---
title: "Brand Owner External Circulation + Distributor Internal Circulation: The 1+N Digitalization Path"
description: "At the 7th China FMCG Channel Innovation Conference held in Chengdu from November 3-5, 2022, Zhou Bin, co-founder and COO of Renwoxing Technology, shared insights on digitalization strategies for FMCG enterprises. He introduced the 1+N dual circulation model, emphasizing the importance of digital tools in empowering the real economy and achieving symbiotic growth between brand owners and distributors."
author: "周斌"
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published: "2022-11-13"
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# Brand Owner External Circulation + Distributor Internal Circulation: The 1+N Digitalization Path

> At the 7th China FMCG Channel Innovation Conference held in Chengdu from November 3-5, 2022, Zhou Bin, co-founder and COO of Renwoxing Technology, shared insights on digitalization strategies for FMCG enterprises. He introduced the 1+N dual circulation model, emphasizing the importance of digital tools in empowering the real economy and achieving symbiotic growth between brand owners and distributors.

From November 3 to 5, 2022, the "7th China FMCG Channel Innovation Conference" hosted by New Distribution, a professional FMCG new media platform, was successfully held in Chengdu. This article is based on the keynote speech delivered by Mr. Zhou Bin, co-founder and COO of Renwoxing Technology, at the sub-forum "Digitalization: Business Empowerment" during the conference. It has been organized and published with authorization. Compiled by Kang Zhiqiang.

Today, I would like to share in detail the approach to digitalization construction and how enterprises can implement it. The dual circulation mentioned in the 14th Five-Year Plan is an important national strategy, namely building a new development pattern with domestic circulation as the main body and domestic and international dual circulation promoting each other. The state has mentioned a unified large market, and dual circulation will bring new development opportunities to distributors and brand owners in the FMCG industry, because FMCG terminal stores maintain a growth rate of over 20% annually, and the future FMCG industry will have greater development space. At the 20th National Congress, the state mentioned the relationship between the digital economy and the real economy. The digital economy and the real economy are not contradictory or opposing; the real economy does not refer to the state of physical operation. In the digital era, the real economy should embrace the digital economy and actively promote the integrated development of online and offline. How the digital economy empowers the real economy is a question enterprises need to consider, and the key is how to implement digital tools. Against the backdrop of national policies, I would like to take this opportunity to share with you the dual circulation model of the digital economy.

**01**
**Enterprise digitalization has entered the deep water zone** Currently, there are three types of enterprises entering the field of enterprise digitalization. First, pure internet enterprises represented by Alibaba and JD.com; second, physical enterprises represented by distributors and brand owners; third, service providers represented by warehousing and distribution services and supply chain integration; they are all deeply cultivating the digital economy from different angles. There are three major trends in the development of the digital economy. **1. Digital intelligence:** From manufacturers, distributors, small stores, to consumers, through channel digitalization, it is not just about achieving deep distribution, but precise marketing. **2. Integration:** First, the integration of management and marketing within distributors; second, the integration of production, supply, and sales across the upstream, midstream, and downstream of manufacturers. Integration has become a consensus in digital development. **3. Ecosystem:** Whether distributors or small stores, they will all have their own systems, either bought by themselves, opened for free by manufacturers, or connected by service providers. Whoever lays out the digital channel first will be the biggest winner. Today's business is dominated by digital channels. In enterprise digital transformation, we mention dual circulation, which involves several roles: brand owners, distributors, retailers, and finally consumers. This is the entire offline channel path. Every role in the path is beginning to digitalize, and they are integrating with each other, with mutual promotion and coordinated development.

**02**
**How can brand owners and distributors achieve symbiosis and win-win?** In the past, brand owners had information systems such as ERP and SFA. These were self-built systems that could only reach distributor ordering and brand owner salesperson management. They did not know distributor inventory, sell-through, downstream customers (second-tier wholesalers or terminal store information), or even consumer information. Expense verification and rebates were all handled manually. This is the current state of the brand owner's centralized "1" system, which cannot empower distributors, second-tier wholesalers, or stores to achieve their own private domain digitalization. Now is the era of enterprise private domain digitalization. Distributors and stores will build their own decentralized digital systems, that is, "N" sets of enterprise-owned mini-programs and APPs, which can not only sell goods of a certain brand but also put all their supplier products, customers, salespeople, and other people, goods, and money online. Each enterprise must complete its own internal digital closed loop, while also connecting the upstream, midstream, and downstream of the supply chain for external large circulation, forming an interactive pattern. This is the 1+N dual circulation model we propose. **What is 1+N?** It means that a brand owner establishes a platform of "1". This platform is not centered on the brand owner, but is based on altruistic thinking. Do not think that all distributors and stores on the platform must use our system and revolve around the brand owner; this is unrealistic. For example, we have served some large brand owners with thousands of distributors and millions of terminal stores. Should everyone share one system, or should each enterprise be given a system? Is it a control mindset or an empowerment mindset? If everyone can do their own business, put brand products into it, accurately invest marketing expenses, connect channels, and achieve rapid data feedback and analysis, this is an initial victory for the brand owner's channel digitalization. 1+N must be decentralized, not revolving around a certain brand enterprise, but empowering channel partners to do their own digital business. I for all, all for me. Many brand owners emphasize control, but now I think it is more about empowerment and altruism. While helping your distributors, you also achieve the brand owner's goals. So 1+N is to achieve a community, helping you complete your own digital business closed loop, while forming the brand owner's channel large circulation. For example, I am a brand owner with hundreds of distributors downstream. Everyone has their own independent mini-programs, APPs, and official accounts, but we are all connected. We can sell my brand and also non-competing brands A and B, forming a community of interests. Then there are terminal stores. The core touchpoint of BC integration is terminal stores. Stores are the sales engine, and the digital upgrade of people, goods, and scenes is very important. Finally, there is ToC, with online and offline integration, wholesale and retail, community group buying, and social distribution, forming a BC-integrated digital platform.

**03**
**How to implement digitalization?** **Three steps for enterprise digitalization implementation:** **Step 1: Online** Customer experience online, products online, marketing online, FBbC personnel online, operations management online, people, goods, and money all online. This is the first step of digitalization, which is business digitalization. The key words for implementation, **first, products and marketing online.** Without being online, nothing else matters. The starting point of digitalization is being online: products, marketing, customers, operations, and payments must all be online. Only when master data such as products, stores, and members are unified can the value of precise channel marketing services, real-time two-way data interaction, and data-driven operations be unleashed. GJP has been doing enterprise informatization for 27 years and can help major brand owners achieve seamless integration with distributor ERP data. We now serve traditional foreign brands, large domestic brands, and small and medium brands. These brands need corresponding channel digitalization solutions in their digital transformation to help channel partners achieve online and offline, upstream and downstream integrated dual circulation. These systems are not built behind closed doors or used mechanically, but require in-depth research of customer scenarios and upstream and downstream business forms. The path we recommend is generally: first business online, then business dataization, and finally data-driven operations. As a digitalization supplier, we provide distributor-based internal circulation systems, such as the Kuaima digital system, which can help distributors manage customer SCRM, salesperson SFA, office approval SOA, online ordering B2B, inventory and financial ERP, warehousing and logistics WMS/TMS, etc. For example, in customer management, customers were previously recorded in the salesperson's mind or phone, and ERP customer data was messy. Now with SCRM marketing-oriented customer relationship management system, we can see which customers place orders, when they browse, purchase status, visit status, accounts receivable, etc., and the customer profile is clear. **Second, personnel online**, for example: **SFA field management**, the boss can see it at any time; where people are, brand owners can also see it. The trajectories of brand owner salespeople and distributor salespeople are visible in real time. **SOA mobile office management**, we have colleague circles (similar to WeChat Moments), online office approval (similar to Enterprise WeChat or DingTalk), announcements, information, enterprise mobile portal, and HR employee file management, all presented in one integrated system. This achieves comprehensive digitalization of enterprise people, goods, money, customers, and marketing, with data interpenetrating each other. One system solves all enterprise digital management problems, truly achieving "system hosting, liberating the boss". **Step 2: Connection** In today's digitalization, the more resources of people, goods, and money you connect, the stronger your digital channel ecosystem. It requires both internal online and offline integrated business management closed loop, and external connection to upstream supply chain resources, peer resources, downstream customer resources, and intermediate service provider resources. Renwoxing Yunliushui New Business Technology Platform is a solution to help brand owners achieve F2B2b2C channel integration and business model upgrades for large distributors. For example: **Model 1: For large distributors, how to integrate more supply sources to become bigger and stronger, and empower downstream customers one-stop.** Distributors have a problem: besides possibly selling goods of a few major brands, their small store customers need multiple brands and categories. They want to supply more goods to small stores, but if they want to represent more brands, they need to pay more deposits and stock more goods. With the F2B2b supply chain integration system, they can integrate quality supply from peers or source brand owners without stocking or paying deposits. They can display wholesale and retail online, and after receiving customer orders, push them to suppliers for shipment, either through warehouse consolidation or direct supplier delivery. This way, they do not need to stock or pay deposits, and can still have more product margins. Through one-stop, multi-fast, good, and economical service, they stick to small stores, thereby achieving new digital gameplay of controlling products, stores, and traffic. **Model 2: For existing large brand owners, how to achieve upstream and downstream production, supply, and sales connection through channel digitalization.** This is the 1+N supply chain digitalization system mentioned earlier, from manufacturers to distributors, second-tier wholesalers, terminal stores, and consumers, achieving digital channel connectivity across the upstream, midstream, and downstream. Each enterprise has its own internal circulation, while also integrating into the large ecosystem for co-creation and symbiosis. Brand owner products can reach terminal stores and consumers in seconds, achieving precise marketing investment and verification, data can be fed back in time, and they can see which small store the distributor's goods are sold to, which consumer they are sold to, and then do precise marketing and C2F flexible production. **Model 3: For business association alliance enterprises, how to achieve resource integration, private domain empowerment, and co-creation and sharing digital ecosystem.** There are many business associations across the country, with thousands in each province, gathering a large number of core enterprise members from various industries. Everyone wants to form alliances and combine their resources to create a co-creation and sharing platform ecosystem. But there is a problem: everyone only wants to find customers in it, but is unwilling to contribute their own customers. In our business association supply chain resource integration solution, we can build a shared platform where everyone can share supply sources and cross-purchase quality supply. But they do not need to share customers. Our platform supports helping each member enterprise build its own private domain digital ecosystem. Everyone can find better supply sources on the platform and put them on their own private domain digital system for circulation and sales, thereby achieving both supply integration and customer protection. Through the integration of public and private domains, co-creation and sharing are achieved. **Step 3: Drive** Enterprises connect internally and externally, upstream and downstream, forming a closed loop, so that enterprises can obtain more comprehensive data to drive operations, achieve more precise marketing, more refined management, and more efficient operations. In the past, relying solely on manual calculation and tabular statistics, the utility of data could only play a small role. Now we can use visual large screens to intuitively see dynamic and comprehensive data to help enterprises make wiser decisions.

**In conclusion:** Let me share a model with you. In fact, each of us, each enterprise, faces a problem. We must both maintain the existing stock and want to create incremental growth. In the current uncertain environment, the only certain thing is to do digitalization well. Digitalization will definitely bring new growth in the future. We must have black chart bottom-line thinking (survive), keep existing customers, and settle people, goods, money, and customers online. After the bottom line is guarded, then go for blueprint growth (live well), not only look at immediate gains and losses, but also look at the long term (long-termism, live long), and drive incremental growth through existing stock (forming compound interest effect), so business will become easier and easier. To go from black chart to blueprint, maintain stock, create increment, that is through digitalization, integration, and ecosystem paths. Finally, I wish all brand owners and distributor friends can seize the opportunity of this once-in-a-century transformation and achieve counterattack growth through digitalization.

Zhou Bin, co-founder and COO of Renwoxing Technology
Senior consultant for "GJP" enterprise e-commerce platform operations, executive general manager of Renwoxing Yunliushui SCM New Business, has guided multiple FMCG enterprises in digital transformation.

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