes clearer. Online transactions, promotional support, expense verification, and private domain operations can all be completed through the mini program. In summary: "One Product, One Code" + mini program maps specific products, stores, and consumers one-to-one. Stores receive merchant services while providing services to consumers; both parties experience services and each gains benefits. Helping stores quickly access various marketing scenarios—what does the brand get? Real, detailed, and precise product flow data.
Connecting Data Across All Links of F2B2b2C
Is the Only Way for Channel Digitalization
Here, you might have a question: Can brand directly connect with stores and reach consumers, thereby bypassing distributors? Yu Tengjiang said that all product revenue is based on a digital profit-sharing model. What does that mean? From goods leaving the warehouse, to distributor receipt, to terminal store scanning and shelving, and then to stimulating consumer scanning through activities, the product flow data is clearly visible. Specific products correspond one-to-one with the subjects at each circulation link, and profit distribution can be completed digitally. Moreover, facing millions of terminal stores, removing the distributor link is unrealistic because their roles in cargo distribution, regional market operations, etc., are irreplaceable. For traditional FMCG companies, connecting data across all links of F2B2b2C is the only way for channel digitalization. How is Yanghe doing so far? As mentioned earlier: Yanghe's scan rates across channel links are: distributors 100%, terminal stores 90%+, and consumers 80%+. F2B2b2C data connectivity helps companies quickly locate and understand the relationship between each market investment and its implementation. The authenticity of expenses is well controlled, activity effects have a basis for measurement and evaluation, and channel operation efficiency is effectively improved.
Final Thoughts:
Digitalization is a hot topic in all industries today. For FMCG companies: bC integration is the key to channel digitalization; channel digitalization is part of marketing digitalization, and marketing digitalization is an important part of the entire enterprise digitalization. Based on Yanghe's case, this article introduces how it uses "One Product, One Code" and WeChat mini programs to connect F2B2b2C, while expressing a viewpoint: Talking about digitalization is from the enterprise's perspective. To truly achieve digitalization, we must stand in the shoes of the data subjects (here, distributors, terminal stores, and consumers) and think about how to provide them with better services and experiences. From an institutional perspective, efficiency is the keyword; with people as the measure, service and experience are the keywords. Service and experience are the starting point for thinking about digitalization and also the ultimate result digitalization points to. Of course, digitalization involves many aspects. Next, New Distribution's BC Integration series will bring you more cases and thoughts. If you are interested in this topic, please add the author's WeChat, noting your company, position, and name, to join the New Distribution "BC Integration" exchange group. Focusing on in-depth interviews in the FMCG industry, thinking about the latest changes in the industry For communication, you can long-press to add WeChat. When adding, please indicate your company, position, and name. Recently, WeChat Academy is holding a Partner Co-creation Program in the FMCG field, inviting manufacturers, distributors, and service providers to participate in exchange activities, sharing industry cases and operational methodologies to help business growth and industry merchant exchanges. If interested, click Read Original to fill out the form to register. Are you "watching" me?