Scan the QR code in the image to register -01- If we talk about what is hottest in the consumer goods industry in 2020-2021, it must be community group buying. However, we see that many manufacturers and distributors have different attitudes towards the surging social retail boom: **Some friends don't know how to do it and dare not easily try. They fear price chaos, losses, and that after the hype fades, they'll be left with a mess. Another group feels that the platforms are still unstable, the rules are unclear, internal management is chaotic, traffic is insufficient, and it's not cost-effective for big brands to enter too early. So we see many FMCG manufacturers and distributors are waiting and watching. It's understandable that everyone has such thoughts; it's essentially the choice that maximizes their own interests from their perspective. New Distribution has always expressed support and encouragement for manufacturers and distributors to actively try this new retail scenario. Because no matter how many problems mentioned above, one logic prevails: If you don't get on board, someone else will; if you don't do it, someone else will. We see on e-commerce platforms, a large number of small and medium brands and TP merchants have risen. In B2B, many suppliers have gained business on platforms and completed national channel layout. Douyin short videos are even more so; many broadcasters have rapidly accumulated capital with the help of short videos. Whenever a new traffic dividend appears, some people hesitate, while others see the opportunity, enter quickly, and leverage the low traffic costs and co-created rules of the platform's early stage to overtake on curves in this channel. Walking with the times is not a choice everyone has the courage to make, but I believe it is a must for those who actively embrace and dare to stand at the forefront of the wave. -02- The heat of community group buying is superficially driven by capital, but at a deeper level, after Tencent brought 1.4 billion people onto WeChat, people spend a lot of time on this platform for life, entertainment, socializing, and work. WeChat has become a super relationship collaboration network unprecedented in human history, and its efficiency and value cannot be measured by money. In a previous article, I mentioned that there are currently three types of retail: pyramid, star, and topology. Community group buying is topology retail, the first retail model to explode in the social network era. The pyramid model relies on product drive; the star model relies on central traffic distribution; and the topology network model relies on people. Essentially, these are three completely different retail logics. However, from a traffic perspective, these three types are like a big river called "traffic." Someone built a dam for offline retail, e-commerce opened another dam upstream, and short videos, live streaming, and community group buying are dams even further upstream on this river called traffic. The first pyramid model is where goods move while people don't; the second star model is where people move while goods don't. But with the third traffic model, traffic has been pre-intercepted at the early social interaction stage. In the future, no model can further pre-intercept traffic. Social traffic is the source of all traffic, which is why all giants are rushing into community group buying at any cost. Yesterday, I heard that Alibaba Retail Link will definitely re-enter the community group buying field. Why would they insist on entering despite such public pressure? The core issue is that community group buying can serve both B2B and B2C, both wholesale and retail, both pre-intercept and real-time transactions. This essentially cuts off the future of Alibaba's platform traffic, so even if this business is at the doorstep of rival Tencent, Alibaba will squeeze in. JD.com's all-out effort in community group buying is largely for the same reason. Pinduoduo started with social traffic; it needs growth and fears being outflanked, so it cannot abandon its founding foundation. Similarly, Meituan's entry into community group buying is because it's a life-and-death battle for Meituan. Community group buying can not only group-buy fresh produce and vegetables but also movie tickets, restaurant vouchers, and hotel discount coupons. From a traffic perspective, it also cuts off Meituan's retreat. If Meituan doesn't do it, Xingsheng Youxuan will break Meituan community by community, and Meituan's valuation logic of hundreds of billions will no longer exist. -03- Why does New Distribution encourage distributors to actively try and explore this business? On the surface, it's a money-making opportunity. Essentially, it's a topic that distributors must address as offline channels and social retail gradually merge. In the past, you just needed to distribute goods to small shops; now you also need to distribute to platforms. In the past, you just needed to write price tags; now you also need to offer special prices and promotions. In the past, you just needed to find a good shelf position; now you also need to secure good positions on platforms. If you don't do these, others will, and they'll take away your offline traffic. This is the most uncomfortable part; distributors must learn to do business in integrated channels. This is not just a business; it's a topic! Many distributors privately ask New Distribution: I know this is important, but on one hand, I don't have resources in community group buying; on the other, I lack experience and talent; and third, I operate in a region with small volume, and after calculating round-trip freight, I lose money. Since I'm in physical business, such a business isn't worth doing! For example: Platforms use a retail procurement model; they don't keep inventory. On the surface, costs are low, but these costs don't disappear; they're transferred to suppliers. If goods aren't sold that day, they're all taken back; if sold out, they require rapid replenishment in a very short time. This places extremely high demands on distributors' operations. But to meet these demands, distributors end up losing money in various ways. Doing it once or twice is okay, but over time, who can bear such losses? It's understandable that distributors express such sentiments. Indeed, community group buying platforms have many problems in terms of rules, models, and current price demands, which are objective and hard to change in the short term. But I think we can look at this from another angle. On a macro level, I believe distributors fail for the following reasons: 1. The categories they represent are low-margin, with few SKUs and high-volume big items, making prices easily broken and lacking price elasticity. 2. Their represented regions are limited, making it hard to supply and deliver across regions, and they cannot meet the platform's rigid logistics demands in real time. 3. They still operate with a supply mindset rather than co-creating games and plays with the platform and providing targeted, constructive suggestions. 4. Their existing business models, performance, and assessment systems are not suitable. But these problems are not unsolvable. From a macro perspective, if distributors are truly determined to do this channel, I think several things should be prepared in advance: 1. Try to change the represented area. Some pure distributors who don't do wholesale can expand their scope and supply some categories to wholesalers capable of supplying. 2. Try to change the business scope. In the past, they operated standard products with low margins and high sales; based on new retail channels, consider operating seasonal, timely, and occasion-specific categories. 3. Try to change the logistics delivery model by outsourcing, using third-party operations, internal third-party conversion, or third-party logistics distribution to solve logistics issues. 4. Some small-scale distributors who also do wholesale can consider cooperating with national TP merchants to undertake local logistics distribution and earn pure logistics fees. 5. Specialize, functionalize, create your own brand, and supply one product to national community group buying channels. Having said so much, from the perspective of distributors' own operations, they still need to adjust and adapt purposefully according to channel characteristics. The prerequisite for doing so is that it must be a strategic-level decision from the distributor's own business perspective. But no matter how complex, how many problems or opportunities, don't blindly follow, don't be conservative, keep curiosity, understand, learn, discuss and exchange, find a way to start, and it's not too late. From April 1-3, during the Spring Sugar Fair, New Distribution, in response to the emergence of many innovative channels and the situation where many manufacturers and distributors lack resources and methods, and many platforms lack products, specially organized a channel innovation conference themed "Opportunity" to help manufacturers and distributors understand these platforms and hope to bring some cooperation opportunities. Interested friends, don't miss it. Here are the details: