Click to read the original article for details**** A brief history of channel digitalization for FMCG companies Today, the issue of channel digitalization is no longer about popularizing the concept, but about how to achieve it. Since 2015, countless FMCG companies have successively attempted marketing digitalization. Without exception, these attempts started with channel digitalization. The reason is simple: in the FMCG field, the data volume from online e-commerce is too small. For the vast majority of FMCG companies, the largest data volume is offline, accumulated in the channel. If the circulation process from distributors to terminals could be digitalized, the potential would be enormous. Looking back, the paths taken in channel digitalization over the past few years can be roughly categorized as follows: 1. Manufacturer-built mobile business systems, or sales force automation (SFA) systems Some leading brands, including Coca-Cola, started mobile business systemization as early as 2010 during the 3G era. For example, salespeople used mobile tools for route visits, location tracking, checking terminal inventory, and placing orders. With the advent of 4G, features like display photos were added. 2. Manufacturer-led self-built B2b projects aimed primarily at online terminal ordering In 2015, manufacturers began to realize that if channel data could not be generated in real time, online, and penetrate to the distributor level, digitalization would be a false proposition. Therefore, leading FMCG brands like Coca-Cola and Uni-President launched vigorous self-built B2b campaigns. The so-called self-built B2b system starts digitalization from the terminal, getting terminal stores to download ordering apps and place orders on them. To promote coverage and activity of self-built B2b, brands used every possible means. For example, all expense reimbursements had to go through the app, or special promotions were offered for ordering through the app. Unfortunately, terminals cannot open a specific brand's app every day to order, and terminal owners' phones cannot download dozens of leading brands' apps. In the end, the vigorous self-built B2b efforts fizzled out. Today, except for brands that have not yet suffered losses and might still be tempted, the first wave of brands that tested the waters have already become indifferent, knowing that this path is a dead end. 3. Third-party B2b ordering platforms These can be divided into three categories: self-operated B2b platforms like Yijiupi and Zhongshang Huimin; platform-based B2b platforms backed by internet giants like Alibaba Retail Link and JD New Channel; and some third-party software companies that provide B2b system services to distributors, allowing them to promote ordering systems to terminal stores. The outcomes for these three types of companies have also been far from expectations. Self-operated B2b platforms, the vast majority burned through their funds and went bankrupt, and the few remaining are in poor condition, gradually turning into online distribution markets. Without the manufacturer's terminal policies and the service of the brand's business team, they can only cover some marginal small stores or become channels for manufacturers to push inventory or boost sales periodically. Platform-based B2b platforms, although still alive, have not met the strategic expectations of the internet giants. Since the community group buying model became popular in 2020, B2b orders have significantly declined, and they have transformed. For example, Alibaba Retail Link turned into Alibaba's community group buying MMC. As for those regional distributors that launched B2b ordering systems, they either found that to meet terminal needs they had to become large second-tier wholesalers, or they found that after a flurry of activity, their app activity was almost zero, and they had to give up. If we consider 2015 as the first year of channel digitalization, we will find that in the past six years, almost all attempts at channel digitalization—whether initiated by manufacturers, internet companies, or distributors—have failed. Six years later, the entire FMCG industry has thrown hundreds of billions into channel digitalization, with countless companies trying various angles and models. To this day, massive amounts of channel data remain submerged below the surface. Those that persist are merely hanging on, either entertaining themselves with falsified data or fragmented and worthless. Is the dream of channel digitalization in the FMCG industry truly unattainable? Why did the previous wave of channel digitalization fail? The failure of channel digitalization campaigns is certainly not due to technical reasons. If it's not technical, then the problem lies in the model and logic. Manufacturer-led channel digitalization starts from the perspective of control. You are my distributor, so you must listen to me and use my system. Unfortunately, no matter how the manufacturer-distributor relationship is beautified, at its core it is a naked exchange of interests. You give me goods, and I sell them to make money—that's natural. You give me a system, and I give you all my data—why? What's in it for me? In fact, not only is there no benefit, but if you know my terminals, inventory, and sales situation clearly, how can I survive? If something brings no benefit but carries a host of hidden dangers, why would a distributor do it? There are only two answers: either firmly refuse, or passively resist and falsify data. If it were in exclusive brand distribution fields like home appliances or automobiles, manufacturer-led channel digitalization could be achieved, but not in FMCG. Because FMCG has a serious issue: the vast majority of FMCG distributors are multi-brand agents. If one manufacturer sets up a digital system, do I have to use them all? Facts have also proven that manufacturer-centric channel digitalization, after several years, either ends without results or merely self-deceives within a fake data system. Internet giant-led B2b is nothing more than the same traffic logic. They use price tactics to maximize offline orders online, thereby achieving coverage of massive terminals and monopolizing ordering channels. This internet approach is already an open scheme, and no brand is foolish. My thousands of soldiers and channel partners have worked hard for years, sweating and bleeding to create best-selling products—how can I let you steal them at low prices? You provide no marketing support; how about I give you a few new products, and see if you can make them best-sellers? Without brand promotion and offline brand business promotion, internet B2b platforms are incapable of selling any new product well. Since then, the capital story of internet B2b platforms growing traffic and commanding the industry has completely collapsed, and they have become supplementary channels that most major brands do not even look at. As for distributor self-operated B2b, it is just a large second-tier wholesaler moved online, with the same logic and outcome as internet B2b. Without brand policy support for most products, even in the regional market, you cannot sell them. For channel digitalization to succeed, distributors must be the protagonists First, it must be understood that advanced productive forces will inevitably eliminate backward ones. The path may be tortuous, but history will never regress. In fact, in recent years, the demand for distributor digitalization has been rising. More and more distributors feel that without digital capabilities, they cannot do business well or make money. From the business of some excellent system service providers in the industry, in recent years, excellent service providers like Fenxiang Xiaoke, Waiqin 365, and Zhoupu Data have seen rapid growth in distributor customers. In just two years, Zhoupu Data's distributor customer count exceeded 10,000, which is a very clear signal. Yikuaixiao is a system provider specifically positioned to serve beverage distributors. Its founder, Chen Renxi, led the development and promotion of Coca-Cola's earliest MMS system. Chen Renxi judges that the protagonist of FMCG channel digitalization should not be manufacturers or internet companies, but distributors. Moreover, the purpose of distributor digitalization must be to meet their own business digitalization needs, not to pull terminals online for ordering. Once distributor-led digitalization is completed, it will be the completion of channel digitalization for China's FMCG industry. Digitalization should first be an internal need of distributors, not an external imposition or pressure from upstream. Human nature is the core issue; any model that goes against human nature cannot succeed. The correct path for FMCG channel digitalization Today, more and more distributors are discovering that without digital transformation, they cannot do business well, manage teams well, manage assets well, or even know whether they are making or losing money. Therefore, in the coming years, there will be a peak period for distributor digitalization. A Yanjing Beer distributor in Beijing's Tongzhou District lamented that she had already purchased and tested two or three SFA systems, spending over 100,000 yuan, but still couldn't use them effectively, which was very troubling. Nevertheless, she remains certain that if business digitalization does not succeed, her company will have no future. The New Distributor Academy trained over 4,000 FMCG distributors around 2020. In the systematic training sessions, distributor trainees all lamented the importance of systems and digitalization. Therefore, we predict that the next three years will be a peak period for distributors to proactively and spontaneously undergo digital transformation. We suggest that all relevant system service providers pay close attention to the distributor group, deeply understand their needs, and provide more professional and suitable system products for their business upgrades and transformations. Once the vast majority of distributors complete digitalization, desensitized data from various brands can be opened to brand owners via data interfaces. As long as this data is generated and can be technically shared, brand owners can obtain it through various incentive methods. Thus, manufacturers and distributors can achieve interconnection and interoperability on single-brand data, and channel digitalization will be completed. Channel digitalization with distributor digitalization as the main body is the only correct path for FMCG channel digitalization. Is FMCG channel digitalization difficult? Yes! The difficulty is not in technology, but in top-level design, and in how to make distributors actively integrate into the torrent of channel digitalization. From August 24 to 26, at the 4th FMCG Conference held in Shanghai, there will be leading digital service providers such as Yonyou, Baidu, Fenxiang Xiaoke, Yingxiaotong, and Waiqin 365, as well as numerous digital pioneer brands like Snow Beer, Jiangxiaobai, Lidu, and Coca-Cola, jointly discussing FMCG digital strategies and implementation paths, and sharing successful cases in digital practice. For all brands and distributors aspiring to marketing digitalization and channel digitalization, this digital thought feast and practical course is not to be missed.