Click 'Read Original' for details. According to New Distribution, following Mengniu's WeChat business product 'Manran Fiber Milkshake Milk', a new product named 'Ningchun Collagen Peptide Crystal Extract' will be launched today. According to available public information, this product is mainly targeted at women and office workers, and 'can inhibit the production of glycation products, help cells resist glycation, and thus have a certain anti-aging function'. In terms of sales channels, it will adopt a 'one-on-one' WeChat business model in the Moments. In January this year, Mengniu's official WeChat announced the launch of the new product 'Manran' Fiber Milkshake Milk. This product targets new retail and is sold through WeChat business, marking Mengniu's official entry into the WeChat business! According to data, as of early August, this product, sold through WeChat 'Moments', had achieved sales of over 1 billion yuan within 6 months of launch. Since 2018, Mengniu has been frequently launching new products. Against the backdrop of the 'double 100 billion target' and industry competition, Mengniu has shifted new products to the WeChat business channel. Zhu Danpeng, a Chinese food industry analyst, believes that Mengniu's development of 'new retail' e-commerce channels is a strategic goal to meet omni-channel operations and better align with the shopping mindset of the new generation. However, some industry insiders also analyzed that the 'E-Commerce Law of the People's Republic of China' (hereinafter referred to as the 'E-Commerce Law') will be officially implemented on January 1, 2019. As a traditional enterprise, Mengniu's first foray into WeChat business under the opportunities and challenges of 'new retail' still needs to solve many problems. Testing the New WeChat Business Channel Manran, which has been in the WeChat business circle for half a year, is gradually becoming popular in WeChat Moments. According to Mengniu's regulations, this Manran product can only be sold in WeChat Moments and is not authorized on third-party e-commerce platforms. 'City manager agents need to pay 3,552 yuan for 24 boxes of goods, city partners need to pay 15,360 yuan for 120 boxes, and senior partners need to pay 194,400 yuan for 1,800 boxes. Currently, senior partners are no longer recruited. It is worth noting that city managers can only earn the retail price, while agents above city partners can earn retail price differences and lower-level price differences. Agents can also place Manran in physical supermarkets, weight loss centers, beauty centers, pharmacies, gyms, etc., for physical store distribution,' said a WeChat business agent. Another WeChat business agent said, 'Mengniu has no sales quantity requirements for agents, but agents need to actively cooperate with the company by posting on Moments every day, which makes it easier to sell. If offline distribution is needed, the physical store must have an agent's authorization letter. At the end of September, Mengniu will also release new products, and other Mengniu products will occasionally 'make cameo appearances' in the WeChat business channel. In the future, more and more new products will be sold through the WeChat business channel.' In recent years, many first-tier FMCG brands have successively entered the WeChat business, which is no longer new. The WeChat business industry has entered the right track in terms of market size and development stage. According to the '2017 WeChat Business Industry Development Report' released by the China Internet Association, the overall market size of the WeChat business industry in 2017 will reach 683.58 billion yuan, with a growth rate of 89.5%. WeChat business emerged in 2013, and after 5 years of development, it has basically passed the 'immature stage under barbaric growth'. The awareness and recognition of WeChat business among social groups have gradually improved. In addition, from the perspective of the FMCG industry, the cost of traditional distribution channels remains high, and consumer demand is diversified. Traditional FMCG brands have ended their 'good days' of high-speed growth, with slowdowns or even negative growth becoming the main theme in recent years. The 'Duopoly' Battle In the view of dairy expert Song Liang, the current Chinese dairy market has shown a 'duopoly' pattern of Yili and Mengniu. 'The output value of the two companies currently accounts for one-third of the entire Chinese dairy industry. Not long ago, both Yili and Mengniu announced their first-half 2018 financial reports. The revenue gap between Yili and Mengniu widened to 5.468 billion yuan, accounting for 69.2% of the total difference in the previous year. In the first half, Yili's total operating revenue was 39.943 billion yuan, a year-on-year increase of 19.26%; Mengniu's sales revenue was 34.474 billion yuan, a year-on-year increase of 17%. In the first half, Yili achieved net profit of 3.469 billion yuan, a year-on-year increase of 2.43%; Mengniu's net profit was 1.562 billion yuan, a year-on-year increase of 38.49%. In the view of industry insiders, Mengniu's frequent new product launches are also related to the competition for industry leadership. As competitors vying for the leading position in the dairy industry, Yili and Mengniu have been competing in products, both wanting to lead market development. Previously, Mengniu and Yili had highly overlapping products and channels. Although the product concepts were slightly different, the overall packaging and taste did not show significant differences, and raw material costs were also similar, so channel profits at all levels were also similar. With the rapid development of the Internet, the traffic dividend of traditional e-commerce is gradually fading, and new retail channels have become the focus of major brands and retail giants. Stimulated by 'Internet+', Mengniu's new products have entered the public eye through the social new retail model. In the view of brand marketing expert Lu Shengzhen, relying solely on e-commerce, Mengniu will not pose a competitive threat to Yili. 'Mengniu's entry into the WeChat business channel indicates that the space for traditional channels is limited, and the pressure on performance growth is high. Entering the WeChat business, Mengniu faces greater challenges from product price challenges and whether the functional appeal of products can be reasonably accepted by consumers.' Multiple Challenges This year, many first-tier FMCG brands have entered the WeChat business, represented by Mengniu and Wahaha. A few days ago, an industry media outlet revealed that Wahaha's WeChat business product 'Tianyan Jingjing' had changed its agent recruitment policy several times, with some agents withdrawing due to losses, and even some agents believing they were 'cheated', thus establishing a 'Wahaha Agent Rights Protection' group, which has gathered nearly 70 people so far. New Distribution also asked several heads of Mengniu's 'Manran' product agents, who revealed to New Distribution, 'Currently, this product with three-level agents is selling average. It's a viral product; once the hype passes, it's gone.' A Beijing Business Today reporter found that price chaos for Manran has already emerged. For Manran products sold only through WeChat business channels, they have already appeared on platforms such as JD.com, 1号店, and Taobao, with varying prices. A box of Manran priced at 198 yuan is sold at a minimum of 148 yuan for 250ml×10 boxes on JD.com and 1号店, and at a minimum of 104 yuan for 250ml×10 boxes on Taobao. 'Mengniu is dealing with e-commerce platforms like Taobao and JD.com. Mengniu does not allow sales on other e-commerce platforms; those e-commerce products are counterfeit. If agents sell on Taobao and other e-commerce platforms, the company will treat it as price chaos and penalize by confiscating inventory,' said a Manran WeChat business agent. Zhuang Jianzhong, a domestic social e-commerce expert who successfully operated the 'Kumamoto-ya' project, told New Distribution that first-tier FMCG brands have begun to gradually attach importance to new social e-commerce channels like WeChat business, which is a fact. However, FMCG brands should carefully choose products or categories when entering the WeChat business. For example, products like Manran and Tianyan Jingjing are functional products with relatively higher gross margins, but their universality is slightly worse. Dali's 'Fu Xiaoxian' is more of a daily necessity with high repurchase frequency for consumers compared to the above two types. The universality of a product determines whether a WeChat business product can continue to go further and last longer, rather than being a viral product that fades away. Many experts also said that after the implementation of the E-Commerce Law next year, WeChat business operators will need to register with the industry and commerce bureau and obtain a business license, and must also pay taxes according to law. If they sell food, they also need to apply for a food circulation license. 'This will bring new challenges to WeChat business, and for Manran, it is also a problem that must be faced.' New Distribution compiled from Beijing Business Today. October 23-24, during the Autumn Sugar and Wine Fair, New Distribution will host the '2018 FMCG City Distribution Logistics Conference'. We will invite industry bigwigs, FMCG warehousing and distribution experts, and distributors who have transformed to unified warehousing and distribution platforms to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of distributor transformation to unified warehousing and distribution, hoping to bring you different inspiration and thinking! -END-