I recall a brand executive once told me that they invest over 400 million yuan annually in promotional expenses at retail stores. But the effectiveness is a mess. Stores report volumes as they please. Once the money goes in, the manufacturer doesn't know which stores responded and which didn't, nor which region yields the highest returns. ROI cannot be calculated clearly—this isn't a problem unique to one brand but a pain point for all brands' offline channels.

Why ROI Is So Hard to Calculate

Offline channels are an opaque "black box." From factory shipment to consumer purchase, the middle involves distributors, sub-distributors, and retail stores. The chain is too long, with too many links, but information gets lost at each level. FMCG brands' marketing expenses typically fall into several major categories: consumer-facing promotional red packets, display and promotion fees for small retailers (B-end), and various rebates for distributors. Each category involves significant sums, but each faces the same problem: money goes out, but its destination is unknown.

  • Take display fees first. Traditional display fee approval is submitted level by level. Sales reps negotiate display positions at stores, fill out forms, submit to regional managers for review, and then it goes up the chain. It's time-consuming, information is opaque in the middle, and whether the fees are actually incurred or intercepted relies mainly on manual checks.
  • Then there's in-store promotion. The fees are distributed, but do they actually incentivize the store to push your product? The answer is often: you don't know. Unclear expenses are the first problem. But there's a second, even harder to manage. An industry veteran once told me something that I think is very accurate: "Traditional expense allocation only messes up the pricing system." When money is thrown out, all levels of the channel start gaming—today this one gets a bit more subsidy, tomorrow that region gets a bit more rebate, and price gaps are created. By the time you notice, the market is already damaged.

The Pitfalls Dongpeng Encountered

This isn't an unsolvable problem. But few have truly solved it. Among those I've discussed this with, the most thorough was Dong Wenbo. As Dongpeng's first IT employee, Dong Wenbo worked at the company for twelve years, fully participating in the construction of Dongpeng's marketing digitalization system from zero to one, witnessing and leading the implementation of the brand's digital infrastructure. In 2023, he ventured into entrepreneurship, founding Ronghui Data Technology, focusing on providing one-stop marketing digitalization consulting and implementation support services for the FMCG industry. He remembers every lesson Dongpeng learned in expense control. The first was "One More Bottle." Around 2015, almost all beverage brands were running this promotion. The logic was simple: consumers who got a winning cap could exchange it for a free bottle at the store, making everyone happy. But soon, a large number of counterfeit winning caps appeared on the market. Some people specialized in hoarding and reselling them, even forming an industrial chain. The manufacturer's promotional expenses flowed out, but instead of real sales, they got fake caps. At that time, Dongpeng's annual sales were about 800 million yuan. After one promotion, it was impossible to tell how much money was wasted. This wasn't just Dongpeng's problem. The entire industry was paying the same tuition, just with different amounts. The first lesson led Dongpeng to shift to QR code marketing. Consumers scanned the code inside the cap to receive red packets, which was safe and direct, leaving much less room for counterfeiting. This was the starting point of Dongpeng's digitalization. But new problems soon emerged. In 2018, Dongpeng started B-end case code activities. Store owners who ordered a case of goods could scan the code inside the case to receive a red packet, ranging from a few yuan to dozens of yuan per case. The logic was: give the store more benefits to encourage them to push Dongpeng's products. But after running for a while, they noticed something was wrong. Stores that usually ordered three to five cases suddenly ordered thirty cases at once when the promotion came. After scanning the codes and getting the red packets, they slowly sold the goods. When the promotion intensity decreased, they put the remaining codes in a drawer and waited for the next big promotion to scan them. The expenses were invested, but the goods didn't actually flow to consumers; instead, they became arbitrage space for store owners. Dong Wenbo later told me this was a fundamental problem—giving red packets to stores was meant to incentivize selling out, but it ended up incentivizing buying in. The two seem like a minor difference in wording, but the direction is completely opposite.

Direct Expense Investment: Money Finally Spent Where It Should Be

Dongpeng's later solution was to integrate the expense logic of the C-end and B-end. The core action was: make the distribution and verification of expenses happen in real transaction scenarios. When a consumer buys a bottle and scans the code to get a red packet, the store owner helps the consumer verify the code and scans to get a return-goods voucher. These two actions are linked together. Only when the store owner truly helps the consumer redeem can they get their reward. It's no longer "money for stocking up" but "money for selling out." For the first time, expenses truly fell on "selling out" rather than "buying in." The handling of display fees also changed. Sales reps operate on the SFA system. For displays that meet the standards, the system automatically generates electronic vouchers for store owners. Sales reps verify them on-site, and the entire process is digitally recorded. Every display fee's store, amount, and verification node are traceable and documented. Dong Wenbo said that after this system was fully operational, Dongpeng for the first time truly knew where every expense went. Not just promotional red packets, but display fees, free goods, and all channel expenses can be quantified, tracked, and analyzed. With this data, Dongpeng could answer a question that was hard to answer before: which region has the highest expense efficiency, which channel's expense ratio is rising, which stores are worth continuing to invest in, and which stores are wasting money. Expense allocation shifted from "feeling" to "evidence." Dongpeng's goal was to achieve the effect of 300 million yuan with 200 million yuan. Before expense digitalization, this was just a vision; after it was fully implemented, it became possible to verify for the first time. When Dong Wenbo started his own business, he brought not just methodology but the experience of having personally implemented this system. He experienced all the pitfalls and solutions in expense control during Dongpeng's years. What Ronghui Data Technology helps brands do is transplant the core logic of this path: digitalize, directly invest, and track expenses, so that every penny has a destination, a record, and feedback. Brands of different sizes can start from different points—some start with in-store promotions, others with display fee control—but the direction is the same: shift expenses from flood irrigation to drip irrigation. In the two years since its founding, Ronghui Data Technology has gained the trust of many leading brands with its deep expertise in FMCG marketing digitalization. Its current clients include Baixiang, Mengniu, Jianlibao, Master Kong, and Wong Lo Kat. Final Thoughts At the CFC conference in March this year, the concept of "Advancing Toward the C-End" received widespread recognition from brand decision-makers. Building a C-end command center is an important topic for the FMCG industry. Consumer profiling is the first foundation of the command center—you need to know who your real consumers are. Expense control is the second—ensuring every expense is spent where it should be. Without the second, even if the profiling is precise, the budget may be lost layer by layer during execution, and what reaches consumers is only a discounted signal. FMCG brands' marketing expenses have never been the problem. The problem is how much money is spent where it truly should be. The moment digitalization opens this "black box," brands truly know how much money they have to win this battle.