---
title: "How a Financial Elite Crossed into FMCG and Became a Leading Regional Dairy Distributor in Four Years"
description: "Even the strongest companies will struggle if they don't take action for the future. 2022 was tough, but no one expected it to be this tough. The recurring pandemic has lasted three years, impacting all industries to varying degrees. Facing this uncertain future, what should distributors do? There's no standard answer. For distributors, the core is to focus on the present, deeply cultivate regional markets, monitor competitors, and stay 'half a step' ahead. This 'half step' lead was mentioned by Mr. Liu Wanqing of Shenyang City Dairy Co., Ltd. during an interview."
author: "周群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-05-12"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/RQwnkSrOmZh1eqKcTah0Hw"
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---

# How a Financial Elite Crossed into FMCG and Became a Leading Regional Dairy Distributor in Four Years

> Even the strongest companies will struggle if they don't take action for the future. 2022 was tough, but no one expected it to be this tough. The recurring pandemic has lasted three years, impacting all industries to varying degrees. Facing this uncertain future, what should distributors do? There's no standard answer. For distributors, the core is to focus on the present, deeply cultivate regional markets, monitor competitors, and stay 'half a step' ahead. This 'half step' lead was mentioned by Mr. Liu Wanqing of Shenyang City Dairy Co., Ltd. during an interview.

> **Even the strongest companies will struggle if they don't take action for the future.**
2022 was tough, but no one expected it to be this tough.
The recurring pandemic has lasted three years, impacting all industries to varying degrees. Facing this uncertain future, what should distributors do?
There's no standard answer. For distributors, the core is to focus on the present, deeply cultivate regional markets, monitor competitors, and stay 'half a step' ahead.
This 'half step' lead was mentioned by Mr. Liu Wanqing of Shenyang City Dairy Co., Ltd. during our exchange. In a sluggish market environment, being half a step faster than competitors increases your chances of standing last.
Shenyang City Dairy Co., Ltd., established in 2018, primarily represents Huishan and is an excellent large dairy distributor.
Recently, I had the privilege of interviewing Mr. Liu Wanqing, founder of Shenyang City Dairy Co., Ltd. In nearly two hours of conversation, his market insights and management strategies offered much to learn and ponder.
******The FMCG Industry Is Truly Fascinating**
**It's hard to imagine two completely different life trajectories in the same person.**
In 2008, Liu Wanqing graduated from a UK university and entered the financial industry, working in the US and Canada. Following a predetermined path, he would have remained a financial elite.
His connection with FMCG began in 2013.
At that time, due to a project, Liu Wanqing had some interactions with Huishan Dairy.
Fate may have been predetermined from the start. Liu Wanqing never expected that after this encounter with FMCG, he would never leave.
In 2014, Liu Wanqing invested in a community marketing project, delivering goods door-to-door. Every day at 7 AM, based on orders, fresh milk and vegetables were delivered to customers' doorsteps.
This was an attempt outside his main career and didn't truly root him in FMCG.
The turning point came in 2018 when Huishan Dairy faced bottlenecks in the Shenyang market, and friends hoped Liu Wanqing would return to China to help.
In 2018, Liu Wanqing returned from Canada and officially entered the FMCG dairy industry.
Initially, he felt a bit lost, unfamiliar with market operations.
But his financial industry experience told him that **any economic activity has an underlying business model.** **So after returning, Liu Wanqing immersed himself in the front-line market, conducting terminal research.**
He visited nearly 400 terminals, spending over 10 minutes at each, deeply understanding Shenyang's distribution model and terminal realities.
After visiting 400 stores, Liu Wanqing had a preliminary picture of Shenyang's market operations and business conditions.
This research solidified his determination to stay in FMCG. **In his words, 'This industry is truly fascinating.'**
Thus, Shenyang City Dairy was officially established in 2018, primarily representing Huishan dairy products.
At that time, Huishan faced immense pressure in Shenyang, with competitors increasing resources to grab market share, leaving the overall situation passive.
If they continued like this, they would eventually collapse. Liu Wanqing made a decisive move, setting the initial strategy for Shenyang City Dairy to first integrate surrounding resources, then manage the market meticulously.
After nearly two years of development, Shenyang City Dairy truly entered a corporate operation phase, with its operational strength ranking among the top in Shenyang's dairy industry.
******Traditional Business Needs Digital Transformation**
After entering the industry, Liu Wanqing noticed many traditional FMCG distributors trapped in a vicious cycle.
Weak profitability led to cost-cutting: reducing vehicles, drivers, salespeople, etc., sometimes even regressing to 1990s-style sit-down merchants.
**Traditional distributors are called traditional because of rigid models and low efficiency.**
His financial background made Liu Wanqing clearly realize that the core issue for distributors, beyond market conditions, was inefficiency. **
**If efficiency isn't addressed, no amount of cost-cutting can avoid elimination.**
To this end, Liu Wanqing spent considerable time researching and exploring efficiency optimization across the entire product circulation chain.
**In logistics and warehousing, Shenyang City Dairy adopted a three-tier logistics system with front-store-back-warehouse: factory—large warehouse—small warehouse—terminal.**
**Over 20 small warehouses use the front-store-back-warehouse model, covering 200-300 terminals each, in addition to store operations.**
At first glance, the three-tier system seems to add intermediate steps, but it actually improves efficiency and raises competitive barriers.
Dairy products differ from traditional beverages; they generally have shorter shelf lives, especially low-temperature milk, often under 10 days, requiring cold-chain transport.
With a traditional single-warehouse delivery model, delivery radius and cycle extend, and some products might approach expiry before reaching stores.
**In the three-tier system, small warehouses cover nearby stores, drastically shortening physical radius and delivery cycles, greatly improving overall delivery efficiency.**
Leveraging this logistics advantage, Shenyang City Dairy can achieve daily store delivery, even for low-temperature milk with only 4-day shelf life, ensuring rapid distribution.
The logistics system provided the foundation, but to achieve qualitative efficiency gains, data integration was needed.
To integrate data, Liu Wanqing tried developing proprietary software, but results were poor. So for digitalization, Shenyang City Dairy partnered with Zhoupu Data to achieve full-chain digitalization.
For Shenyang City Dairy, digital integration brought significant cost reduction and efficiency gains. Two major changes:
**First, in data retention, terminal sales data, route distribution, store SKU counts, order frequency, order unit price, etc., are all clearly visible on mobile devices.**
For example, during Shenyang's pandemic, some salespeople were isolated at home and couldn't work. The company could quickly deploy new staff, who could get up to speed using the system's complete sales data and route history.
**Second, in warehousing and logistics, not only did order delivery efficiency improve, but costs also decreased.**
For instance, before system data, daily loss was around 200 yuan; now it's controlled to 10-20 yuan. Even cardboard quantities are recorded, selling for over 300,000 yuan annually.
Liu Wanqing told New Distribution, **'For distributors, digitalization is an inevitable path. We shouldn't treat digital tools merely as tools, but apply them to real scenarios to build an ecosystem that feeds back into business growth.'**
******Let Every Good Product Enter the Right Terminal**
**'I'll tell you what's good; I study what you like.'** This is Liu Wanqing's understanding of products and consumers, also the consumer philosophy of famous game maker Nintendo.
There are consumption differences between north and south; many southern brands don't sell well in the north. Conversely, some northern local products sell better.
**So, how to find good products?**
**First, prioritize northern products, selected by the team.** Compile information on northern FMCG manufacturers in advance, visit them proactively, and experience product quality.
**Second, uncover processing plants behind chain systems to find good products.** For example, Lawson has extremely strict quality control and aligns with consumer preferences; you can find their processing plants and replicate products.
**Third, choose manufacturers with business philosophy.** For instance, when visiting manufacturers, those with a philosophy will let you try selling first and clearly tell you which products are for terminal policies, not for distributors.
Once good products are selected, another issue arises: some may not suit the Shenyang market.
To address this, Liu Wanqing **combined the Boston Matrix to establish a standard distribution and sell-through model.**
**First, Shenyang City Dairy classified its covered terminal stores into four levels, referencing the Boston Matrix.**
** _A-class stores: Star stores, 20% of total._ ** _Typical features: high sales ranking, strong business awareness, strong customer loyalty, high initiative from store owners, ability to analyze consumer groups, and willingness to proactively promote products._ _
_**_B-class stores: Cash cow stores, 40% of total._ ** _Typical features: large sales volume, relatively standardized stores, but lacking service awareness from owners, lower customer loyalty, and less initiative._ _
_**_C-class stores: Problem stores, 30% of total._ ** _Typical features: good location, high foot traffic, good natural sell-through, but core issue is weak business and service awareness from owners._ _
_**_D-class stores: Dog stores, 10% of total._ ** _Typical features: almost no advantages, generally not key maintenance targets._
Second, **based on the proportion of each store type, select 100 stores with excellent customer relationships. Once a product is confirmed, first distribute to these 100 stores for trial sales.**
If trial sales data from any of the A, B, or C store types shows good results, the product is deemed viable. Then, based on sales performance in each type, determine distribution ratios.
For example, if a product sells well in A-class stores, focus distribution on all A-class stores, with other types getting appropriate distribution based on trial results.
A special case: if a product only sells well in D-class stores, abandon it.
In Liu Wanqing's words, every store has customer relationship value that shouldn't be wasted. Only with a rigorous attitude and data-driven results can you maintain store loyalty.
**Final Thoughts:**
In nearly two hours of conversation with Mr. Liu, his thinking and practice in FMCG offered much to learn, but space is limited here.
At the end of the article, I'd like to share Mr. Liu's thoughts on the future direction for distributors.
In the current market environment, it's normal for distributors to feel confused about the future; I'm no exception.
But even amid confusion, some things are necessary to do. **
** _First, embrace digitalization to reduce costs and increase efficiency. In the future, data and business will inevitably be highly integrated. If you resist, you risk being eliminated in a big-fish-eats-small-fish environment._ ** _
_****_Second, excel in service to build channel barriers. Service isn't just frequent visits and displays; it's service that competitors can't imitate._ ** _
_****_For example, daily delivery to every dairy store, or making your product more profitable for stores than competitors—these are services that build channel barriers._ _
_****_Third, communicate more, read more, and learn management and models. The pain distributors face is essentially a lack of awareness of new things. The best way to solve awareness issues is through more communication and learning._ ** _
_****_'There are so many brilliant people in the world; we just need to learn from them,' such as studying Drucker for management, MUJI for refined operations, and excellent peers or manufacturers for practical implementation._ **
 **_-END-_**


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