The 6th China FMCG Channel Innovation Conference, hosted by New Distribution, a professional new media platform for FMCG, was grandly held from April 1 to April 3 at Chengdu Agile Howard Johnson Hotel. This grand event attracted 3,000 industry professionals including distributors, community e-commerce platforms, brand owners, and internet companies from all over the country, with a full house and unprecedented scale. On the morning of April 1, at the China FMCG Channel Innovation Conference, Mr. Liu Zhao, CEO of Field 365, delivered a heavyweight sharing on the theme "Channel Innovation in the Era of Data Explosion." Mr. Liu Zhao founded Field 365 in 2012 and has been committed to providing professional digital services to the industry for many years. To date, he has served over a thousand brand owners and tens of thousands of distributors in achieving digital channel innovation. He has received three rounds of financing from international investment institutions including GSR Ventures, China Broadband Capital, Weiguang Venture Capital, and Fengqiao Capital. New Distribution has carefully compiled and excerpted the essence of Mr. Liu Zhao's speech at the conference, and now publishes it for the benefit of New Distribution readers.

-01-

What You Think Is Channel Innovation Is Just Responding to Consumer Changes

From the moment I learned that the theme of this conference was channel innovation, I felt it would be very popular, and sure enough, so many people came. Why? Because everyone is anxious; the world is changing too fast. From the original traditional retail model, suddenly many new channel models have emerged that people are unfamiliar with, can't believe, yet see growing robustly. Today, too many things that people can't understand have been born. For example, when e-commerce first emerged, many FMCG peers said that e-commerce wouldn't have much impact on business because most customers still bought offline and wouldn't go online to buy a bottle of soda or a chocolate bar. But now, it's clear that e-commerce is unstoppable. Similarly, home delivery and in-store businesses, as well as community group buying, are thriving. Although many people despise community group buying, they have to sell goods to community group buying companies; that's the current situation. Everyone is in a state of anxiety, so many brand owners come here hoping to find new channels, thinking that old channels may not be suitable for new business development or new models. Actually, that's not entirely the case. Now brand owners are almost caught in a pincer attack: the front is the huge change in retail formats, and the rear is the emergence of new brands. Including the current craze for domestic products, which makes many foreign brands tremble because the wave of domestic products has swept too fast. This wave of domestic products started when President Xi called for cultural confidence. Such a wave actually happened in Japan long ago, around the late 1970s. The key point of this wave was that emerging Japanese domestic brands saw a significant improvement in product quality, which helped the rapid rise of Japanese domestic brands. Now, we can see that many Chinese domestic brands are rising; this is a huge opportunity, and capital is flocking in. This era is undoubtedly the golden age for the birth of new brands in the FMCG industry. Countless FMCG executives are creating their own new brands, and the market has enormous opportunities. This era has a huge impact on brand owners. What about channel distributors? Today's distributors actually have more choices, so brand owners present here should pay attention: embrace your current channel partners, because they might run away one day. In fact, not only are new consumer brands constantly emerging, but new consumer groups are also stepping onto the stage. Let me give you an example: last year, a company called Pop Mart went public on the Hong Kong Stock Exchange. If you haven't heard of Pop Mart, you're about to be abandoned and eliminated by the new generation. Many people still don't understand how Pop Mart achieved such a large scale. Isn't it just a toy company? Some think it's just a blind box company? Others think Pop Mart is an IP-selling company. What is its IP? It's a little figure called Molly. This figure has no animation, no story, no plot, and even no expression. Is such an IP a company selling IP? Let me tell you: Pop Mart is essentially a channel innovation company. Its channels are mostly offline, but over 30% are online. This online part is not sold through Tmall or JD.com, but entirely through private traffic and its own mini-program. It perfectly achieves offline channel distribution, inventory control, price control, artificial stockouts, creating a hunger atmosphere, and using limited editions to entice people's desire to buy. This is the channel innovation that Pop Mart does. We should be very eager to learn from such channel innovation companies. The reason for everyone's anxiety is actually very simple: the world is changing faster and faster. Humans were born 5 million years ago, civilization formed only 5,000 years ago, and e-commerce exploded only 12 years ago... From today on, innovation in FMCG channels will develop faster and faster. Today, you see various new concepts that are dazzling, but maybe next year, even more new concepts will be born. When everyone is chasing newer concepts, they find themselves increasingly anxious. Because we serve over a thousand brand owners, including FMCG, durable goods, and even feed and building materials sellers, after observing so many companies, I found that channel innovation is essentially about changes in consumption scenarios, people, and fields. Channels don't innovate; consumers change, and the changes are very significant. Actually, the consumption habits of FMCG users haven't changed that much. Which industries have changed more? For example, car sales. You know that many cars are now sold in shopping malls, not in 4S stores. Xiaomi recently said it would sell cars, and I believe Xiaomi's cars will definitely be sold in Xiaomi Home. It will also happen that users buy a car while shopping at the mall; buying a car is no longer such a difficult thing. In the past, when a family bought a car, they would decorate with lights and set off firecrackers. Now, it's just a tool for daily commuting. Data shows that 80% of private cars travel less than 15,000 kilometers per year, just as a means of transportation when it rains or when it's inconvenient to take a taxi. The consumption scenario has changed too much. Not to mention private cars, just take taxis: in the past, you could hail a cab by raising your hand. Now, can you still hail a cab on the street? You might stand for an hour and not get one. In this era, consumers' consumption habits are undergoing huge changes, and these changes are unpredictable and unforeseeable. What should we do? -02-

Please Correctly Understand "Digitalization"

The answer is digitalization. After much discussion, you'll find that digitalization seems to be the only solution to rapid change. It seems that building a digital system can meet the needs of rapid channel changes. Everyone now likes the number 2, which means "To". Whenever digitalization is mentioned, countless people talk about B2B2C, F2B2B2C, S2B2C, until their heads spin. When it comes to digitalization, everyone says I want to connect, connect with channel partners, connect with consumers, and even connect with consumers' parents, wives, children... I think everyone has misunderstood the concept of "connection." Is your product not selling well because you haven't connected with consumers? Even if you connect with consumers and push coupons daily, will sales definitely go up? This is a very interesting topic. Let me give a funny example: many people use iPhones. iPhones undoubtedly establish connections with consumers. Everyone has an Apple ID. Is this Apple ID used by Apple to push coupons to me? No, it's for me to use to pay for apps in the App Store. Every Tesla owner has an app installed on their phone. Is this app used by Tesla to push coupons to me? Of course, it's also used for remote control of the car, turning on the air conditioning in advance, and summoning the car to me in the parking lot. It's for these things. Connection is the effect, not the cause. It's not about connecting for the sake of connecting. When your product has content and services to offer consumers, connection naturally forms. This is a major difference. Now many consumer goods companies like to do QR code scanning, which is very popular. Let channel distributors scan codes to ship goods. I can understand box codes, but I can't understand letting consumers scan codes. I buy a bottle of drink and have to scan the code, then through five draws, I get a 0.5 yuan red packet. Do I care about this 0.5 yuan red packet? This 0.5 yuan can't be withdrawn; I have to accumulate 20 yuan to withdraw. That's too ridiculous. Connecting with consumers for the sake of connecting is useless; it's treating consumers like fools. Does Moutai need to connect with consumers? Brand owners build brands, and the connection with consumers naturally forms through brand characteristics, not through QR code scanning. Many brand owners have fallen into this misunderstanding in digitalization, not thinking about what experience they want to provide consumers. Even if you want to make a bottle code for consumers to scan, what they scan should be a piece of content, a story, something that moves consumers. Give you the opportunity to provide additional services to customers, not like scanning 3,000 times to get a chance at a free trip to Sanya for two, with expenses paid by yourself. It's especially awkward that some customers like to take a bottle of liquor with a QR code, scan it, and get a 30 yuan red packet. The red packet is big, but when I invite a table of people to dinner, who will scan it?

-03-

Achieving Channel Digitalization Through Self-Built B2B Platforms

B2B looks like channel innovation, but in fact, it's channel digitalization. Alibaba, JD.com, and Yijiupai have been doing B2B for years. Many entrepreneurial giants hope to achieve corner overtaking through channel digitalization. In the past three years, Field 365 has helped more than ten brand owners build their own B2B platforms, achieving channel digitalization. Let me emphasize again: B2B looks like channel innovation, but it's actually channel digitalization. Yesterday, someone asked me: why do terminals want to order? How do terminals order? Why are bosses willing to order? This is what experienced digital service providers can bring. So how can a company's self-built B2B platform succeed? There are three factors for success. The first factor is to use B2B to distribute fees to terminals. Take a portion of the various rebates originally given to distributors and channel them through the B2B channel, taking effect when ordering through B2B. All brand owners and large distributors can build their own B2B platforms and channel digitalization platforms. Also, it's recommended to find a mature software supplier with experience to do this. For example, when promoting B2B, problems like a large number of fake stores and fee deductions will surface. Can you handle it? Yesterday, a friend said, "Do you know the fake rate of paid stores after going on B2B?" Let me tell you, in some areas, the fake rate of paid stores exceeds 90%. When you go to an area to visit stores and find that all the stores you visit are fake, it's completely overwhelming. I responsibly tell you that most of the channel marketing fees of brand owners are wasted. You won't know without B2B, but once you know, it will shake the interests of most people. Can you handle it? If you want to promote the B2B system, what if business personnel don't cooperate? Distributors' businesses have multiple payment methods; can you meet them? Is there C-end marketing that can bring traffic to B-end... These are all problems encountered in actual combat. We have rich experience. A reliable service provider can help you do digital transformation and upgrading well.

-04-

Building the "Foundation" of Digitalization: Five Online-izations

In addition, many companies have a problem when building digital systems: they are incomplete. Many people think that making a function or building a platform can meet all digital needs? Of course not. To do digitalization well, you must build the infrastructure as the foundation. Without this foundation, it's hard to carry out digital business later. Don't think you can reach the sky in one step or that one time can help the company increase sales. First, think about whether your foundation is laid. Field 365 proposes 5 online-izations as the infrastructure for channel digitalization. Even if you don't choose Field 365, you should especially consider this. Are personnel managed online? Are customers managed online? Are fees managed online? Are orders managed online? Is inventory managed online? Once these five things are online, the infrastructure for channel digitalization is complete, and you have a foundation to respond to channel innovation. You can make precise decisions on which channel is good, which channel is newly rising, which channel to allocate fees, and which channel to put personnel and policies. Targeted action comes from the previous five online-izations. In the digital wave, a situation will soon arise: information that was previously invisible becomes incomprehensible and unusable. Here is a picture of a doctor doing an ultrasound. When your wife is pregnant, you'll see this picture, and the doctor will tell you where the baby is. Sorry, I didn't see it. Why? I can't understand it and can't use it. Numbers will increase, data will increase. How to use the value of data well? How to turn invisible data into visible data and incomprehensible data into comprehensible data in the digital wave? Those who can manipulate data are the big shots of future channel innovation. If a tip is adopted, a payment of 400-2000 yuan will be made.