Will new retail take the place of manufacturers? How does community marketing reshape manufacturer-dealer relationships? In the intelligent interconnected era, where is the manufacturer-dealer game headed? The author's answer: compete for the C-end, create customers, and focus on the industry chain. The new manufacturer-dealer relationship will move from 'game' to 'symbiosis'. "Competing for the C-end" has become the mainstream in the current market. Manufacturers, brand owners, platform operators, and retailers are all competing for the C-end, making consumers the darling of the industry chain. In the apparel industry, Kutesmart Group (formerly Red Collar) uses intelligent production lines to meet consumers' personalized customization needs for thousands of people with thousands of faces. In the furniture industry, Kefulai Wardrobes uses whole-house customization to meet families' personalized needs. These are examples of manufacturers competing for the C-end. Coca-Cola, Jiangxiaobai, and Xiaoming Classmate use scenario-based copywriting and fun, engaging marketing activities to connect with consumers, making products the expression props for consumers' 'emotions, friendships, and tastes.' These are examples of brand owners competing for the C-end. Hema Fresh uses intelligent super service experiences to capture users; Pinduoduo and NetEase Yanxuan use cost-effectiveness to capture users; Xiaohongshu and Kidswant use high stickiness of 'social + service' to capture users; and Yunji uses the name of developing consumer merchants to capture mothers. These are examples of retailers competing for the C-end. Alipay, Qijia Decoration Network, and other platform operators compete for consumers under the banner of "satisfying consumers and ensuring consumer interests." These are examples of platform operators. The competition for the C-end has just begun. In the future, more industries and brands will join this competition. Background Interpretation: Why is everyone competing for the C-end? Every industry's value chain has four links: manufacturing, distribution, retail, and consumption. In the Chinese market, the 40 years of reform and opening-up have also been 40 years of commercial hegemony shifting from upstream to downstream. The first stage was manufacturing hegemony. At the beginning of reform and opening-up, products were in short supply; if you could produce, you had no worries about sales. At this time, commercial hegemony was in the hands of manufacturing. Mass production responded to mass sales; whoever could get goods could get rich quickly, and consumers had to rely on connections to buy scarce goods. The second stage was distribution hegemony. Products began to balance supply and demand, and performance growth relied on rapid distribution. Thus, mass sales were replaced by deep distribution. At this time, channel merchants rose, and regional agents, provincial agents, and other distribution giants controlled commercial hegemony. The voice of manufacturing shifted to channel merchants. The third stage was retail hegemony. Products exceeded demand, and homogenization appeared. An effective means to quickly digest large inventories was low prices. Thus, chain giants like Walmart, Gome, and Red Star Macalline were born. They won consumers and commercial hegemony through low prices and rapid channel expansion. However, the good times did not last. When e-commerce channels rose, the commercial hegemony of physical stores shifted to e-commerce platforms like Amazon, Tmall, and JD.com. But commercial hegemony remained in retail. The fourth stage is consumer hegemony. With the popularization of mobile internet technology, the substitutability of brands, products, and channels increased. Coupled with the emergence of self-media and consumption upgrades, consumer sovereignty rose. Commercial hegemony ultimately shifted to the consumption end. "User thinking," "providing scenario-based solutions for consumers," and "focusing on and satisfying consumers' personalized needs" have become the loudest voices in the market. —This is the background interpretation of the era of "competing for the C-end." Competitive Logic: From "Game" to "Symbiosis" The previous market competition logic was the manufacturer-dealer game, a game among manufacturers, brand owners, channel merchants, and retailers, which ignored the "interests of the consumption end." When the wheel of history puts consumers on the "throne," consumers not only participate in consumption but also in product R&D, manufacturing, distribution, and sales. This role change of consumers will reshape the relationship between manufacturers and dealers, and between individuals and organizations: changing the direction of competition from "manufacturer-dealer game" to "industry value chain" game; changing the logic of competition from "game" to "symbiosis." The underlying logic is as follows: 1. Individual self-independence promotes the rapid growth of self-organizations, subverting the original interest distribution methods. There are two ways of interest distribution: one is internal management, and the other is market coordination. In the past, whether inside or outside the enterprise, interests were mostly distributed through management. Today, the post-90s and post-00s are becoming the main force in the workplace and consumption. These individuals are extremely self-independent, promoting the rapid development of self-organizations. Self-organizations also subvert the original interest distribution methods, evolving from "internal regulations" to "supply-demand negotiation." Why is Inamori Kazuo's Amoeba management model so popular? Why is Haier's maker system attracting attention? Why can HSTYLE's brand teams continuously incubate new brands? This is all due to the role of self-organizations. What is a self-organization? It is an operating unit that, without external instructions, can self-develop, self-manage, and self-grow according to certain rules among its internal subsystems, enjoying maximum incentives. Because of self-organizations, within enterprises, the original hierarchical pyramid management organization is being seriously challenged. In November 2018, Harvard Business Review even published a cover article titled "The End of Bureaucracy." Because of self-organizations, outside enterprises, the relationship between manufacturers and dealers has transitioned from "internal management" to "market coordination." In the past, the manufacturer-dealer relationship relied more on internal management, either "big factories" managing "small merchants" or "big merchants" managing "small factories." Now it relies on market coordination. After all, manufacturers and dealers have a lot of room for self-selection; if you leave "Butcher Zhang," there is "Butcher Li" to choose from. Moreover, in the mobile internet era, "factories" can operate their own sales without relying entirely on "merchants," and "merchants" can also commission "factories" to manufacture goods, not necessarily relying entirely on "factories." 2. Fragmented everything is interconnected into one. Data-driven connection and cloud computing make efficiency come not from division of labor but from collaboration. Human society has always relied on division of labor to improve efficiency. In the industrial era, division of labor indeed improved technology, reduced costs, and achieved economies of scale. Today, consumption upgrades are pushing consumption toward "personalization." To meet personalized needs, collaboration becomes the prerequisite for precise division of labor (because through data-driven connection and cloud computing collaboration, big data can mine the laws of "personalization"); simple division of labor alone cannot improve efficiency. Only with "precise division of labor" based on "collaboration" can efficiency be greatly improved. On the one hand, factories, brands, channels, merchants, consumer behaviors, and communication methods are being fragmented into more and more pieces by new technologies, appearing chaotic and disorderly, but in fact, they are interconnected by smart devices and mobile internet technology. On the other hand, manufacturers and dealers must solve the contradiction between "personalized demand" and "large-scale production." That is, enter the customer's demand chain, create customers, and then use intelligent equipment to achieve "personalized scale." This is also a means to compete for the C-end. Creating Customers: Technology Rooting or Market Rooting Drucker said: The only purpose of an enterprise is to create customers. How to create customers? My understanding is Michael Porter's strategic choice: either backward integration, technology rooting, which focuses on R&D, using new products to create customers and guide new consumption trends. From big things like Apple phones, Tesla cars, and DJI drones, to small things like Jiangxiaobai, Heytea, and Uniqlo. This is the optimal choice for brand owners. Or "forward integration," market rooting, which focuses on service, providing personalized solutions for consumers, and using value-added services to create customers and meet new consumption trends. For example, Alibaba's Hema Fresh (fresh food), Kidswant (mother and baby), Bestore (food), and Xibei (catering) all choose this direction. This is the best choice for merchants. Whether it is technology rooting or market rooting, both are practicing community marketing (abbreviated as AF, i.e., Association Fans or Association Friends). The core of community marketing is one sentence: Use the community as an organizational form to organize users or related stakeholders on a large scale to make contributions, either cultivating them as fans or as friends. Turn the weak relationship between brands and related stakeholders into a strong relationship, building the foundation for continuous transactions. How does community marketing build strong trust relationships? Brands either shine brightly, making users admire you!—Fan relationship. Or they are highly trustworthy, making users support you.—Friend relationship. Association Fans shine brightly and always sparkle: products, stars, activities, online and offline all shine together. Association Friends always serve and are highly trusted: understand you, serve you, and stick to you online and offline. How to Focus on the Industry Chain Strategy scholar Michael Porter said: Future competition is not between individual enterprises but between different industry value chains. A single enterprise cannot compete against a complete industry value chain; it will inevitably automatically align and form groups, creating new industry value chains to compete against another industry value chain. The strategic competition between the Tencent system and the Alibaba system, whether through acquisitions or equity participation, is essentially about forming industry value chains in different industries to participate in future competition. How to participate in the competition of industry value chains? My understanding is: Start from one end of the industry chain, extending upstream or downstream; or focus on the "product R&D chain," "product supply chain," and "customer relationship chain" together. (1) C-end Focus: Building the "Customer Relationship Chain" In the mobile internet era, the new business logic is: From the product supply chain to the customer's demand chain. In other words: It's not "sell whatever products I have," but "based on consumers' life scenarios, discover what consumers need, and then organize and provide such products." If customers have leisure needs, I provide rest areas with water bars, fruit bars, and coffee bars: when you are tired from walking, you can sit down and rest, have something to eat, and drink something; when you need to take your kids out on weekends, I provide children's entertainment venues and equipment: children's playgrounds, rock climbing, painting, handicrafts, small theaters, and sightseeing cars; When you have cultural and entertainment needs, I add cinemas, game halls, singing bars, KTVs, and art exhibitions; when you need excitement, I provide AR, VR, and other technology venues for you to experience. NetEase Yanxuan, which calls itself new manufacturing, enters the "consumer demand chain" by reverse integrating manufacturer resources. It seems to be taking the place of manufacturers, but in essence, it is still new retail; Hema Fresh enters the "consumer demand chain" by reverse integrating fresh food supplier resources and taking the place of catering manufacturers. Entering the "consumer demand chain" inevitably leads to cross-border operations, which will be the standard configuration of new retail. Its purpose is to deepen the relationship with customers and build a "customer relationship chain." The approach is to use community tools to organize consumers, use "social + service" scenario-based solutions to stick to consumers, and cultivate their strong trust relationship with the brand. In this regard, Kidswant in the mother and baby industry, Xibei in the catering industry, Bestore in the food industry, and Yishion in the apparel industry are all benchmark enterprises. (2) B-end Focus: Transitioning from Management to Empowerment In the incremental market, the relationship between brand owners, channel merchants, and retailers is a game within the supply-demand chain, either "big customers bullying the store" or "big stores bullying customers." If manufacturers and dealers have small conflicts, they can rely on internal management for interest distribution (everyone makes money). In the stock market, when competitive pressure increases, the practice of brand owners relying on deep distribution to improve performance fails. Forcing inventory and allocating new products only shifts industrial inventory to commercial inventory. Brand owners have meager profits, while channel merchants and retailers may suffer losses. Thus, conflicts between manufacturers and dealers intensify, either channel merchants and terminals abandon old brands and seek new ones, or they threaten brand owners with cliff-like performance declines to demand support. What to do? The solution is to shift the interest distribution between manufacturers and dealers from "internal management" to "market coordination." That is, the "production, supply, and sales" parties form a supply-demand integrated 'industry interest chain,' where product R&D, logistics, information flow, capital flow, and consumption data are co-created and shared," and use this industry chain to compete with another industry chain. In simple terms, whether it is the upstream brand owner, the midstream channel merchant, or the downstream retailer, everyone transitions from management to empowerment. This is also about using community tools to build the "product R&D chain," "product supply chain," and "customer relationship chain," where everyone contributes value to related stakeholders in the community, and enterprises mutually follow and support each other. Toyota Motor focuses on the "product supply chain," using community tools such as auto finance, repair shops, driving schools, and 4S stores to empower midstream and downstream partners. Conversely, the co-creation and sharing of downstream and midstream also builds the "product R&D chain," achieving Toyota's "lean production." Kidswant, Xibei, and Haidilao all start with the "customer relationship chain," relying on the power of the C-end, and then gradually build the "product supply chain" using community tools, empowering midstream channel merchants and manufacturers. (3) Full Industry Chain Focus Xiaomi Technology is a special case; it focuses on the entire industry chain. Since 2015, it has formed various community matrices, building the industry chain comprehensively, including the "product R&D chain," "product supply chain," and "customer relationship chain." 1. Product R&D Chain MIUI is the starting point of Xiaomi's "product R&D chain." It has become a global R&D, innovation, and experimentation platform for various products, no longer limited to the mobile phone category. Currently, MIUI has 7 million enthusiast users at home and abroad, renowned in nearly 20 countries including China, the UK, Germany, Spain, Italy, Australia, the US, Russia, the Netherlands, Switzerland, Brazil, and India. 2. Customer Relationship Chain "Xiaomi Forum," "Xiaomi WeChat Official Account," and "Xiaomi Community" are the iron triangle community tools of the "customer relationship chain"; these are platforms for Xiaomi consumers to discuss and exchange, sharing Xiaomi usage experiences and tips, and also the best platform for help, consultation, and complaint reporting. Through this platform, Xiaomi interacts with fans online and organizes offline activities like popcorn parties and Mi Fan Festival, gradually cultivating consumers into fans. To date, the Xiaomi Forum has over 50 million registered users. 3. Product Supply Chain Xiaomi Mall (self-operated channel) + Xiaomi distribution channels (e-commerce and physical specialty stores) + Xiaomi Home (physical stores) + Xiaomi Shop (QQ and WeChat versions) + Mijia (App) + Xiaomi Live + Xiaomi VR + Xiaomi Finance, etc. In a word, organizing users, developers, suppliers, and related stakeholders in different communities, everyone co-creates and shares, forming a "supply-demand integrated" industrial organization. Currently, many people do not understand Xiaomi because Xiaomi is practicing new community marketing (AF) and using community marketing to build a complex full industry chain, including the product R&D chain, product supply chain, and customer relationship chain. On the surface, it seems chaotic and disorderly, but in fact, it is interconnected and powerful. Source: Cui Deqian New Marketing (ID: cdq99999af) Tips will be paid 400-2000 yuan once the tip is adopted. China FMCG + Internet Professional New Media Committed to FMCG manufacturer and dealer transformation and channel digital solutions