Click to read the original article for details The disappearance of channel driving force does not mean channels will disappear. Whether offline or online, channels as transaction pathways will always exist. The disappearance of channel driving force is a major trend, not something that will happen overnight. In central cities, it is already close to disappearing; in township markets, channels still have some driving force, but it has severely declined. Western marketing has long entered 1P marketing, where product (brand) is the sole driving force. Chinese marketing is dual-driven: brand-driven and channel-driven. Early Chinese enterprises lacked brand driving force, especially compared to multinational companies, and were almost uncompetitive in all marketing elements, but they had one advantage: channel operation advantage. After 2000, teachers Bao Zheng and Shi Wei proposed the theory of deep distribution. Teacher Chen Chunhua in 2004 in "Sales and Market" proposed that Chinese marketing should prioritize channel driving over brand driving. This formally established the "dual driving force" of Chinese marketing in theory and practice. Professor Chen Chunhua said: "Many researchers in economics and management, especially some Chinese scholars, when summarizing the success of world-class enterprises based on limited data, often conclude that the 'brand economy' era has arrived, and no Chinese enterprise can be considered a truly successful brand. This makes many Chinese enterprises pessimistic, even doubting the channel advantages they have just built, and hesitant in choosing between 'brand awareness' and 'channel maturity'." "In the Chinese market, the process of promoting products to occupy the market is not a process of building a brand through market means; even if an enterprise establishes a brand, it cannot increase market share. This does not mean that brand is unimportant—in China, end consumers cannot and do not rely solely on brand to purchase products. Between 'brand awareness' and 'channel maturity', I suggest choosing channel first." Now, deep distribution is called the "best Chinese marketing practice." First channel-driven to accumulate resources, then brand-driven, has become the path for many enterprises to rise. I once said that China's dual market structure (brand market in central cities, channel market in lower-tier markets) makes complex channels a "safe haven" for weak Chinese enterprises. Even multinational companies successful in China, such as P&G and Coca-Cola, have made different efforts in Chinese channels compared to Western markets. There are also many well-known multinational brands that withdrew from the Chinese market because they could not adapt to Chinese channels. If it were possible to achieve both brand-driven and channel-driven "dual driving," that would be better, but if due to resource constraints one cannot cross the high threshold of brand driving, relying solely on channel driving can still complete the early accumulation process. This greatly lowered the threshold for early Chinese marketing. Why has channel driving become a unique phenomenon in Chinese marketing? Even a Chinese characteristic distinct from Western marketing? This is similar to the logic of the Chinese revolution's "rural areas encircling cities" versus the Soviet Union's "seizing central cities," and is determined by the environment of Chinese marketing. Environment determines everything. All marketing logic unfolds from this origin. Teacher Shi Wei proposed "cognition, transaction, relationship," which I believe is a universal analytical logic for business. A complete business process must go through three stages: cognition, transaction, and relationship. In Western countries, cognition is achieved through mass media (brand communication), and transactions are handed over to a third party: channels. The function of channels is relatively simple: transaction and the services surrounding it. In the Chinese market, cognition can be achieved through mass media (brand-driven) or through channels. This is a characteristic that Chinese channels once had: the trinity of cognition, transaction, and relationship. Cognition, transaction, and relationship, trinity. This was originally used by Teacher Shi Wei to analyze the business characteristics of the internet environment. But we find that this theory is more useful for analyzing China's driving forces. This is because traditional Chinese channels have a unique element: relationship. Western marketing also talks about relationships, such as CRM (Customer Relationship Management), but that is transaction-based. Chinese channel relationships arise because the terminal owner's "life radius" overlaps with their business radius. Before a business transaction occurs, a relationship already exists. Acquaintances are regular customers. This is a remnant of China's agricultural society. Modern commerce, such as KA (Key Accounts) and chain supermarkets, does not have this relational trace. Because in urban structures, life radius and business radius are separated. Entering the store is a guest; leaving the store is a stranger. Because acquaintances are regular customers, this relationship helps reduce cognitive costs. That is, when terminal owners use their acquaintance relationships to recommend products to users, users are receptive. Relationship becomes cognition, cognition becomes transaction, and transaction deepens the relationship. This is the trinity of Chinese channels. If deep distribution is the "collective feel" of Chinese marketing, Teacher Shi Wei's theory provides a post-hoc theoretical analysis of China's best marketing practices. If brand-driven is "user first choice," then I call the terminal performance of channel-driven "store owner first recommendation." In my early research, I often asked store owners "what products sell well," and the typical answer was "whatever I want to sell sells well." Deep distribution, operationally, seems to be "distribution," the process of distributing products. In fact, distribution is just the process of approaching terminals and building "relationships" with store owners. This relationship-building is not just about turning "business friendship" into "acquaintance," but also completing the process of making the store owner "want to recommend" (profit) and "dare to recommend" (product cognition, confidence). "Store owner first recommendation" is the core of channel driving. When Uni-President promoted Lao Tan pickled cabbage instant noodles, they adopted the "three precise and effective strikes" approach. They did three consecutive promotions at one terminal. Because the promotions were effective, the store owner "dared to recommend" (even though Lao Tan was not yet famous at that time); because of the three consecutive promotions, a relationship was built with the store owner; because of profit, the store owner was willing to recommend. In recent years, I have been saying that deep distribution should be downplayed. This time I also propose the disappearance of channel driving force, all stemming from a core environmental cognition: the weakening of the relationship between terminal store owners and users. There are three reasons for the weakening of the relationship between terminal store owners and users: First, it is an inevitable result of urbanization. In new communities, traces of agricultural society gradually disappear, and the strong relationship between store owners and users weakens; second, the new generation of consumers is more accustomed to "free selection" rather than store owner recommendations; third, the motivation for store owners to recommend has weakened. Now, terminals with slightly better operations have their displays and end caps "bought out" by manufacturers. Many stores' buyout income alone is enough to cover operating costs. Some stores have become like former KAs, shifting from profiting from product sales to selling traffic for backend profits. When store owners no longer use relationships as a means of user cognition, or when users prefer free selection, the channel's function as a cognitive tool declines, and channel driving force also declines. Deep distribution as channel driving force: distribution is the result, but relationship lowering cognitive thresholds is the core. The cognitive logic of deep distribution is: manufacturers and terminals build relationships, and store owners have relationships with users. Two relationships form a relationship chain, and the manufacturer-terminal relationship can be "monetized" (cognition, transaction) through the terminal-user relationship. If deep distribution cannot monetize through the store owner-user relationship, then the channel function is merely a transaction pathway, lacking the trinity of "cognition, transaction, relationship," mainly lacking cognitive function. Recently, in frontline research, in central cities, whether large or small stores, users are "freely selecting"; in county towns, it is basically user free selection with less store owner intervention; in township stores, many have become supermarket-like, and supermarkets naturally allow free selection. In townships and below, there is still some store-owner-recommended purchasing, but the proportion is already very low. Although some KAs still have sales guides, for non-brand products, the significance of sales guides is limited, because in KAs where sales guides have value, there are already a bunch of brand manufacturers' sales guides gathered. The weakening and even disappearance of channel driving force is now evident: First, in central cities, in small stores, non-famous brands have almost disappeared; Second, without leveraging IP, new brands, even in lower-tier markets, find it very difficult to rise, almost impossible. The disappearance of channel driving force is a trend and a process that has already begun. Chinese channels will eventually become third-party channels, i.e., channels focused on efficient, low-cost transactions. The cognitive function will gradually be stripped from channels. This is why I firmly believe in B2B. However, the "relationship" between terminal store owners and users still has enormous value. But this relationship has new uses. For example, community group buying. Community group buying still leverages the "strong relationship" between store owners or mothers and users. However, this strong relationship is no longer a "one-on-one" cognition and transaction process, but a platform-based cognition and transaction. Store owners are traffic entry points, but the ones who turn traffic into value may not be the store owners but the platform. That is, traditional offline has two relationship chains. One is the relationship between brand owners and store owners; the other is the relationship between store owners and users. Now the relationship logic has changed. Store owners have relationships with users, platforms also build relationships with users, and the cognitive process is mainly completed between platforms and users. Store owners are just traffic entry points. Of course, early store owners' trust endorsement is still very useful. The reason community group buying "group leaders" can switch platforms is because of the strong relationship between group leaders and users. Although directly monetizing through channel relationships is increasingly difficult, building user relationships based on channel relationships, and using communities to initiate promotion and cognition, channels still have enormous value beyond transaction functions, just in different forms. When channel driving force disappears, can we build new driving forces? This is the core issue. The West has long entered 1P marketing. Channels are efficient third-party transaction systems. China will also enter a similar pattern. When channel driving force weakens, China has leveraged the internet to create IP-driven. IP is the brand in the internet context. The difference between IP and brand is that brands typically rely on high-intensity mass media communication, while IP relies on social media communication. IP-driven has two forms. First, niche products leverage vertical communities for vertical communication, in the form of IP+KOL; second, mass products leverage horizontal communities, such as community group buying group leaders, for horizontal communication, also in the form of IP+KOL. Due to the high fragmentation of communities, China's large sales force will still exist for a long time. In the past, China's channel human-wave tactics were due to channel fragmentation. Now, because of customer group fragmentation, even with similar group control technology, as long as it is relationship maintenance, personnel are still indispensable. However, with the emergence of middle-platform technology, front-line personnel will be greatly reduced, and front-line personnel supported by big data will be much more efficient. IP+KOL driving. This is another combination of marketing driving forces. IP-driven is similar to previous brand-driven. It can be centralized. KOL-driven is actually community-driven. Similar to previous channel-driven, community is the channel. Communities are necessarily distributed and decentralized. Currently, some terminal store owners can be regarded as KOLs, such as community group buying "group leaders." When channel driving force is about to disappear, building community (KOL) driving force is very important. Leveraging the still-existing influence of terminals, developing some store owners into community operation KOLs is the right time.