---
title: "M2C Model: Building the Second Engine for Enterprise Performance Growth"
description: "The following is the speech content delivered by Mr. Ren Xiaodong, partner of New Distribution, at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers. Today, my sharing topic is 'M2C Model: Building the Second Engine for Enterprise Performance Growth.' In the context of enterprises' omnichannel marketing strategy, in addition to public domain traffic tactics, there are also private domain traffic tactics. We have summarized a set of M2C models, also known as enterprise C-chain construction. This is a summary of our experience in helping six or seven enterprises in practice over the past few years. Around M2C..."
author: "任小东"
publisher: "New Distribution"
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published: "2019-03-31"
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# M2C Model: Building the Second Engine for Enterprise Performance Growth

> The following is the speech content delivered by Mr. Ren Xiaodong, partner of New Distribution, at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers. Today, my sharing topic is 'M2C Model: Building the Second Engine for Enterprise Performance Growth.' In the context of enterprises' omnichannel marketing strategy, in addition to public domain traffic tactics, there are also private domain traffic tactics. We have summarized a set of M2C models, also known as enterprise C-chain construction. This is a summary of our experience in helping six or seven enterprises in practice over the past few years. Around M2C...

The following is the speech content delivered by Mr. Ren Xiaodong, partner of New Distribution, at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers.
Today, my sharing topic is "M2C Model: Building the Second Engine for Enterprise Performance Growth." In the context of enterprises' omnichannel marketing strategy, in addition to public domain traffic tactics, there are also private domain traffic tactics. We have summarized a set of M2C models, also known as enterprise C-chain construction. This is a summary of our experience in helping six or seven enterprises in practice over the past few years.
Around the M2C model, I will discuss three topics: **First, traffic, stock, and increment; Second, interpretation of the M2C model; Third, common misconceptions and existing problems in the M2C model.**
**01 Traffic, Stock, and Increment**
**First, as marketing practitioners, we must understand that the first principle of new marketing is traffic; the essence of all business is the traffic problem.**
What is our current dilemma? The dilemma of traditional marketing is that traffic is almost completely lost. In the past, there were roughly two types of traffic: online B2C e-commerce traffic, and offline distribution stores and KA store traffic.
But with the popularization of online payment, more and more entry points have become traffic entrances, such as social, video, community, and neighborhood communities. The traffic behind these has become one of many sales channels. Traditional marketing traffic is being intercepted by various business models, causing enterprises to be unable to find their own traffic.
There are three typical dilemmas currently, and I believe many brand practitioners can relate. First, KA channels are declining sharply; under the impact of e-commerce, costs continue to rise.
Second, distribution channels are impacted by B2B e-commerce. Last year, the B2B industry scale was 100 billion yuan, and it is expected that by 2021, the B2B market will reach 230 billion yuan. According to a report released by New Distribution, in 2018, about 90 B2B platforms were shut down, leaving nearly 140. The remaining hundred or so may become mainstream. Previously, it might have been said to be fragmented, but B2B channels will gradually become block-like, similar to the rise of KA in the past. In the future, B2B channels will profoundly change the overall distribution channel landscape. In less than 3-5 years, half of distributors may be eliminated.
Third, B2C channels, such as Taobao, Tmall, and JD.com, have traffic costs that are almost approaching those of hypermarkets. All traffic must be paid for, and costs may reach 36%-40%.
This is the dilemma of traditional marketing, and also the dilemma of traffic. To avoid being held hostage by platform traffic (KA, B2B, B2C) as much as possible, enterprises must consider shifting traffic to the brand and building private domain traffic.
We propose a three-stage theory of traffic, finding that current traffic is being replaced by social traffic. What channels does social traffic empower? Social e-commerce, community e-commerce, content e-commerce, and so on. In addition, B2C e-commerce has also been cut into a large piece. During the 11.11 period in 2018, I think everyone remembers that only a little traffic flowed to traditional offline KA and BCD channels.
Last year, a book called "Traffic Pool" was very popular, written by the marketing director of Shenzhou Car Rental. It extracted a new internet marketing system, which is very worth learning from for FMCG enterprises in transformation. Doing new marketing means forming your own traffic pool.
We believe that user attention is traffic. When users' attention is on shopping, location is our traffic; when users like searching, portal search is our traffic; when users like socializing, social is our traffic; when users like certain values and prefer their own life circles, our brand is traffic.
When we summarize these four types of traffic, we can find that the offline distributor system, direct-operated KA system, and our ground sales team are for obtaining offline location-based traffic; many enterprises are still doing SEO, buying diamond exhibitions/direct traffic on Taobao and Tmall, which is search traffic, as well as social traffic and brand traffic. Through this reclassification, it is relatively consistent with the FMCG industry's definition of traffic. Among them, categories 1, 2, and 3 belong to public domain traffic, and the fourth belongs to private domain traffic. Only when we have a clear definition can we know how to solve it.
Coca-Cola says to refine the stock. How? Cooperate with various new traffic platforms, while continuing to strengthen its sales team and provide digital tools to empower offline sales. For example, in 2018, we promoted a group of enterprises such as Coca-Cola, Nestlé, Master Kong, and Qingdao to cooperate with B2B platforms and issued the industry's first complete B2B practical operation manual. We observed the comparison of growth before and after implementation, and the effect was quite obvious. For example, in the B2C channel refinement, the clients we served grew from only 6-8 million to 130 million this year, with self-built sales teams.
This **is to refine the stock under public domain traffic. Stabilize the basic plate and maintain the operation of the first engine.** How to do the increment? How to build your own private domain traffic?
Many people are wondering whether to do private domain traffic (social traffic) or whether it is worth doing. Let me first list a few sets of numbers, which are given by industry research reports:
> First, overall mobile users have grown by more than 20%;
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> Second, user numbers: from 2019 to 2022, online shopping scale will increase from 500 million to 600 million people;
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> Third, by 2020, 50 million new middle class will be added. Let me give two examples. I am a "three-high" person and usually cannot drink beer or liquor, but I was recommended by two people. The first is Zhao Bo, founder of New Distribution. He said you can't drink this beer; you should drink craft beer. One night he set out 24 bottles of craft beer, from the lightest to the richest. For liquor, Teacher Niu Enkun told me how to drink sauce-flavored liquor. You will find that ritual and circle sense affect the lifestyle of the new middle class, which affects the sales of all products and brands. The addition of 50 million users is the growth dividend;
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> Fourth, observing the industry-wide KOL-guided e-commerce growth of 25%;
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> Fifth, the rise of Pinduoduo and community group-buying e-commerce.
How should enterprises utilize these "surging" social traffic? We have designed a framework. The first part, public domain social traffic, is divided into three parts: national, regional, and vertical categories. For national social platforms, we have classified more than 50, such as Yunji, Beidian, Pinduoduo, Xiaohongshu, etc. The second part, private domain traffic, is brand self-built e-commerce platforms. There are also many mature cases, such as KFC, Walmart, Mengniu, Junlebao, etc.
**02 Interpretation of the M2C Model**
How to build private domain traffic is essentially the M2C model. Enterprises build their own traffic pools in the form of mini-programs, official accounts, service accounts, and micro-malls. Of course, tools alone are not enough; corresponding new marketing organizations must be established to develop corresponding new marketing functions. For example, in the backend, you need to reconsider whether you can become an investment company; the previous departmental system is not feasible.
Regarding middle platform construction, can you establish functions centered on user operations, such as interactive communication, community operations, and e-commerce operations? Without such an organization, it is difficult to build your own M2C model.
Regarding front-end construction, we have previously come into contact with many enterprises, even invitations from very well-known enterprises. They said they have millions of small and micro business owners and want to use them for social e-commerce. But after understanding, we found it couldn't be done. Why? Because their small and micro owners have not mastered social sales skills and are still accustomed to traditional channel sales skills.
We talk about personal IP every day. When implementing this model, many employees do not have IP attributes, so they cannot influence the people around them. WeChat Moments theoretically has 3,000 to 5,000 people, but only 150 people have strong relationships with you. Among these 150 people, how many can you influence to make a purchase, and after making a purchase, not be blocked? An industry insider told me that when everyone around becomes a salesperson, it becomes boring. In fact, not everyone is suitable for selling goods, so you must find suitable KOLs.
This is a model for restructuring regional sales functions. Many distributors also need to try to change their entire functions and learn the overall gameplay of new marketing.
**03 Common Misconceptions and Existing Problems in the M2C Model**
Of course, based on our implementation of M2C models in five or six enterprises, we have also found some problems, roughly divided into four categories.
First, ideology. Sometimes the chairman knows, but the people below are unwilling to do it, or middle management knows, but other departments are unwilling to support. In addition, the entire sales team, especially the sales teams of many large companies, are accustomed to channel sales and are not used to social sales, feeling embarrassed or psychologically resistant.
Second, action skills. They have not mastered the basic concepts and methods of the new marketing system, such as social currency, why to post in Moments like this, and how to set up their persona. This will cause you to be just an individual, not a small IP with 500-3,000 followers.
Third, enterprises do not have digital marketing teams or content supply chains. Your videos, images, and everything are not distributed across the entire network, so when you build traffic, you are just making a few things for self-amusement. Only with full-network distribution can you achieve traffic-driven growth, and flow can bring sales growth in all channels.
How to solve it? First, change people and heavily invest in the post-90s generation; second, if you cannot change people, you can only repeatedly train; third, Teacher Liu Chunxiong provided a method: select a few benchmark markets to do, use facts to prove that things can be done well, and once done well, people will naturally follow. In terms of supply chain, everyone admires Coca-Cola's expression bottles and lyrics bottles, but you cannot do it because you do not have the corresponding flexible supply chain support. In addition, for example, outsourcing logistics to third-party warehousing and logistics companies, cooperating with third parties, can obtain front-end, supply-end, and sales-end data.
**-END-**


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