Introduction: The Russia-Ukraine war is in full swing. In today's globalized and information-driven world, it was destined from the start to be not just a competition of military might between Russia and Ukraine, but a full-spectrum contest spanning culture, economy, and information technology. Recently, news that global internet and software giants like Oracle and SAP have successively withdrawn from the Russian market has flooded social media. As one of the world's largest providers of database and business process software services, Oracle and SAP once held a combined global market share exceeding 50%. As infrastructure of the information age, the importance of Oracle, SAP, Apple, and other internet giants to business development cannot be overstated. It is no exaggeration to say that daily, over 50% of global enterprises rely on these software giants for data storage and business management. The impact of their exit from the Russian market on businesses is unimaginable. In today's intensifying trend of de-globalization, this serves as a wake-up call for Chinese enterprises: If such a scenario were to occur with Chinese consumer goods companies, could domestic enterprises walk away unscathed? In an era where digitalization has become a consensus among domestic brands and even all distributors, how should brands and distributors ensure their data security and business security?

When Digitalization Becomes New Infrastructure In communications with many brands and distributors, the common feedback in recent years is that business is getting harder, with a continuous "winter." Especially with the recurring pandemic in recent years, the offline physical retail industry has faced unprecedented shocks, and brands and distributors have not been spared, anxious about increasingly weak market growth. As a result, many enterprises have cut business, reduced marketing budgets, or even announced layoffs. At the same time, various new e-commerce and new retail formats have emerged. FMCG enterprises with keen business acumen have proactively observed changes in the face of new market dynamics, actively participated, seized channel dividends, achieved curve-overtaking, and effectively hedged business risks from intensified market competition. However, more enterprises have remained indifferent to new formats, turning a blind eye to changes in consumers and markets, missing market opportunities time and again, and ultimately showing decline in fierce market competition. In 2016, FMCG B2B developed rapidly. Some brands and distributors achieved channel下沉 and business digitalization through cooperation with B2B platforms. In 2017, unmanned retail emerged, and a well-known domestic FMCG enterprise used unmanned vending machines to achieve seamless coverage of all product lines and business scenarios. In 2018, community group buying entered the public eye and eventually exploded under the catalyst of the pandemic. A certain daily chemical enterprise, through cooperation with community group buying platforms, penetrated its sales network into vast fourth- and fifth-tier markets, doubling sales performance... Admittedly, various new formats, catalyzed by capital, have erupted with various problems. But at the same time, we also see that some brands and distributors actively embrace change amid the tide of new formats, continuously lead market innovation, and ultimately achieve digitalization of their management models, channel models, and marketing models.

Three Ways FMCG Enterprises Achieve Digitalization It is undeniable that the degree of digitalization among domestic consumer goods enterprises varies greatly, with significant gaps between enterprises of different sizes and even among those of the same size. However, looking at industry development, combining the initiation methods and application scenarios of digitalization, the current ways FMCG enterprises digitalize mainly include the following:

1. Top-down type: Brands initiate and drive the application and implementation of digitalization from the top down. This type of digital upgrade mainly focuses on business areas such as finance, channels, and marketing expense management. On one hand, it enables online ordering among stores, distributors, and brands, shortening order processes and reducing communication costs. On the other hand, it visualizes channel marketing expenses, avoiding waste of some market funds. Examples include Haitian's Xiaokang Maimal, Coca-Cola's Coke GO, and Uni-President's Uni e-Mall. The advantage of this model is that brands lead the digitalization process, gaining access to channel financial, transaction, product, and inventory data, while reducing the difficulty for distributors to digitalize. The information tools align well with business operations, and distributors can follow the brand's guidance step by step. The disadvantage is that it is difficult to adapt to distributors operating multiple brands (especially large and medium-sized brands in the industry), as these brands often have their own information systems. If multi-brand distributors do not assign dedicated personnel per brand, running multiple brand information systems in parallel can lead to resource waste and employee resistance in practice.

2. Distributor-initiated type: Distributors independently initiate information upgrades and transformations, often cooperating with third-party software service providers. In recent years, with the rise of the new retail wave, most distributors have been more or less affected and impacted by e-commerce. At the same time, in competition with new retail formats, the drawbacks of traditional distributor business models have gradually emerged. In this context, many distributors have begun to proactively seek change, using new information tools to transform traditional businesses and actively integrate into new formats. This type of distributor digitalization mainly focuses on channel management, sales field management, store management, and warehouse management. Typical examples include Dunjie in Shijiazhuang, Hebei; Rongcheng Yigou in Chengdu, Sichuan; Jiecang Wanggou in Chongqing; Yijia Supply Chain in Yunnan; Huashang Chengpei in Jiangsu; and Youdehuo in Fujian. From another dimension, these enterprises are no longer traditional distributors but have upgraded through digitalization into emerging supply chain organizations or platform-based enterprises. They have broken through the boundaries of single-brand and single-category operations in category management and operations, and through digital and standardized tool transformation, they have also gained the potential for external replication and expansion. The advantage of this model is that distributors hold the initiative in digitalization. They can proactively manage their own business using digital tools according to the category characteristics, channel characteristics, and management characteristics of the products they represent, while keeping data in their own hands, truly achieving upgrades in business, organizational form, and business model. However, this digitalization approach also severely tests distributors' cognitive abilities, acceptance of digitalization, and courage and determination for transformation.

3. Outside-in type: Cooperating with new retail formats to "borrow strength to build a boat." In recent years, new retail formats have emerged endlessly. Whether B2B, unmanned retail, community group buying, unified warehousing and distribution, or O2O and home-delivery e-commerce, all require product support, which means cooperation with distributors is inevitable. In this context, many distributors have begun to try cooperating with e-commerce platforms. In addition to supplying products, some distributors have become warehousing and distribution service providers for e-commerce platforms (some platforms call it cloud warehousing or grid warehousing), continuously building warehousing, order, and financial systems suitable for their own development during cooperation. For distributors, this way of achieving digitalization has the lowest cost, so to speak, "borrowing strength to build a boat," by filling gaps in their capabilities through cooperation with platforms. However, due to the limitations of business cooperation between distributors and platforms, cooperation often focuses on warehousing, logistics, and distribution, which has certain limitations and makes it difficult to achieve digitalization upgrades of the entire business process.

How Can FMCG Enterprises Ensure Their Digital Security? Since digitalization has become a consensus among all enterprises, most brands and distributors have more or less come into contact with new retail formats and have personally felt the changes digitalization brings to enterprise management, marketing, channels, warehousing, and distribution. Some brands and distributors have even become practitioners of digitalization and begun to enjoy the huge dividends it brings. With increasing external uncertainties, how can we reduce the impact of black rhino events on our business? From a higher perspective, with the lesson of the Russia-Ukraine conflict, how should Chinese FMCG enterprises ensure their business security?

1. "Learn from others' strengths," and cultivate digital business capabilities. Many people have heard a story: Two farmers were chatting about the emperor's daily life and work. One farmer said, "The emperor must eat meat-filled dumplings every day." The other added, "That goes without saying. When he goes up the mountain to chop wood, he uses a golden axe!" It seems like a joke, but it actually reflects the differences in vision, cognition, and perspective caused by limitations in identity, occupation, and knowledge. Returning to the digitalization of FMCG enterprises, many distributors often think that digitalization is merely installing a set of tool software. Having software means digitalization; otherwise, it is not. They ignore the role of digitalization in promoting business. Digitalization essentially uses new technologies to establish a new, vibrant, and innovative business model centered on digital technology, aiming to increase revenue and reduce expenditure, reduce costs and increase efficiency, control risks, and enhance reputation, thereby fundamentally improving enterprise competitiveness. It is worth noting that digital transformation is often accompanied by business transformation, which inevitably reconstructs previous work and management methods. This requires brands and distributors to force the construction of digital capabilities by introducing professional managers, external third-party institutions, or cooperating with other new retail e-commerce, thereby enhancing business digital cognition and capabilities.

2. "Repair the roof on sunny days," and develop your own spare tire plan. From the Huawei incident to the Russia-Ukraine conflict, and the successive bans on certain domestic enterprises, it has been proven that only by mastering core technologies in key areas can one avoid being strangled at critical moments. For FMCG enterprises, the possibility of a "strangling" event may be relatively small, but as digitalization becomes new infrastructure, once a "supply cutoff" occurs at the digital level, the losses to Chinese enterprises should not be underestimated. At this point, it is crucial for FMCG enterprises to develop their own "spare tire" plan. Currently, many domestic manufacturers can replace international software giants, but we will not elaborate here. Earlier, we mentioned three ways FMCG enterprises achieve digitalization. Among them, the top-down and outside-in types both rely on third-party forces to digitalize their own business. For distributors, from a more micro perspective, once external formats change, such as the recent frequent explosions of new retail formats, or if performance fails to meet standards and brands suddenly terminate cooperation, distributors' businesses will undoubtedly be affected. Under uncontrollable external factors, rather than waiting for death and passively accepting changes, it is better to anticipate possible changes in advance, repair the roof on sunny days, and build your own digital system to ensure business and data security. Only by anticipating changes and making timely adjustments can you build a core competitive barrier for your business when changes occur.

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