From March 17 to 19, the 10th China FMCG Innovation Conference, along with the 4th China FMCG Hard Discount Conference and the 4th China FMCG Distributor Conference, grandly opened in Chengdu under the theme 'New Order, Symbiosis'.
Mr. Chen Cheng, General Manager of 1919's Data Marketing Division and also General Manager of its Instant Retail and Traditional E-commerce divisions, delivered a keynote speech titled 'Channel Evolution: 1919's Exploration of Instant Retail and Scenario Innovation'. The following is an edited excerpt of his speech, compiled by New Distribution for our readers.
As a long-established Chengdu enterprise, 1919 has deep roots in instant retail. Even in the early days before the internet became widespread, 1919 pioneered a prototype of instant retail—taking orders by phone and leveraging its local offline store network, with its own employees serving as couriers for home delivery. This forward-looking approach stemmed from our profound insight into the immediate consumption needs of alcoholic beverages.
Our chairman once shared a story: some restaurants in Chengdu would turn away delivery personnel wearing 1919 uniforms. This was because restaurants enjoy high profit margins on alcohol, and 1919's low-price strategy made customers more inclined to order from us rather than consume at the restaurant.
To continuously deepen our learning and understanding of instant retail, 1919 has always actively participated in industry forums, including last year's and this year's New Distribution conferences. Last year, we identified the incremental market of instant retail. Based on this trend, we launched 1919 Quick Drink, a cloud chain brand under 1919 for instant retail of alcoholic beverages. Its core positioning is 'fast': first, the speed of fulfillment for consumers; second, leveraging 1919's existing 5,000 stores to lay out a network of front warehouses; third, aiming for rapid business growth in the context of the fast-evolving internet.
After a year of practical exploration, especially the Quick Drink concept proposed at last year's New Distribution conference, we are now seeing initial results. Today, I'd like to take this opportunity to share with you the changes we've observed in instant retail during the rapid development of Quick Drink, as well as areas where we believe instant retail should be strengthened and explored in the future.
When we built '1919 Quick Drink' last year, we defined its core competitiveness as 'fast'—and the essence of this 'fast' lies in digital empowerment. This year, we continue to regard digitalization as the core of 1919's development in the entire instant retail traffic sector.
After a year of practice, we have observed many industry changes. Particularly among Quick Drink's 5,000 stores, through communication and feedback, we've noticed some noteworthy industry phenomena: famous liquor sales have become highly competitive, making it hard for stores to profit; some Quick Drink store owners, to save costs, are reluctant to hire employees and work 18 hours a day, handling both online and offline operations themselves. After DeepSeek became popular this year, they even proactively suggested introducing AI technology to improve operational efficiency.
Looking back at Quick Drink's development over the past year, our understanding of instant retail has evolved through four stages: from nonexistence to existence; once it exists, wanting more; once there is more, instant retail becomes a user habit; and then better serving and satisfying users—this is the shift from goods to people.
After a year of rapid development, we have successfully expanded to 400 regional agents nationwide, and our 5,000 stores are rapidly expanding toward the goal of 10,000. In the instant retail sector, traffic is no longer a problem; market awareness is well established.
The next consideration is: how to convert 'traffic' into 'retention'? How to shift from 'birds of a feather flock together' to 'people of a kind gather together' for more refined operations? This is our key focus direction in the instant retail sector this year.
Our core effort for 1919 Quick Drink lies in providing digital upgrade solutions. Within the company, Quick Drink is positioned as instant retail, while also serving as a crucial traffic entry point for the entire group. Through the Quick Drink platform, we aggregate traffic and channel it into the group system for deep operation and conversion. Next, I'll briefly explain this operational conversion model.
Let me also introduce the group company 1919. Currently, as a long-established enterprise deeply rooted in the alcohol industry for over 18 years, 1919 has a total of 5,000 stores of various types nationwide, covering 1,000 cities. Its online platform has accumulated 20 million active members, with annual transaction value exceeding 10 billion yuan. These are the achievements 1919 has made in the alcohol industry over 18 years of development.
1919 Quick Drink is positioned as a traffic entry point. Therefore, we have reformed and upgraded: we no longer compete with existing stores or try to outdo neighboring stores through heavy assets. Instead, we unite all society's tobacco and liquor stores, leveraging brand power and digital capabilities to share traffic together. So 1919 Quick Drink focuses more on providing solutions for storefront rebranding.
Over the past year, we have been building traffic everywhere, covering all major online instant retail traffic platforms. From shelves to content, we persist in building. Content live-streaming rooms, private domain mini-programs—all channels that can obtain traffic are being tapped into relentlessly.
This year, we have also observed some phenomena.
First, the instant retail industry is undergoing a transformation from extensive growth to refined operations.
In the early days, everyone obtained traffic by listing all products. Now, the focus has shifted to pursuing 24-hour uninterrupted service capabilities—can we take orders even while sleeping? Can couriers pick up goods from the store after work? For instant retail and user fulfillment capabilities, the trend is definitely 24/7 operation. In this competitive environment, we compete on effort.
Second, the user base of instant retail is showing a clear trend toward younger demographics.
For a long-established enterprise like 1919, we sell more baijiu (white liquor) categories. However, we found that, first, the consumer base for baijiu is getting younger; second, when baijiu users order through 1919, they also tend to choose beer. Based on this insight, we have begun to pay more attention to young users, creating value for them through the emotional value of 'relaxing with a drink', the product selection of 'rich and trendy', and the service value of 'reachable late at night', building a three-in-one user experience system. This is a key direction for us to seek breakthroughs in the future.
Third, we summarize the store formats of 1919 Quick Drink's rebranded stores, mainly in five directions.
One is city selection. The core of instant retail is speed, but after a year of reviewing fulfillment, we found that in cities above third-tier, instant retail requires extreme speed, while in some cities below third-tier, the focus is not on speed but on delivery—for example, slower delivery, like within an hour, or if you order at 12 o'clock, delivery by 5 o'clock is fine. In cities below third-tier, the pace is slower, and the core demand is fulfillment and delivery. Therefore, different city selections lead to different operational strategies.
Second is the location of tobacco and liquor stores. Location selection mainly depends on the surrounding 5-kilometer area.
Third is the product assortment. With goods, you attract people.
Fourth is diversified customer acquisition. Our store owners have endless creative methods; some use their private domain to attract traffic, while others distribute flyers in busy streets for ground promotion. Including the last point, marketing forms are diverse.
So we also see a batch of new Quick Drink stores. Some rebranded or newly opened stores are in office buildings, some in basements, not just on street corners. These are the insights we've gained from the five types of Quick Drink store formats.
We have concluded that instant retail channels may be more suitable for fast-moving products and famous liquor development brands, while the incubation of private labels and their effects have not been as high as we anticipated. Of course, we will continue to invest in private labels and hope for breakthrough progress this year.
The high-speed operation of 1919 Quick Drink is first attributed to our commitment to keeping ourselves 'light'. Over 18 years of deep industry involvement, we have accumulated 20 million loyal users and strong brand value. This allows us to adopt an open and cooperative stance, outsourcing supply chain and regional refined operations to partners.
For example, as I mentioned earlier, tobacco and liquor stores on a street or in an entire region can become our partners rather than competitors. We quickly rebrand their storefronts, and we cooperate and unite.
Second, through years of continuous deep cultivation in the industry, we have a clear view of the product assortment. Famous liquors mainly serve the function of attracting traffic, while private label products are what ultimately enable everyone to profit and survive. This differentiated product positioning not only meets diverse consumer needs but also ensures sustainable business development.
Furthermore, there is the positioning of delivery fulfillment. We are committed to building 'Jiu Mama' into a B2B market, similar to closed procurement platforms like Ling Shou Tong. Today, if you become a 1919 store owner and join the 1919 ecosystem, you can purchase goods from 'Jiu Mama'. In 'Jiu Mama', through closed operations, we ensure the circulation efficiency and product authenticity of all alcoholic beverages, providing guarantees for franchise stores.
Finally, we believe that the value of instant retail lies more in traffic acquisition. After bringing in massive traffic, we need to think about how to catch and retain it.
In the current context of economic downturn, intense competition among famous liquors, and consumption involution, we conclude that simply doing instant retail is difficult to bring real benefits to everyone. When we define instant retail as a traffic entry point, forming a 'sky net' to continuously acquire traffic, converting traffic into retention, and through users and our own 'ground net', achieving final repurchase and conversion—this is the key path to maximizing traffic value.