Click to read the original text for details After the 2020 pandemic, we found that various industries have undergone tremendous changes again. Especially the retail industry, it's a process of pressing the 'fast-forward button'. Let's see which industries rose against the trend during this process? For example, Hema Fresh, Dingdong Maicai, Meituan Waimai and other fast-delivery businesses developed rapidly. In 2020, the total number of food delivery orders nationwide was 1.712 million, a year-on-year increase of 7.5%; the national food delivery market transaction scale was 835.2 billion yuan, a year-on-year increase of 14.8%; according to business registration data, more than 670,000 new food delivery-related enterprises were added in 2020, a year-on-year increase of 1487%. Another example is live-streaming. According to Ministry of Commerce monitoring, in the first half of 2020, there were over 10 million e-commerce live-streaming sessions nationwide, with over 400,000 active anchors, over 50 billion views, and over 20 million products listed. There is also the rise of social e-commerce such as Meituan Youxuan, Duoduo Maicai, and Xingsheng Youxuan. According to the '2020 Community Group Buying Investment and Financing Data Report' released by Qichacha Big Data Research Institute, in 2020, there were 19 publicly disclosed financing events in the community group buying industry, with a total financing amount of 17.17 billion yuan, a year-on-year increase of 356.3%, setting a new historical high. ... Why did such huge changes occur? Facing such changes, what is the future development of the industry? The Era of Consumer Sovereignty Arrives Peter Drucker, in his book 'Management: Tasks, Responsibilities, Practices', posed three classic questions: 'Who is the customer?' 'What does the customer buy?' 'What is value to the customer?' These three questions are worth pondering for all enterprises. We can summarize them into one sentence: What is the ultimate need of the customer? Tetra Pak, the world's largest and most forward-looking packaging company, uses the advertising slogan 'Tetra Pak, protects quality'. The core behind this slogan is that bottles or cups are just carriers, but using this carrier can ensure freshness. At this time, the customer's ultimate need is freshness. Many people say that the pandemic brought bad changes, breaking the balance between online and offline. But objectively, many changes existed long ago, just accelerated by the pandemic. As an enterprise, one question to consider is: What has been changed in this world, what is being changed, and what remains unchanged and can be grasped? Today, looking back at the SARS outbreak in 2003, you will find that the current leading companies in the industry almost all rose during that period: Taobao, JD.com, SF Express, etc. On the surface, some enterprises rose against the trend, but what is the underlying logic? It is that at that special time point, the underlying logic of business underwent fundamental changes, and a new organizational form of 'big platform + 'ant army' small organizations' was emerging. Looking back, the 2020 pandemic, on the surface, saw the rise of social e-commerce, fast delivery, live-streaming, etc., but in fact, the starting logic of the entire business has changed. In the industrial era, it was an era of scarcity, emphasizing 'economies of scale' and focusing on the '80/20 rule'. There was no need for rich SKUs; only the mass market needed to be addressed, providing standardized products that meet functional needs. There was not enough space to display all products, from mom-and-pop stores to small supermarkets, from KA stores to shopping malls... In the internet era, it is an era of abundance, emphasizing 'fan economy' and focusing on the 'long tail theory'. Common basic needs have been met, and fragmented, personalized needs are emerging. It is necessary to face the market of everyone and provide customized products that consumers need. At the same time, unlimited shelves bring unlimited supply. Products do not need physical space, making it possible for differentiated personalized products and consumer participation in production. The market has shifted from 'brand hegemony' to 'consumer sovereignty'. In the past, the industrial era started with products, and the underlying logic of the market was 'scarcity', leaving consumers with no choice; now in the internet era, it starts with consumers, and the underlying logic of the market is 'abundance', leaving consumers with no choice. In the past, we said 'Please consumers pay attention', and consumers were the effect; now it is 'Pay attention to consumers', and consumers are the cause. The change in starting point has shifted the market from batch 'economies of scale' to fragmented 'economies of scope', with standardized products gradually transitioning to diversified, fragmented, and personalized needs. The value proposition of C-end segmentation and the diverse/fragmented personalized needs have led to B-end differentiation. Whether it's wechat business, group leaders, live-streaming, or innovative consumer brands, they are essentially B-end differentiation. For example, before 2014, only two local Chinese cosmetics companies had sales exceeding 2 billion yuan, but now there are more than 30. In the past, those two companies had blockbuster products, but now cosmetics companies basically have 6 or 7 major products, each with sales of maybe 500 million yuan, but together they exceed 2 billion. The product sovereignty of the industrial era has become the consumer sovereignty of the information era. In the past, it was big B to big C; now it is small b to small c. Retail Revolution, New Infrastructure, and Big Middle Platform What exactly is new retail? Ma Yun said, New retail is a data-driven pan-retail format centered on consumer experience. The key word is pan-retail. The essence of new retail is to broaden the interface between products and consumers. In the past, the interface between products and consumers was the store, the supermarket, and the mall. The arrangement of scenes, the placement of displays, the production of advertisements, and the sales pitch of promoters all affect consumer choices. Today, the interface between products and consumers has become riders, couriers, group leaders, etc. The emphasis is on product, efficiency, and service: whether half-hour delivery can be achieved, whether the delivery attitude is good, and whether product quality is good, etc. The entire scene has shifted from a single product sales to a multi-dimensional service scenario, becoming the interface between product providers and customer interaction. From 'point' to 'surface', from single-point sales to multi-point touch, from single need satisfaction to comprehensive service coverage, this is precisely a thorough change brought by new retail. The logic of operation has also changed. In the past, it was operating products; now it is operating people (consumers), and other carriers are means to operate people. But there are also problems here. People-oriented sounds beautiful, but in reality, there are problems: channels and carriers are fragmented, but service requirements are diversified, which is a contradiction. Of course, this contradiction will lead to further changes, from information data to counting tools, to payment methods, to service guarantees, to logistics, etc. Services are not only diversified but also need to be segmented and specialized. Therefore, the emergence of new retail is to broaden the interface between product providers and consumers. There is also a key point: the development of new retail must have a suitable soil for its growth, which we call the foundation for the survival of the ecosystem. The 'new infrastructure' proposed last year is to reshape the commercial infrastructure and empower the soil for new retail growth. How to reshape? The core is to 'merge similar items', build an empowering 'big middle platform', and turn the past linear supply chain into a networked supply chain. In simple terms, it is to gather the past individual supply chain units that fought alone and work together. From this perspective, the essence of new retail is a new logistics supply chain network. In the past, the supply chain was a single-point long chain, easily stuck by strong links; now the supply network is multi-point short chains, relatively more stable. For example, in the past, the engine was the core of a car; if it ran out of oil, it stopped. But now new energy vehicles have emerged, with dual use of electricity and oil, providing higher mobility. Whether it is Alibaba's 'middle platform strategy' by Daniel Zhang, JD.com's 'building block organization' by Liu Qiangdong, or Tencent's 'biological organization' by Ma Huateng, they all indicate the 'inevitability' of rebuilding an ecological new organization with self-organizing vitality and resilience in the face of a 'runaway' new world. From another perspective, the big middle platform model is more stable. Because we don't know when 'black swan' events will occur. Traditional management pursued stability, control, planning, and replication, but now uncertainty and insufficient preparation are the norm. What will happen tomorrow is unknown. In this situation, it is necessary to have a stable big middle platform as the foundation. From broadening the service interface to consolidating the basic platform, from grasping the future in the past to developing the ability to adapt to the future; from pursuing efficiency in the past to emphasizing agility now, once there is a problem, change immediately; from linear control in the past to networked management now. From 'Market Dividend' to 'Organizational Dividend', Creating a Community of Shared Destiny In the past two decades, the market was exploding with dividends. Small organizations only needed to grab market share and didn't need to worry about competition; they just needed to see how much share they could get and how big a business they could do. But now it's a stock logic, and some industries are even shrinking. The growth of a small organization inevitably means the death of others. 'Market dividend' is moving towards 'organizational dividend'. In the future, more small organizations will become partners on platforms, creating an ecosystem of shared destiny, which is S2b2C. The front-end small b touches consumers and interacts in real-time. They have good relationships with consumers and can be called customer relationship representatives. The back-end small b are empowerment service providers, providers of professional skills, mainly playing a role in empowering the front-end. Of course, there is a core issue here: in the past, B-end services to C-end were unified and standardized, but now there is a need for customized and personalized services. If it's a very small number of customized services, it's easy to satisfy, but when there is large-scale demand for customization, the middle platform S is the platform to solve the problem. It is a supply chain platform for data connection, technology penetration, and network collaboration, achieving flexible production and meeting personalized needs. The most typical example is mobile phones: everyone's phone is personalized because the apps inside are different, but the underlying middle platform system is the same. The back-end is modularized links, connecting all supply chain systems. This is the future development: based on the idea of collaborative supply chain management, combined with the business needs of each entity in the supply chain, the operation process and information system are closely integrated to achieve seamless connection of all links, forming the integration of information flow, business flow, capital flow, and logistics. Note: Mr. Ma Hong, founding partner of Chessboard Capital, will be a speaker at the 2021 (4th) China FMCG Conference held by New Distribution from August 24-26 in Shanghai. He will share more on the theme of logistics supply chain transformation in the new era. Interested friends should not miss this conference! PS: From August 24-26, 2021, the 2021 (4th) China FMCG Conference organized by 'New Distribution' will be held in Shanghai. Focusing on industry trends + practical cases + growth through connections, 3000 FMCG practitioners will gather. 10 themed forums covering new retail O2O, community group buying, short-video live-streaming e-commerce, distributor transformation, rise of new consumer brands, new wine and beverage interpretation, distributor B2B supply chain, omni-channel marketing, B2B2C new technology applications, etc., with operators in each segment bringing the latest case studies. Some of the confirmed heavyweight guests so far include: 1. Tao Shiquan, founder of Jiangxiaobai; 2. Yao Xuhong, general manager of Meiyijia Holdings Co., Ltd.; 3. Lu Xiuqiong, global expert partner at Bain & Company, former vice president of marketing for Coca-Cola China; 4. Chen Xiaodong, vice president of Nestlé Greater China; 5. Zhang Fujun, president of Lee Kum Kee Sauce Group China; 5. Bi Chaojiao, general manager of China Resources Snow Breweries (China) Marketing Center; 6. Yang Hongbin, vice president of Junlebao Dairy Group; 7. Guo Xulin, assistant to the president of Hema Fresh; 8. Yang Shun, COO of Lipton Greater China; 9. Zhang Yipeng, general manager of Kuaishou E-commerce SKA Brand Operations Center; 10. Li De, general manager of e-commerce at Gold Hong Ye Paper Group ..... Gain excellent practical cases from participation, make new industry friends through exchanges, and expand new industry horizons. 3000+ industry attendees, 1500+ brand executives, 1000+ new e-commerce platforms & regional distributor leaders. The latest trends, the latest models, and the latest business are all here! A grand event for FMCG people, you must be there! Are you 'watching' me?