---
title: "Don't Expect the Mainstream to Act; Embrace the Rise of the New Fringe"
description: "Author: Liu Chunxiong. Source: Teacher Liu's Forum (ID: liuchunxiong1964). China's transformations typically emerge from the fringe—this is a pattern. Deng Xiaoping's reforms first enriched those on society's margins. Incremental reform is immediately fatal; fringe rise is fatal after a delay. Either way, it's a matter of life and death. At such times, the more mainstream an entity is, the harder it is to act or not act. Preserving the stock and creating increment are hard to achieve simultaneously."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2017-05-22"
language: "en"
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# Don't Expect the Mainstream to Act; Embrace the Rise of the New Fringe

> Author: Liu Chunxiong. Source: Teacher Liu's Forum (ID: liuchunxiong1964). China's transformations typically emerge from the fringe—this is a pattern. Deng Xiaoping's reforms first enriched those on society's margins. Incremental reform is immediately fatal; fringe rise is fatal after a delay. Either way, it's a matter of life and death. At such times, the more mainstream an entity is, the harder it is to act or not act. Preserving the stock and creating increment are hard to achieve simultaneously.

Author: Liu Chunxiong
Source: Teacher Liu's Forum (ID: liuchunxiong1964)
China's transformations generally rise from the fringe—this is a pattern.
During Deng Xiaoping's reforms, the first to get rich were basically social fringe figures. At the time, there was a saying: "Workers cry, farmers laugh, the shady types make money."
**Incremental reform is immediately fatal. Fringe rise is fatal after a delay. In short, both are life-and-death matters.**
At this time, the more mainstream you are, the harder it is to act or not act. Preserving the stock and creating increment are hard to achieve simultaneously.
Since 2014, when I proposed the product upgrade direction of "mainstream gear shift" with Mr. Shi Xianlong, the companies we had high hopes for have done nothing. Instead, a phenomenon emerged that Mr. Shi called "new fringe rise": manufacturers that were originally marginalized have been growing by leveraging the mainstream gear shift. Will they become the new mainstream in the future?
I think it's highly likely.
**Mainstream gear shift means redoing products; new fringe rise means redoing the industry. This is both a disaster and an opportunity.**
The new fringe includes both manufacturers and merchants, and both have opportunities.
**"New Wine Merchants": The Rise of the New Fringe**
At the 2017 Chengdu Spring Sugar and Wine Fair, Tao Shiquan of Jiangxiaobai proposed the concept of "new wine merchants," which I believe represents the new fringe rise in the distributor field.
When Jiangxiaobai recruits distributors, they now have to use connections; the 400 recruitment hotline was overwhelmed. However, Jiangxiaobai actually prefers to keep only 200 distributor slots and a "big red envelope" of 100 million yuan. Mr. Tao said: "We hope to find 200 young distributors who are just starting out, even those who were originally regional managers or sales representatives and now want to start their own distribution businesses. We are willing to invest 100 million yuan to support them, lowering the payment threshold and supporting such customers through payment and expense investments."
This is completely different from the recruitment standards of most companies in the past: they don't emphasize strength or seniority, only ideological willingness. Jiangxiaobai's profile for such "new wine merchants" is:
**1. Born after 1985, young with innovation, ambition, entrepreneurial drive, and their own ideas.**
**2. Understand community marketing and internet communication.**
**3. Either have refined management thinking, are willing to open markets, are non-wholesale, flat direct-operation customers; or are frontline sales managers in FMCG, beverages, beer, etc., who are willing to start businesses but lack sufficient capital.**
From this profile, they are definitely new fringe, but they are the new fringe that meets Jiangxiaobai's requirements for channel partners. They meet the requirements of the internet era in two main aspects: **first, they understand the internet; second, they are non-wholesale direct-operation customers.**
If such a batch of "new fringe" truly rises en masse, it would be fatal for existing channel partners. In fact, many of Jiangxiaobai's current channel partners who perform well fit the "new wine merchant" profile.
Jiangxiaobai's "new wine merchant" profile also matches my understanding of new channel partners, but Jiangxiaobai has already done it, which is more convincing. I've long said that Chinese people are hard to convince with reason but easily conquered by facts.
**New Fringe Manufacturers: Quietly Rising**
Since we proposed "mainstream gear shift," two phenomena have emerged: **One is upgrading without shifting gears, without changing generations.** At the 2016 Chengdu Spring Sugar and Wine Fair, I proposed a new term for mainstream gear shift: **"change the main dish."** Changing side dishes is useless; you must change the main dish. The dairy industry has done relatively well, and relatively early. For example, Yili's 2016 new mainstream product Ambrosial has already exceeded 10 billion yuan.
Upgrading without shifting gears is too weak to change the overall landscape.
**The second phenomenon is that products have been upgraded, but traditional promotion methods have basically failed.** The sales system and channel system, in a state of anxiety, only think about how to quickly increase volume and lose money, while mainstream gear shift is relatively slow.
**New fringe rise not only involves product gear shifts and generational changes, but more importantly, it leverages internet communication methods.** Just like Jiangxiaobai's requirements for "new wine merchants": understand community marketing and internet communication.
New fringe rise includes not only Jiangxiaobai but also Taishan Raw Pulp in the beer industry and Xiaoshile Hawthorn Refresh in the beverage industry.
These new fringe rising companies are all related to internet use, and some even have fully internet-based marketing systems. Their internal marketing organizational structures are completely different from traditional companies, and their marketing mechanisms are also different.
During the 2017 Spring Sugar and Wine Fair, a friend told me about a traditional liquor company executive's change in view of Jiangxiaobai. A year ago, he firmly denied that Jiangxiaobai could succeed, saying its liquor didn't taste good (not knowing who Jiangxiaobai's target consumers were, judging only by personal preference, and not understanding new consumers). This year, he finally admitted that Jiangxiaobai is okay.
The beer industry is already highly concentrated, with the top three players holding about two-thirds of the market share. Buying out channels with huge capital has become an insurmountable gap for fringe companies, which can only wait to be acquired. However, Taishan Raw Pulp Beer has bypassed channel barriers by using fresh beer and internet communication to attract consumers and adopting direct operation. Despite the industry's overall decline, it has risen against the trend.
Xiaoshile Hawthorn Refresh was originally an unknown beverage company. After introducing an internet communication system, it recruited 600 distributors in just two months. This is a goal that many small beverage factories haven't achieved in years.
**New Marketing Drivers**
Traditional marketing drivers include technology, brand, and channel. In the consumer goods sector, brand and channel are the main drivers. Multinational companies excel at brand driving, while Chinese companies excel at channel driving. Multinational companies that do well in China use both brand and channel driving.
This set of methods no longer works.
**Through recent observation and practice, I propose three new marketing drivers:**
  1. **Products with their own traffic (IP-based products);**
  2. **Internet communication;**
  3. **Internet-optimized channels.**
In the internet context, products no longer refer only to quality but also imply IP. IP is intellectual property, but not in the traditional sense; for example, IP can also be a person—Jack Ma is a super IP. **Good products carry their own IP, which means they have their own traffic and autonomous communication ability.** So I prefer to treat IP as communication energy.
In the past, brands relied on media communication. Traditional media has lost its power, and brand communication faces difficulties. Traditional media is hard communication, relying on repeated stimulation to form responses. **The internet is autonomous communication, which can be targeted. Autonomous communication only achieves cross-coverage and communication effects when it ignites.** In this regard, a complete system has not yet been formed.
In China's traditional channels, except for consumer goods channels which are relatively optimized, channels in industries with low concentration still have huge optimization space, so B2B has great potential in these industries. Through new channels, a batch of new fringe enterprises will definitely rise.
Even in FMCG channels, improving efficiency through B2B and precise distribution and promotion through big data is very effective.
If the above three new drivers are fully integrated, a new marketing framework system will be formed.
**The Helplessness of the Stock in the Face of New Fringe Rise**
Not long ago, B2B expert Zhao Bo exchanged views with brand experts, and several points were good. **Consumption has changed, but the traditional stock still exists and is still large, and new channels cannot support the stock.** So now, facing the rise of the new fringe, traditional mainstream companies are helpless.
**The helplessness lies in the fact that the stock cannot be lost, but it may be declining. As long as it declines, no matter how large the scale, there is no momentum—this is what I call the "scale burden."** In every transition period, there is this "scale burden." Can the new model and the old model merge within one system? Currently, it seems they cannot. The organizational structure and functional design are different.
Seeing the rise of the new fringe, mainstream companies respond by setting up new departments, such as Tsingtao Beer's Innovation Business Unit. In fact, many mainstream companies have set up similar departments. This should be a relatively good approach, but whether "new fringe rise" can occur internally remains to be seen. After all, the upper level is still traditional, and the short-term survival of the old mainstream still depends on tradition; the future belongs to the new mainstream.
Seeing the new fringe gain discourse power, although small in size, their discourse power is significant. Internal new fringe, although new, is too small in size, and whether they have internal discourse power is unknown, but externally, they indeed find it hard to gain discourse power. So mainstream companies are also quite helpless.
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