Editor's Note In recent years, Chinese FMCG distributors have been continuously impacted by retail e-commerce, with growth in physical channel sales hindered. Numerous B2B platforms, including Alibaba Retail Link, JD New Channel, Yijiupi, and Baishidianjia, are vying for distributors' business, leaving traditional distributors facing unprecedented difficulties and challenges. In this era of rapid change, the transformation and upgrading of distributors has become a hot topic in the industry. As a service platform focused on the digital transformation of China's FMCG channels, New Distribution has launched the 'New Distribution 100 People' column, providing in-depth coverage of 100 outstanding distributor representatives undergoing transformation and change. Through their practical business cases, it aims to lead business, organizational, and operational reforms among Chinese FMCG distributors, activating their distribution vitality in regional markets. Written by | Yuan Lai Introduction: Tangshan Huiwangxing Industry and Trade Co., Ltd. is a leading FMCG trading enterprise in the Tangshan region, with annual sales of 200 million yuan. It operates multiple categories including snacks and daily chemicals, with over 4,000 SKUs, and represents well-known Chinese and foreign brands such as Mars, Mondelez, COFCO, and Unilever. As early as 2000, Huiwangxing began its information technology construction, completed an ERP system upgrade in 2006, and carried out internal Amoeba reforms in 2009. By 2017, the company had completed the platform construction of its internal warehouse WMS system and order system. Recently, 'New Distribution 100 People' visited Tangshan Huiwangxing to deeply analyze the growth code of Huiwangxing. △Huiwangxing Chairman Li Guojie and New Distribution reporter Yuan Lai As the soul of Huiwangxing, Chairman Li Guojie is a veteran of the FMCG industry with 40 years of experience. He has witnessed several changes in the FMCG distribution system and the ups and downs experienced by many FMCG distributors. Huiwangxing has grown from zero to annual sales of over 200 million yuan. In an interview with New Distribution, Li Guojie shared his years of struggle and told us how regional distributors can grasp the times, seize opportunities, and respond calmly. 01 A Trading Company Without a Single Delivery Vehicle "Although Huiwangxing's sales have reached over 200 million yuan, we don't have a single vehicle. Ten years ago, we sold all vehicles to our employees," Li Guojie recalled. At that time, a vehicle cost 50,000 yuan. To avoid putting too much pressure on employees, we implemented monthly deductions and transferred all vehicles to them. In this way, the vehicles belong to the employees, making them independent business entities responsible for their own profits and losses, fully leveraging their initiative. To earn more income, employees would voluntarily come to the company early to make more deliveries." Li Guojie told New Distribution that this single measure alone saves Huiwangxing 700,000-800,000 yuan per year in transportation costs compared to others. At that time, we didn't know what a platform was, but we knew it aligned with human nature and hearts. Since the implementation of the internal contracting system for the logistics fleet, Huiwangxing's logistics efficiency has increased by nearly 50%, and overall costs have decreased by about 30%. In recent years, we have talked a lot about distributor transformation and upgrading. In fact, transformation and upgrading have existed since the emergence of the distributor group. Ten years ago, Li Guojie already realized the need for organizational upgrading. Being vigilant in times of peace is an ideological awareness every leader should have. Even at his age, he maintains a learning state, spending 3 hours every night checking mobile news to stay updated on the latest FMCG industry news. Li Guojie told New Distribution that in this era, one must always maintain a learning mindset. Especially as the internet moves offline, we should proactively learn about these new things rather than resist them. We should even revere these advanced productive forces and adopt the good ones for our use. Only then can a company progress. 02 Using Information Technology to Upgrade Warehouse Management, Doubling Personnel Efficiency Li Guojie recalled that before using the WMS system, an average picker could only handle 200 orders per day. Now they can handle 400-500 orders, and employees can leave work on time. In the past, pickers had to take paper lists to find goods. Now, with a handheld terminal, they just scan the location code to know exactly where the goods are, then move them and leave. In the past, without computers, one employee had to manage 300-600 SKUs, handling both picking and checking, and needed to be very familiar with the goods. Now, with the WMS warehouse management system, even new employees can start working after 3 days of training, reach one-third of the picking efficiency of veteran employees in 7 days, 60%-70% in half a month, and match veteran efficiency in one month. Such efficient management tools not only improve operational efficiency but also shorten the trial period for new employees, thereby helping them increase income. Traditional distributors have always resisted the internet, viewing it as competition and feeling worried and anxious when facing it. In fact, distributors should see the internet as a helper, an auxiliary tool to help them do business better. It's like going to Beijing: you can choose a bullet train, car, bicycle, or even walk, but the mode of transportation you choose determines the time it takes to get there. Although tools themselves don't create value, they can help you save time in achieving goals, allowing you to do more than others in the same time. Tools only truly realize their value when attached to specific operations and to the distributor's resources and advantages. Many distributors are afraid of investment, worrying that money will be wasted. But Li Guojie told New Distribution that investment in information technology is very worthwhile for distributors. The company's finance department once calculated that each investment can be recovered in about 1-1.5 years. Li Guojie lamented that those who become FMCG distributors in China are all very hardworking people. Those who don't work hard or fear hardship cannot succeed in FMCG. But diligence alone is useless; tactical diligence can never compensate for strategic laziness. If you don't build information systems, you are doomed to be eliminated by this era. 03 Visiting Outlets Without Taking Orders, Only Providing Service In the past, visiting small stores was very tiring. There were two time periods you couldn't go: 11:00-13:00 and 16:30-19:00, which were peak sales hours. You could only tidy up goods, not discuss restocking. Additionally, due to salary commission issues, salespeople often left after taking orders to visit the next store. In the past, without an ordering platform, if salespeople didn't visit, there were no orders; only by visiting could there be orders. Therefore, the primary goal of salespeople's visits was to take orders. Li Guojie told New Distribution that after launching the ordering platform, store owners can now place orders anytime, anywhere, and salespeople's visit efficiency has significantly improved. Their work content is now more focused on communication, promotions, new products, and displays. The detailed online order information also allows salespeople to more efficiently grasp terminal demand, making visits more targeted. This reduces time spent on order communication, increases time for product service, and increases the frequency of terminal orders. The launch of the business information system has brought a qualitative leap in Huiwangxing's business efficiency. 04 Information Reform Is a Top-Priority Project When discussing the topic of distributors transforming into centralized warehousing and distribution, many people are confused. They know centralized warehousing and distribution is a trend and direction, but they cannot correctly judge whether it suits them. On this point, Li Guojie shared his views on doing centralized warehousing and distribution: The key is the coverage rate of outlets. He believes that in most regions, if a distributor's outlet coverage rate reaches over 50%, they can consider leading the centralized warehousing and distribution themselves and building a complete information system. If it's below 50%, they can consider actively cooperating with centralized warehousing and distribution platforms to strengthen and expand their own business. Li Guojie emphasized that regardless of whether distributors do centralized warehousing and distribution, they must build information systems. If a company hasn't yet used information tools internally, it should accelerate their use, and the sooner the better. Information technology determines a company's future competitiveness. Especially, awareness should be elevated to a strategic height. Information construction is a top-priority project; never delegate it to someone else. If the boss doesn't understand, they should learn quickly. The boss must be the leader and driver of information reform. Li Guojie told New Distribution that during the process of promoting information construction, the clash between old and new ideas can most easily cause the company's information reform to die in the cradle. Due to past habitual work thinking, employees may find it hard to accept change. At this time, organizational systems and rules should be used for management and communication. Besides employees, many distributors' organizations also have relatives such as husbands and wives, brothers and sisters. These veterans fought alongside you to build the company, but when encountering information construction, they may be the loudest objectors. Li Guojie believes that internal ideological disunity is the biggest problem. At this point, leaders must adopt a 'strong-arm' attitude, not seeking anyone's opinion but only discussing how to execute. Final Thoughts From the logistics contracting system over a decade ago to today's information platform construction, Huiwangxing has proven through practice that there is no unchanging era, nor any unchanging enterprise. For a company to develop, it cannot stop upgrading. Through Li Guojie's introduction of Huiwangxing's practical upgrades, we gain two points of reflection: 1. The Importance of Information Construction: Regardless of a distributor's strength or sales scale, information construction is a key path for enterprises to embrace the future and enhance their competitiveness. The operating costs of personnel, warehousing, vehicles, etc., as percentages of sales, and which details can be improved—such as personnel commission design: whether the commission for high-margin products can be increased, and by how much; whether the commission for traffic products can be decreased, and by how much—can only be clearly understood through internal information construction. If a company lacks clear data details internally, how can it talk about improving efficiency or reducing costs? Even if a company wants to save money, it has no handle. Information technology not only makes business operations smoother and more efficient, providing a basis for business decisions, but also ensures everyone in the company is well-informed. 2. There Is No Perfect Upgrade; Take the First Step: As the saying goes, if you're afraid, you lose. Many distributors don't have the capability to do centralized warehousing and distribution themselves, but they know its benefits. Regional platforms have extended olive branches, yet when faced with choices, distributors hesitate and waver. In fact, whether for individuals or enterprises, in this unpredictable era, every choice we make will encounter one problem or another. But we cannot stop moving forward because we fear problems. If you don't take the first step, you'll never progress. We all worry about choking on fish bones, but does that mean we stop eating fish? Want to discuss more with the 100 transformation experts? Welcome to add the column author to apply for the group! New Distribution, China's leading FMCG + Internet new media! -END-