Click 'Read Original' for details. Recently, New Distribution exclusively learned that Dali Group's WeChat business project, the new brand 'Frota', has entered platform internal testing. It is understood that 'Frota' is a fresh life project under Dali Group, which began its first phase of internal testing at 8 PM on August 13, 2018. An industry insider told New Distribution that as of yesterday afternoon, the number of people who entered the internal testing platform reached 50,000-60,000, with orders expected to be in the tens of thousands. In the past two days, dozens of WeChat business teams in Guangdong and Fujian have gone almost crazy, flooding into Dali's headquarters in Quanzhou, hoping to obtain operating rights. It is reported that the project's first product, 'Fuxiaoxian Cake', will be officially launched online on August 18. So far this year, following first-tier well-known FMCG brands such as Mengniu and Wahaha entering social e-commerce, Dali Group has also extended its reach into the 'Moments' field. 1 'Fuxiaoxian' Three-Level Distribution System Profit Sharing Exposed Regarding the Fuxiaoxian product, New Distribution consulted relevant WeChat business insiders. An anonymous friend told New Distribution that the product is currently priced at 59 yuan per box, with 30 small cakes per box and a shelf life of 30 days. The operation model adopts a 'three-level distribution system', with profit sharing divided into 'horizontal income' and 'vertical income'. Details are as follows: Simply put, horizontal income is the profit distribution system of the three-level distribution. Suppose you are A. After you try the product (first purchase) and register your own account, you become a gold agent. Then you generate your own QR code through your personal center and give it to B. B generates their own QR code and shares it with C, and C generates their own QR code and shares it with D. During the initial trial phase, you can earn a 12% commission from B, 10% from C, and 10% from D. E is not related to you, so you get a total of three levels of profit. Vertical income: When your direct agents reach 20 people (i.e., 20 people like B), you upgrade from gold agent to first-level distributor. At this point, 20 direct agents = 20 teams, because each of them is the leader of a team. In addition to the three levels of horizontal income, you can also earn 5% of the entire team's sales, with no level limit, as a commission from their entire team. Regarding the new product Fuxiaoxian, New Distribution contacted several offline agents of Dali, who reported, 'We are completely unaware of this product and have not received any related notifications.' New Distribution also consulted the person in charge of Dali's branch company, and the feedback was also ignorance. Based on this, it can be roughly determined that 'Fuxiaoxian' is operated by an independent department, separate from the traditional offline distribution. 2 What is the Hidden Motivation Behind Dali Group's Entry into WeChat Business? In recent years, many first-tier FMCG brands have successively entered WeChat business, which is no longer new. The WeChat business industry has already stepped onto the right track in terms of market size and development stage. According to the '2017 WeChat Business Industry Development Report' released by the China Internet Association, the overall market size of the WeChat business industry in 2017 will reach 683.58 billion yuan, with a growth rate of 89.5%. WeChat business emerged in 2013, and after five years of development, it has basically passed the 'immature stage of barbaric growth', and its awareness and recognition among social groups have gradually improved. In addition, from the perspective of the FMCG industry, the high costs of traditional distribution channels and the diversification of consumer demand have led to the end of the 'good days' of high-speed growth for traditional FMCG brands, with slowdowns or even negative growth becoming the main theme in recent years. Under the objective market environment, Dali Group's entry into WeChat business is also reasonable. But what is noteworthy is that Dali's product for the WeChat channel this time is short-shelf-life snacks. As we all know, Dali has always occupied the market with 'long-shelf-life' leisure foods. Now, for the exploration of new channels, Dali has abandoned its strengths and chosen the weak category of short-shelf-life products to enter WeChat business. Is it a trial, or is there another reason? According to a person close to Dali's internal affairs, Dali Group's current market value is nearly 100 billion yuan, while Taoli Bread's market value is 20 billion yuan. Although the gap is huge, Dali, which started with pastries, lacks layout in the short-shelf-life field. At the same time, long-shelf-life pastries are gradually being replaced by medium and short-shelf-life products, and the trend is obvious. Taoli Bread has only over 30 short-shelf-life bread products, but its market value has reached 20 billion yuan, and its growth momentum is rapid. Currently, Taoli Bread's core market has gradually expanded from Northeast and North China to South China, which makes Dali Group's senior management very anxious. According to public data, the national pastry market capacity will reach over 80 billion yuan in 2018. Currently, medium and short-shelf-life products have exceeded 10 billion yuan, and are growing at a double-digit rate annually. On the other hand, Taoli's market share in Northeast China is nearly 1.8 billion yuan. Based on population proportion (accounting for 10% of the national population), Taoli's expansion nationwide will have a market space of 20 billion yuan. Whether from the perspective of consumption trends or competition, laying out short-shelf-life bread is an urgent strategic measure for Dali Group. According to insiders, Dali Group has designated the short-shelf-life category as a key focus for 2018. In addition to the online WeChat channel, Dali will also use the Daliyuan 'Quality Meal Bag' brand to go through the offline dealer system. The short-shelf-life products are expected to be officially launched at the end of August and early September. At the same time, they will change the previous inventory pressure strategy, with a minimum order of 100 pieces across the province, without pressing inventory. In summary, short-shelf-life products are the future consumption trend, and Dali needs to gradually transition from leisure foods to medium and short-shelf-life foods. Currently, Taoli Bread has taken the lead. What Dali needs to do is accelerate its pace and 'walk on two legs' online and offline. Through the online WeChat channel, starting from C-end consumers, it can reach consumers in the fastest way and achieve interception of consumer categories; offline, it can achieve distribution of short-shelf-life products through the dealer system. The two short-shelf-life brands work together to seize the growing market share of the short-shelf-life category. 3 Can Dali Group Succeed in Entering WeChat Business? This year, many first-tier FMCG brands have entered WeChat business, represented by Mengniu and Wahaha. Coincidentally, yesterday, an industry media outlet revealed that Wahaha's WeChat product 'Tianyan Jingjing' has changed its agent recruitment policy several times, with some agents withdrawing due to losses, and some even believing they were 'cheated', thus establishing a 'Wahaha Agent Rights Protection' group, which has gathered nearly 70 people so far. New Distribution also asked several people in charge of Mengniu's 'Manran' product. They revealed to New Distribution, 'Currently, this product's three-level agents are selling average. It's an internet celebrity product; a gust of wind blows and it's gone.' Zhuang Jianzhong, a domestic social e-commerce expert who successfully operated the 'Kumamoto-ya' project, told New Distribution that first-tier FMCG brands are beginning to gradually attach importance to new social e-commerce channels like WeChat business, which is a fact. But when entering WeChat business, FMCG brands should carefully choose products or categories. For example, products like Manran and Tianyan Jingjing are functional products with relatively higher gross margins, but their universality is slightly worse. Dali's 'Fuxiaoxian' is more of a necessity for consumers with higher repurchase frequency compared to the above two types of products. The universality of a product determines whether a WeChat business product can continue to go further and last longer, rather than being an internet celebrity product that fades with a gust of wind. Behind Dali Group's layout in WeChat business, in fact, is the hope of bypassing the channel end and directly overtaking on the curve to achieve user reach and consumption. In New Distribution's view, for Dali, there are two meanings: First, test new channels and find new growth points. Dali's original leisure food growth has hit bottom, and some old categories are no longer growing. Second, and most critically, to seize market share in short-shelf-life snacks, walking on two legs, attacking online and offline, to help the company establish a firm foothold in the short-shelf-life field. Compared with Mengniu and Wahaha, Dali Group's entry into WeChat business will be relatively easier, because the leisure food category is more familiar to consumers than 'Manran' and 'Tianyan Jingjing'. 'Fuxiaoxian' does not require much market education, and the category consumption is relatively high-frequency. The key to success in entering WeChat business depends on how Dali positions this product in its own product structure and how it positions the WeChat channel! -END-