---
title: "Deep Distribution Has No Substitute; Internet-Enhanced Deep Distribution Is the Inevitable Path"
description: "The US has over 10 million salespeople, while China has over 80 million sales reps. Salespeople target C-end, while sales reps target B-end. What are these sales reps doing? They are deeply cultivating fragmented channels. This is a last resort, as deep distribution has no substitute. However, indiscriminate visits and inefficient human-wave tactics can be abandoned. The internet makes precision distribution possible."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-05-30"
language: "en"
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---

# Deep Distribution Has No Substitute; Internet-Enhanced Deep Distribution Is the Inevitable Path

> The US has over 10 million salespeople, while China has over 80 million sales reps. Salespeople target C-end, while sales reps target B-end. What are these sales reps doing? They are deeply cultivating fragmented channels. This is a last resort, as deep distribution has no substitute. However, indiscriminate visits and inefficient human-wave tactics can be abandoned. The internet makes precision distribution possible.

The US has over 10 million salespeople, while China has over 80 million sales reps. Salespeople target C-end, while sales reps target B-end. What are these sales reps doing? They are deeply cultivating fragmented channels. This is a last resort, as deep distribution has no substitute. However, indiscriminate visits and inefficient human-wave tactics can be abandoned. The internet makes precision distribution possible.

**-01-
Deep Distribution Has No Substitute**
During China's urbanization, two independent commercial systems emerged. One is the modern large supermarket system in cities; the other is the vast rural areas, lower-tier cities, and small stores in urban gaps. Correspondingly, Chinese marketing has formed two major systems: one is terminal sales for large supermarkets, and the other is deep distribution for small and medium-sized stores.

**Deep distribution, known as the "best Chinese marketing practice" of the past 20 years, solves the supply chain problem of about 6 million stores in China.** The supply chain problem manifests in two ways: first, China's distributor landscape is "county-based," with distributors generally small in scale; second, stores are highly fragmented.

The essence of deep distribution is to reach terminals and achieve high coverage through the integration of manufacturers and distributors, leveraging the manufacturer's organizational strength and the distributor's customer relationships and delivery capabilities.

**The business ecosystem of large supermarkets plus small stores cannot change in the short term.** Therefore, regardless of the problems with deep distribution, it cannot be abandoned but must evolve. There are two major directions for evolution: one is combining channels with the internet to form efficient deep distribution; the other is reaching C-end directly from terminals through communities, live streaming, cloud stores, etc., forming BC integration.

**-02-
Human-Wave Tactics Are Unsustainable**
**China's channels are essentially human chains. Without customer relationships, nothing can be discussed.** In deep distribution, customer relationships are built before distribution. This is a characteristic of Chinese business: customer relationships deepen connections, connections lower cognitive barriers, and cognition forms transactions.

This characteristic, combined with highly fragmented terminals, forms the basic feature of deep distribution: **human-wave tactics**.

Indeed, high-frequency, high-density visits consume enormous human resources. Therefore, human-wave tactics and hard work have become basic features. In the early days, we summarized this as the "Four Thousand and Four Ten Thousand" spirit: traverse thousands of mountains and rivers, enter thousands of households, think of thousands of ways, and speak thousands of words.

Human-wave tactics were effective in an era of incremental growth, ample labor supply, and relatively simple personnel management. However, the foundational conditions of incremental space, low labor costs, and easy labor management no longer exist.

Since deep distribution currently has no substitute, and the human-wave tactics of deep distribution are unsustainable, **where is deep distribution headed?**

**-03-
Seeing New Dawn from the "Four-in-One" Model**
In recent years, when the overall industry atmosphere was poor, **Jinmailang has consistently shown rapid growth.** The secret to Jinmailang's counter-trend growth is the "Four-in-One" model of "people, vehicles, areas, and terminal devices" started in 2011.

The "Four-in-One" model has two highlights: first, it activates "small workers" by combining "people, vehicles, and areas," turning "small workers" into profit units, similar to a "contract system," mobilizing their enthusiasm so they work for themselves rather than for the boss; second, it improves distribution efficiency through the dataization brought by "terminal devices."

**The terminal device is Jinmailang's internet-enabled efficient deep distribution system.** It can even be said that because of the terminal device, activating "small workers" more easily brings incremental growth.

**What is the value of Jinmailang's terminal device?** It can be summarized in one sentence: visualization of deep distribution. In summary: 1. Dataize channel and terminal scenarios; 2. Visualize outlets; 3. Make expense management transparent; 4. Make communication management real-time and interactive; 5. Make distributor management mobile and inventory management integrated.

In the "Four-in-One" model, the terminal device is a platform, and "small workers" are profit units. Isn't this the "platform + unit combination" model of the internet era?

"Small workers" becoming unit organizations solves the problem of their willingness to work. The empowerment platform formed by terminal devices solves the problem of their ability to work well. The combination of the two is nearly perfect.

**It is the internet platform that empowers individuals, re-activating deep distribution.**

**-04-
The Internet Is the "Clairvoyance" of Deep Distribution**
**I spend a lot of time visiting terminals every year, and I feel there are still many opportunities at the terminals.** Jinmailang's counter-trend growth despite the industry ceiling is evidence that opportunities still exist at the terminals.

In the early days, deep distribution was a strategic opportunity; as long as you did deep distribution, you seized the opportunity. Now, you can only discover tactical opportunities during the process of deep distribution.

In the era of incremental deep distribution, following the norms of deep distribution could capture incremental opportunities. **In the era of stock deep distribution, only by squeezing competitors can you seize opportunities.**

Opportunities lie at organizational boundaries, at terminals, and on the front lines. However, opportunity-oriented thinking is not something frontline personnel can generally achieve. This is a structural contradiction: top management can discover opportunities, but they are not on the front lines; frontline staff are on the front lines, but they lack opportunity thinking.

How does Jinmailang solve this problem? **Jinmailang's "Four-in-One," the value of the terminal device, I summarize as "visualization"** , which many may not understand. Although top management cannot be on the front lines long-term, through the terminal device they ultimately achieve "visualization" of the channel, placing elements of deep distribution such as channels, terminals, and personnel in a "visible" environment, equivalent to top management being able to visit the front lines daily.

Frontline personnel use terminal devices to "visualize" the front-line environment. **Top management uses "visualized" data and images to discover terminal opportunities and then guide frontline personnel in their work.**

**-05-
Breaking Human-Wave Tactics with "Precision"**
Early deep distribution was hard and tiring work, involving **indiscriminate visits** , commonly known as "blind visits." This indiscriminate routine visiting, with high frequency and density, required a large workforce. Whether there was business or not, one had to "walk through" the terminal. Some companies eventually formed "routine formalities."

Let me share a case of precision deep distribution.

In 2001, I conducted research at a county-level baijiu distributor in Jiangsu. The boss initially went to the market to deliver goods himself, with all data stored in his head. As the scale expanded, sales reps delivered goods to the countryside. But sales reps certainly lacked the boss's customer management ability, so he posted several tables in the warehouse. Every day when sales reps returned from deliveries, they had to fill in the daily customer delivery situation on the large tables in the warehouse. The horizontal axis was time, the vertical axis was terminal customers, and the tables recorded delivery volume and variety.

The boss told me that every few days he would stand in front of the large tables and look. Through continuous delivery data, he could roughly judge each store's restocking cycle and quantity. If a store that should have restocked didn't, it indicated a possible problem; if a store restocked when it shouldn't have, that also indicated a possible problem.

**Indiscriminate visits: whether there is business or not, walk through. Precision visits: go if there is business, skip if there is none.**

So, what is "business" and what is "no business"? Normal is no business, abnormal is business. That is, meeting expectations is normal, not meeting expectations is abnormal.

Precision visits solve problems at "abnormal" stores. For normal stores, visit frequency can be reduced.

In early deep distribution, sales reps discovered on-site problems such as normal or abnormal conditions during visits, and all problems could be solved on the spot. But such visits required high frequency. At the same time, many visits were problem-free, wasting time and being inefficient. Or, sales reps could only discover low-level problems, and many problems were difficult to detect with their abilities.

Precision visits are different. First, based on information provided by data and images, professionals identify problems and patterns. Then they guide sales reps to make precise visits. Before the visit, the problem and solution are already planned. Therefore, precision visits are like "precision blasting," precisely solving problems.

Of course, not all problems can be discovered through data and images, so indiscriminate visits are still needed, but with much lower frequency.

**Precision solves the inefficiency of deep distribution's human-wave tactics.**

**-06-
Data Enables Precision**
The earlier case of a distributor using data to judge whether stores were normal gave me great inspiration: 1. Continuous data can reveal patterns; 2. Inconsistency with patterns may indicate abnormality; 3. Finding the cause of abnormality leads to solutions.

Since 2010, SaaS systems have been widely used in China. Since 2014, B2B has been vigorously promoted in China, driving the dataization of Chinese brand owners. Now, the combination of AI and B2B brings real-time channel data.

**The greatest value of data is discovering patterns, and discovering patterns allows predicting the future.** For example, comparing sales data with images can reveal that a terminal's sales increased or decreased due to changes in display position. Finding the best display position and adjusting the display could increase sales.

Data includes longitudinal and horizontal data, each with its own value. Longitudinal data compares oneself with oneself, while horizontal data compares oneself with competitors or related products. For example, by discovering changes in competitors' (or related products') sales at the same terminal, one can identify one's own problems.

In the past, obtaining horizontal data was difficult. However, AI technology applied to channels can quickly capture and recognize data on one's own products and competitors at terminals through photos, including display area changes and sales changes. Because AI already has the ability to quickly identify brands, calculate display areas, and infer sales from them, it only requires an appropriate data capture cycle.

**If the main value of longitudinal data is to prevent good terminals from deteriorating, horizontal data can discover potentially good terminals.**

Whether horizontal or longitudinal data, as long as one has data awareness, it can be applied to almost all aspects. For example, all manufacturers are currently upgrading their product structures. Which stores have strong ability to promote new products, and which stores can promote products at what price points—these can all be answered from data.

**The value of channel data in marketing is twofold: one is labeling; the other is prediction.**

For example, if a store has strong ability to promote high-end new products, that is labeling. Labeling facilitates precise work.

For example, through data prediction, one can know when a store should restock and how much, and if it doesn't match, there is a problem. After finding the problem, precise work can be carried out.

For example, whether market expenses are more effective in good markets or poor markets is often based on intuition. If data can support it, one can act with a clear goal.

**Precise work improves efficiency. Deep distribution is human-wave tactics; without efficiency improvement, it is hard to sustain.**

**-07-
Precision Deep Distribution Requires a "Back Office"**
For a long time, sales reps have basically operated as "lone wolves," relying only on personal ability in daily business, aside from platform support such as brand and expense support.

Current SaaS systems are very powerful. The use of SaaS can be divided into three levels: first, attendance systems that record sales reps' itineraries; second, order systems for online orders; third, using data to empower sales reps.

The term "empowerment" is not favored by traditional marketers. In fact, traditional marketing also has empowerment. A person's performance comes from two abilities: one is the sales rep's personal ability. Because personal abilities differ, individual performance varies. The second is empowerment from the organization (platform). For example, corporate training, management, standardization, and models can enable "ordinary people to achieve extraordinary results."

**"Making ordinary people successful" is organizational empowerment.** Excellent companies are excellent not because they have many talents, but because they enable ordinary people to achieve extraordinary results—this is the result of organizational empowerment.

SaaS has been widely used in China, but why is only Jinmailang relatively successful? **Data itself has no value; it is management based on data that creates value.**

Who analyzes and uses this data? Most ordinary frontline sales reps cannot do it. Therefore, there is a need for **professionals in the data "back office" or "middle office" to analyze data and use it to guide sales reps in "precision marketing." This is data empowerment.**

Source: Teacher Liu's New Marketing (ID: liuchunxiong1964) Author: Liu Chunxiong


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