The "Digital New Infrastructure · 2020 (3rd) China FMCG Conference", hosted by New Distribution, was held grandly at Shanghai Fuyue Hotel from August 24 to 26. The event attracted 3,000 industry professionals, including distributors, manufacturers, and internet companies from across the country, filling the venue to capacity. The following is the speech content of Mr. Li Jie, Vice President of Products at Fenxiang Xiaoke, organized and published for our readers. Deep distribution has been practiced for over 20 years. Why has it started again in 2020? Let me briefly review and summarize why brand owners are refocusing on deep distribution in 2020. First, from a macro market perspective, although the pandemic affected the overall consumer market in 2020, consumption trends remain positive. In 2019, China's total social retail sales reached 41 trillion yuan, and various data suggest an 8% growth. Second, the polarization of consumption upgrading and downgrading is severe. In the post-pandemic consumer market, some outdated product categories will exit, and the previously stable landscape of brand manufacturers and channel distributors will be disrupted. Many forward-thinking brand owners are considering how to quickly seize this time window to expand channels and capture terminals through deep distribution. As for the relationship between digitalization and deep distribution, we are now talking about more refined deep distribution. Without digitalization, it is difficult to implement corporate strategy. Since we are discussing deep distribution, let's quickly review its development in China over at least 20 years. In the early preparation stage, the market shifted from seller to buyer. Deep Distribution 1.0 began with paper CRC cards, recording only sales volume and amount. The problem was obvious: how to verify accuracy and aggregate statistics? Around 2005, some companies equipped frontline staff with PDAs, marking Deep Distribution 2.0. This era recorded sales data and simple check-in/out, but could not verify the effectiveness of actions. Around 2012, China's mobile internet dividend emerged, and in the field of deep distribution management, all staff had mobile terminals and smartphones, starting Deep Distribution 3.0. Companies still focused on goals but also incorporated behavior management. In 2018 and 2019, in the last two to three years, many leading brand companies began to focus on the next generation of deep distribution, called Deep Distribution 4.0. Its core management philosophy is to change from management to empowerment, and the management perspective shifts from a single brand company to the entire industry chain. Deep distribution has been in China for 20 years, but most companies have various problems. Through thorough research, there are three issues: First, many brand companies recognize the management model of deep distribution, but in practice, they encounter resistance and poor results. The reasons will be analyzed later. Second, employees do not like the deep distribution model. Surveys of frontline staff show that the vast majority dislike using deep distribution. One reason is that it is not user-friendly; it increases working hours without improving efficiency, making them leave work later. Another reason is that such systems make employees feel undignified, as some companies implement real-time location tracking, which they perceive as disrespectful. Ultimately, the deep distribution model becomes a simple attendance system. Third, data and expense fraud: salespeople use false operations to obtain expenses, but the expenses yield no results. In recent years, Fenxiang Xiaoke, together with several leading brand companies, has practiced and researched a new deep distribution model, which we call "gamified" deep distribution. The key point is that empowerment is the goal; we cannot simply manage forcefully. Empowerment is the core objective, and gamification is just a means. There are four elements. First, brand companies must clearly define their KPIs and sales model. With clear KPIs, second, incentive guidance: rather than managing employees forcefully, use incentives to make them voluntarily engage. Actively design appropriate incentive mechanisms, and through digitalization, let employees feel positive incentives every second. This is the core. Third, PDCA: Deep distribution requires continuous innovation, exploration, problem identification, and improvement through management practice. An effective PDCA mechanism is essential. When you can manage or identify problems for each employee, each piece of work, and each area daily, and effectively improve through information technology, and then provide feedback on these improvements the next day, the PDCA loop is well executed. This enables continuous daily improvement, which is also a core element of gamified deep distribution. Fourth, service awareness: solve all problems that affect sales. In this process, we repeatedly emphasize that effective execution is the top priority in deepening deep distribution. How to execute effectively can be divided into four steps: First, instructions and goals must be clear, with specific, measurable actions and behaviors defined as effective or ineffective. Second, all processes must be fully digitalized to ensure real-time and accurate data. Finally, a small PDCA loop must be closed for each visit, with quantifiable summaries and analyses, and effective management actions. We propose gamified deep distribution and then build the IT foundation and analysis. Brand manufacturers' promotions and distributor collaboration must be fully covered to ensure digitalization. At the same time, the distributor's digitalization process includes upstream integration, reconciliation business collaboration, and terminal stores as an important component. This is gamified deep distribution. What are the results? Fenxiang Xiaoke tracked a leading company in a specific category over five years of using gamified deep distribution. They found that with appropriate expansion of channel terminals, business grew continuously each year. In 2016 and 2017, the compound growth rate was over 50%, and in 2018 and 2019, annual growth remained above 30%. What do frontline employees do every day? Frontline staff earn points through sales activities, similar to leveling up in a game. The points accumulate in real-time on the system interface. After each effective action, the points earned are immediately displayed, giving salespeople positive momentum. They can see how much they earn for their families through today's work, and use the efficiency insight chart to review their effective actions and identify areas for improvement. The actions of salespeople at each store are clear and specific, and the backend intelligent system plans ahead for them. The efficiency insight chart is very useful. Frontline staff spend three to four minutes daily self-reflecting on shortcomings, while management can quickly review the effectiveness of a salesperson's daily actions in 30 seconds. This information is extensive. Distributors, channel managers, and directors can all gain insights. When you find areas for improvement, you can use the information system to set point incentives for specific targets, and salespeople will know quickly. What are the actual results? From the salesperson's perspective, they can earn money faster and maintain dignity, as they are busy leveling up daily. From the manager's perspective, they can promptly identify any management issues and make rapid improvements through PDCA, which is a very positive feedback loop. Another issue is the biggest challenge of deep distribution: many brand companies say, "If we do it alone, how do we mitigate risks? With so much manpower and resources invested, what if results are poor?" Fenxiang Xiaoke offers another model: brand manufacturers can collaborate with their distributors to jointly empower the entire industry chain through gamification. This shows a typical digital channel, connecting brand owners and distributors digitally, and connecting people within the enterprise. After building connections, a 1+N IT network is formed. On this IT system, brand manufacturers can quickly deliver management policies and promotional measures directly to distributors online. For example, any point incentive policy can be distributed to every location through the distributor system. The four key elements of gamified deep distribution: The first is experience. Gamification brings to mind experience, which for enterprises means efficiency. We must achieve high experience and efficiency. We have summarized 16 design principles that are reflected in all aspects of frontline employees' product usage. The second key element is AI. For terminal store visits, originally 4-5 steps were needed for check-in or photo taking. Now, with minimalist design, at least 4 steps are reduced. Our principle is: not one extra click is allowed. During visits, numbers are used in multiple scenarios and must be reported, which was very inconvenient. Fenxiang Xiaoke proposes a management methodology: first conduct follow-up visits to see the numbers, then quickly develop a digital keyboard tailored to the enterprise. Using this tool improves interaction efficiency by 2-3 times. As shown in the figure below, look at the difference between left and right. When salespeople operate, reading text is cumbersome and causes mental pauses. We innovated by using color association memory to significantly increase operational fluency. Such small innovations significantly improve efficiency. Let me briefly mention data: the first major AI scenario is shelf inventory, which significantly improves efficiency. Each AI data operation saves at least 100 seconds, allowing employees to leave work earlier. The second AI scenario is AI ordering. Originally, mobile operations were complex. Now, AI automatically matches products and uses intelligent product recognition plus multi-level price lists to automatically match different store product prices, increasing order efficiency by at least 80%. The third key element is "thousand enterprises, thousand faces" (customization). This relies on two platforms: the SaaS platform and the BI platform. We use code to customize applications and services for each enterprise, with highly customizable entry points for all APP applications. Each enterprise can customize. Our brand companies have over 20,000 salespeople with many rules. There is a rule engine, and behind it, data interconnection. This is a highly customizable SaaS platform. As for the BI platform, a brand distributor boss told me, "After using your BI product, it changed my lifestyle. Every day I can sit with a cup of tea and watch the dashboard. The dashboard and business data change every minute. This product completely changed my lifestyle." Through years of accumulation, we have customized exclusive data dashboards for many enterprises. A data dashboard brings significant digital insight and management value. In the past two years, we have cooperated with many brand manufacturers and received positive feedback. Many brands are industry leaders. In the process, we have built our ecosystem, such as Huawei and JD.com, which have strategic cooperation with us, providing quality services through the digital ecosystem. Tips will be paid 400-2000 yuan once adopted.