Introduction: Dr. Rui Yun points out that retail has entered a new era. The core of all retail revolutions is the revolution of efficiency, and the core of the efficiency revolution is to improve the operational efficiency of brand owners and the life efficiency of consumers. B2B is the winning weapon to connect factories to endpoints in the new maritime era of FMCG. 1. What was the logic of brand development in the past decade? If we carefully review the traditional FMCG distribution model, from brand owners to regional distributors, then to wholesalers, and finally to retail terminals including KA stores, chain supermarkets, and mom-and-pop shops, we will find that the core of these actions is to make products ultimately available on shelves, allowing consumers to perceive and occupy their minds, forming repeat purchases. All of this revolves around consumer demand. In the past decade, the internet and mobile internet have become deeply ingrained, also centered around consumers. The core needs they address are threefold: information needs, service needs, and product needs. People need to browse news and information to get more information, use Meituan for services through group buying, and shop through e-commerce platforms. We have seen that the emergence of Alibaba and JD.com has impacted offline physical stores and retail channels, Jumei has impacted traditional offline cosmetics channels, and Ele.me has impacted whom? It is hard to imagine, but it ultimately had a certain impact on the market share of instant foods like instant noodles. Whether it is traditional distribution or the internet, they can solve consumers' stage-specific needs, largely thanks to the evolution of China's consumption upgrade over the past 10-20 years. This is a history of comprehensive upgrade from consumption quality to consumption structure, from consumption experience to consumer demand. Many brand owners can feel that the growth rate of China's total retail sales has slowed since 2014, and many brands' sales are declining. Correspondingly, labor costs are accelerating due to the traditional distribution system. 2. In the new consumption era, what is changing? Masataka Tsutsumi, founder of Tsutaya Books, believes in his book "The Capital of Knowledge" that Japan's economic development can be divided into three stages: the era of product scarcity, the era of platform explosion, and the era of personalized demand. That is, early consumption behavior was passive, with no choice of product brands; in the middle stage, brands flourished and consumers began to have choices; in the later stage, personalized consumption is the big trend. China's consumption also shows such a development process. This makes today's consumers increasingly dominant, with a strong sense of sovereignty. This is the change in consumers. In the past two decades, commercial infrastructure has also changed. Offline, many brands' production processes, assembly lines, and technical levels are iterating and upgrading, and warehousing and distribution infrastructure is continuously improving. Online changes are changing rapidly, such as today everyone is fully accustomed to using WeChat for work and life, forming a new social ecosystem. This also includes backend cloud computing, big data processing capabilities, etc. In fact, this is also changing with consumers. So, should brand marketing thinking also change? The answer is yes. The core of this change is to reconstruct the entire brand marketing infrastructure around people, goods, and scenes. We must achieve seamless people-enterprise connection, boundless goods, and unlimited scenes. First, the connection between enterprises or brand owners and consumers is increasingly close. They can fully understand consumer needs and iterate concepts. Today, many products are directly customized by manufacturers for consumers. Second, boundless goods actually transforms the traditional concept of goods as commodities into the thinking that goods are content, and content is data. Goods, content, and data have become one. For example, the well-known Jiangxiaobai has implemented many interactive texts on bottle bodies, and this interaction is a manifestation of the trinity. What is unlimited scenes? Simply put, it is the inseparability of online and offline, and the expansive thinking of consumption scenes. While traditional big brands are in a period of anxiety, some small brands' explorations are very successful. For example, Vita Lemon Tea has a widely circulated advertising slogan online: "Vita Lemon Tea, better than smoking marijuana." This kind of promotion with strong new media attributes instantly exploded on WeChat Moments. Platform marketing is becoming increasingly vivid, social, new media-oriented, and precise. This should be attributed to the transformation of consumer internet over the past decade. Now, consumer internet is upgrading to industrial internet. At this year's iHeima Unicorn Conference, Niu Wenwen said: Every sub-industry can be upgraded locally, and with industrial thinking, Chinese business can be done all over again. This is a very forward-looking statement. 3. How can B2B become a booster for the FMCG efficiency revolution? JD.com once said: In the past 10 years, we have been impacting offline retail stores, and 3C home appliances have been affected by us. But there is one business format that has not been replaced by online, and that is the mom-and-pop store. If we cannot replace it, we must embrace it. Under the trend of industrial internet, FMCG categories have extreme demands and unique characteristics, and mom-and-pop stores are an indispensable part of their terminals. For this business format, the core revolution is the efficiency revolution, improving the efficiency from factory to endpoint. We believe that B2B is the winning weapon to solve this problem. It reaches brand owners upstream and small stores downstream, which complements the brand owner's channel. Brand owners focus on products, and B2B serves the fragmented outlets, transactions, and communication. From the development of B2B, 2015 was a year of war. In the more than three years since 2015, this business format has been ups and downs, but we have found that one constant principle is that the value reshaping of B2B is improving, getting closer to the industry and closely integrated with the FMCG market. What characteristics should a truly valuable B2B have? We have summarized and internally call it the triathlon of empowering brands. The first is supply chain, the second is fulfillment, and the third is supply. The supply chain must be established on the basis of no channel conflict and no price chaos. On this basis, we must do fine SKU management, including turnover from brand owners to warehouses, turnover of each SKU, online operation capabilities, and offline ground promotion capabilities. At the same time, we believe we should build a digital high-speed channel for distribution marketing. Fulfillment includes three points: first, extreme warehousing and distribution efficiency; second, direct-to-terminal outlet penetration; third, service. In terms of warehousing and distribution efficiency, our overall cost is currently within 4 points, significantly lower than the brand owner's 10 points of circulation cost. Only by achieving extreme efficiency can we carry out unified warehousing and distribution and serve terminals. This warehousing and distribution efficiency is based on excellent capacity matching. If we compare the operation efficiency of warehousing and distribution to our stomach, and the terminal sales speed to the intestines, a person's stomach cannot be too full or too hungry. If too full, it will directly burst the warehouse. If too hungry, the warehousing and distribution will be idling, and idling efficiency is extremely low. FMCG B2B service actually represents depth, density, brand effect, and the brand awareness of small store owners. Small stores are most sensitive to price, but service is also important, which can make small stores pay long-term attention to our core value. Short-term price wars are a practice with endless troubles, and long-term service is the ironclad trump card. Scale is a frequently mentioned word in our industry. At the beginning of this year, there was even a debate about regional dominance vs. national scale. We believe that we should emphasize quality scale, which includes three parts: regional density, user quality, and brand density. Regional density: we emphasize the number of outlets covered in the region and the degree of service to these outlets. Our ground promotion is different from traditional business formats. It does not only serve one brand, but through OMO service capabilities, it empowers all brand owners. Each ground promotion staff serves more than 100 outlets, still on the basis of ensuring the length and depth of service. In terms of user quality, for example, the effective outlets we cover are further divided into 520 outlets, that is, 5% core outlets and 20% high-quality outlets. This is still positively correlated with the service of ground promotion staff. Brand density: from the perspective of B2B cognition, all brands we have served are evenly distributed. Now we need to change to a Gaussian distribution, because our overall online and offline service capabilities and resources are limited, so we must focus on head brands to make highlights. 4. How can B2B empower brand owners? We have summarized three points to empower FMCG brand owners around core service capabilities. First, refine the existing and expand the incremental. This is also what all brand owners need to explore. From the deep distribution of the past decade, we have found that the market is saturated, but this saturation is not extreme. For example, when a person is overweight, he should first reduce fat and then exercise to increase muscle. The original transaction, fulfillment, and communication of traditional distribution can be completely released to B2B, and cost reduction and efficiency improvement can produce huge benefits. Second, direct to terminals and penetrate outlets. We must leverage online and offline advantages to achieve 7×24-hour rapid delivery, which traditional business formats cannot achieve. Traditional business formats serve during the day. At night, it is exactly when small store owners are free, and they can browse the platform and complete replenishment. Third is the digital distribution marketing mentioned earlier. We can monitor in real time how many of our brand's products are in stock, and we can generate some activity plans for terminals and achieve real-time verification, which will greatly improve the operational efficiency of brand owners. To summarize, FMCG has now entered the new maritime era. We firmly believe that FMCG B2B is the winning weapon to connect factories to endpoints in the new maritime era of FMCG. In the era of digital new marketing and new distribution, we hope more brand owners can cooperate with trustworthy B2B at a deeper level. They can completely make in-depth attempts in certain regions, complete basic transactions, basic fulfillment for fragmented small stores, and local brand promotion. The third point is the so-called new technology and new thinking. When mobile internet technology and artificial intelligence technology rise, we must have new thinking capabilities. Our B2B platform is willing to choose brand owners, and at the same time, we hope brand owners choose trustworthy B2B platforms to cooperate and jointly develop this industry and open up the new maritime era of FMCG. Thank you all. The above content is the speech shared by Mr. Rui Yun, founder of Dianda Mall, at the sub-forum "Brand Innovation Growth Forum" on the afternoon of the 22nd at the FDIC2018 China FMCG Digital Innovation Conference. -END-