A pandemic accelerated the development of home-delivery O2O business. According to New Distribution's research data, in the 30 days after the 2020 Spring Festival holiday, affected by the pandemic, the number of people working remotely from home surged, and under the stimulus of the home economy, active users of fresh food O2O platforms increased by 58% year-on-year. In fact, in recent years, O2O business has maintained rapid growth in both catering and supermarket channels, cultivating a massive user base, and its business model has become increasingly mature and stable. Taking Meituan and Ele.me as examples, public data shows that Meituan Waimai has 400 million registered users and 50 million monthly active users; Ele.me has 420 million registered users and 50 million monthly active users. A mature business model and a massive user base—whether high-frequency fresh food or high-frequency catering—have strong relevance to FMCG categories. Therefore, FMCG brands must pay attention, and for some categories, they should consider heavy investment. Among them, Tsingtao Beer seems to have acted the fastest. △ Chen Ruijie, General Manager of Commercialization Department of Dianping (left) and Lu Xujun, Vice President of Marketing at Tsingtao Beer (right) representing Meituan-Dianping and Tsingtao Beer signing a strategic cooperation agreement On June 2, Tsingtao Beer announced a strategic cooperation with Meituan-Dianping. Both parties will leverage their respective resource advantages to expand and build richer consumption scenarios, achieve omni-channel penetration, and help traditional FMCG industries accelerate their digital marketing pace. Regarding the value and significance behind the cooperation between Tsingtao Beer and Meituan, New Distribution recently exchanged views with Shi Yonggang, E-commerce Director of Tsingtao Beer. -01- The Three Sides: Brand, Channel Terminals, and Consumers—From Chasm to Thoroughfare Tsingtao Beer, as a leading practitioner of "deep distribution" in the FMCG field, covers millions of terminal outlets offline. Meituan, as an internet company based on offline retail formats, the cooperation between the two will ultimately land on these terminal outlets. The focus of industry attention should be on the specific form of cooperation. Mr. Shi told New Distribution, Tsingtao Beer's cooperation with Meituan marks the official launch of Tsingtao Beer's O2O business. For Tsingtao Beer, leveraging internet platforms like Meituan, it can reach consumers with relevant activities in the first time, generating sales conversions, whether for home consumption or in-store consumption. Tsingtao Beer's O2O responsible department will plan marketing activities and allocate resources on the Meituan platform, while various sales units will collaborate to undertake platform traffic conversion and promotion execution. Using the Meituan platform as a carrier, Tsingtao Beer's online and offline businesses are linked together, operating as one chess game. Traditional e-commerce platform resource allocation mainly promotes online traffic conversion and sales growth, and of course, also enhances brand communication influence. But the greatest value of O2O platforms is that they build a bridge for communication among consumers, terminal stores, and brands. Relying on the construction of home-delivery and in-store consumption scenarios, it achieves information symmetry and resource integration among the three roles. Brands need to increase brand voice and drive sales performance; terminal stores pursue single-store conversion and revenue assurance; and consumers hope to have cost-effectiveness while enjoying service experience. Therefore, brand investment on O2O platforms cleverly integrates the roles of the three. Compared with traditional hard advertising, terminal exclusive locks, and fragmented consumer promotions, the various plays and promotions on O2O platforms allow brands to interact directly with consumers, while also increasing brand control over channels, achieving diversified returns on investment. From this, it can be seen that in the future, brand investment in market expenses will not be limited to stack fees, display fees, and store-buying fees, but will truly invest more in consumer pull. Meituan is just a platform; Ele.me, Taoxianda, Benlai Life, Duodian, JD Daojia, etc., all these O2O platforms will become carriers for brand investment. -02- Achieving Brand and Performance Unity Based on Digital Platforms Regarding cooperation with O2O platforms, besides getting three cents of effect for every cent invested, the efficiency of investment also far exceeds traditional media investment. What is investment efficiency? Mr. Shi told New Distribution that investments made on O2O platforms show results immediately. Previously, spending 1 million on traditional media, such as TV ads, subway, and other traditional communication channels, made it difficult to estimate how much sales output it would bring. But through O2O platform investment, you can immediately see the investment effect. Daily promotional output, GMV, and promotion of terminal stores can basically be tracked every day, and investment and output can be quantified with specific data. Not only that, you can also compare effects through data ring ratios and year-on-year comparisons. If you didn't invest for the first 4 days and sold 100 boxes of beer, and invested for the next 4 days and sold 1,000 boxes, you can see that. Because of the value of brand and performance unity, in the past, Tsingtao Beer's new product launches were basically through traditional media such as CCTV, satellite TV, and subway. Now O2O platforms are becoming a favorable communication matrix for new product releases. These platforms have high daily active users and objective traffic, and are more cost-effective than CCTV and satellite TV. For Tsingtao Beer, when launching new products and conducting national promotions, it will be more willing to choose O2O platforms for release. For example, during the 517 Foodie Festival, Tsingtao Beer took the opportunity of launching the new product Pure Draft Flower Can to join hands with Ele.me to create a special event for the Foodie Festival, launching new products and promoting sales with a 50% discount, achieving over 100 million exposures for the new product and rapidly driving Tsingtao Beer's overall online trading volume. In contrast to traditional media, the TV opening rate is now less than 20%, but Meituan, Ele.me, Miss Fresh, and Meicai have high user stickiness. Urban white-collar workers basically order fresh fruits and vegetables online, which is exactly what brands value. The advantage of online transactions is ensuring the authenticity and accuracy of data. While brands invest in promotions, they also achieve private domain traffic accumulation. It is understood that various O2O platforms are launching brand pavilion channels to help brands undertake traffic and build private domain traffic positions. Through interaction with consumers and enhanced stickiness, brand pavilions will become a new window for interaction with consumers. Tsingtao Beer has performed impressively on e-commerce platforms such as Tmall and JD.com in the past two years. This strategic cooperation with Meituan indicates that Tsingtao Beer is officially moving towards omni-channel layout. -03- Let Professionals Do Professional Work Behind the cooperation between Tsingtao Beer and Meituan, what does it mean for FMCG manufacturers? In the new retail era, channel fragmentation is an inevitable trend. Many manufacturers are suffering from anxiety. In the past, channels were built by FMCG manufacturers one person, one city at a time. Now, various new species have hijacked them, and they are unwilling to accept it, thinking about transformation and change. How to transform? Build their own B2B platforms, build their own O2O platforms, so that others cannot strangle them. But in Mr. Shi's view, this is not advisable. As the saying goes, there are things you do and things you don't do. Each FMCG manufacturer should clearly know its positioning. As a brand, do R&D well, do production well, sell good products to distributors, let distributors sell to terminal stores, and in this process, through digital operation, improve business efficiency. As for home-delivery business, leave it to home-delivery platforms and O2O platforms. The so-called professional people do professional work, and we must fully respect the realistic laws of social division of labor. Why don't professional companies like Coca-Cola, Master Kong, and P&G build their own O2O and B2B platforms? The logic of retail is always high-frequency driving low-frequency. You are not selling vegetables or meals; consumers don't need to go to your platform every day to click around. Low-frequency business is always attached to high-frequency platforms. Let's look at the platform business again. Alibaba first had Taobao. After operating to a certain stage, it found that traffic reached a bottleneck, then acquired large retailers like Gaoxin Retail and Intime Department Store, also built Hema, did Taoxianda, and invested in Dingdong Maicai. Why? The essential logic is that these businesses are high-frequency, "necessities" that every consumer needs daily. As FMCG manufacturers, we should fully embrace platforms, rather than trying to build our own platforms. Seriously do products well, build brands well, and efficiently reach retail terminal outlets. That is the job we should do. Finally: Returning to the cooperation between Tsingtao Beer and Meituan-Dianping, from another perspective, Meituan-Dianping, as an internet giant with tens of millions of monthly active consumers, is essentially also a media platform. Where consumers' attention is, we go there. Today's consumers are not on TV, not in newspapers, not on radio, but on various platforms. We should advertise, promote, and build brands on platforms. At the same time, these platforms also have the function of selling goods. For FMCG manufacturers, since they can complete both communication and sales, why not embrace them! In New Distribution's view, this strategic cooperation between Tsingtao Beer and Meituan also provides the entire FMCG industry with a best channel innovation case of embracing rather than resisting, and breaking through O2O. Tips will be paid 400-2000 yuan once adopted.