---
title: "Big FMCG Doesn't Believe in Private Traffic! How to Reconstruct Distributor Relationships in the Omnichannel Era?"
description: "This article discusses why private traffic (private domain traffic) is not suitable for the fast-moving consumer goods (FMCG) industry, which relies heavily on traditional distribution channels. It argues that FMCG companies should focus on omnichannel digital transformation and reconstruct their relationships with distributors to thrive in the digital age."
author: "梅BOSS"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2021-09-09"
language: "en"
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# Big FMCG Doesn't Believe in Private Traffic! How to Reconstruct Distributor Relationships in the Omnichannel Era?

> This article discusses why private traffic (private domain traffic) is not suitable for the fast-moving consumer goods (FMCG) industry, which relies heavily on traditional distribution channels. It argues that FMCG companies should focus on omnichannel digital transformation and reconstruct their relationships with distributors to thrive in the digital age.

**Click to read the original article for details**
Source: Private Traffic Observation (ID: gh_8a0eb58fba1a)
**This is an era where everyone talks about private traffic.**
If last year's COVID-19 pandemic pressed the start button for private traffic, this year's internet antitrust and data privacy protection laws have become a continuous force holding down the button.
At various conferences and training activities organized by Bowang Digital, private traffic topics attract the most attention, with high-value, high-repurchase industries like beauty and maternal and infant care showing interest, as well as durable goods industries like real estate, home furnishing, and 3C electronics, and even FMCG and B2B sectors. The capital market is even hotter. In Bowang Digital's two consecutive years of MarTech research reports, private traffic-related technologies have been hot investment targets, such as **SCRM (Social Customer Relationship Management)** in 2019, **WeChat Work** and **intelligent outbound calling** in 2020, and currently the hottest is **private traffic agency operations**. Gao Haibo, founder of Blue Whale Private Traffic, told me a few days ago that they have recently secured four rounds of financing exceeding 100 million yuan, with participation from Meihua Chuangtou and Tiantu Capital.
Last weekend, Heiqiang, founder of Dongdong Laike, privately revealed that he had just completed a transaction of tens of millions of dollars in investment, with their strength lying in private traffic operations for the restaurant industry.
Jian Feng, founder of 01裂变, who specializes in private traffic operations for shopping malls, supermarkets, and brand chains, had already talked with me months ago, saying that almost every day well-known institutions approach him to discuss investment. From being overlooked in 2019, to being forced to do it in 2020, to the frenzy of 2021, the growth curve of private traffic has witnessed the progress of enterprise marketing digital transformation.
Accompanied by the recurring pandemic, this curve fluctuates and intertwines unpredictably, leading me to hallucinate: **Is private traffic a twin of the pandemic, or an inevitable product of digitalization?** But in any case, hot topics always drive market progress, just like when everyone talked about new media a few years ago. Now we know that the social media revolution is actually an inevitable result of the mobile internet era.
The emergence of private traffic is actually a significant feature of user-centricity and an important way to manage user loyalty. **It is your IP relationship, your sales channel, and your data asset.** Especially Perfect Diary, which went public under the private traffic concept, and Kidswant, which is about to go public, as well as Watsons, which successfully transformed through its massive membership assets, all show the powerful force behind private traffic! However, is private traffic omnipotent? Or can private traffic save all industries from fire and water? Obviously not! For many industries, private traffic is someone else's game! It's just a trendy concept; you can understand digital trends from it, but if you try to apply it deeply, you may end up empty-handed. This article focuses on the FMCG sector, which is exactly such a case.
I have had in-depth exchanges with insiders from P&G, Liby, and Carlsberg, who told me that in the FMCG field, **channels centered on distributors and mom-and-pop stores still account for over 70% of sales**, followed by the KA channel, with online sales accounting for less than 10%.
Private traffic is almost nowhere to be seen. Jian Feng, founder of 01裂变, also revealed that even in the supermarket chain industry, where FMCG is concentrated, a new set of user operation strategies must be restarted.
**Why is private traffic difficult to penetrate FMCG?** In many discussions on private traffic topics, I have noticed an interesting phenomenon: although the concept of private traffic is hot, people's understanding varies greatly, and there are even significant deviations. It is precisely due to many misunderstandings and blind following that the popularization and application of private traffic face great difficulties. The so-called private traffic is a stage-based stratification of traffic systems, essentially data resources that enterprises can control independently, and it is also the privatization of user (fan) data by brands (IP).
The purpose is to improve operational efficiency, achieve low-cost high-reach of user resources, and multi-level conversion through user asset operation and lifecycle management.
Private traffic has two important conditions: **first, data privatization**, which allows free use and multiple free uses; **second, clear user profiles**, enabling direct information delivery and one-on-one interaction. Boston Consulting Group once drew a category map for private traffic, dividing product categories into four quadrants based on consumption frequency and interaction level.
As shown in the figure, not all quadrants are suitable for private traffic operations. For example, high-frequency, high-interaction industries (such as maternal and infant care and beauty) are suitable for private traffic operations, while low-frequency, low-interaction industries (such as automobiles and real estate) are suitable for lead management.
Source: 2020 China Social Retail White Paper
In fact, even if private traffic operations are possible, the playbooks vary greatly across industries due to different product characteristics and business models.
For example, in industries such as catering, maternal and infant care, pharmaceuticals, finance, and beauty, each has its own unique private traffic approach. Therefore, for an excellent private traffic operation team, more work must be done in understanding business relationships. For high-frequency, low-interaction FMCG, private traffic operations are actually a pseudo-concept, or rather, private traffic is difficult to penetrate into FMCG operations; marketing must be laid out from packaging, advertising, and pricing at multiple levels.
There are two reasons: **first, FMCG has strong channel dependence and unique scenario needs; second, low unit price makes it difficult to maintain private traffic relationships.** Youxin Technology is a channel digitalization solution company. Founder Lin Shaozhang was once the technical leader of WeChat Work, and other core members such as Feng Weizhao and Sun Jinhou also come from Tencent, Didi, Alibaba, etc., with a strong mobile internet gene, and have been deeply cultivating channel digital transformation.
Based on low-code development advantages and channel digitalization exploration experience, in the first half of this year, Youxin became a global partner of Tencent Cloud Native Accelerator. Lin Shaozhang said that FMCG is a special area of digital transformation. Although channels are increasingly diversified and information is increasingly fragmented, people's dependence on traditional channels remains strong.
For example, in the beverage market, although Genki Forest has become a phenomenal brand in the industry, to truly scale up, it must leave city center stores and go deep into various mom-and-pop stores (just imagine the recent hand-to-hand combat between Nongfu Spring and Genki Forest for sales terminals).
Because for consumers, **scenario-based consumption is the primary need**, which is why the concept of MOT (Moment Of Truth) is currently very popular; you must find the most authentic behavior of users at critical moments. For example, when a person is thirsty, what is their consumption scenario? Do they go to a nearby physical store to directly buy the drink they need, or do they slowly repurchase through online private traffic channels?
When ordering at a store terminal, besides the brand impression that instantly comes to mind, the available choices and promotional offers at the terminal are often the main drivers of purchase. Some may say, isn't Genki Forest also doing its own private traffic? Let's see what the private traffic value of Genki Forest really is? We all know that Genki Forest places great emphasis on product R&D. Tang Binsen said that at least 95% of their products have not yet been launched! But how to maintain a large amount of product R&D and find the next hit product?
Genki Forest usually uses five testing methods: **target audience taste testing, e-commerce virtual testing, convenience store behavior testing, information flow advertising testing, and DTC channel testing.**
At this time, the core value of private traffic is to serve user demand testing and product lifecycle management.
As the saying goes, the drunkard's heart is not in the cup. The answer is also obvious: because FMCG itself has low unit prices, consumers' trial costs are low, and they are easily influenced by terminal promotions, so it does not have private traffic development value.
What enterprises really need to do is to promote omnichannel digital transformation around marketing touchpoints to achieve seamless integration in the mobile internet era. Shaozhang told me that the FMCG market is currently 20 trillion yuan in scale, with fierce competition. It seems the entry barrier is low, but marketing methods are very complex, and later investment will become heavier. What is truly needed is to deeply cultivate channels with a "solid camp and stubborn battle" approach!
In the era of intelligent marketing, simple private traffic playbooks cannot handle this field. It is necessary to use advanced big data and algorithm models to reconstruct the marketing foundation from multiple levels, including users, products, distributors, and marketing technology applications.
**The underlying logic of FMCG marketing digitalization** In the digital age, what does the basic consumer profile look like? In January 2021, Accenture and Ocean Engine released a survey report, suggesting that today's users are fluid consumers.
64% of surveyed users said that if companies cannot continuously provide strong relevance, they will switch to other brands; **67% of users who frequently switch brands said the reason is attraction to new brands, not dissatisfaction with current brands.** In the mobile internet era, users are easily "hijacked"! If there are not enough marketing touchpoints, **users abandoning you has nothing to do with you.** In marketing, FMCG currently faces three main challenges:
**First, user segmentation: fragmentation and stratification are severe, making it increasingly difficult to capture; second, category segmentation: personalized product demands intensify, and users dominate consumption, such as Genki Forest's 0-sugar soda water, which is a typical product of health needs; third, channel segmentation: sales costs increase, for example, social media has become a new sales model, from HFP in the WeChat official account era to Heytea and Zhong Xuegao, all are examples.** In Kotler's classic marketing model, customer, product, and channel form a golden triangle. Distributor channels are an extension of the enterprise organization, and all products must rely on external channels for sales.
With the advent of digitalization, the boundless internet has become a new organization extended by enterprises. The primary and secondary positions of products and users (from operating products to operating users) have changed, and the definition of channels is also being rewritten.
For example, DTC is a model that removes distributors. The way enterprises connect with users changes, with brands directly reaching users, forming a new marketing form. **How to reconstruct the underlying logic of FMCG marketing digitalization?** We can mainly start from two points: first, put user MOT first; second, achieve omnichannel digital layout, build a digital deep distribution system, move from informatization to digitalization, and achieve an empowering relationship.
Speaking of understanding user MOT, Dongpeng Special Drink, with a market value of 100 billion, is a good case. In the early days of the product, Dongpeng Special Drink focused on imitation, and the results were predictable. The real change came after finding its target users and deeply studying their real needs.
In simple terms, Dongpeng Special Drink later made (truck) drivers its core audience, and built a complete experience loop around their need for refreshment (the "tired and sleepy" advertisement), purchase channel needs (gas station distribution), drinking scenario needs (bottled with a cap), and price needs. Heytea is another case. Insiders told me that Nie Yunchen places great emphasis on product R&D and user experience. Every company meeting, he acts as the first user to try a batch of new products and writes down his evaluations one by one. To pursue the ultimate taste, he even modifies the recipe a few hours before the product launch!
To solve Heytea's long-standing queuing problem, Nie Yunchen personally served as the architect of Heytea's mini-program, and starting from application scenarios, he participated in drawing every detail of system development, ensuring a good user experience in the MOT from tea selection, ordering, to picking up and tasting. It is worth mentioning that because Heytea's main business is simple, with only over 800 stores nationwide, it does not require too complex technical deployment.
In other words, through the ultimate application of official accounts and mini-programs, Heytea not only solved problems such as social content marketing, user experience, and product delivery, but also accumulated 30 million user assets, achieving 80% of user orders from its own platform, effectively increasing profit margins. However, **with the emergence of more products like Heytea Xiaocha and Heytea Xiaoping, Heytea will face true digital upgrades.**
Especially after launching various sparkling waters and juice tea drinks, the ever-expanding all-around beverage competition will bring new challenges to Heytea's channel operations, and there is an urgent need for marketing technology to reduce costs and increase efficiency.
Currently, FMCG typically adopts the **"OMS+DMS+SFA"** channel management model, which connects manufacturers, distributors, and stores through order management, distributor management, and sales management, implementing standardized control.
However, as a product of the information age, because such distribution specifications are too standardized, they cannot reflect the advantages of rapid product iteration, increasing various additional costs and losing opportunity costs. For example, traditional SFA visits usually follow a seven-step process: entering the store to check inventory, checking shelves, display, taking orders, promotions, etc., with the prominent feature of relying on manpower, belonging to "multiple people, multiple stores, multiple orders."
In the mobile internet era, with increasing labor costs and high personnel turnover, this playbook lacking marketing automation has become an obstacle to the development of many enterprises! What should the digital playbook look like in the omnichannel era? Let's first look at a functional comparison chart of two products from different generations.
In the first chart, we can see that in the traditional model, the channel management process has many levels, poor timeliness, and low reach. Often a policy must be deployed months in advance, far from being able to cope with fierce market competition.
In the digital era, channel management is conducted through the mobile internet, enabling agile policies and one-click concurrency across all channels, not only providing timely feedback on sales policies and effects but also greatly saving labor costs. Lin Shaozhang said that based on Youxin's practical experience, to reconstruct an omnichannel digital system, the key is to re-match "people, goods, money, places, and orders," achieve online business data, and seamlessly connect enterprises, partners, customers, and users.
To achieve this function, Youxin has developed 8 engines—front-end engine, form engine, process engine, data engine, rule engine, settlement engine, integration engine, and aggregation engine—and deploys them through low-code methods. One thing to emphasize is that the channel deep distribution system coupled with these 8 engines can not only fully improve the decision-making and management efficiency of brand owners, distributors, and small stores, further driving sales, but more importantly, it will also promote the establishment of a new ecological cooperative relationship among brand owners, distributors, and small and medium stores.
The establishment of this relationship fully mobilizes the enthusiasm of all parties and forms a joint force in operations, which is the true significance of omnichannel digitalization.
**Reconstructing the Three Relationships of Distributors** Zhu Jianming is a veteran with 20 years of channel experience, from P&G to Dumex, then Mars and Liby. He has not only experienced frontline sales but also personally led Liby's digital transformation.
He said that over the past 20 years, he has dealt with various distributors, from remote small stores in Hunan's mountainous areas to various large distributors of multinational companies, and knows the complexity of China's FMCG market well.
With the deepening of marketing digitalization, changes at the channel end are entering the deep water zone. Especially reconstructing distributor relationships is becoming the main contradiction in enterprise digital transformation. He believes that the new era of distributor relationships is to change from the past "control and order dumping" logic to a new ecological partnership, simply put: help empower, help sell goods, help grow bigger.
In the traditional model, the relationship between enterprises and distributors is one of control, with distributors mainly responsible for stocking and purchasing goods.
In a sense, enterprises do not know who their consumers are; **distributors and small stores are the frontline employees in contact with consumers.**
For a national brand, due to space and time constraints, there is a lag in market and distributor management, often forming a situation of control and counter-control. Back then, Wahaha founder Zong Qinghou saw this point. To form a community of interests with distributors, Wahaha created the **joint sales model**, binding interests through equity. The brand and distributors were united, thus achieving the glory of the Wahaha empire for 20 years.
In the digital era, as users become the main business entity, the relationship between brand enterprises and distributors will also change.
On one hand, the mobile internet and marketing technology closely connect everyone, achieving management integration and greatly improving timeliness.
On the other hand, digital technology also promotes transparency in stakeholder relationships. As gray areas disappear, everyone must rethink their relationships with each other.
Essentially, distributors, as ecological partners of brand enterprises, will truly become an extension of the enterprise's business capabilities. The relationship between enterprises and distributors is no longer one of control, but of empowerment, selling goods together!
Taking Dongpeng Special Drink as an example again, through the application of one product, one code, this enterprise reconstructed a new relationship among distributors, promoters, and users.
For instance, after the product arrives, to encourage small b stores to open boxes and put products on shelves as soon as possible, Dongpeng Special Drink designed a reward for opening box codes; after the product is on the shelf, to encourage product sales, it designed a reward for scanning codes.
More critically, how can store owners be motivated to actively promote? Dongpeng Special Drink's approach is that once a consumer wins a prize, the store owner also gets the same reward, but it must be approved by the promoter's scan! In this way, Dongpeng Special Drink, through a small QR code, mobilized the aggregation of four forces: the **push of store owners opening boxes and shelving** and **actively recommending purchases to consumers**, the push of consumers actively **scanning codes to win prizes**, and the push of business personnel achieving **management verification**, thereby reconstructing a new interactive relationship among the three parties. Zhu Jianming believes that establishing such a new relationship was impossible in the past and must be supported by digital marketing technology!
Currently, Youxin has made many explorations and calls this capability the ability to operate B2B with a B2C approach. Compared with the "OMS+DMS+SFA" model of the information age, this playbook can achieve "fewer people, more stores, more orders," truly realizing real-time management and cost reduction and efficiency improvement! The specific modules mainly include the following five aspects: **1. Distributor lifecycle management:** JBP joint business plan online, data-driven, automated tracking and evaluation; achieve classified and hierarchical management of distributors, full visualization, and achieve openness, fairness, and justice.
**2. Full online order process:** Fully online office mode for business, effectively improving operational efficiency. The key is to achieve online ordering on behalf of customers.
**3. Channel policy management:** Efficiency improvement, data visibility, waste elimination, and sales increase.
**4. One product, one code empowerment:** Create incentive policies through scanning box codes and middle codes. The key is to achieve functions like Dongpeng Special Drink.
**5. All-staff BI empowering business decisions:** According to authorization and classification, each role can only see panoramic data within their scope. What are the specific effects of such technology applications? Youxin President Feng Weizhao gave me a case of Sancao Liangmu: Sancao Liangmu is a beauty store brand with a retail scale of 5 billion yuan and over 6,000 physical stores. The brand has many stores and types (5 types). Before cooperating with Youxin, to solve the channel digital transformation problem, they tried many methods: building their own team, but the cost exceeded 10 million yuan a year, and coordination issues between departments easily arose, failing to keep up with the pace of enterprise development.
Purchasing industry-standard software, but SaaS software categories are too segmented, and real problems are complex, so they cannot solve problems well.
**Seeking strategic consulting and implementation services from international top-tier software companies, but over three years, the total cost would be 120 million yuan, which is too expensive.** Feng Weizhao said that Sancao Liangmu approached Youxin for cooperation in early 2020. After understanding the needs, Youxin decided to reconstruct Sancao Liangmu's distribution system and, combined with the characteristics of the beauty and personal care industry, established an effective low-code operation system that can be regularly upgraded.
After the system went live earlier this year, Sancao Liangmu immediately achieved a 65% year-on-year growth in performance. Since then, Youxin's products have run nearly a hundred marketing policies in half a year, not only maintaining policy agility but also shortening product launch time to 7-15 days. Zhu Xiaohu, founding managing partner of GSR Ventures, said that after antitrust, omnichannel and full-platform empowerment give startups great opportunities. This is indeed true for Youxin, which is deeply cultivating channel digitalization, but for more FMCG companies, **the disruptive changes brought by digitalization may be even more imaginative.**
**Are you "watching" me?**


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