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"Oranges grown south of the Huai River are true oranges, while those grown north of it become trifoliate oranges. The leaves look similar, but the fruits taste different. Why? Because the soil and water differ." This well-known story reflects the geographical differences between the north and south. Due to differences in geographical environment and climate, China's north and south differ in politics, culture, and economy. A joke goes, "The north produces officials, the south produces merchants," which aptly captures the different mindsets in economic and cultural terms.

Recently, I have been visiting leading regional distributors, both in the south and the north. During these visits, I noticed some interesting phenomena about southern and northern distributors. Let me share them with you.

1. Northern big distributors, no matter how big their business, likely have their office in the warehouse; southern big distributors generally separate office from warehouse, likely in an office building.

This is largely related to the distributors' mindset. Northern distributors mostly believe that you cannot just look at data and detach from the overall business. The boss should be with the employees. On one hand, being in the warehouse allows the boss to see the company's overall operations, promptly solve problems, and listen to employee feedback, improving communication efficiency. On the other hand, having the office in the warehouse allows close interaction between boss and employees, which in a sense motivates employees and improves overall operational efficiency.

Many southern distributors, however, want to escape the "miserable" state. In the past, most people thought distributors just moved goods and earned a margin. But in their view, future business must be formalized and corporatized. Distributors are not simply selling goods; they engage in strategic planning, refined management, digital operations, and other "higher-level" activities. Moving the office to an office building essentially liberates themselves, giving them more time and energy to think about future business.

2. Northern distributors like to drink liquor; southern distributors like to drink tea.

A joke circulated online: A northern boss, while making tea, said, "Why are southerners richer than us? Because southerners like to drink tea when idle. When drinking tea, they feel poor and talk about how to do business. Northerners? They like to drink liquor. Once they drink, they feel like emperors and start talking nonsense." The conclusion: "Three cups of wine in the mundane world, a pot of tea for a great career."

Of course, this is a joke, but it is mainly related to climate. The north is colder, and drinking liquor can speed up blood circulation and warm the body. A distributor from Liaoning explained that many northerners believe only when you are drunk are you a true friend; if not drunk, you haven't been properly entertained. "After wine, truth comes out," and drinking builds sincere friendship.

Southern tea drinking is closely related to lifestyle habits. When I visited distributors in Jiangsu, Zhejiang, and Shanghai, I found tea sets in their offices. When guests arrive, they start boiling water for tea. In the eyes of southern distributors, drinking tea is a leisurely activity. While sipping tea and chatting, they inadvertently talk business and close big deals.

3. Both diversify, but northern distributors like to buy land and build warehouses, while southern distributors like to open hotels and restaurants, venturing into the service industry.

When business reaches a certain scale, to achieve further development, most distributors diversify into new businesses. At this point, the difference is obvious: northern distributors prefer to invest in familiar businesses, expanding warehouses and scaling up. Many southern distributors, however, like to cross over into the catering industry for two reasons: to enhance the corporate and personal image, and to have a stable cash flow.

4. Northern distributors are relatively conservative and generally less receptive to new things; southern distributors are more willing to try new models and methods.

This is related to economic development. Since the reform and opening up, the South's GDP share has risen rapidly, and the gap between north and south has widened. In 2020, the South's GDP share rose from 52.7% in 1952 to 64.8%, while the North's fell from 47.3% to 35.2%. The rapidly developing economy has made the retail industry iterate faster in the South than in the North. Many new models emerge in the South, such as community group buying, which first appeared in Hunan, and leading e-commerce headquarters are mostly in the South. This means southern distributors often get exposed to new things earlier and can analyze their feasibility with actual cases, so they are more willing to try new models and methods.

5. Northern distributors prefer relationships; southern distributors prefer business.

In the North, many distributors have a huge network of relationships, involving family, blood, interests, ranks, and other factors. Various relationship chains intertwine. They do business by first building emotional connections, calling each other brothers, and using emotions to facilitate business. In the South, relationships are simpler; they are more purely merchants, based on interests. Often, they quickly gather when there is business, but disband as soon as they cannot make money. That's why we often see various group organizations formed by distributors.

6. Northern distributors look farther ahead; southern distributors are more pragmatic.

In business planning, northern distributors look further, thinking about what might happen in the future, how big the business can become, and set relatively larger goals. Southern distributors are more pragmatic, focusing on what is happening now and what methods and strategies to use to solve current problems. When setting sales targets, they often progress step by step, increasing 10-20% annually.

7. Northern distributors like to calculate small accounts first, then big accounts; southern distributors like to calculate big accounts first, then small accounts.

During visits, I noticed an interesting phenomenon. Northern distributors are extremely meticulous in internal management, detailing employee income, various costs, warehouse picking and distribution management, down to every link and person. They usually have a very capable financial manager, with clear records of every expense and income. They first do internal management well, then expand externally. Many southern distributors do the opposite: they start from the outside, first have a framework for business goals, then match internal management. They first scale up, then gradually optimize internal processes.

8. Northern distributors, no matter how big, appear to have a bigger business; southern distributors, no matter how big, appear to have a smaller business.

There are relatively fewer merchants in the North, so once they succeed and accumulate wealth, they show off. This is how many people perceive northern merchants: like "nouveau riche," making you think their business is doing very well. In the South, there are too many merchants, and many have made money, so even if they make a fortune, there is nothing to show off. When interviewing southern distributors, I had a clear feeling: they are very low-key. Even if their scale is large, they deliberately downplay it externally.

9. Northern distributors care about face; southern distributors care about actual benefits.

Northern distributors value face. What they do may not be for themselves but to gain external recognition. For example, when dining, northern distributors like to treat. If they receive a transfer after paying the bill, it might even cause conflict. Southern distributors focus more on tangible benefits. Everything they do has a clear purpose, rarely involving many social relationships. They just handle their own affairs, with interests as the bond.

The above differences are just my personal perceptions during visits. Comparing north and south is not rigorous, and may even be irrelevant. Take it as a joke. The real differences between distributors depend on mindset, learning ability, and the boss's vision and pattern.

Whether southern or northern, when they reach a certain stage, they share many commonalities:

1. Love of learning. These distributors like to attend industry conferences and exchange ideas with peers, brand owners, and other distributors. Through intensive information exchange, they maintain a keen sense of the market. As a distributor from Xuzhou said, "When I reached 80 million, I went to learn how distributors with 100 million do it." They look at future business from a higher dimension.

2. Like to explore new business. Often, when they find a new model that works well in some markets, they immediately form a small team to test it on a small scale. For example, when community group buying was still in its infancy, many excellent distributors started cooperating immediately, or even built their own platforms.

3. Use data for decision-making. In the refined operation stage, "no data, no decision; with data, good decision." Through real-time data flow and efficient integration, they further improve overall operational efficiency.

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In summary, the core essence is that these distributors have strong learning and adaptability, maintain sufficient awareness of industry developments and new things, and stay "half a step ahead" of competitors.

PS: The 2021 (4th) China FMCG Conference, organized by New Distribution, is about to open in Shanghai. Focusing on industry trends + practical cases + growth connection as the core, 3,000 FMCG practitioners will gather. 10 themed forums cover new retail O2O, community group buying, short video and live e-commerce, distributor transformation, rise of new consumer brands, interpretation of new alcoholic beverages, distribution B2B supply chain, omni-channel marketing, B2B2C new technology applications, etc. Operators in various segments will bring the latest case studies.

Confirmed heavyweight guests so far include: 1. Tao Shiquan, founder of Jiangxiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings; 3. Lu Xiuqiong, global expert partner at Bain & Company and former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, senior vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 6. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 7. Yang Hongbin, vice president of Junlebao Dairy Group; 8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, e-commerce general manager of Gold Hong Ye Paper Group...

A grand gathering for FMCG professionals, you must be there!

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