01 Like all hot topics, the 'corn incident' involving East Buy faded after a week. Compared to the fiery confrontation between Xinba and East Buy, we should pay more attention to the behavior of Northeast Farmer's Sister. Because similar 'unprincipled' actions happen almost every day in our market, representing a very typical commercial phenomenon with Chinese characteristics. East Buy removed the Northeast corn from its shelves, Xinba apologized, and Northeast Farmer's Sister was criticized so harshly that it shut down its Douyin live-streaming room. It seems like a lose-lose-lose situation. But in reality, East Buy simply switched to selling other products, and its fans continued to support it; Xinba, as an internet celebrity seller, just took the opportunity to gain traffic, and they don't seem to care much about reputation. The real loser is only Northeast Farmer's Sister. Not only did it lose a high-quality channel like East Buy, but it also lost credibility among many consumers, and more importantly, it lost the trust of its supply chain. Pangdonglai, a supermarket with significant offline influence, also removed Northeast Farmer's Sister's products after the incident. Many people now accuse it of 'dishonesty,' 'burning bridges,' 'violating business rules,' and 'reaping what it sows,' with condemnation pouring in from all sides. The company is likely under immense pressure. Lao Miao doesn't want to criticize anyone on ethical or moral grounds, but rather wants to say that 'Northeast Farmer's Sister' is a widespread phenomenon, very much in line with the most basic human nature. It's a cognitive issue, not a moral one. In other words, they aren't bad; they simply did foolish things out of wishful thinking and self-perceived cleverness.

02 In the past, real estate agents hated it most when tenants, after seeing a desirable property, secretly contacted the landlord to close the deal. This is called 'jumping the order' in the industry. The problem is that all tenants who do this feel no moral guilt; instead, they feel smug about getting a bargain. No one around them condemns them; rather, they think the person is shrewd and capable. Even more common is that many people go to physical stores to check out clothes, bags, and cosmetics, and after deciding, they search online for better prices and place orders. This has become a consumption habit for many, praised as 'frugal housekeeping' and 'living wisely.' Should these tenants be condemned? Or should customers who try products in stores but buy online be condemned? Neither. People are self-interested; if they can spend less, who wants to be a fool? It's not a question of whether to condemn, but a matter of interests. Why are there fewer 'jumping the order' cases in real estate now? Because relevant legal provisions have been introduced, making the cost of jumping higher, not because people think it's wrong. Such phenomena are so widespread because the idea that 'bypassing intermediaries saves money' has broad grassroots support, deeply rooted and without moral pressure. Although our commercial civilization is highly developed, people's business concepts mostly remain in the agricultural era. The idea that 'scholars, farmers, artisans, merchants' (with merchants at the bottom), 'no merchant is not cunning,' merchants are the most unscrupulous and have the lowest status, has been passed down for thousands of years. Not recognizing the value of 'intermediaries,' 'distributors,' and 'advertisers' is still a high-level social consensus. From the 'factory direct sales' of the 1980s and 1990s, to the 'no middleman to take a cut' of recent years, to the 'factory direct supply' and 'direct sales from the origin' of today's live-streaming e-commerce, these statements that clearly violate business common sense keep appearing in different forms and are still praised.

03 As consumers, it's fine to think with simple intuition. Sometimes getting a bargain, sometimes falling into a trap, is part of life's fun. But if you're running a business, playing this way can really harm yourself. Not recognizing the value of intermediaries will isolate you in the channel chain, and your business will struggle. If you also burn bridges in channel cooperation, you may end up alienated, becoming a target of public criticism and disdained by the industry. During the era of big-box store expansion, under the pressure and profit temptation of these stores, many manufacturers chose to bypass distributors and cooperate directly with the stores. The results were mostly: large accounts receivable, high promotional costs, high terminal maintenance costs, and frequent fines imposed by the stores. Now, many manufacturers who can no longer bear it want to return to distributors for supply, but things have changed, and it's hard to go back, with high costs. Some OEM manufacturers hope to promote themselves by publicizing their status as producers of big brands. From ancient to modern times, from the West to China, there has never been a successful precedent. Market laws are powerful and cruel. The less society recognizes the value of channels, the higher the cost of building and maintaining them, and the lower the efficiency. This corresponds to higher channel costs. The circulation cost rate for goods in mainland China is mostly above 80%, meaning a product with a cost of 20 yuan will end up priced at over 100 yuan to the consumer. Some special products even have circulation cost rates above 95%. This cost rate is much higher than in developed countries. Even so, distributors and retailers generally live a hard life, with low profits and difficult operations. Old man Kotler pointed out in 'Marketing Management (Asian Edition)' that the inefficiency of distribution in Asian enterprises is shocking. Not recognizing the value of agents and advertisers is a simple concept from agricultural civilization, but in commercial civilization, it's a disaster. President Ye (Ye Maozhong) said that an enterprise needs two distributors: one to put the product on the shelf, and one to put the product in the customer's heart. And a high-quality agent like East Buy is exactly the kind that can both put the product in front of consumers and into their hearts. A corn cob may indeed cost one or two yuan to grow. But getting more city dwellers to buy it is worth no less than one or two yuan. And making buyers feel it's worth six yuan is worth at least two yuan. But in the eyes of those who don't understand market laws (or pretend not to), reciting a poem and selling a corn cob for six yuan is conscience-less. Sorry, but in the eyes of many buyers, the 'poem' is part of the product; corn with a poem is worth six yuan, while corn without a poem isn't worth 3.6 yuan. Advertising is part of the product, just as consecration is part of a Buddhist bead.

04 In 1960, marketing thinker Theodore Levitt published 'Marketing Myopia,' which shocked the business and academic worlds and became a foundational work of modern marketing. Levitt said that being production-oriented and sales-oriented while ignoring customer value and needs is the fundamental cause of enterprises falling into trouble. Such 'myopia' is now frequently occurring in our current stage of market economy development. The extreme symptom of excessive production and sales orientation is the pursuit of 'selling combs to monks.' During the years of internet platform explosion, the symptom was 'traffic worship,' with everything oriented toward traffic. Born from agricultural civilization, our 'myopia' also has a manifestation different from the West: the contempt for channel value. 'Farmer's sisters' are everywhere in China, not only in the market but also hidden in each of our hearts. They bring harm to our business environment, to our industries, and to ourselves. We must not only fight against the 'farmer's sisters' in the market and the 'farmer's sister' phenomenon within enterprises, but also against the 'farmer's sister' in our hearts. However, 'it is easy to defeat the 'farmer's sister' in the mountains, but difficult to defeat the 'farmer's sister' in the heart.' We, as business operators, must achieve clarity of mind and maintain twelve-point strategic focus at all times. This corn incident is very typical. As business operators, we should not just treat it as a hot topic, but as a profound business lesson. It brings us at least these insights:

  1. Doing business by intuition is unreliable; we must have reverence for business laws.
  2. Every link in the value chain should give necessary respect to other links. Protecting their interests means protecting your own.
  3. The value chain is not a 'commons'; the 'tragedy of the commons' does not apply here. Whoever contributes more to the value chain and has more say can gain more channel benefits and even become the 'chain master.' So harming the value chain's interests damages both long-term and short-term interests.
  4. Bypassing intermediate links, or letting them pave the way and then 'cutting in' later, may seem like a bargain, but it's actually 'throwing a chicken and losing the rice'—not only do consumers not buy it, but your reputation is ruined.
  5. Many people are addicted to such 'bargain-hunting,' which fits our intuitive cognition. Especially in our cultural context, every business owner has a 'farmer's sister' inside. So maintaining strategic focus is crucial; you must avoid activating the 'farmer's sister' in your heart, as such 'pies' can bite.
  6. There are too many 'farmer's sisters,' and enterprises will inevitably encounter them during development. East Buy provided a good handling model: no arguments, no disputes, just terminate cooperation directly. Here, we should also give a big thumbs up to Pangdonglai, which immediately self-checked upon hearing about such suppliers and took action as soon as they were found. Don't be a 'farmer's sister' yourself, don't cooperate with 'farmer's sisters,' and don't give them space to harm the channel chain.

As for Northeast Farmer's Sister, it's a microcosm of many small and medium-sized enterprises with weak business awareness. I sincerely hope they can change their mindset, respect laws and business rules. If they improve, China's enterprise environment will truly become healthy.

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