From April 6 to 8, the 8th China FMCG Innovation Conference, themed "New World, New FMCG," was successfully held in Chengdu! More than 3,000 FMCG brands and regional distributors, including Nestlé, China Resources Snow Breweries, PepsiCo Foods, Lee Kum Kee, Yanjing Beer, Feihe Dairy, Luhua, Panpan, Tsingtao Brewery, Jiangxiaobai, Yili, and Red Bull, along with numerous digital technology service providers, gathered to gain insights into industry trends, interpret FMCG innovation cases, and explore business growth opportunities. At the conference, Mr. Wang Hao, founder and CEO of Guanjiapo Renwoxing Technology and chief designer of Kuaima Digital, delivered a speech on "The Underlying Logic of Supply Chain Digitalization," sharing directions and suggestions for the digital transformation of channels and brand owners.

For 28 years, Guanjiapo has been deeply involved in information management for small and medium-sized enterprises, especially in the trading industry, where nearly 70% of trading companies choose Guanjiapo. Every day, thousands of Guanjiapo staff across the country provide services to over one million enterprises. Because of the consistent focus on providing information technology services to the bottom of the supply chain, Mr. Wang Hao believes that IT technology has always been the driving force behind modern business. From the era of accounting computerization around 1995 to 2000, to the era of enterprise management informatization from 2000 to 2018, and then to the first year of enterprise digitalization in 2019, enterprises have experienced three major stages: manual assistance, tool efficiency, and business intelligence. Especially in the current digital era, business has entered a completely new world, and digitalization has even entered the deep water zone. Mr. Wang Hao also mentioned that the most familiar "Guanjiapo" is the earliest brand of Renwoxing Software Group. In fact, the Renwoxing system has now developed many enterprise informatization and digitalization brands and products.

Especially in the digital era, Renwoxing launched "Kuaima Digital," an integrated digital management system specifically designed for distributors, which has been widely loved and praised by the distributor community. In addition, for the digitalization of brand owners, manufacturers, and service providers in the supply chain, "Renwoxing · Yunliushui" provides solutions and implementation tools for various application scenarios, including F2B2b2C, S2B2b, and b/c integration. During his speech, Mr. Wang Hao focused on the key points of digitalization for distributors and brand owners:

Three Major Infrastructures for Distributor Digitalization

For distributors, the underlying logic of digitalization is not as high-end as it seems, nor is it about creating complex charts or tables. The first step in digital infrastructure is going online. There are four key points for going online: the online closed loop of "people, goods, money, and place." First, people must be online: bosses, employees, and customers. Second, goods must be online: products, inventory, and prices. Third, money must be online: many distributors' money is either in the pockets of their downstream partners or in warehouses, with little in their own pockets, which is a drawback of the traditional model of delivering goods before payment and selling on credit. You can completely change your mindset by moving payments, transactions, and credit lines online, using more advanced and efficient methods to solve cash flow problems, allowing your "money" to flow back quickly and reduce burden. Finally, the place must be online: if you are still operating with a front store and back warehouse, waiting for customers to come to you, then your marketing and business venue is too inefficient. Integrated online and offline operations are an important feature of venue management in the digital era. The online closed loop of "people, goods, money, and place" is the first step.

The second step is integration. Many companies may have implemented various systems such as SFA, ERP, OA, etc., but these systems may be developed by different companies, each operating independently, and data cannot flow between them. This is not digitalization; digitalization must be integrated. Guanjiapo Kuaima Digital may seem to redo what was done in the informatization era, but it has a new and most important logical focus: integration, meaning one system simultaneously solves SFA, SCRM, EC, OA, ERP, etc.

The third step is socialization. This is an important feature of the digital era. Your business must be shareable and recommendable anytime, anywhere to gain more attention. When customers need you, they can find you immediately and receive service. When users want to interact with you, there should be an entry point for immediate communication. Service is no longer a single delivery model; users need more participation and experience.

Anything that cannot operate automatically is not a business, just a transaction

An important reality today is that the first generation of distributors is aging, facing the issue of second-generation succession. However, with traditional business methods, many second-generation members are unwilling to take over because they do not want to become like their parents, sitting in the market every day waiting for customers, surrounded by relatives, not knowing how many customers they have, and even unable to answer basic questions. But once you transform to digitalization and use digital methods to manage and hand over the business, you only need to give the younger generation a mobile phone. The company's management and operations are all on the phone, with real-time access to various reports, data, and employee work progress. You can even manage the company while lying on a beach in the Maldives, without having to be in the office every day to run the business. Mr. Wang Hao believes that anything that cannot operate automatically is not a business, just a transaction; anything that cannot accumulate compound interest is not commerce, just a deal. Short-sighted traders will be eliminated. He hopes that distributors attending the New Distribution conference can become true digital distributors, transitioning from the era of assembling traditional cars with various GPS and cameras to the era of intelligent integrated new energy vehicles.

Brand Supply Chain Digitalization Cannot Be Separated from Distributors

Regarding supply chain digitalization led by brand owners, Mr. Wang Hao believes that supply chain digitalization without distributors is nonsense. The idea of brand owners bypassing intermediaries to reach end consumers directly is difficult to achieve, as even Alibaba and JD.com cannot accomplish this due to China's macro environment and policy orientation. Distributors will never disappear. Brand owners should adopt an empowering attitude to help distributors grow stronger. Co-building a digital supply chain through symbiosis and co-creation, with brand owners focusing on products and operations, and distributors focusing on sales, customer management, and service, each doing their own part, is the only way to achieve a win-win outcome. The underlying logic of brand supply chain digitalization is to connect "points, lines, surfaces, and bodies" and "people, goods, place, and money" to form a closed loop, forming a distributor surface, and then connecting distributors, brand owners, and service providers to form a three-dimensional pipeline, which is supply chain digitalization. In the past, wholesalers worked in wholesale markets; in the future, digital distributors will work in office buildings, no longer relying on heavy warehousing and logistics, but instead using more powerful third-party warehousing, distribution, and logistics providers and service providers to solve the last-mile problem, reducing operating costs and risks for distributors. For example, the combination of Midea's "One Pallet" and Guanjiapo's "Kuaima Digital" empowers brand owners and distributors to achieve the integration of "information flow, business flow, and logistics," jointly paving the way to the supply chain of the new FMCG world, providing digital transformation services to more distributors. Guanjiapo has not only served over one million distributors but also dozens of leading brand owners. The three-stage implementation path for brand channel digitalization is as follows: We can be indifferent to changes in one year, but ten years is enough to change everything, just like our mobile phones, WeChat Pay, and new energy vehicles have changed the world. In summary, the key for distributors to undergo digitalization is to focus on the infrastructure of online presence, integration, and socialization, while brand owners should focus on connecting and empowering in supply chain digitalization.

PS: For those interested in the on-site speech content, please follow the WeChat official account of "New Distribution" for recent posts. We will compile and publish all guest speeches for our readers.

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