Click read the original text for details Eternal Asia, which started with broad supply chain, is extending its business to downstream terminal distributors. Recently, Eternal Asia's first 380 Life Supermarket commercial complex opened in Meizhou, introducing 380 smart retail machines, the Xinglian Youdian online platform, and 380 terminal media. A person familiar with Eternal Asia told a reporter from China Business Journal that Eternal Asia has advantages in supply chain and logistics, has always hoped to revitalize inventory, and extended its business downstream early on. In fact, Eternal Asia, which started in the ToB market, had already launched the social e-commerce platform Xinglian Youdian for C-end users, but it has been questioned for suspected pyramid scheme due to "pulling people in" and "charging entry fees." Xie Xiaowen, a special researcher at the China Logistics Society, told reporters that the development of supply chain enterprises towards downstream retail terminals is not comparable in difficulty to traditional retail enterprises moving upstream in terms of brand creation, channel sales, and operational services. C-end attempts Eternal Asia is the "originator" of supply chains in China and the first supply chain listed company on the A-share market. In 2009, the company underwent business transformation, and now has formed three major business segments: broad business platform, deep business platform, and supply chain ecosystem company, with deep supply chain business being the top priority. The deep supply chain business cooperates with local distributors, forming joint venture subsidiaries with Eternal Asia holding shares and local distributors participating. These subsidiaries deliver products from upstream brands to terminal channel merchants and consumers, providing one-stop services such as sales support, market services, settlement services, logistics distribution, and after-sales support. As this business develops, supply chain management service enterprises have a large demand for funds and face pressure on accounts receivable and inventory costs. To enhance risk resistance, Eternal Asia not only increases the collection of upstream and downstream accounts receivable but also vigorously promotes "Supply Chain+" services. The Xinglian series, operating on a "Supply Chain+Internet" model, is one such example. The supply chain ecosystem company, as the third major business, mainly focuses on Xinglian internet business and supply chain technology companies. Among them, the Xinglian internet business mainly features Xinglian Youdian and Xinglian Yundian as its flagship products. Public information shows that Xinglian Youdian is a platform where everyone can participate in self-purchase savings, sharing to earn, and consumer investment. Xinglian Youdian offers C-end users products such as alcohol, food, beauty, clothing, maternal and baby products, home goods, and digital appliances. Its model is S2B2C, where small B (B-end) is not only a physical store owner but also any person who loves sharing, such as full-time mothers or urban white-collar workers. Now, Eternal Asia has expanded from its original supply chain services to C-end retail. When our reporter called Eternal Asia's securities department as an investor, a staff member introduced that the 380 Life Supermarket and 380 smart retail machines are mainly based on the deep supply chain. Xinglian Youdian is a product of the Xinglian internet business. Eternal Asia told reporters that Xinglian Youdian has been widely applied and expanded in Eternal Asia's business layout. For example, not long ago, Eternal Asia implemented the "38000 Strategy" in Meizhou. It stated that the transformation from B2B to B2B2C is an important direction for enterprise transformation and upgrading. In addition, compared to the B-end market, the C-end market is broader, and laying out the C-end will further expand Eternal Asia's business scope and profitability, effectively increasing its revenue and profits. Compared with Alibaba and JD.com's ToC attributes, Eternal Asia has natural advantages in ToB services and has not had direct interaction with C-end users. Xie Xiaowen believes that supply chain enterprises developing towards downstream retail terminals will change their original cooperative relationships with e-commerce platforms and retail enterprises, adding unnecessary development resistance in market development and affecting existing business development. Moreover, entering the retail field, which is not their specialty, means that in the short term, scale and quality cannot be well guaranteed, and advantages in supply and price are not obvious. In the view of supply chain knowledge service expert Li Haiping, when supply chain enterprises expand their business scope and extend to the downstream retail industry chain, each step is like "every trade has its own master." According to Eternal Asia Chairman Zhou Guohui's vision, the goal is to connect brand owners, distributors, retailers, and consumers nationwide, creating an O2O supply chain business ecosystem from offline to online. "The Xinglian business is quite valued by the boss; it's an attempt to revitalize existing resources," a person familiar with Eternal Asia told reporters. "Xinglian's role within the company is an attempt at diversified development, after all, Eternal Asia has its own warehouses and logistics, giving it advantages in this business." According to Eternal Asia's official materials, the operator of Xinglian is Shenzhen Xinglian E-commerce Co., Ltd., a project incubated internally by Eternal Asia in 2015. It was spun off for independent operation in early 2019. After the spin-off, Eternal Asia became the second largest shareholder, and the team held shares to become the largest shareholder. In March of this year, it received over 100 million yuan in Series A financing from CITIC International Trust. According to Qichacha data, the legal representative of Shenzhen Xinglian E-commerce Co., Ltd. has changed from Eternal Asia Chairman Zhou Guohui to Chen Fangquan. Eternal Asia remains the second largest shareholder. Chen Fangquan is the Executive President of Eternal Asia's 380 Ecosystem and CEO of Xinglian Youdian. In the view of Eternal Asia insiders, the Xinglian business has never really taken off. "Previously, Eternal Asia launched many products for different customers, including 'Xinglian Yunshang' for brand owners, 'Xinglian Yundian' for retail stores, the social e-commerce 'Xinglian Youdian' for individual sellers and consumers, and the community e-commerce 'Xinglian Shenghuo' for consumers, but now some of these products have gone silent." Questioned Xinglian Youdian Now, Xinglian Youdian, which is highly valued under the Xinglian brand, has been accused of resembling a pyramid scheme due to "pulling people in" and "charging entry fees." Similar to many social e-commerce platforms on the market, to register as a user on the app, you need an invitation code, or you can register through a link shared by a store owner. The platform has 4 identities and 3 promotion levels: ordinary consumer - store owner - manager - director. The higher the level, the higher the commission rate. After our reporter successfully registered, browsing as an ordinary consumer, a phone priced at 1699 yuan (OPPO A9 full-screen phone) showed that purchasing this product would earn 1699 Xingli points, and after upgrading to store owner, one could enjoy a maximum income of 53.97 yuan. Ordinary consumers need to spend at least 199 yuan on a gift package to become a store owner. After becoming a store owner, they can save on self-purchases and also gain the qualification to invite downlines. If a direct downline also becomes a store owner, the inviter will receive a store opening bonus and also obtain the non-gift package income of the direct store owner. According to a reward description provided by Xinglian Youdian customer service, a store owner who accumulates self-purchases and sales of gift packages of 10 or more and totaling 8000 yuan, and also self-purchases and sells non-gift package products worth 8000 yuan, can be promoted to manager. Managers not only receive bonuses for self-purchases and product sales but also receive product promotion income from their direct store owner team's self-purchases and sales of gift packages, as well as brand marketing rewards from their direct manager team's self-purchases and sales of gift packages. Our reporter asked customer service on the WeChat platform whether selling gift packages means inviting new store owners, and customer service said "yes." This also means that managers can receive bonuses for inviting store owners themselves, for direct store owners inviting new store owners, and for the direct manager team they cultivate adding store owners, and they can also receive income from non-gift package products of direct store owners, direct managers, and direct directors. However, customer service claimed that starting from the 6th of last month, the brand marketing rewards for managers have been cancelled. If a manager sells a certain amount of store opening gift packages, they can be promoted to director. After becoming a director, they can receive bonuses when direct downlines become store owners, when their store owner team adds new store owners, when their direct manager team adds new store owners, and when the direct director team they cultivate adds new store owners. They can also receive a share of the non-gift package sales bonuses of direct store owners, managers, and directors. Anti-pyramid scheme expert Li Xu told reporters that pyramid scheme behavior has three main characteristics: First, paying or disguisedly paying an entry fee, i.e., after paying to join, one can obtain the "qualification" to receive calculated remuneration and develop downlines; second, directly or indirectly developing downlines, i.e., pulling people in and forming levels in a certain order; third, uplines calculating remuneration from the sales performance of directly or indirectly developed downlines, or calculating remuneration or rebates based on the number of directly or indirectly developed people. As long as the three points of "paying entry fees," "pulling people in," and "forming levels with team-based compensation" are present, it can be identified as suspected pyramid scheme. Li Xu believes that if A can receive rewards for B inviting C, it is called three-level distribution, which has the characteristics of forming levels with team-based compensation. In response, Eternal Asia told our reporter that Eternal Asia has a supply chain foundation. By using social promotion methods, it allocates part of the market expenses originally used for offline channels (such as entry fees, barcode fees, display fees, festival fees, etc.) to sales rewards, which is completely legal and compliant. All users can register for free as consumers to enjoy the affordable prices represented by Eternal Asia, with no threshold restrictions. Store owner, manager, and director are just concepts of membership levels, similar to bronze, silver, and gold member benefits. Source: China Business Journal (ID: chinabusinessjournal)