On January 22, Zhoupu Data officially announced the completion of a Series B financing of 100 million yuan, led by Yunfeng Capital, with existing investors FreeS Fund and Ivy Capital continuing to follow. As a company focused on providing digital distribution channels, digital supply chain management, intelligence, and big data services for FMCG distributors, why has Zhoupu Data won the favor of the capital market? What changes in the FMCG industry do software service companies represented by Zhoupu Data reveal through their frequent large-scale financing in 2020? Behind these changes, what trends do they reflect for the future development of the FMCG industry? -01- FMCG Industry Upgrade: Without Efficiency, Competition Is Hard Efficiency is the core of a distributor's competitiveness, but for a long time, amid the battles of various external forces, people have habitually believed that business models such as B2B, community group buying, and warehouse-distribution integration are the real determinants of life and death, while neglecting the status that efficiency should have. Besides thinking efficiency is unimportant, this neglect also gives distributors a new illusion that their efficiency is actually acceptable. If we use the low efficiency of external forces as a benchmark, it seems to support this conclusion: Whether in transaction costs or fulfillment costs, distributors are not inferior to those external forces, and even slightly ahead. The misjudgment of the market and competition leads to a chain reaction of losing the core of their own competitiveness. Until today, when all the noise has subsided, distributors have found that their advantage in successfully resisting external attacks lies in local operational efficiency; they have also truly discovered that after the external forces leave, the threat has not disappeared: The high-efficiency distributors who have been lurking nearby are the opponents who may deliver a fatal blow in the future. **After all, the direct result of efficiency improvement is carrying more business, and more business, obviously, will only come from low-efficiency distributors in the same region. This cognitive return may be the main reason why SaaS has regained high attention. SaaS software services are not an industry that has just emerged in the past two years. There were waves of SaaS entrepreneurship around 2000 and 2015, but it is only in the past one or two years that SaaS has truly gone from being noticed to being valued. Especially after the pandemic, SaaS software companies have once again returned to the industry and capital spotlight, gradually becoming a "standard configuration" for enterprises. According to incomplete statistics, in February 2021 alone, 12 domestic SaaS service providers received financing, with a total financing amount exceeding 1.8 billion yuan. In the secondary market, the stock prices of Weimob and Youzan have risen by more than 800% so far, and many SaaS service companies focused on the FMCG industry have also seen increases of 2 to 5 times, fully demonstrating the market's enthusiasm for the SaaS software industry. Behind this frenzied pursuit, it actually reflects the various changes taking place in the FMCG industry in the new era. 1. Demographic dividend disappears, labor costs rise, and the marginal effect of efficiency improvement becomes increasingly significant As China gradually enters an aging society and population growth slows, the original advantage of low labor costs no longer exists. Both brand owners and distributors face rising operational costs due to increasing labor costs. When it is impossible to obtain revenue and profit through rapid market growth, brand owners and distributors have to improve profits through optimization and upgrading of internal management, operations, distribution, and other links. The application of SaaS software technology tools can undoubtedly help brand owners and distributors achieve cost reduction and efficiency improvement to a certain extent. 2. Pandemic catalyzes accelerated digital penetration in the FMCG industry Before the outbreak, although many companies were paying attention to digitalization, their willingness to transform and upgrade was not strong. They often regarded digitalization as an added value to business growth, insignificant. However, this pandemic has made many companies see the drawbacks of their own business models, either low internal management efficiency, heavy reliance on manual promotion, high costs, or insufficient flexibility, with existing organizational structures and distribution systems unable to cope with new challenges. This pandemic will also prompt traditional brand owners and distributors to pay more attention to and actively use digital tools to manage the business flow, logistics, capital flow, and information flow of their own businesses, seeking increments from the market, and more importantly, using digital management tools to improve efficiency, tapping into internal stock. Efficiency has gradually become the most concerned topic in the daily operation and management of more and more distributors. 3. New e-commerce models such as O2O, community group buying, and B2B emerge one after another, causing increasing impact on traditional FMCG manufacturers and forcing them to undergo digital upgrades With the emergence and development of community group buying, video live streaming, and content e-commerce, the business of traditional FMCG manufacturers has been increasingly impacted. This impact not only comes from the diversion of original markets and consumers by new channels, but also from the helplessness of traditional FMCG people when facing new things. The business logic of traditional FMCG manufacturers is that as long as products are produced and placed on shelves, they can naturally circulate and sell quickly. The competition among FMCG manufacturers is about production capacity and capital. The more abundant the production capacity and capital, the larger the business scale can be. Now, the competition among FMCG manufacturers is a contest of efficiency. Whoever has stronger mobility and can quickly adapt to new changes can build a wider channel network and a larger market. This requires both brand owners and distributors to possess digital capabilities. This manifestation of efficiency is not only evident in the moments of fierce attacks by "barbarians," but also in the competition among local peers after the tide recedes. In a stock environment, the higher the efficiency, the stronger the competitiveness, and the larger the market share. The competition among distributors has completely entered a zero-sum game stage. Behind the efficiency competition lies the battle of digitalization. -02- China's SaaS Software Services: From "Optional" to "Standard" The foundation of digitalization is tool software and data service platforms. Currently, there are a large number of software tool service providers on the market, but more does not mean better. Many providers only have software tools without data service capabilities. "More but not refined" has even become a true portrayal of China's SaaS software industry. In the past two decades, most SaaS software companies have developed lukewarmly, and many have even gradually died out during development, leaving no trace. For traditional FMCG enterprises, SaaS construction is only an "optional" configuration, but it has never become a standard one. So, where exactly does the problem lie in the SaaS industry? 1. SaaS companies: Insufficient focus on efficiency For a period of time, many SaaS companies were ashamed to talk about tools and efficiency. They preferred to talk about models and platforms, hoping to bring about transformative changes for distributor clients through model changes and platform applications. In any industry, improving efficiency means directly entering deep waters. It is understandable that many SaaS companies initially avoided the deep water, trying to explore in marginal areas, and then gradually step into the deep water after accumulating enough customers. This seems like a wise choice. However, this strategy will cause significant problems when applied to the distributor field. As small and micro enterprises with extremely clear and simple main business, there is no prosperous margin. In other words, apart from the core, such enterprises do not have any margin. This is the biggest difference between this specific field and other industries and large enterprises. Therefore, applying the path of large customers to enter the distributor field will seem irrelevant and superficial. Of course, the greater reason for insufficient focus on efficiency is not unwillingness but inability. Once truly delving into using tools to improve distributor efficiency, one must deeply understand the essence of distributor competitiveness, deeply understand distributor operation scenarios, support flexible distributor operations, and embed sustainable professionalism into this flexibility. Without sufficient deep cognition and investment, SaaS companies will find it difficult to create truly useful efficiency tools. 2. Distributors: Unable to feel the value of SaaS services Once SaaS services provided to distributors deviate from efficiency, distributors cannot feel the value of the service. Services that deviate from efficiency and only talk about models are undoubtedly clever in the early sales stage, capturing the anxiety points of many distributors; however, this approach will expose significant problems when implemented: no one's service can truly turn stone into gold. This will objectively greatly harm customer experience and also give customers a wrong perception of SaaS, thinking that these things sound good but are actually useless. Eventually, distributors will habitually return to the familiar old path. Since no one can improve my efficiency, I have to return to what I think is valuable: adding vehicles and people. In the past, the huge population base provided a continuous supply of low-cost labor for the development of China's FMCG industry. In a state of rapid market growth, both large and small enterprises exchanged money for time, maintaining continuous market coverage and growth by constantly adding people and vehicles. Deep distribution is a special product of this era. Many flashy SaaS applications serving marginal functions further deepen customers' perception, making them think that entrusting the future of their business to those flashy SaaS services is worse than focusing on the familiar old path. But this path is becoming increasingly difficult. On the one hand, labor costs are steadily rising; on the other hand, some people have already enjoyed significant efficiency improvements through informatization. A group of distributors has taken the lead in using informatization and digitalization to improve efficiency. This means that the balance determining competitive efficiency has tilted. -03- Full-Chain SaaS Software Service Providers Break the Dilemma This pandemic has completely pushed digitalization to the forefront for FMCG manufacturers, and achieving cost reduction and efficiency improvement through software tools has become a consensus among all FMCG manufacturers. Zhu Yikai, partner at Yunfeng Capital, said: "In the evolution of new retail, the integration of online and offline omni-channel is a definite trend." This requires FMCG manufacturers to put their original business online, move customers online, and digitize product distribution, transaction processes, and market services. Only in this way can the overall business operation efficiency be maximized. Many distributors easily fall into a misunderstanding, attempting to drive the digitalization of the entire business process through the online and data-driven transformation of a single business link, thereby enhancing overall business efficiency; however, this often brings more burden to other business processes, resulting in half the effort with twice the result and little effect. As typical small and medium-sized enterprises, all actions should revolve around the core of competitiveness, and the application of all systems and tools should make the core business smoother. Any single system that does not revolve around the core operation process will ultimately lead to efficiency loss rather than improvement due to the artificial fragmentation of the distributor's operation process. For brand owners and distributors, full-chain SaaS services not only mean that business links such as distribution processes, store ordering, salesperson management, customer management, financial management, and warehouse distribution management can achieve smooth data flow and efficient connection, but also mean the coherence and consistency of business logic from business expansion to personnel management to warehouse distribution logistics. Taking Zhoupu Data as an example, after more than five years of development, Zhoupu has completed a full set of solution layout for the digital upgrade of the FMCG supply chain. The core solutions include "Zhoupu Cloud Butler," "Zhoupu Store (Group) Butler," and "Zhoupu Cloud Warehouse," respectively positioned to provide full business process management solutions, store connection and transaction solutions, and intelligent warehouse distribution and unified warehouse distribution technical solutions, successfully serving tens of thousands of traditional distributor customers nationwide. In addition, the newly independent big data service division of Zhoupu Data will also rely on AI technology and big data analysis to further provide decision support for FMCG enterprises, accumulate data assets for them, and let data speak, truly empowering with big data. Undoubtedly, in the context of the Internet era, with the continuous iteration and improvement of new infrastructure, the traditional FMCG industry will inevitably undergo earth-shaking changes. In the FMCG distribution chain, distributors will inevitably exist for a long time, but this does not mean that distributors will do business in the same way as before. In the new business environment, only by continuously arming themselves with data and enhancing their business capabilities and operational efficiency can distributors remain invincible in the increasingly fierce market competition in the future. The competition in future business will definitely be a competition of efficiency. The digital tools and services reflected behind efficiency are the productized output and embodiment of relevant practitioners' understanding of business processes and business logic. This depth and breadth of understanding of the FMCG industry is the core competitiveness for the future development of SaaS software companies. Once the tip is adopted, a payment of 400-2000 yuan will be made.