Without community groups, brand owners cannot universally connect with users. Just as e-commerce connects users through platforms, 2B connections also require an intermediary.
During the COVID-19 pandemic in 2020, home delivery services, community groups, and live streaming became popular. Surprisingly, this time traditional businesses took the lead.
Although new retail platforms also participated in home delivery services, the main players were traditional retail stores; community groups were not micro-businesses but traditional stores plus groups; the main players in live streaming were not internet celebrities but brand owners following the "community + live streaming" path.
Due to logistics disruptions, e-commerce and social e-commerce that rely on logistics systems were temporarily at a low point during the pandemic. At the same time, because of measures like "community lockdowns," traditional businesses discovered that community groups were the best path to reach users, and brand owners also launched community partner recruitment.
For the first time, traditional business systems such as brand owners and retailers became the protagonists of the internet! Once it happens for the first time, the trend becomes irreversible.
Since Alibaba's rise, the protagonists have been platform companies, including platform e-commerce, social e-commerce, B2B, and new retail—all new internet platforms have been the protagonists. Brand owners could only become one of the merchants on these platforms, which can be seen as passive participants in internet commerce.
Since the internet era, the biggest loss for brand owners has been not having their own business thinking but accepting the business thinking of "counterparties," such as platform thinking and traffic thinking. These are business thinking from the platform's perspective, and platform companies and brand owners are mutually adversarial.
Platform thinking and traffic thinking result in platform companies being able to "use ammunition provided by brand owners to compete against brand owners." Platform traffic is created collectively, but in turn, brand owners have to buy traffic from platforms. Therefore, for brand owners, traffic thinking may be a "traffic trap."
Business thinking has a stance. Platform thinking, from its perspective, is against brand owners.
Since 2017, I have proposed a series of new concepts, such as new marketing, BC integration, and community groups, and have been practicing them with brand owners, hoping that brand owners can establish their own independent internet business systems.
During the COVID-19 pandemic, the nationwide business practice was led by traditional brand owners and retailers, based on community groups, using the "community marketing" approach we have always advocated.
Whether brand owners can see the opportunity of their own internet business is a crucial strategic insight. If they miss this opportunity, there is no regret medicine.
Community + Groups: The New Hub for Brand Owners' 2C
Traditional business is 2B; internet business is 2C. Using the internet as a tool to reach 2C can be considered internet business. Therefore, we must break through the fixed thinking that only platform e-commerce and social e-commerce are internet business, and regard all business systems with a 2C model as internet business.
Traditional business is 2B. Can we first go 2B and then 2C, forming BC integration? The nationwide practice during the COVID-19 pandemic proved that community (2B) + groups (2C) is the best path.
Community partners suddenly became sought after by brand owners because this path is too important for them.
The stock of FMCG is in 2B, so traditional channels cannot be abandoned. But it is almost impossible for brand owners to establish their own independent 2C system. B2B and new retail are also competing for terminals. Therefore, the biggest crisis for brand owners may be not having their own internet business system. If so, brand owners could become OEMs for "new manufacturing."
This is about the position of brand owners in business. Although we know that brand owners are value creators, if value creators do not have their own leadership, they cease to be creators.
Brand owners have already reached communities (terminals) through deep distribution, and then reach users through groups, achieving 2C. Therefore, community groups have become the new hub for brand owners' internet path.
New retail is now divided into two parts. One is innovative new retail, such as Hema Fresh and Luckin Coffee. The other is new retail leveraging community terminals, such as community group buying and B2B transforming into new retail, like Retail Link.
The current situation determines that whether it is new marketing or new retail, community is an important traffic entrance. In future competition, community is the origin, the path for brand owners with groups, and platforms are the path for new retail. Whoever can empower community stores will control the traffic entrance.
It is particularly emphasized that the focus of community marketing is not transaction (ordering) but marketing, including offline scenario experiences and group communication. Communication is not advertising; it may be check-ins during experiences. Where to order—offline, in groups, or cloud stores—is no longer important. Therefore, using community groups as a technical tool to connect offline, groups, and the internet is the real community marketing.
Below, I will raise six topics to explain why brand owners should use community groups to fully complete internetization.
Topic 1: What paths are available for FMCG enterprises to internetize?
In the future, marketing will use internet tools. So, what paths are there for FMCG enterprises to internetize?
Path 1: Platform e-commerce. According to data from the National Bureau of Statistics on total retail sales of consumer goods in 2019, e-commerce accounted for 23.1% of China's total retail sales of consumer goods in 2019. This is close to the limit of e-commerce's share, and platform e-commerce is not the main channel for FMCG. Therefore, e-commerce is not the mainstream path for FMCG enterprises to internetize.
Path 2: Private domain traffic. Micro-business has changed its name multiple times, such as social e-commerce, new retail, and private domain traffic, although they may not admit it. It can be said that private domain traffic's share in total retail sales of consumer goods is negligible. For major FMCG brands with hundreds of billions, tens of billions, or billions in scale, no single brand's private domain traffic exceeds 1 billion. Enterprises cannot use a few hundred million in sales to save a much larger sales volume. Although I do not oppose trying private domain traffic, for FMCG industry leaders, private domain traffic is destined to be marginalized.
Path 3: Self-built e-commerce platforms, such as apps. Most FMCG enterprises cannot do this at all, and it is unrealistic for society as a whole.
Path 4: New retail. Combining offline enterprises with the internet is new retail from the retailer's perspective and new marketing from the brand owner's perspective. I often say to brand owners, "You are a manufacturer; why do new retail?" However, I do not oppose brand owners participating in new retail platforms, just as they participate in e-commerce; it is also one of the sales channels.
Path 5: Community group buying. At present, community group buying has not found a connection point with mainstream brand owners, and community group buying platforms may need to build their own supply chains in the future.
Path 6: Internetization through deep distribution. The main sales of FMCG are currently in traditional channels. Although deep distribution can be combined with channel internetization, such as Jinmailang's "four-in-one" model, and traditional channels can be digitized, such as brand owners doing B2B, these are all 2B businesses.
The main battlefield for FMCG is currently in traditional channels and will remain so in the future. Only by achieving internetization through channels can full internetization be considered complete.
To summarize:
1) Platform e-commerce is nearing its limit; 2) Private domain traffic is a narrow path; 3) Self-built platforms are like moving mountains; 4) New retail has a misplaced stance; 5) Community group buying is not for brand owners; 6) Without B-end internetization, brand owners' internetization is incomplete.
Topic 2: Community marketing is the inevitable path for FMCG enterprises to internetize.
Among the six paths for FMCG enterprises to internetize, the first five are direct 2C. That is, brand owners directly do 2C through platforms, called B2C.
However, the largest stock for FMCG is in 2B, i.e., deep distribution in traditional channels. Therefore, without internetization of traditional channels, full internetization cannot be achieved.
Internetization must achieve 2C. FMCG involves 1.4 billion consumers nationwide, and achieving 2C through centralized business logic is almost impossible. Therefore, the internetization of traditional channels must first go 2B and then 2C, which I call BC integration.
Jiang Xiaobai founder Tao Shiquan said he proposed BC integration early on. New marketing experts, such as Niu Enkun, Fang Gang, Zhang Xuejun, and Ding Ding, have always advocated BC integration.
Where is the connection point between 2B and 2C? I believe it is community groups. This is a very important judgment.
Without community groups, brand owners cannot universally connect with users. Just as e-commerce connects users through platforms, 2B connects users through an intermediary.
There are three means to connect users: first, technical means, such as one product one code; second, content means; third, group means.
The first two are centralized, while the third is distributed. Distributed has stronger stickiness.
During the COVID-19 pandemic, many brand owners proposed the "community partner" model. Although the community partner model still needs observation, at present, there are roughly two paths:
One is the micro-business path. Recruit a partner, spread through Moments, order through cloud stores, and deliver through headquarters (or forward warehouses). This approach bypasses traditional channels, equivalent to building a new channel, still not achieving channel internetization. It has the name of community but not the reality. It is typical FMCG micro-business.
The second is the community marketing path. The community partner's main battlefield should be in the community, which I call community marketing. This is the real BC integration.
Topic 3: The technical path of community marketing is community groups.
Here we need to clarify two concepts: one is community; the other is community groups.
The simplest definition of community is: a social life community formed by people living within a certain geographical area. Thus, "a certain geographical area" is the key word for community.
When we talk about community, there are generally two concepts: one is residential area. For example, convenience stores have a "5-minute walk" geographical radius, often applicable to a residential area; the other is administrative organization, such as the original committee changed to "community." In business, it more often refers to residential areas.
Now, when we talk about groups, it is a concept in the internet context. Groups are social relationship chains with commonalities, such as work groups, family and friend groups, classmate groups, comrade-in-arms groups, and hobby groups. A group has at least one commonality, and can have multiple.
New marketing expert Fang Gang said, Where people are, marketing is there! Geographically, people are in communities; virtually, people are in groups. When the two are connected, people are in community groups.
In business, we divide groups into community groups and vertical groups. This division is for commercial use.
Community groups have one commonality: geographically in the same community. People rarely establish community groups, but property management, administrative community managers, and commercial institutions in the community often establish community groups for management and commercial needs.
Vertical groups' commercial value often lies in shared interests and preferences, which can be used commercially. The groups established by micro-business are often vertical groups.
In the past, community groups were rarely discussed in business. When it comes to group commercialization, it seems to be vertical groups. Group commercialization has been greatly influenced by micro-business. This is also a major obstacle when we promote community marketing.
The biggest characteristic of community groups is that offline they are already acquaintances, but because the commonality is only the shared community, the social relationships are not particularly strong. It is often "we see each other often but don't know each other well." Because of this, I summarize three characteristics of community groups: First, clean. Unlike many groups that are messy; Second, quiet. No one speaks unless there is something; Third, warm. Because the community has limited people, the group owner must cherish it. Therefore, effort is put into operation.
Traditional retail has a business radius. KA's trade area radius is large, while convenience stores' is small. The larger the trade area radius, the weaker the stickiness of community groups, because people are not familiar. Therefore, a good community group must have a small geographical radius but high member density.
Community groups are not many, and those with density are even fewer. For group commercialization, vertical needs stickiness, and community needs density.
Topic 4: Community marketing is activating public domain traffic.
From the perspective of traffic, there are now three major types of traffic:
First, all private domain traffic does not rely on intermediaries and directly goes 2C. However, we also find that private domain traffic will eventually become "multi-level 2C", for example, micro-business uses multi-level groups as sales channels, which I call group channelization.
I repeatedly emphasize that private domain traffic is very small. Traditional brand owners with large stock should not hope that private domain traffic can save their growth.
Second, commercial domain traffic. All e-commerce platforms are commercial domain traffic. Traffic is bought with money, and prices are getting higher. Now it is more expensive than offline. The scale of commercial domain traffic is limited and is now approaching its limit.
Moreover, for FMCG, e-commerce platforms account for a small share, not exceeding 10%. Fang Gang said, The share ratio of the three major traffic types for FMCG should be "1990": private domain traffic accounts for 1%, commercial domain traffic accounts for 9%, and public domain traffic accounts for 90%. I generally agree.
Third, public domain traffic. Traditional channels are public domain traffic. As mentioned earlier, they account for 90% of FMCG share. How to internetize this part?
As mentioned earlier, most 2C requires an intermediary. So, what is the intermediary for traditional channels? I believe it is community groups.
Since community groups are public domain traffic, remember a few points: First, their traffic is huge, far beyond private domain traffic; Second, they do not belong to any brand owner; Third, whoever activates public domain traffic, the traffic flows to them.
Why can community groups activate public domain traffic? This is because 2C can force 2B, and increment can activate stock. Therefore, community groups are not just about selling goods; they have a leverage effect.
I once said, The spark of 2C can start a prairie fire in 2B. This is the charm of BC integration.
Topic 5: Community groups naturally connect three-dimensional space.
There are two routes to establish community groups: one is the approach of Three Squirrels. First recruit people with group capabilities to join, then build stores offline; the other is the path traditional FMCG enterprises should take: first find people in the community with group operation capabilities, and naturally have community groups.
Because community groups pull community acquaintances into the group, this naturally connects offline and group spaces, and the internet (such as live streaming and mini-programs) can easily be guided through groups. Therefore, community groups naturally connect three-dimensional space.
What is the importance of connecting three-dimensional space? Offline traffic is exhausted, and the dividends of groups and e-commerce have disappeared. This is the same problem: single-dimensional business has reached the ceiling of traffic costs.
Traditional channels, micro-business, and e-commerce are all business systems with only one spatial dimension. Although the landscape of single-dimensional business can still change, for brand owners, no matter which spatial dimension they turn to, the cost is not low. Strategy and management expert Shi Wei not only proposed the concept of three-dimensional space but also simplified business into three basic links: cognition, transaction, and relationship.
Connecting three-dimensional space means that cognition, transaction, and relationship can be integrated in three spaces, thereby reducing overall costs. For example, establish relationships offline, build cognition in groups, and transact online.
How valuable is connecting three-dimensional space? It is beyond imagination. Therefore, do not regard community groups as a transaction platform. In the three-dimensional space of offline, groups, and internet, groups are the router. Community groups naturally connect offline and internet.
During the COVID-19 pandemic, traditional "store visits" were blocked, and e-commerce delivery was also lacking. Thus, community groups became the connection tool for 2C. What does this show? With community groups, there are three paths to 2C simultaneously.
Topic 6: How to operate community groups
Step 1: Targeted breakthrough, establish strong 2B relationships
It must be clear that community relationships exist inherently, and group operation is a professional skill.
In the past, deep distribution assessed distribution rate. In 2017, when I practiced new marketing, I proposed "targeted distribution." Targeted distribution has two prerequisites: first, the store has strong offline relationships; second, the store owner can become a "fan" of the brand owner.
With strong offline relationships in the community, it is possible to turn them into "strong interactions" through groups. When the group owner becomes a "fan" with strong cognition, the community group naturally has a communication function.
Groups have three major functions in business: socializing, communication, and transaction. In the commercial operation of community groups, it is essential to implement "strong socializing, medium communication, weak transaction". Because transaction harms relationships. However, as long as there is cognition, transactions can occur in all three spaces, and the main transaction scenario for FMCG is offline.
Step 2: Create increment for 2B through 2C
In commercial operations, incremental thinking is important. China's reform and opening up had an important thinking: "use increment to activate stock." Activation brings the leverage principle. The leverage principle either saves time or effort.
To achieve the above two points, brand owners need to reorganize their organizations. The traditional sales department is a 2B organization; now it must be able to operate both 2B and 2C.
Step 3: High-density operation of community groups
Community groups are public domain traffic. Once public domain traffic is activated, some people will use resource advantages to claim it as their own. In traditional deep distribution, deep distribution evolved from early customer relations to final heavy resource investment, which is the same.
What is density? Density is cognition; density is brand. Community groups and C-end cognition without density have no commercial value.
Step 4: Strengthen offline experience
The more we enter the internet age, the more important offline becomes. If in the past 2B only required customer relations, now experience is also needed. Because experience is the strongest cognition. And offline experience requires scenario construction.
To achieve the above four points, the functions of the traditional sales department must be transformed:
1) Transform the front office. Do not build a new team; otherwise, it is not BC integration but building another channel directly to 2C.
Unified Company has already changed its sales department's functions from "army" (channel construction) to "airborne marines" (channel construction + communication).
Doing this will naturally increase personnel in the early stage. However, when the channel extends from 2B to 2C, it will force 2B, thereby improving channel efficiency and personnel efficiency, and also accelerating channel digitization (B2B).
2) Transform the back office. Community groups are public domain traffic, just like traditional channels. In traditional channels, whoever has good customer relations uses them well. So, how can community groups as public domain traffic be used well? There are two methods: first, content production capability; Unified has already changed its original marketing department to market content department; second, the replacement of group play methods; activating groups, play methods are important.
Source: Teacher Liu's New Marketing (ID: liuchunxiong1964)
Tips will be paid 400-2000 yuan once adopted.