---
title: "Going Offline? What Does the 'Street Battle' for New Brands Really Come Down To?"
description: "A decade ago, the best marketing strategy for brands was to seize offline channels such as malls, supermarkets, convenience stores, and department stores. Ten years later, with the advent of the mobile internet, e-commerce platforms like short-video live streaming, JD.com, and Tmall have become powerful customer acquisition tools. However, as internet dividends fade and online customer acquisition costs rise, many brands face a 'ceiling.' According to Everbright Securities' in-depth report on private domain traffic, Alibaba's customer acquisition cost rose from 278 yuan per person in 2018 to 929 yuan in 2020, an increase of nearly 234%. Even Pinduoduo, with the lowest cost, saw it rise from 77 yuan to 203 yuan per person. In 2020, e-commerce accounted for 26.7% of FMCG sales, while offline channels still hold 800-900 billion yuan in sales. Thus, the offline 'street battle' is also a channel war."
author: "朱先生"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-01-26"
language: "en"
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# Going Offline? What Does the 'Street Battle' for New Brands Really Come Down To?

> A decade ago, the best marketing strategy for brands was to seize offline channels such as malls, supermarkets, convenience stores, and department stores. Ten years later, with the advent of the mobile internet, e-commerce platforms like short-video live streaming, JD.com, and Tmall have become powerful customer acquisition tools. However, as internet dividends fade and online customer acquisition costs rise, many brands face a 'ceiling.' According to Everbright Securities' in-depth report on private domain traffic, Alibaba's customer acquisition cost rose from 278 yuan per person in 2018 to 929 yuan in 2020, an increase of nearly 234%. Even Pinduoduo, with the lowest cost, saw it rise from 77 yuan to 203 yuan per person. In 2020, e-commerce accounted for 26.7% of FMCG sales, while offline channels still hold 800-900 billion yuan in sales. Thus, the offline 'street battle' is also a channel war.

Time traces back to ten years ago, when the best marketing method for brands was to seize offline channels such as shopping malls, supermarkets, convenience stores, and department stores.
Ten years later, with the advent of the mobile internet era, short-video live streaming, JD.com, Tmall, and other e-commerce platforms have become a dazzling array of online channels that serve as powerful customer acquisition tools for brands. But as internet dividends fade and online customer acquisition costs become increasingly expensive, many brands' marketing efforts hit a 'ceiling.'
According to data from Everbright Securities' in-depth series report on private domain traffic, Alibaba's e-commerce customer acquisition cost rose from 278 yuan per person in 2018 to 929 yuan per person in 2020, an increase of nearly 234%. Even Pinduoduo, with the lowest acquisition cost, saw it rise from 77 yuan per person in 2018 to 203 yuan per person in 2020. Intensifying competition has gradually filled the low-lying areas of traffic dividends.
In 2020, e-commerce accounted for 26.7% of FMCG sales, while offline channels still hold a sales volume of 800-900 billion yuan. Therefore, **the offline street battle is also a channel-grabbing war.**
A decade is a cycle, and we return to the present. Whether online or offline, brands have to fight their way back offline, penetrating various retail scenarios. They are engaging in street battles with big brands, engaging in close combat.
New consumer brands, are you ready?
**The Essence of Street Battles**
When we mention street battles, what comes to mind?
The Battle of Taierzhuang, the Battle of Berlin, or the world-famous Battle of Stalingrad. What do these battles have in common? In short: a pyrrhic victory.
In the past, Nazi Germany and the Soviet Union fought fiercely to seize the strategic location of Stalingrad, paying enormous casualties: Nazi Germany suffered 1.5 million casualties, and the Soviet Union 2 million. This unprecedented urban street battle in modern human history ended with a Soviet victory. In terms of casualties, it became the bloodiest battle in modern history, known as the 'meat grinder of cities.'
By analogy, returning to the offline market, we raise three questions about street battles between brands:
  * **What does a street battle mean?**
  * **What does a street battle rely on?**
  * **Who is more powerful in a street battle?**
First, let's look at the first question:
**1. What does a street battle mean?**
In the Battle of Stalingrad, the Soviet Union's 'pyrrhic victory' and Nazi Germany's 'crushing defeat' show that **a street battle is a huge consumption of resources.** Therefore, in brand offline street battles, **it's about who has more resources, whose resources can withstand consumption, who has deeper pockets, and whose investors can endure longer.**
So, a street battle equals a war of attrition.
**2. What does a street battle rely on?**
In the streets and alleys, what does an offline street battle rely on? Resources? Wrong. A street battle relies on people.
Is it managers, directors, or even higher-level executives? Still wrong. A street battle relies on lower-level officers and soldiers—those grassroots salespeople willing to do the dirty work, the tiring work, and put up posters.
Only when grassroots salespeople achieve extreme distribution and sell-through, reaching a certain base market share, can they intercept offline consumers into their brand matrix.
Imagine if you just flood the market with ads without anyone doing consumer interception, and distributors only pay lip service, you might pay 3 to 4 times the cost to open the market.
**3. Who is more powerful in a street battle?**
For example, between the U.S. military and Afghan guerrillas, which army do you think is more powerful?
Some say the U.S. military, others say the Afghans; neither is absolute. To judge strength, you have to look at where the battlefield is.
If it's on U.S. soil, the U.S. military is certainly stronger; if in Afghanistan, the Afghan guerrillas have a better chance of winning. This also explains why the U.S. attacked Iraq but could never occupy it.
So, to a certain extent, **a street battle is also a sales war. No matter how many brand resources or capabilities you have, you still need to leverage the power of local distributors and wholesalers, relying on their familiarity with the local market to break in and occupy it.**
This is why many 'regional brands' are 'local snakes' in their own territory, but once they leave, they become 'moles.'
Finally, after clarifying these three questions, consider whether to engage in a street battle and to what level.
**The Essence of Channels**
After discussing the essence of street battles, let's look at the essence of channels.
What is the essence of channels? From another angle, offline channels are also called retailers. What characteristics do retailers have?
  * **Purchasing on behalf of consumers**
  * **Supporting the strong, not the weak**
  * **Easily defecting**
**1. Purchasing on behalf of consumers**
The channel strategy for FMCG solves the problem of commodity circulation, transferring products from producers to consumers in the shortest time, with the least cost, and through the most reasonable route. So, in essence, retailers (channels) are purchasing on behalf of consumers.
**2. Supporting the strong, not the weak**
What does 'supporting the strong, not the weak' mean?
For example, under the same brand, there is a high-end mineral water product with high-quality water sources from Changbai Mountain, high appearance, and high style. But compared to traditional bestsellers, salespeople are more willing to sell the latter. Why?
When salespeople recommend new products to terminal stores, they may need to spend 3 to 4 times the time and effort to convince the store owner to stock them.
But traditional bestsellers already have a mature market and user base, so salespeople can easily complete or even exceed their tasks. Compared to traditional bestsellers, even if salespeople talk until they're blue in the face and repeatedly promote, this high-end new product may not even reach half the sales of a traditional bestseller.
So we often see that salespeople have a characteristic: **they always sell the products that sell best.**
By extension, distributors also only want to sell products with higher volume.
**3. Easily defecting**
Price is always the most concerned issue for distributors. The brotherhood between brand owners and distributors is always 'plastic friendship' in the face of price. Whoever offers a lower price, I'll sell their product. Even if it's just five cents difference, five cents is enough for them to 'break up.'
From the side, this is also a microcosm of terminal competition.
**How to Do Offline?**
It can be seen that doing offline market is a long-cycle process. The first thing to enter offline is not to cover a large area, but to establish a foothold in a regional market, build a base, and sustain the war by fighting.
According to experience, when a brand's market share in a region reaches over 26%, it can be considered to have survived; when it reaches over 41%, it is relatively comfortable; once it reaches over 71%, competitors may need three years and three times the funds to shake its position.
So, start by targeting one-third of the market share to fight for a market, then replicate and expand, taking a county market, then a city, layer by layer, establishing your own base.
And 'sustaining the war by fighting' is not only a need for building the market but also for building the organizational system. From the first battle, the boss must intentionally establish an offline sales organizational system, from channel deployment to consumer pull, forging an iron army in the deep distribution system, unified from top to bottom, quickly forming a combined force.
After all, online awareness does not mean offline awareness. To open up offline, you must establish an offline 'brand barrier.' **No matter how channels change, only the brand is immortal.**
**Final Thoughts:**
When it comes to offline street battles, is it 'survival of the fittest' or 'survival of the strongest'? In the Chinese market, it's ultimately survival of the fittest. Why didn't Darwin say 'survival of the strongest'? Looking at the Chinese FMCG market, no matter how strong you are, a strong dragon cannot crush a local snake.
When online new consumer brands, having experienced data bubbles, capital pre-investment, and strategic losses piled up like premature growth, first step offline, street battles are inevitable. Whether they can grow bigger and stronger ultimately depends on brand and product.
 _Editor's note: This article is based on the sharing by Mr. Zhu, a guest at the 'Offline Street Battle' new brand seminar, organized by the New Distribution team. The seminar was successfully held by New Distribution in conjunction with Zhoupu Data on December 23, 2021._
_**-END-**_


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