-01- The Smallest Business Unit Modern commerce operates in three spatial dimensions: geographic space (offline), community space, and cyberspace. These three dimensions form independent business systems: traditional marketing, social e-commerce (micro-commerce), and e-commerce. For each business system, it is essential to understand the smallest and largest business units. For example, in traditional retail, the smallest unit is the convenience store (community store), and the largest units are KA (key accounts) and convenience store chains. In social e-commerce, the smallest unit is the social group, and the largest unit is IP plus multi-level social groups. In e-commerce, the smallest unit is the cloud store (e.g., mini-programs), and the largest unit is the e-commerce platform (e.g., Alibaba, JD.com). To grow, a company must understand its smallest business unit. The smallest units in the three dimensions are community, social group, and cloud store. If these are integrated, they form "community + social group + cloud store." The marketing system built around these three smallest units can be called community marketing. Community marketing is the smallest business unit of the most complex business system in the internet age; it is the cell of the business system.
-02- Community: The Smallest Unit of Traditional Commerce Where people are, there is consumption; where consumption is, there is business. Commerce forms around the gathering of people. Chinese marketing has traditionally been divided into two major segments: first, the urban market dominated by KA and convenience stores, known as the terminal market, which is a high-density population market; second, the circulation market dominated by distribution channels, which is a low-density population market. Correspondingly, marketing models are also divided into two categories: one is the marketing system based on terminal interception (sales promotion); the other is the marketing system based on deep distribution. This marketing system, classified by geographic space, requires a clear understanding of China's population aggregation patterns and numbers. For example, the following data are essential for Chinese marketers: In 2019, China's urban permanent population was 848.43 million (an increase of 17.06 million from the end of the previous year), and the rural permanent population was 551.62 million (a decrease of 12.39 million). China has approximately 300 "cities," 2,856 "counties," 41,658 "townships," and 662,238 "villages." In 2019, the total number of migrant workers reached 274 million. If we subtract some rural students, the average actual rural population per village is less than 30 people! During normal times (excluding Spring Festival and farming seasons), the urban population is as high as 1.2 billion. China's retail commerce is laid out according to communities. Convenience stores are also called community stores, located within a "5-minute walk" from residences. KA stores have a larger trade area radius, covering multiple communities. There are many definitions of community. From a commercial perspective, it is an area where a group of people resides. In China, it is often called a residential community (小区), to distinguish it from the administrative community (社区) reformed from neighborhood committees. According to relevant data, there are over 300,000 residential communities in Chinese cities. Taking Shanghai as an example: by the end of 2018, Shanghai had 15,468 residential communities, with an average area of about 0.4 square kilometers per community, and an average of 1,567 residents per community. Where there are people, there is marketing. Communities have become the most basic residential unit in urbanization, with over 1.2 billion people living in communities! Traditional deep distribution, when fully implemented, will inevitably have a route map. The route map is actually formed around communities. Therefore, the deep distribution management system is actually a grid of communities.
-03- Social Group: The Smallest Unit of Social E-commerce Early micro-commerce was the socialization of direct selling. Direct selling systems inevitably involve multiple levels. Micro-commerce is the same. As micro-commerce develops, multi-level stickiness becomes insufficient. Moreover, laws and Tencent's system do not allow too many levels. Therefore, IP + social group became the standard. Now, this type of micro-commerce is also called social e-commerce, suitable for niche products. During the COVID-19 pandemic, another business system based on social groups emerged: terminal store + social group, sometimes called community social group. Because terminal stores are often community stores, and social groups have become the basic tool for communication among acquaintances or semi-acquaintances. During the strict lockdown measures of the pandemic, community social groups became the best channel for commercial communication with residents. Inspired by this, brand owners discovered a new continent and launched "community partner" recruitment campaigns during the pandemic. If social e-commerce requires IP plus multi-level social groups to achieve commercial scale, community social groups can be commercialized even as a single social group.
-04- Cloud Store: The Smallest Unit of E-commerce The rise of Chinese e-commerce followed the path of platform e-commerce. Therefore, platform thinking and traffic thinking, which are business logics that should belong to platforms, have also "brainwashed" brand owners. Large platforms form traffic pools, and then merchants purchase traffic. This is the logic of platform e-commerce. Brand owners and retailers find it difficult to form their own e-commerce platforms. Innovative new retail is an exception, such as Hema Fresh and Luckin Coffee. During the COVID-19 pandemic, brand owners and retailers discovered another e-commerce path: building an e-commerce system around social groups. For example, Tsingtao Beer's community partner system is built around social groups. Even live streaming during the pandemic followed the social group path. Social e-commerce views social groups as a system integrating cognition, transaction, and relationship. From the perspective of brand owners and retailers, social groups can be a commercial path along the relationship system (social groups are actually social relationship systems), without necessarily being a trinity business system. Therefore, no matter the size, brand owners and retailers can build the smallest e-commerce system along social groups: the cloud store.
-05- The Path of Brand Digitization People's thinking is easily influenced by benchmarks, consciously or unconsciously aligning with them. Alibaba, JD.com, etc., are e-commerce benchmarks; Hema, Luckin, etc., are new retail benchmarks. Business thinking has its stance. Traffic thinking and platform thinking are the business thinking of e-commerce platforms and new retail platforms. So, what is the digitization of the brand owner role? If traditional marketing is B2B, then internet commerce is B2C. With this understanding, as long as the channel reaches B2C, it can be considered digitized. Digitization can be the digitization of any one of cognition, transaction, or relationship, not necessarily platform transactions. The largest stock of FMCG enterprises is in traditional channels, which is a reality. Without the digitization of this stock, the digitization of brand owners is incomplete. However, FMCG brand owners cannot completely follow the path of platform e-commerce and social e-commerce. Therefore, completing digitization on the basis of deep distribution is an inevitable choice. From community to social group, from social group path to cloud store. Thus, community → social group → cloud store becomes the internet path from B2B to B2C. We call this path BC integration. The core of BC integration is community + social group. Once this path is successful, community + social group + cloud store is an inevitable result. The three dimensions are thus connected. The marketing system built around community + social group is called community marketing.
-06- Community: The Battlefield for New Marketing and New Retail Community is the hub node from B2B to B2C. New retail platforms are competing for it. For example, the B2B platform Retail Link (零售通) now calls itself new retail, and its focus is on community stores. Another example is community group buying, also a new retail platform, whose commercial path directly uses community social groups. At least for now, there is no visible integration point between brand owners and new retail platforms. When brand owners also adopt community social groups as a path for internet transformation, it becomes crucial which side community stores choose. Which side do community stores choose? It depends on who can empower them. Whether e-commerce or new retail, the biggest benefit to merchants is not traffic (after all, traffic costs money), but the temptation of empowerment. Because empowerment means "returns exceed personal capabilities" and "break through personal capability bottlenecks." In the past, deep distribution was not about empowerment but about dividing existing stock. For example, the customer relationship in deep distribution was at the cost of redistributing existing stock. The more stock reaches its ceiling, the more empowerment is needed. Now, the path for brand owners to reach B2C has been opened through community social groups. However, only when brand owners complete B2C empowerment for B2B can the community social group channel truly open. Source: New Beer (ID: newbeer_BJ), Author: Fang Gang Tips will be paid 400-2000 yuan upon adoption.