Currently, FMCG companies' understanding of the internet varies greatly. Some companies are already deeply integrated with the internet, while others are still rejecting it; some are actively and comprehensively adopting "+ internet," while others are waiting and watching; some are continuously practicing internet applications, while others are still "sticking to old rules" in previous environmental models; some are deeply studying the impact of the internet, while others are still immersed in superficial understanding; some companies are using all internet means to expand corporate influence and product promotion, while some bosses only use WeChat for fun. On one hand, a group of internet FMCG companies like Three Squirrels have achieved great success in a short time; on the other hand, more traditional companies are still based on previous FMCG thinking, complaining about market decline, saying "the internet has disrupted the real economy," and waiting for the market to improve. Zhang Ruimin said: "In the internet era, there are no enterprises, because enterprises are self-centered. Future enterprises will definitely be networked organizations, nodes of the internet, not self-contained systems. Connected to the internet, you may get unlimited resources; but disconnected from the internet, you may be nothing." The FMCG industry has already entered the internet era. If FMCG companies do not deeply study the internet, fully embrace it, deeply explore its impact on the current and future FMCG industry, and seriously research the new business models, marketing models, and corporate management models created by the internet environment, they will inevitably be eliminated by the internet era. Of course, the internet is still rapidly developing and changing, and society's understanding of the internet business environment is still being explored through trial and error. Currently, synthesizing information from various aspects, everyone's understanding of the internet and e-commerce is mostly one-sided. Those with a technical background tend to interpret the impact of the internet on business models from a technical and big data perspective. For example, Alibaba Research Institute emphasizes data-driven and consumer profiling. Those with an operations background tend to interpret the impact from traffic, promotion, and marketing perspectives. Those with a physical retail background tend to analyze the impact from a business logic perspective. It is precisely because of these differences and discrepancies in understanding that we have the big bet between Ma Yun and Wang Jianlin, Miss Dong's "disdain" for Xiaomi's model, President Ding's inability to understand how a water seller can become so large, Brother Dong's claim to open 1 million convenience stores which many say is bragging, and Alibaba constantly comparing itself to Walmart. Because of these different and one-sided understandings, some become "martyrs" in eighteen months, many internet companies are struggling, and many are burning cash. Many FMCG companies dare not test the waters of the internet, and many are still passively responding to internet changes and impacts. Currently, the impact of the internet on FMCG companies needs comprehensive, in-depth, and systematic analysis. But in any case, FMCG companies must clearly see that the internet society has profoundly affected corporate operations and management. Synthesizing current conditions, FMCG companies should study the impact of the internet on corporate operations and management from the following aspects. The Internet Has Become an Important Tool for FMCG Company Operations and Management The internet is an important tool, and it is a viewpoint widely accepted and used by many FMCG companies. However, there may be gaps between different companies. Currently, the vast majority of FMCG companies have achieved online ordering; many companies have achieved online team management and dealer management; many companies commonly use WeChat and DingTalk for internal management; many companies use positioning systems for daily management of sales teams; many companies use WeChat groups, Moments, and official accounts for product promotion and marketing. Some companies have also started to seek corporate resources on the internet and develop customers online. Some companies have opened flagship stores on Taobao, Tmall, and JD.com; some companies are developing their own e-commerce platforms; some companies have started to develop e-commerce agents specifically responsible for online channels. In short, using the internet as a primary tool has been accepted by most FMCG companies and is being used more and more widely. The broad impact of the internet on society has brought greater, broader, and deeper impacts on FMCG companies, posing challenges to their actual operations and management. If FMCG companies only view the internet as a tool, they will have a significant gap in fully understanding and grasping the current internet social environment and market environment. The impact of internet development on society has profoundly affected the external market environment and internal corporate management environment of FMCG companies. The Internet Society Has Significantly Affected Consumer Consumption: First, more and more consumers' lives are becoming internet-based. The number of Chinese netizens has reached nearly 900 million. In today's highly developed internet, many consumers, especially the post-90s and post-00s generation who grew up in the internet environment, have their lives internet-based. Therefore, for these consumers whose lives are internet-based, they cannot be fully found offline; their main life time and space are online, and their consumption purchases are more often realized online. So FMCG companies should quickly shift from only finding consumers through offline channels to finding your consumers through all channels. Especially for brands targeting young and fashionable groups, it is even more necessary to shift your main focus from offline to online, because your main target customers are mostly online. Second, in the current internet environment, for these internet-based consumers, the influence on their purchases is no longer the previous brands and mass media, but has shifted to communities and niche media in the internet environment. Third, the purchasing habits of these internet-based consumers have changed from the traditional in-store purchase process of "awareness—interest—desire—purchase" to the internet environment's "search—evaluation—experience—purchase—review—share." Fourth, the retail scenarios created by the internet have made the entire supply of goods extremely abundant. Previously, due to limitations of retail store area and shelf resources, customers could only receive tens of thousands of products. The powerful internet scenario has presented tens of millions or even hundreds of millions of products to consumers, giving them more choices. Fifth, in the internet environment, consumers truly enjoy the right to autonomous shopping. And shopping has become fragmented, "click on your phone, goods arrive at home." In the internet environment, there are more consumption advantages, hence the "hand-chopping party" (impulsive buyers). Therefore, the internet has deeply affected the consumption habits, consumption concepts, and purchasing methods of some consumers, and is affecting more people's purchasing habits. These changes must be highly valued by FMCG companies. They should quickly study and master the consumption changes in the internet environment and meet new consumption needs. The Internet Is Changing the Corporate Management Environment: The internet era has subverted traditional corporate management theories, and FMCG companies face the reconstruction of corporate organization and management models. First, the internet brings zero distance. Zero distance means Taylor's scientific management is no longer effective. Zero distance requires a shift from enterprise-centered to user-centered. User needs are personalized. Taylor's scientific management is mass production; now it must change from mass production to meeting stratified, personalized, and niche consumption needs. In the previous round of economic development, the rapid development of FMCG companies was based on a large market consumption environment where consumers had more common consumption needs. In this environment, companies could organize production according to large-scale industrial thinking and organize marketing according to unified needs and larger market potential. They could position their products: facing many consumers, companies could use one product to meet the needs of different consumers. Therefore, they could organize mass production through standardized products and organize marketing according to a unified marketing model. Companies could achieve faster development in this standardized and unified model. But now, in the internet environment, the market has changed. As Zhang Ruimin said: market uncertainty, personalized user needs. Overall, the current market characteristics of consumption stratification, niche, and personalization have become very important realities. Therefore, the external environment of the previous mass production enterprise model is changing. So, the key now is to further see this significant change in market characteristics and its future development trend. Chairman Sun of Tsingtao Brewery pointed out: "A company cannot use one product to respond to all consumers." How to adapt to this change? Zhang Ruimin's answer is to transform into small and micro companies. That is, to quickly abandon the previous mass production business philosophy, transform the corporate organization, and create smaller, more flexible organizational units to respond to the new market characteristics of stratification, niche, and personalization. This transformation is very complex and involves all aspects of the enterprise. However, the environment has changed, and the previous corporate model and philosophy environment are changing. Companies must undergo organizational transformation to adapt to the environment. Haier, by transforming from a traditional manufacturing enterprise with mass production philosophy to an internet-based networked, small and micro organization with employee maker system, provides a demonstration for all enterprises' organizational transformation in the internet environment. Second, decentralization, no leaders. Decentralization is a very important feature of the internet society. The internet is changing the relationship between employees and enterprises. Zhang Ruimin pointed out: "Who is the employee's leader? Not their superior, but the user. Employees and users must communicate directly." This subverts Max Weber's bureaucracy. Why didn't American automakers compete with Toyota? Because American automakers had 14 levels, while Toyota had far fewer. In the internet environment, the previous bureaucratic management model is being subverted. Employees are no longer defined as executors of the enterprise. In an environment with increasing market uncertainty and personalization as the main market feature, FMCG companies must transform their previous organizational model from enterprise-centered and product-centered to consumer-centered and market-centered. Corporate headquarters far from the market find it difficult to accurately grasp the marketing characteristics of different markets. Currently, severely inefficient corporate operations and severely inefficient sales team operations can no longer meet current market development needs. The partnership system has become an important choice for many companies' organizational transformation. Changing employees from passive executors to partners, fully mobilizing their creativity and innovation, is an urgent topic in current corporate management reform. Third, distribution breaks the closed model of enterprises. The internet environment has broken the strict boundaries of enterprises. All resources are not internal but global, which subverts Fayol's general management theory. Why must it be done internally? Why not attract global resources? As Don Tapscott (Canadian) and Anthony Williams (British) wrote in "Wikinomics," "The world is your R&D department." Boundarylessness has become an important feature of internet companies. Business operations are boundaryless, resources are boundaryless, and markets are boundaryless. Alliance, integration, cooperation, and sharing have become the main themes of current enterprise development, operations, and management. Companies do not need to follow the previous thinking of cultivating talent step by step, accumulating resources step by step, and building various business and management elements step by step. The internet already has abundant talent resources, corporate resources, and various elements needed by enterprises. New Business Models Created by the Internet Are Subverting Previous Business Models A greater impact of the internet on FMCG companies is that new business models created by internet thinking are subverting previous FMCG marketing models. B2C, B2B, and C2F models are changing previous channel and terminal models. Internet business models are changing previous FMCG distribution models with fewer links, higher efficiency, and lower costs. E-commerce models have changed the previous dealer model, reduced the previous multi-level distribution system, and reduced circulation links. The internet is changing FMCG marketing models from channel marketing to omni-channel marketing. From a certain perspective, e-commerce models can reduce customer acquisition costs for FMCG companies, shifting from investing more marketing expenses in channel and terminal retailers to directly investing in consumers, achieving direct connection and interaction with consumers. The internet can achieve precision marketing for FMCG companies. Zhang Ruimin pointed out: "In the traditional era, we only sold products, and customers were anonymous. But in the internet era, your users must be named and interactive. Whatever requirements users have, we must continuously iterate to meet them, thereby creating a lifelong relationship." The essence of big data is small data, that is, data about users' personalized needs. After high efficiency, high precision must be solved. Internet business models are developing rapidly. The key is for FMCG companies to seize opportunities. While many traditional companies are experiencing performance declines and traditional markets are shrinking, Three Squirrels, with its e-commerce model, saw sales rapidly climb to 4.4 billion yuan in five years. While traditional dealers are "struggling," B2B models are developing rapidly. I believe B2B models will definitely play a greater value in future FMCG distribution channels. Currently, e-commerce has occupied one-eighth of the market share, and in some categories, it has taken half of the market. The development of e-commerce brings new opportunities, new channels, and new market development space for FMCG companies, solving previous problems of channel segmentation and high marketing costs. In the future internet thinking environment, more new business models will be created, and more previous FMCG marketing models will be subverted. Sharing models, platform models, and other new business models generated in the internet environment are transforming many traditional fields. Didi Chuxing transformed the previous taxi field. While bringing convenience to more consumers, it reconstructed this traditional field. For the FMCG industry, the rapid development of logistics and the rise of supply chain finance are robbing previous dealer channels. Currently, the logistics value and capital value of traditional dealers are disappearing. WeChat is changing people's social methods. Communities are generating more social influence. The rapid development of official accounts has replaced previous mass media—television, newspapers, and radio. I believe that in the future, with the continued rapid development of the internet, more new business models will emerge, bringing more opportunities for FMCG companies. Bao Yuezhong Column: Special Contributing Writer for New Distribution Senior Economist Expert of the Ministry of Commerce's "Ten Thousand Villages and Thousand Towns Market Project" Famous FMCG Retail Expert Bao Yuezhong New FMCG, New Retail Innovation Practice Studio -END-