On August 17, under a blazing sun, I was invited to participate in the 'New Distribution - Distributor Member Club' national benchmarking distributor study tour. The event was held from August 17-18, 2023, at the Lifeng Hotel in Tangshan, with the activity of visiting Tangshan Yihe Trading. I chose to drive to the conference hotel on the morning of the 17th, covering 350km in one go, and entered the venue just as the first speaker, Yuan Lai, Chief Content Officer of New Distribution, began speaking. Yuan Lai's presentation was titled 'Path Selection for Distributor Transformation and Upgrading under Current Circumstances.' Yuan Lai is one of the few domestic professionals who deeply study distributors, brand owners, and the upstream and downstream of the FMCG industry. His one-hour report was rich in content, combining professionalism with accessibility. Notably, he summarized the six stages of the evolution of Chinese FMCG distributors: 1.0 Stall Doctrine; 2.0 Warehouse and Distribution Doctrine; 3.0 Brand Doctrine; 4.0 Category Doctrine; 5.0 Channel Doctrine; 6.0 Consumerism. △Yuan Lai, Chief Content Officer of New Distribution These 24 characters encapsulate the transformation of the mainland consumer goods industry from its inception to the present, instantly pulling me into many career memories. Although each doctrine differs by only two characters, the external operating environment, internal operational costs, product profits, changes in agency brands, and operational changes can all be expanded richly. Expanding on any single doctrine could take days and nights. It truly is 'the seas change, the world turns, and things are no longer what they were'! Yuan Lai also made his judgment: the endgame for local distributors is to unite with downstream stores, deeply bind, and extend operational reach to local consumers through various forms of cooperation such as joint operations, alliances, and co-management. This gave the attending distributors food for thought about their endgame. Yuan Lai directly provided the endgame conclusion for distributors, showing his deep insight and confidence in his professional field! The endgame thinking is worth savoring for every practitioner who still wants to make a mark in the FMCG channel, and they should formulate future development strategies based on their own operating conditions and external environment. Before I could fully emerge from my thoughts of over a decade of industry experience and future endgame considerations, the protagonist of this study tour, Yu Xiuwei, General Manager, took the stage. △Yu Xiuwei, Founder of Tangshan Yihe Trading Meeting General Yu for the first time, he appeared as a gentle, slow-speaking man. The first page of his PPT displayed the large words 'Yihe Service Provider.' General Yu's first job was at Mengniu, where he rose from grassroots sales to regional manager in five years. His first business venture was as an agent for Mengniu milk, winning the Bronze Bull Award multiple times. His second venture was operating the Diandiantong B2B platform for three years. His third venture was the local Tangshan chain brand, which has been running for over two years. It's clear that General Yu is an outstanding entrepreneurial operator. His project sharing, from the listener's perspective, used the movie 'Titanic' as a metaphor to empathize with the current decline of distributor businesses. He compared the sweetness of ROSE and JACK to the eventual collision with the iceberg of the 'unsinkable ship' to describe the changing relationship between distributors and brands in different periods. General Yu's metaphor of the big ship reminded me of a classic line from the manga 'One Piece': 'The remnants of the old era cannot board the ship to the new world,' so I slightly modified it as the title of this article, which I think is fitting. General Yu's report was highly significant in awakening the distributor community, with strong and genuine emotional empathy that moved every listener. General Yu compared the monthly end-of-month visits by factory sales reps chasing performance targets to his 'receiving guests.' I often say, 'Nowadays, factories have lower and lower technical content; every time they come to demand tasks, the most annoying are those with guns and bowls.' General Yu's current business foundation and future strategic plans allow him to reduce over-reliance on factories, thus becoming the master of his own domain. Hearing this, I couldn't help but give him a thumbs up in my heart. After the report, we went to visit Yihe Trading's supply chain front-end warehouse and the C-end facing snack discount store. After a few dozen minutes by bus, we arrived at Yihe's 4,000-square-meter warehouse. Two buses were full, and everyone was excited for the on-site inspection. Upon getting off, the warehouse and distribution staff warmly welcomed us, and the head of warehouse and distribution led us on an orderly tour while explaining the processes. The warehouse was clean and tidy, with goods neatly stacked by category, and loading and unloading channels were smooth. Around the warehouse, banners with reminders, encouragement, and motivation were visible everywhere. This represents the work spirit and corporate culture of Yihe people. The second stop was the Jiji Snack Store under the Jiji chain brand, which was also General Yu's first store. The store was located in a row of storefronts outside the market, not large in area. Coinciding with the evening rush hour and the visit by the New Distribution team, the snack store was packed with customers inside and out, buzzing with noise. General Yu returned to introduce that the initial site selection had some accidental factors, but after two years of operation, the store is performing very well, which is inseparable from the team's efforts. Accidental factors also require inevitable choices and efforts to produce sustained good results. Because I had arranged a private visit in Tangshan, I didn't go to the second, newly opened larger store, which was a slight regret. After the day's study tour, I conducted a deep review and thought about the underlying business logic that night. Here are my reflections: 1. Maintain a hunger for learning. I thank the New Distribution media for building a study tour platform centered on distributors, providing a good learning environment for those who love to learn. I often say that the membership fee for the New Distribution Member Club is my best expenditure in 2023; paying for knowledge is the most worthwhile. 2. Thinking about the future. Chief Editor Yuan Lai has already pinpointed the endgame scenario for the FMCG industry. In the current economic environment, distributor-type trading companies need self-reflection, self-change, self-elevation, and self-innovation. The previous reliance on brands is no longer reliable; the long-term economic uncertainty and the sharp decline in population will lead to future unpredictability. How to live well in the present and win the future? Good peer communication among peers is essential. As General Yu said, I'm not here to sell courses; I'm looking for co-conspirators. Three people make a crowd; the future belongs to those who prepare and change now. 3. How to implement knowledge? I think we can refer to the 'Six Doctrines' given by Chief Editor Yuan Lai, based on our current operating situation, to see which stage our company is in, how we passed the previous stage, and where the next stage leads. Solve current operational problems, streamline traditional trade channels, logistics and warehouse distribution, operational processes, financial processes, and brand structure. Ensure the current business runs smoothly before considering implementing future plans; it's not too late. Of course, it should also be combined with each company's operating income, which is the most important, because our country is vast and diverse. If you are currently comfortable, then it might be better to enjoy a few more years of dividends. 4. The collapse of order in the FMCG industry and where to go in the post-jungle era? The honeymoon period between manufacturers and distributors is gone forever. The industry has entered a period of supply-side reform and adjustment, and FMCG merchants have entered the law of the jungle period of survival of the fittest. Only lower prices and faster turnover rates are the hard truths for survival. The above are my brief records and reflections, hoping to be of some help to everyone, and I also hope that the businesses of all peers can get better and better. If future study tours are suitable for the industry and the timing is right, I will continue to participate, and I look forward to meeting everyone again.
Dealer Operations
Old-School Distributors Can't Board the Ship of New Sales
On August 17, under a blazing sun, the author attended the 'New Distribution - Distributor Member Club' national benchmarking distributor study tour, visiting Tangshan Yihe Trading. The event featured a keynote by Yuan Lai, Chief Content Officer of New Distribution, on the path for distributor transformation and upgrading, and a visit to Yihe's warehouse and discount snack store. The author reflects on the six stages of FMCG distributor evolution and shares insights on learning, future thinking, knowledge implementation, and industry changes.
