---
title: "Liu Zhao, Founder of Field 365: Power Comes from the Barrel of a Gun; the Market Must Be in Your Own Hands!"
description: "This article is a transcript of Liu Zhao's presentation on \"New Trends in Consumer Goods Supply Chain\" at the FDIC 2018 China FMCG Digital Innovation Conference. From an internet industry perspective, Liu Zhao interprets new changes in the FMCG industry, emphasizing that brand owners must control their own supply chains and markets."
author: "刘昭"
publisher: "New Distribution"
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published: "2018-08-27"
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# Liu Zhao, Founder of Field 365: Power Comes from the Barrel of a Gun; the Market Must Be in Your Own Hands!

> This article is a transcript of Liu Zhao's presentation on "New Trends in Consumer Goods Supply Chain" at the FDIC 2018 China FMCG Digital Innovation Conference. From an internet industry perspective, Liu Zhao interprets new changes in the FMCG industry, emphasizing that brand owners must control their own supply chains and markets.

This article is a transcript of Liu Zhao's presentation on "New Trends in Consumer Goods Supply Chain" at the FDIC 2018 China FMCG Digital Innovation Conference. From an internet industry perspective, Liu Zhao interprets new changes in the FMCG industry.
**Power Comes from the Barrel of a Gun; the Market Must Be in Your Own Hands**
First, he shared two interesting questions about the FMCG industry.
**First: Who is your customer?** When asking many industry insiders this question, he received many different answers. Some companies said consumers and retail terminals are their customers, while others said distributors and secondary wholesalers are their customers. Clearly, there is no clear definition of "who is your customer."
**Second: Why is it said that the market should be returned to distributors?** There is a voice in the industry saying that it is time to return the market to distributors.
"This is a very strange statement. Generally, industries treat distributors and channels as partners, but some FMCG practitioners believe that distributors are customers and that the market should be handed back to them. In my impression, no company in any industry would hand over its market to others. Apple didn't, Cisco didn't, Amazon didn't. I can't find any CEO in any industry who would say they would hand over their market to someone else. A company with billions in sales hires elites from 985, 211, or Ivy League schools, but they would hand over the market to a local distributor boss? That is quite irrational. Regarding this statement, let me give an example. In 1927, the Kuomintang said to the Communist Party: 'Hand over your guns and troops.' Then the April 12 Incident happened, and the KMT-CPC cooperation collapsed. Fortunately, our Communist Party knew that power comes from the barrel of a gun, and the market must be in your own hands, not handed over to others."
**New Retail: A Nightmare for Brand Owners**
Speaking of new retail, we explained our view from an internet perspective.
**There are several keywords for new retail:**
First, the reintegration and operation of offline traffic.
Second, the scaling up of retail, increased concentration, and the core concept behind it is monopoly, because monopoly creates efficiency.
The third keyword is the integration and optimization of the supply chain. When retail terminals form an aggregation effect and create a monopoly, the nightmare for brand owners begins. Whether it's MUJI, Xiaomi Youpin, or Decathlon, they are not selling brand owners' products but their own retail products. So brand owners need to clearly recognize the impact that new retail will bring in the future. Brand owners who completely hand over the market to distributors will face big trouble in the future.
**The "Romance of the Three Kingdoms" in Offline Sales**
Offline sales will inevitably evolve into a struggle for control of the supply chain.
"Brand owners must have controllable supply chain resources. To do new retail, they must also integrate upstream supply chain resources. The first trigger point of this war is the competition for the supply chain. This war is significant. If they still hold the idea of handing over the market to distributors, they will inevitably pay a painful price. The future market will polarize. The first extreme: brand owners have their own vertical, autonomous, and controllable supply chain system. Some may think it is unattainable, but apart from the FMCG industry, pharmaceuticals, automobiles, real estate, and finance all have their own autonomous supply chains, so this is not a fantasy. The second extreme: strong retail. When retail forms a monopoly advantage, it will inevitably build its own supply chain and create its own product brands, and the market will undergo earth-shaking changes."
**What is an Autonomous and Controllable Supply Chain System?**
So in the current digital era, under the background of new retail, how should brand owners face the transformation of the supply chain?
**"Brand owners need to build an autonomous and controllable supply chain system!"**
"An autonomous and controllable supply chain system is divided into three controls and three transformations. The three controls are: dynamic control of supply chain inventory, control of channel structure, and control of supply chain personnel. The three transformations are: informatization, digitalization, and intelligence. Traditional Chinese enterprises have not paid much attention to informatization and digitalization. This is inevitable due to the rapid economic growth and emphasis on infrastructure development in the early stages of reform and opening up, but in the digital era, we need to embrace change."
**Field 365: Helping Enterprises Build an Iron Army**
Field 365 is committed to providing enterprise customers with comprehensive "offline sales management" solutions, helping companies manage their internal and distributor employees, assisting distributors in completing business with partners, and achieving digitalization, informatization, and intelligence in the entire distribution chain and supply chain.
"The purpose of Field 365 is to help enterprises build their own iron army in the next ten to twenty years, just like the large-scale iron armies that Didi, Meituan, and Alibaba have. We hope that brand owners can have their own autonomous and controllable channels and supply chain systems, and have a powerful army that looks down on all others!"
Click **Read Original** to see more highlights of the 2018 FDIC China FMCG Digital Innovation Conference...
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