China is a super-large-scale market, and deep distribution has been the most effective channel solution in the Chinese FMCG industry over the past 30 years, without exception. Its internal logic is: large-scale factory production, wide-area communication through mass media, and finally large-scale distribution through deep distribution, with manufacturers and distributors joining forces to expand production and sales scale and share economies of scale. This is the most efficient sales system under the manufacturer-distributor combination. The purpose of deep distribution: to enable goods to reach consumers on a larger scale, with higher density, and more effectively. The core of deep distribution is 'sell-through', and its essence is the effective 'conversion' of shelf traffic, with the transaction logic being to achieve consumers' random and impulsive consumption through effective reach. In his previous articles, Mr. Liu Chunxiong clearly expressed the two cores of deep distribution: one is distribution, and the other is sell-through. The first category is distribution, which involves establishing good relationships with customers, including agents, secondary wholesalers, and retail terminals, to achieve product placement in stores. The second category is sell-through, which includes shelf management, replenishment, merchandising, promotional activities, and all other actions centered around consumers 'buying' the product. -01- But today, the market is facing some problems: 1. Most categories have shifted from incremental markets to stock markets, including e-commerce traffic, which means all enterprise growth is squeeze-type growth; your growth is based on squeezing competitors' market share, so competition will be extremely fierce. 2. The internet brings users the ability to compare prices across the entire network and consume across all scenarios, leading to a large number of random online transactions. 3. The large-scale communication in the HBG model has become ineffective, resulting in the inability to provide high-density, comprehensive education and influence to users, directly weakening brands' ability to launch new products through deep distribution. Based on this, the distribution problem for brand owners is built on how to better reach consumers and achieve rapid transactions in the digital era. In the digital era, both 4A agencies and e-commerce are promoting a term: 'brand effect and sales effect integration', which follows the same logic as deep distribution: improving traffic conversion rates through effective operations. But the typical characteristics of FMCG are: high frequency, low value, unconscious consumption during the process, no brand loyalty, relatively high time cost for consumers, and the need to buy immediately. Therefore, regardless of the era, high-density channel coverage and high-quality terminal display remain one of the mandatory actions for all FMCG brands. Online e-commerce penetration is essentially insufficient, especially for FMCG. If we do not emphasize ultra-large-scale coverage and effectively cover China's 6.8 million retail small stores, it still won't work. So although deep distribution is inefficient (in terms of rate), it is still effective (in terms of results). This is also why major brands continue to use it despite knowing its efficiency is insufficient. -02- However, in recent years, with the significant increase in corporate labor costs, the massive ground forces and inefficient management methods of the past have led to increasingly poor ROI data, even losses. This forces brand owners to be extremely cautious about adding personnel when considering growth. But you have to add personnel to ensure effective coverage of terminal ground, which places high demands on per-capita output. Refer to the structure and investment of the army's ground forces: In modern warfare, although the US military uses high-tech weapons such as missiles and aircraft to strike enemies, once a full-scale war breaks out, it inevitably involves large-scale deployment of ground forces. The composition of the US military's ground forces is highly targeted. The US Army has mechanized infantry divisions, armored divisions, airborne divisions, light infantry divisions, and air assault divisions, which can be combined and deployed in a targeted manner according to different war situations. In terms of individual soldier investment, China spends about $1,500 per soldier, basically a rifle, a helmet, and a pair of boots. The US spends $18,000 per soldier, almost armed to the teeth. This investment ensures that US soldiers have strong combat capability in battle and also fully guarantees their life safety. Returning to the enterprise itself, as food and beverage companies, with labor costs increasing in the future, per-capita output is definitely a topic that every enterprise manager cannot avoid. In addition to adjusting the model and handing the market to distributors, in terminal services, whether it is brand owner business or distributor business, improving efficiency is definitely an unavoidable prerequisite. -03- Salespeople must not only perform traditional functions but also upgrade their functions: scene creation, user experience, fan operation, with the typical feature being the extension from pure B-end work to integrated B2C operations. I agree with Mr. Liu's description of 'function upgrade', but when it comes to local markets, I believe it should be more like the US military's combat forces, with multi-branch, multi-function mixed operations, conducting localized marketing warfare based on actual market conditions. Comprehensively analyzing, I believe that the future new deep distribution will have the following characteristics from the perspective of individual business operations:

  1. Business operations will emphasize the addition of new multi-branch mixed operations, even special forces small-scale operations, in terms of force composition;
  2. Traditional ground business will need to enhance its operational capabilities through the integration of various high-tech technologies;
  3. The enterprise's sales logic will shift from management to empowerment, letting those who hear the gunfire make decisions;
  4. The sales process will change from the traditional single-week visit dot-matrix mode to 24/7, all-scenario, all-traffic reach and conversion;
  5. Shift from B2B sales management to B2B2C marketing services;
  6. Technology-driven ABCD (artificial intelligence, big data, blockchain, cloud computing) middle-platform support. In summary: Traditional business must not only be done, but also be done well with new technologies. At the same time, systematically extend in terms of scenes, three-dimensional space, and time.