---
title: "FMCG Manufacturers: A Practical Guide to Digital Channel Management"
description: "This article uses a case study to illustrate the practical value of digitalization for FMCG manufacturers, focusing on how 'one product, one code' technology can solve traditional marketing challenges such as precise distribution, flexible promotions, efficient expense verification, consumer data collection, anti-counterfeiting, and channel control."
author: "邢仁宝"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-11-29"
language: "en"
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# FMCG Manufacturers: A Practical Guide to Digital Channel Management

> This article uses a case study to illustrate the practical value of digitalization for FMCG manufacturers, focusing on how 'one product, one code' technology can solve traditional marketing challenges such as precise distribution, flexible promotions, efficient expense verification, consumer data collection, anti-counterfeiting, and channel control.

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"Digitalization" has become a buzzword across industries in 2020. From office processes to online meetings, from brand promotion to channel management, from home delivery business to livestream selling, companies are busier than ever.
But behind the busyness, do we truly understand the essence of digitalization, and how to use it to solve traditional marketing problems? This article uses a case study to illustrate the practical value of digitalization for FMCG manufacturers.
Mr. Zhang is the marketing director of an FMCG company with nearly 20 years of experience. He has been with this traditional company from its startup days to its current annual sales scale of nearly 10 billion yuan. However, in recent years, when launching new products, he—who considers himself experienced—has encountered one marketing problem after another. The tactics he once prided himself on are no longer as effective.
Just after the Spring Festival, new products began shipping from the factory. Mr. Zhang quickly convened a national mobilization meeting and announced the "Beachhead Landing Plan." All regional market leaders were to quickly organize distributors to implement a comprehensive distribution plan for the new products, ensuring the "Three Quick Actions" and "Four Focuses":
**Quickly inventory the service points of existing sales staff in the region, quickly connect with existing channel customers, quickly set distribution targets by area, focus on rewards for terminal stock-in, focus on rewards for team completion, focus on penalties for sluggish quality, and focus on efficiency through competition and learning.**
According to Mr. Zhang's plan, relying on the relatively mature sales network of the old products, within six months, the new product's distribution points nationwide rapidly climbed to 1 million, basically achieving that wherever there were old product points, there were new products. The average terminal inventory across the country reached 7 boxes.
Seeing these numbers, Mr. Zhang's confidence in the new product soared. He even assured management that the two-year target of 1 billion yuan was well within reach.
However, what followed was unexpected. Regional branches began reporting poor sell-through of the new product. The average monthly sell-through in traditional channels was less than 1 box. Channel customers' enthusiasm began to decline noticeably, and distributor payment progress also dropped rapidly. Mr. Zhang quickly arranged for his secretary to book tickets to the most problematic market to investigate.
**-01- Unexpected: New Product Not Moving**
**1. Terminal Distribution: Broad but Not Precise**
The new product followed a strategy of piggybacking on the old product's distribution—wherever the old product was, the new product was also placed. Many small terminal stores put the new product next to the old one. When consumers came, they grabbed the old product without a second thought, basically ignoring the new one.
When asked about their attitude toward the new product, 70% of store owners said the salesperson offered strong incentives, so they stocked it, but consumers basically didn't buy it due to lack of brand awareness. They still had six or seven boxes in inventory and wanted to return them, but the salesperson kept making excuses. Terminal goodwill was also affected by the new product launch.
Mr. Zhang asked the local market manager to provide a list of outlets with sell-through data to analyze which outlets were moving the product. The response was that the sales representatives would need to compile the data, as only stock-in data was available. Real-time feedback was impossible, let alone analysis. Mr. Zhang remarked, **"Without terminal data, precise marketing is impossible; a broad distribution approach is just a waste of resources."**
**2. Promotions Too Traditional and Inflexible**
During his market visits, Mr. Zhang found that sales staff used conventional tactics such as stock-in rewards, display rewards, and sell-through incentives. These methods had some effect, but in today's fiercely competitive, space-constrained terminals, they lacked advantage. Store owners with good relationships might recommend the product, but faced with shelves full of well-known brands, they couldn't give consumers a reason to try it proactively.
How to effectively attract consumers? Mr. Zhang was puzzled. The only advice he could give the frontline team was to select large stores, secure the best shelf positions, and make the display as large as possible.
Moreover, as a marketing expert, Mr. Zhang knew well that **building a stable consumer base with brand loyalty is the key to winning. Currently, the only option is a three-pronged approach: online advertising, ground promotion, and terminal display. But this traditional method requires sustained, high-quality execution and resource focus—a long and arduous road.**
**3. Lack of Consumer Data Hinders Decision-Making**
During the new product launch, many companies want to capture terminal consumer purchase data because this level of data best reflects market acceptance—what age and gender bought the product, at which terminal stores, at what times, etc.
But in Mr. Zhang's view, such data typically relies on third-party research agencies, requiring payment or hiring dedicated personnel for surveys. So he had little hope for this dimension of market analysis, relying only on his own market visits and inquiries to gauge the situation.
**4. Non-Standardized Goods Flow Management and Monitoring Difficulties**
After the new product launch, sales units faced immense pressure. To avoid falling behind, sales managers resorted to various tricks. Many places combined promotional prices and product rebates to lower prices and dump goods across regions.
Mr. Zhang rushed to the affected market to investigate. At the wholesaler's warehouse, he sent the batch numbers of the transshipped products back to the company's production and storage department for tracing. After half a day, they couldn't identify the source, saying there was no goods flow tracking system. The same batch had been split and sent to several markets upon leaving the warehouse. When he contacted the other market managers, none admitted their customers were responsible for the transshipment, infuriating Mr. Zhang.
**Without a way to define the source of goods, it's impossible to penalize dumping behavior, and thus such behavior cannot be effectively controlled. Price is the lifeline of a product. If abnormal goods flow isn't controlled within less than a year of launch, it will severely damage the enthusiasm of distributors and the team.**
**Marketing can't rely on the same old tricks forever. As consumers change, so must thinking and methods.** The confusion Mr. Zhang encountered in this market research reflects many pain points that traditional marketing and experience struggle to solve.
However, with the rapid development of digital technology, some better solutions have emerged—**"One Product, One Code" technology**. Many companies have already begun exploring its application. Next, let's discuss the current application of this technology in the FMCG industry.
**-02- Product Identity Markers Make Digital Marketing Possible**
"One Product, One Code" technology has been around for about five years. Baidu defines it as: **A technology that uses cloud platforms to connect consumers, enterprises, and distribution, thereby providing comprehensive solutions for O2O marketing, anti-counterfeiting traceability, and warehouse logistics.**
As can be seen, this technology is the foundation of digital marketing. Only when products have their own identity markers (coding) can product information tracking and other personalized marketing be achieved.
Currently, in the FMCG industry, the two most common coding methods are **product codes and box codes**. Product codes are QR codes on individual products; box codes are QR codes on the outer packaging of whole boxes.
Through the application of this technology, the system accumulates vast consumer data, which, after backend big data analysis, flows back to brand manufacturers, laying the foundation for building information engines and achieving precision marketing.
**1. More Precise Product Distribution Guidance**
For products with box codes, after the initial distribution in target markets, each terminal store staff scans the QR code and enters basic store information (store name, address, channel, etc.), enabling real-time reporting of unboxing quantities. The backend system generates real-time summary analysis reports.
**This quickly identifies which channels and terminals have the highest unboxing rates, helping sales staff quickly lock onto target channels and outlets with the fastest product turnover.**
Of course, in practice, two aspects need attention. First, terminal scanning may be incomplete—many store staff forget, lack motivation, or find it cumbersome to enter information. Therefore, incentives for scanning and registration are needed, typically 5-20 yuan, randomly distributed in several tiers.
Second, false information entry is inevitable in digital applications. This can be gradually improved by exporting backend data and having relevant sales staff conduct field visits to correct it.
For product codes, collecting and analyzing consumer opening (bottle/can) data also helps us understand consumer purchase habits. When combined with box code big data analysis, it enables more precise distribution guidance.
**With this consumer data, terminals can be tiered, and differentiated expenses and manpower can be allocated.** In the next distribution phase, choose more suitable regions and packaging products for targeted distribution, create more model stores for new products, sign annual cooperation agreements with high-volume terminals, deepen cooperation, and continuously expand from points to areas to achieve deep market penetration.
**2. More Flexible and Effective Consumer Promotions**
**The application of one-product-one-code technology greatly solves the problem of single and limited consumer promotion methods in traditional channels.** The most direct application is "scan the cap and get a red packet." This is common in the industry, and many consumers are even tired of it. The main reasons are that the amounts (3-5 jiao) are too small and the winning rate is low.
Compared with traditional promotions like "one more bottle," the appeal is clearly insufficient. At this point, **through backend system control, the winning ratio can be set, and the winning rate can be increased in areas with denser target populations or during weekends and holidays, releasing a few first or second prizes.**
Even for consumers, the winning ratio per cap can be adjusted so that first-time openers have a 100% chance of winning, guiding repeat purchases and quickly triggering offline sales.
For example, if a company sells well in Hebei but poorly in Shanxi, to boost Shanxi sales, the scan winning rate in Shanxi can be increased by 10%, the average red packet amount raised from 1.88 yuan to 8.88 yuan, and a few 888 yuan grand prizes released.
In Hebei, the scan rate can be reduced by 10% to maintain the national average winning rate, with red packets adjusted to an average of 1.88 yuan. Tailor measures to local conditions.
**The second method is to give away new products with old product scans, leveraging the influence of old products for precise new product audience cultivation.** But the prerequisite is to ensure all activity outlets have new product stock before the event. After consumers purchase the old product and scan, the system pops up "Win one XX" or "Add 1 yuan to exchange for one XX." The add-1-yuan method effectively increases terminal redemption enthusiasm.
**The third method is to give away discount coupons, such as JD.com coupons or Didi ride coupons.** Through cross-industry cooperation, brands can achieve mutual benefit, sometimes even at zero cost for better promotional results. Cross-border traffic sharing is a method brand manufacturers should value.
But note: promotions must align with the consumption habits of the target buyers and not be too trivial.
**The fourth method is points rewards. Each time consumers scan after purchase, points are accumulated in the backend. Points can be exchanged for gifts or cash. This method is highly attractive to heavy consumers and effectively enhances brand stickiness.** Of course, gift selection should also match target consumer preferences.
Additionally, these methods can be combined to give consumers multiple chances to win, increasing participation. Especially for new product launches, combining old-to-new and multiple benefits works better.
**3. More Efficient and Faster Expense Verification**
Conventional terminal promotions require terminal stores to advance expenses. The verification process for these advances is complex, and many customers complain.
For example, traditional promotions like "one more can/bottle" typically involve collecting pull rings or caps and verifying them level by level through wholesalers and distributors. This requires strict counting per manufacturer requirements—50 per string, listing quantities per distributor, boxing, weighing, and shipping to the manufacturer's designated location. The manufacturer then spot-checks, and if damaged or counterfeit items are found, the customer is penalized.
With "one product, one code" digital technology, these cumbersome processes can be simplified. **First, if scan-to-win red packets are used, there is no terminal expense advance. For traditional "one more bottle," the inner bottle code and store code can enable convenient online verification.**
For example, a consumer scans the QR code inside the cap, and a "1 yuan happy" pop-up appears. The consumer clicks the "Redeem Gift" button, a scan frame appears, the terminal store shows its store code, the consumer scans it, and pays 1 yuan. The consumer takes the gift without leaving the cap, preserving the drinking experience.
At this point, the backend system records the redemption quantity for that store, accumulating over time. This data is transmitted in real time to the upstream wholesale distribution client system. The upstream customer, based on the terminal store's advance situation, when it reaches a full-box delivery scale, provides reward redemption during the terminal's next order. During redemption, the terminal scans the secondary customer's customer code, enters the redemption quantity, and provides an electronic signature, completing terminal verification.
The verification between wholesale customers and distributors, and between distributors and manufacturers, follows the same pattern. On the manufacturer's system, they can view redemption status at all levels across the country. **Efficient verification improves the operational enthusiasm of terminals and customers at all levels, while also providing a quantitative assessment of channel customer service quality.**
**4. Collection and Analysis of Consumer Purchase Data**
The most direct and meaningful application of one-product-one-code technology is establishing a system for collecting and analyzing consumer purchase data. After purchasing and scanning, consumers link their WeChat ID, phone ID, or location (if enabled) to consumption data, helping brands compile the following:
**1) Native data: gender, location, age, etc.**
**2) Behavioral data: when scanned, where scanned, monthly scan frequency, whether they won, which channels they scanned in, etc.**
The backend system matches data to brand sales markets at all levels, compares with actual distribution and resource allocation, and generates intuitive regional consumer behavior and marketing precision analysis reports.
**Data accumulation allows brand marketing decisions to be fully based on real market consumption, identifying the true "grain-producing areas" of products and achieving precise resource allocation.**
In the case, Mr. Zhang's company only had sales staff's distribution and stocking data, which didn't reflect terminal sell-through. Only by combining with consumer purchase data can distribution quality be analyzed.
Therefore, many companies' current marketing systems are closed systems based on years of marketing layout. When sales decline, they often draw one-sided conclusions about causes and fail to find the root from the consumer end in time.
**5. Quick Product Authenticity Verification**
**Authenticity verification is also a problem many manufacturers want to solve. Through "one can, one code" technology, products can be easily traced from production, and promotional caps or rings can be verified for authenticity.**
Production traceability matches product origin, production process, quality inspection information, etc., to each product's QR code. Consumers scan to instantly see relevant information, making identification easy.
Promotional cap verification is to prevent criminals from exploiting the loophole of recycling promotional rings for product exchange by forging large numbers of fake caps. To mimic, fake caps' QR codes may copy real ones.
So when terminal store owners receive winning rings from consumers, they can scan the QR code inside the product to check the number of queries for that code. Many problematic caps have been scanned hundreds or thousands of times, indicating they are fake. Of course, if the query count is under ten, it might be the consumer scanning multiple times, not necessarily a fake ring.
**6. More Precise Goods Flow Control**
Abnormal goods flow is a headache for companies, and mutual blame and evidence gathering waste time. "One product, one code" can track product circulation paths, but the application cost is relatively high, and few manufacturers currently do it.
The logic is similar to express parcels. Products go from production to base warehouse, to regional distributor warehouses, to terminal stores. The box code records the circulation information of the entire box (professional box code technology enables batch matching of circulation info for entire pallets).
Then, by linking the box code with the bottle codes of products inside, a multi-level packaging data correspondence is established. Finally, scanning the bottle code can trace whether the product is normal circulation in that region.
Additionally, there is anti-transshipment chip technology. Based on existing box code promotions, chips are embedded in cartons to invalidate scans outside designated regions and enable real-time goods flow tracking and transshipment alerts.
Some chip suppliers have designed professional chip detection tools. Goods flow inspectors can place them in briefcases to detect abnormal goods flow within a specified range, avoiding conflicts from transshipment checks.
**7. More Flexible and Effective Promotional Incentives**
**Connect products with key channel sales roles, optimize profit distribution systems, and improve channel distribution efficiency through scan-to-win red packets and exclusive code commissions.**
For example, when products with box codes arrive at terminals, after unboxing and shelving, scanning the box code yields red packet rewards—the more sold, the more earned.
Set exclusive guide codes for terminal sales staff in the backend. When consumers buy and scan the bottle code, they get the first red packet. If they continue to scan the guide code, they get another surprise prize chance, while the guide gets a commission for that sale, which can be withdrawn once it reaches a certain amount.
Secondary wholesale customers can also be incentivized. First, they need to complete basic information registration via a mini-program. When products are delivered to terminals (terminals also need to register in the mini-program in advance to generate exclusive terminal codes), wholesale customers scan the QR code on the box exterior and the terminal code, generating corresponding distribution quantities in the backend, accumulating over time, and calculating distribution rewards at month-end.
**Note: The major challenge is getting channel customers to complete accurate information registration, which requires company investment in incentives and frontline sales staff effort to maintain and promote.**
**8. Fostering and Attracting Fans in Private Domain Traffic**
When consumers scan to win red packets, they follow the brand's official WeChat account, laying the foundation for future brand remarketing. This is what every brand needs.
**Rapidly building a core consumer group is the most important intangible asset for a company. This traffic can be directed to the brand's mall, and through various innovative activities, continuously deepen consumer stickiness, laying the foundation for diversified and stable future development.**
It is understood that through the powerful one-product-one-code function, Dongpeng Special Beverage's platform has accumulated tens of millions of fans, almost the same as Xiaomi. Dongpeng sold its red packet splash screen to China Ping An, Bank of Communications, Minsheng Bank, etc. Alipay also saw value in Dongpeng's one-product-one-code system and was willing to invest tens of millions to advertise on Dongpeng's red packet splash screen.
Dongpeng truly turned its platform into an e-commerce and traffic-generation platform. While others fence off land, it fences off fans. Then it uses advertising fees from other companies to reward its fans.
**"One product, one code" technology is just one aspect of enterprise digital application. Many companies also use CRM, SFA, SAP, and other systems. To better leverage these systems, it's necessary to fully integrate them for unified data application, enabling real-time digital report tracking at every stage from production to distribution, making every decision more timely and precise.**
The inevitable trend of digitalization is rapidly empowering traditional industries. Especially for technologies that solve industry pain points and innovate marketing, traditional enterprises need to actively embrace and boldly try them.
**Quickly seize paths for more efficient and deeper communication with consumers, form a virtuous cycle of mutual influence and promotion between products and consumers, accumulate a fan base truly loyal to the product, and give the company lasting, stable development momentum.**


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