“I've lost about 400,000 yuan in real money.” Yan Shun knows many restaurant owners who didn't survive the pandemic, and as a beverage distributor, he says it could happen to him too. So he and his team are searching for a broken oar to set sail with during the pandemic, avoiding the black cloud larger than the world. Not long ago, the National Bureau of Statistics released data showing that in April 2022, total retail sales of consumer goods were 2,948.3 billion yuan, a year-on-year decrease of 11.1%. Consumers are “fighting the epidemic at home,” a large number of consumption scenarios have temporarily disappeared, offline store operations have stalled, and the catering channel has frozen... These interconnected realities hang over Yan Shun. In 2015, Yan Shun founded Shandong Zibo Haochunte Trading Co., Ltd. From two years ago, he knew that distributors needed to explore new growth methods. “Actually, I know very well that the future of distributors is to do it themselves,” Yan Shun says, “Build your own channels, do your own terminals, and directly serve consumers.” From idea to action, Yan Shun provides a sample of how a person embarks on an unfamiliar path, trying to grasp the hand of reality full of contradictions in a desperate situation. Seeking self-rescue in depression The entire Zibo market was frozen for 13 days. It wasn't just consumers who missed spring, but also the rebound consumption that small business owners had hoped for. From March to now, Zibo, Shandong, has experienced two rounds of the pandemic. After the two rounds, consumption became very weak, the catering industry was depressed, and large banquets such as birthday banquets, wedding and funeral banquets, as well as business entertainment, decreased, causing demand for high-end alcoholic beverages to shrink. In addition, the offline retail industry was sluggish, affecting the movement of beverages and affordable products. “I've lost about 400,000 yuan in real money.” No one is having an easy time during the pandemic, and Yan Shun is no exception. From March to the end of April, sales in that month and a half were only about the same as the usual 10 days. Previously, they might sell 3,000 cases a day, but now only 1,500. Even this near-halved turnover rate is intermittent; more often than not, it's zero. What's more worrying is the shrinking willingness to consume. Zibo is a city supported by chemical and heavy industry, and most local residents need to work offline. The paused production has closed consumers' wallets. The market is in a state of stagflation. The pandemic itself isn't that scary; what makes it scary is the shadow, loneliness, long delays, and various impacts on daily life. The impact of the pandemic is multifaceted. Revenue is declining. Haochunte Trading Company, which has more than ten transport vehicles, four to fifty employees, and distributes products like Tsingtao Beer, Genki Forest, and Changyu, with annual sales of around 90 million yuan, has seen its once excellent performance shrink significantly under the pandemic's influence. Costs are worrying: oil prices have risen about 30%, plus warehouse fees, labor costs... Business keeps retreating, and upstream brands are also adjusting their market strategies. When the market declines, brands tend to adopt more conservative and lukewarm approaches, adjusting product prices and the frequency of new product launches, lowering the proportion, quantity, and sales targets of high-end products. For distributors, these actions mean shrinking gross margins. Regarding not laying off employees and paying full base salaries during the pandemic, Yan Shun says it's nothing special. Sales staff in trading companies rely on commissions; if they can't go out to do business, there are no orders or commissions. “We help as much as we can.” How to save yourself? For Yan Shun, the answer is to go to the consumers. Although the regular offline catering consumption scenarios have temporarily disappeared, and consumers' willingness to consume may shrink, it doesn't mean it has completely disappeared. On the contrary, consumers' needs have become more explicit. Why? The more you stay at home, the more you need emotional products like beer and beverages to bring spiritual pleasure. Yan Shun keenly noticed this and changed the product logic accordingly: since the demand is still there, just deliver the products to consumers' homes. When a person is in business, he is also a consumer Crossing the B-end market and facing consumers directly means thinking from a consumer perspective. In product selection, Yan Shun basically deals in mid-to-high-end products, special flavors, and fresh beer and craft beer, decisions made from the consumer's standpoint. Tsingtao Beer has fifty or sixty products in its full range, but in stores you can only see seven or eight. That's because catering terminals need products with moderate prices and broad appeal. But for consumers at home, they want to alleviate the anxiety caused by restricted outdoor activities through spiritual pleasure, so they need more personalized, high-quality products. Moreover, these high-end, personalized products are not easy to buy on e-commerce platforms. What Yan Shun provides consumers are exactly these products that are hard to buy or even unavailable elsewhere. Once you thought the world was at your feet, now you can only stay at home. As days pass, wine loses its flavor, poetry loses its charm, spring breeze is neglected, and plum blossoms wither. At this time, a variety of beverages and alcoholic drinks in the fridge might be one of the few changes. The reason is simple: staying at home is monotonous enough. Whether working from home or in quarantine, the space is fixed, activities are limited, and time moves forward monotonously. Quality consumption is not just about more personalized, higher-quality product supply; in terms of product structure, consumers also crave a richer experience. Mixed-flavor product combinations are better than whole cases. In daily offline consumption scenarios, consumers tend to buy two bottles each of products A, B, C, and D. This habit doesn't change when staying at home. Buying a whole case of 24 or 12 bottles of the same flavor is too costly, both in terms of time to consume the case and the money spent. Moreover, the price of whole cases is relatively transparent; everyone can look up the price of a case of Genki Forest online. But a non-standard product with 3 bottles per flavor, mixed into a case of 15 bottles, has higher gross margins. As long as the product has enough SKUs, this method is universally applicable. The old distribution thinking focused on how to maximize product distribution to various stores, getting products on shelves, grabbing displays, and negotiating interests. Once those actions were done, it was basically waiting for consumers to come, with little attention to consumer needs, because if the manufacturer launched a product, it must meet some consumer need. When the pandemic hit, distributors tried to cross the B-end and face consumers directly. How to attract consumers to buy, surprise them, and generate repeat purchases? The core of these questions is: where are consumer needs? With the diversification of terminal channels over time, in the long-term race, the key to capturing and meeting needs is to forget data and models; consumers are real people. Not a lifeline, but a basket for eggs Yan Shun admits that although delivering products to homes and building their own private domain has high profits, its contribution to revenue is not significant at this stage. For him, the biggest significance is finding a direction. One more direction means one more layer of insurance. “In the past, we relied more on channels, but some distinctive products didn't sell well through channels.” It puzzled Yan Shun for a long time why good products didn't move. The same product: the channel says it doesn't sell well, but consumers say it's a new product they can't buy or can hardly buy elsewhere. The contradiction comes from different standpoints: the former views products from the perspective of gross margin and turnover rate, while the latter views them from the perspective of experience. It's hard for any channel to buy large quantities of affordable products while maintaining good sales of high-end products. For Yan Shun, crossing terminals means, from a marketing perspective, targeting mixed-flavor, mid-to-high-end, distinctive products. This action actually accomplishes what was done in catering stores before—fan discovery and consumer education. For beer, most consumers try new products in catering scenarios. “Brand promotions, buy X get X for new products,” everyone has heard restaurant waiters say something like that. Now that catering scenarios are temporarily gone, this time gap is perfect for doing things that usually lack energy. Yan Shun says their high-end product combinations sold about 3,000-4,000 cases, conservatively serving over 3,000 families. For these families, these products that channels are unwilling to stock are new products they can't buy elsewhere and have never tried. The quality and combination of products can satisfy consumers in home scenarios. Among these 3,000 families, because of the satisfaction of expectations and pleasant experiences, choosing to become fans or loyal members of Haochunte Trading Company's products becomes a natural thing. Regarding crossing terminals, Yan Shun admits, “Compared to catering stores, it's not a large volume.” But if done well, it's like having an extra basket for eggs. In the future, nearly 60% of high-end products could be sold this way, with good gross margins. “I now have a separate public account online, not my company's, not the brand's, but an independent one for beer enthusiasts. Offline, I've opened a theme store, and I'm also persisting with the catering channel.” In Yan Shun's future vision, the next step is to do small community stores covering only a two-kilometer radius, attracting and serving consumers more precisely. From low to high prices, each product in the matrix can find a suitable sales channel, and channels won't compete for traffic. For upstream brands, if distributors can sell from low to high, from 3 yuan to 30 yuan or even 300 yuan, they'll be more willing to maintain long-term partnerships. “For the brand, I am the person closest to Zibo consumers in the Zibo market, and from the perspective of the common people, I am the person closest to the brand and the one who knows the products best.” The rain is wide, but it doesn't moisten rootless grass. [How to Grow] is not only Yan Shun's personal problem but also a problem all distributors face. This process has tugs and setbacks; it's a long road. At least, try to find a direction. -END-