Click on the image for details Eternal Asia's top salesman and chairman, Zhou Guohui, said, "In the future, we will no longer rely on just one business to make money, but on many '+'s, including supply chain finance, value-added services, and marketing media." Now this oddball company is building a vast supply chain ecosystem "empire" through many '+'s. Written by Li Ni, columnist for iyiou.com Some say the supply chain has no boundaries, so where are the boundaries of supply chain giant Eternal Asia? Perhaps it is to become a state-owned enterprise. However, Eternal Asia, which has been suspended from trading since the market opened on August 7, was planning major matters and almost became a partner with Shenzhen Investment Holdings Co., Ltd., but ultimately failed to sign a formal agreement. As the first listed supply chain company in China, Eternal Asia's every move represents the development direction of China's supply chain industry. Although Eternal Asia's introduction of important strategic partners ended in failure this time, as a pioneer in China's supply chain, Zhou Guohui is leading Eternal Asia to open up a new "blue ocean." In November 2008, "Entrepreneur" described Eternal Asia as follows: "It has no products, does not build brands, and has no sales. It is neither a manufacturer skilled in internal management like Foxconn or BYD, nor a retailer controlling terminal channels like Gome or Suning. It is different from Google or Cisco in developing revolutionary technologies, and unlike McKinsey or Accenture, it does not make a living by providing consulting advice." What exactly is this "oddball" company Eternal Asia, and how does it make money? How does it stand out in the "oddball" market? Eternal Asia's top salesman and chairman, Zhou Guohui, said, "In the future, we will no longer rely on just one business to make money, but on many '+'s, including supply chain finance, value-added services, and marketing media." Now this oddball company is building a vast supply chain ecosystem "empire" through many '+'s. In 2016, there were more than 21,000 companies nationwide with the name "supply chain," of which more than 6,800 were concentrated in Shenzhen. How did Eternal Asia carve out its own space among the crowded supply chain companies? What exactly is Eternal Asia doing? According to Eternal Asia's 2017 first-half development report, Eternal Asia achieved total operating revenue of 30.444 billion yuan, an increase of 14.8% compared with the same period in 2016; total profit for the half year was 401 million yuan, an increase of 0.93% year-on-year; net profit attributable to the parent company was 330 million yuan, an increase of 6.59% year-on-year. In March 2017, Eternal Asia released the "Explanation of Business Organization and Management Structure Adjustment of Shenzhen Eternal Asia Supply Chain Co., Ltd.," adjusting the original five major business clusters into ten major business platforms and adjusting the classification of comparable business data from the previous period. 1. Breadth Platform Business Breadth supply chain business (production-oriented supply chain services) is the core supply chain service business at the time of Eternal Asia's establishment. It mainly undertakes outsourcing of non-core business in all aspects of the enterprise supply chain, using "procurement execution + distribution execution" to connect upstream and downstream partners of core customers and enhance supply chain benefits. 2. 380 Distribution Platform Business At the beginning of 2017, the original depth supply chain cluster (circulation and consumption-oriented supply chain business) was upgraded to the 380 Distribution Platform. This year, the 380 Distribution Platform focuses on fully developing the SupplyTong service platform, improving the logistics efficiency of goods, and strictly implementing operations according to refined management standards to reduce costs and increase efficiency. It has taken the lead in the industry to achieve the first in national scale, first in service network, first in terminal coverage, first in number of product brands, and first in team size. 3. Logistics Platform Business The logistics platform is a collection platform for logistics business separated from various business segments of Eternal Asia. It upgrades from enterprise logistics to logistics enterprise development, enabling the company's logistics resources to serve as a socialized platform; the current organizational structure has been upgraded to an independent platform operation model. 4. Global Procurement Platform Business The global procurement platform continues to integrate excellent operating teams and projects through acquisition and control, integrating upstream and downstream resources to form a one-stop procurement and integration platform. From upstream, it provides raw materials, semi-finished products, and finished product resources from different global suppliers; downstream, it integrates national or regional channels; ultimately, it connects to clients, choosing the most efficient operating model to accelerate capital turnover and improve gross margins. 5. Yusun Financial Control Platform Business The Yusun Financial Control Platform business is positioned based on Eternal Asia's carrier business, serving the B2B enterprise services market in vertical industries nationwide, providing supply chain information management, information matching, technology solutions, and comprehensive services. 6. 380 Financial Services Platform Business The 380 Financial Services Platform mainly targets small and medium-sized related enterprise customers (distributors, dealers, terminal stores) accumulated in the 380 distribution business system. It uses the company's strategic partnerships with many banks and its understanding of the actual business operations of small and medium-sized enterprise customers in long-term cooperation to solve customers' financing difficulties. 7. Food Cold Chain Platform Business The food cold chain platform is based on the breadth "1+N" business model, committed to building a food cold chain product supply chain platform integrating "industrial resources (integration) + services (platform) + distribution (channels)." Currently, this business is still in its early development stage, mainly through integrating upstream brand owners and downstream high-quality distributors to achieve rapid team building and rapid business volume introduction, achieving initial scale effects. 8. New Retail Platform Business The new retail platform evolved from the company's original multi-brand retail franchise chain platform. In the first half of 2017, the new retail platform fully integrated regional franchise systems, that is, integrating high-quality retail franchise enterprises with complete systems such as procurement, logistics, operations, and finance. Currently, the platform has integrated more than 6,000 terminal stores. 9. Marketing Platform Business The marketing platform is an independent operating platform newly established after Eternal Asia's strategic upgrade. Its businesses include the original marketing business Xinglian Media (internet product marketing platform), Terminal Media (million terminal store TV screen marketing), Sudong Media (ground promotion activity marketing), and integrated marketing (integrating high-quality marketing resources). 10. Brand Service Platform Business The brand service platform is a content-based platform newly established at the beginning of the year. It mainly focuses on the strategic core of "distribution + marketing" of the 380 Distribution Platform, coordinating the supply chain services, marketing, finance, and other resources owned by the company's various platforms to help brands achieve their market influence. 11. Capital Service Platform Business The capital service platform mainly provides services for industry integration, industrial integration, and capital integration, helping partner companies develop rapidly and move toward the capital market. 12. Internet Platform Business In the first half of 2017, the platform design team developed a new internet ecosystem product, Xinglian Youdian APP, which serves individuals with sales capabilities to open online stores at zero cost. Combined with previously developed Xinglian Yunshang, Xinglian Yundian, and Xinglian Shenghuo, the business areas span B2b2C, thus building a bridge between brand owners, distributors, supply chain service platforms, terminal stores, and consumers, improving the overall operational efficiency of the circulation industry. Why do all this? Use supply chain to change the scattered, chaotic, poor, and small situation in the circulation industry. On August 30, 2017, Eternal Asia's 20th anniversary series of activities had already visited 30 regions. At 20 years old, Eternal Asia has been on the Fortune China 500 list for 7 consecutive years. As a leading enterprise in the domestic supply chain industry, Eternal Asia jumped from 147th to 110th last year. Over the past two decades, Eternal Asia has evolved from a service-oriented enterprise to a platform-oriented enterprise, and then to an ecosystem-oriented enterprise. Eternal Asia represents the development direction of China's supply chain industry. Zhou Guohui once said that only supply chain transformation can change the "scattered, chaotic, poor, and small" situation in China's circulation industry. Building a trillion-scale ecosystem Eternal Asia was established in 1997 and is the first listed supply chain service enterprise in China. Wen Xiaolin, vice president of Eternal Asia Supply Chain Co., Ltd., introduced Eternal Asia to the public as follows: Eternal Asia is an O2O ecosystem enterprise that goes beyond the supply chain. Eternal Asia's development has mainly gone through the following three stages: Before listing, Eternal Asia mainly provided supply chain services for some production enterprises in the industry, doing breadth supply chain services, adopting a service-centric strategy; After listing in 2007, Eternal Asia carried out depth supply chain services, proposed the "380 Plan," intending to build 380 depth supply chain distribution platforms, adopting a platform strategy; After 2015, Eternal Asia upgraded the "380 Plan," implemented the O2O ecosystem strategy, and built a trillion-scale supply chain ecosystem. Eternal Asia's business model has undergone several changes: from breadth supply chain to depth supply chain, and then to a global supply chain ecosystem; in the eyes of the outside world, it has gone through different identities such as logistics enterprise, distribution platform, and O2O leader that can graft multiple business models. The capital market's valuation of it has also gone through stages from the most traditional PE (price-to-earnings ratio) to PS (price-to-sales ratio, an indicator linking enterprise value and market share) and then to PB (price-to-book ratio, an indicator for examining potential market value) applicable to internet companies. Eternal Asia provided the initial model for China's entire supply chain services. From the most basic, initial production-end supply chain, to back-end supply chain services, to deep distribution coverage, and to the supply chain services at the final stage, Eternal Asia provided a complete supply chain system. In the past 20 years, Eternal Asia first introduced the initial N+1 model of the supply chain into centralized procurement, built a nationwide distribution system, and achieved the reverse deduction of 1+N. In 2016, it achieved sales of 75.3 billion yuan, with a target to exceed 100 billion in 2017 and 200 billion by 2020. Three-Tong Plan Boosts Ecosystem Strategy To more effectively promote the ecosystem strategy, Eternal Asia will focus on implementing the "Three-Tong" (SupplyTong, MarketingTong, XingmengTong) plan. SupplyTong is actually a distribution upgrade. Eternal Asia covers 6 major FMCG industries, with about 21 sub-brands. After covering almost all categories, building this distribution brand enables 1.5 million distribution stores to achieve centralized procurement. Eternal Asia's products connect two ends: one end connects brands, and the other connects terminal stores. For terminal stores, it builds a terminal procurement platform; for brands, it builds a distribution brand. Eternal Asia connects brands and terminal stores, accelerating the efficiency of the entire circulation industry. MarketingTong: Eternal Asia believes that within the next 3 years, if a company only does distribution alone, it will be difficult to survive. Eternal Asia is transforming its supplier system from distribution to distribution plus marketing. Through the distribution system, it can only reach terminals, but through marketing, it can grasp consumer minds and continuously reach them. Eternal Asia is ready for the transformation from distribution to marketing. Products in marketing will make manufacturers feel confident in doing sales-based marketing work. XingmengTong: Combine scattered stores to concentrate all small and medium-sized stores for centralized procurement. Not only achieve online centralized procurement, but also enable offline stores to open online stores. Of course, it also includes marketing services and financial services. Terminal stores related to Eternal Asia have exceeded 50,000, which is a very large number. In this way, help China's small and medium-sized retail stores transform and upgrade. Launching a self-revolution Eternal Asia has come to where it is today. It needs to shift from scale-driven to efficiency-driven and profit-driven. The way of selling at all costs and doing sales without regard for efficiency no longer meets the requirements of the times. Eternal Asia must first have the courage to transform and upgrade itself to help China's commodity circulation industry transform and upgrade. Chairman Zhou Guohui proposed that Eternal Asia's transformation and upgrading path must achieve several "Threes":

  1. "Three-Tong" is the nuclear weapon to promote the transformation and upgrading of China's commodity circulation industry. It can truly help all links of China's commodity circulation industry enhance competitiveness and become stronger and bigger. It is also Eternal Asia's key project throughout 2017;
  2. Push down the three mountains restricting company profits, and vigorously grasp "per capita efficiency, capital turnover, and market expense control." This will be a process of reengineering the company's management organizational structure;
  3. Break the three dilemmas troubling enterprise development: achieve "cultural integration, innovation and capability improvement, and strengthen execution and combat effectiveness." This requires all employees and partners to unite on the same path and continuously achieve self-breakthroughs;
  4. Actively implement the "Three-Harmony" strategy emphasized by the group: cooperate with more like-minded partners, integration is the key to the company and partners working together, and alliance is the core for the company and all partners to jointly grow stronger;
  5. Share the "Three-Dimensional Partnership" of ecological value: strengthen close partnerships with brand partners and share ecological value; adopt platform management models with all partners; cultivate excellent Eternal Asia employees to become the company's sales partners;
  6. Quickly cover terminals with the "Three Vertical Linkages": unified command of logistics, finance, and brand services, all actions follow orders, hit wherever pointed, quickly cover national terminals, and let marketing go to the place closest to consumers. Resisting e-commerce temptation, helping enterprises do e-commerce Recently, the Ministry of Commerce and the Ministry of Finance jointly issued the "Notice on Pilot City Supply Chain System Construction Work," and the State Council issued the "Opinions on Further Promoting Logistics Cost Reduction and Efficiency Enhancement to Promote the Development of the Real Economy," which provide policy support for the development of supply chain enterprises represented by Eternal Asia. Now, the era of supply chain integration + connection has come. As the invisible hand behind retail e-commerce and store commerce, supply chain enterprises represented by Eternal Asia are becoming an important force in China's commercial transformation. Some say that supply chain enterprises master commercial flow, logistics, and capital flow, so turning to e-commerce is "easy," but Eternal Asia clearly stated that it will not do e-commerce. In the eyes of Eternal Asia's chairman Zhou Guohui, the vicious competition of e-commerce and the abnormal business model of burning money for traffic are serious damage to a healthy business environment. Eternal Asia is precisely through the supply chain to connect all customers and resources for commercial O2O e-commerce, jointly build a platform sharing, resource sharing, and mutually beneficial business ecosystem, help stores do e-commerce, and help the entire circulation industry and terminal stores better use internet tools to achieve O2O e-commerce functions. The key to Eternal Asia reshaping this business ecosystem is to reshape the circulation industry. In the traditional circulation market, from brand to consumer, it goes through levels of agents. This agent has many circulation systems. Usually, a distributor is only responsible for one brand, making it difficult for brands to directly face consumers. For stores, it is also difficult to have a good connection and interaction with brands, and it wastes distributor resources. The new circulation that Eternal Asia is committed to building can carry all brands. From brand to service providers, retail terminals, and the entire consumer link, it does not artificially separate them, achieving mutual integration and symbiosis, thereby improving the operational efficiency of the circulation industry. Through the distribution platform created by Eternal Asia, enterprises can reach consumers and retail terminals in one stop, realizing interaction between brands and consumers. Let consumers experience the interconnection of online and offline experiences. This is a new circulation model. The core concept of Eternal Asia's new circulation is to enable brand owners, terminal retail stores, consumers, and distribution service providers to form a complete, harmonious state of mutual integration and symbiosis. This state is not hierarchical; it is a model where you have me and I have you. Through the distribution plus marketing model, help brands better reach terminal stores, and at the same time, do a good job from bottom to top, realizing offline physical stores and online internet products. Zhou Guohui believes that "new circulation" has three major characteristics: First, flattening, that is, the interconnection between brands, terminal stores, and consumers. It is reflected in the reduction of transaction links, effectively achieving the accessibility of information, goods, scenes, and other elements, showing a flattening feature. Second, communityization, that is, any community store can get brand support, creating the community's own "Double 11" and "618" consumption festivals. Third, sharing, that is, brands, O2O stores, platform providers, traffic providers, customers, etc., are all communities of interests, sharing results. Zhou Guohui said that through internet strategy upgrades and online-offline collaborative innovation, Eternal Asia's O2O business ecosystem strategy will establish a link across the entire industry chain from brand owners, distributors, retailers to consumers, achieving a truly "mutual integration and symbiosis." (Note: This article is compiled from Eternal Asia, Financial Street, Wanlian, Entrepreneur, Shenzhen Business Daily, etc.) Click on the image for details The Third (CFIC) China FMCG + Internet Conference will be held in Chongqing in October 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting domestic 1,000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions to jointly explore a new chapter of cross-border integration! Core topics of this conference:

  • How the FMCG industry can leverage B2B to achieve new growth opportunities

  • How to build the new supply chain behind new retail

  • How same-city logistics can help B2B achieve leapfrog development

Highlights of this conference:

  • The industry's first "2017 China FMCG B2B Industry Competitiveness White Paper"

  • Excellent transformation and upgrading distributor case sharing

  • Conference + exhibition upgrade, Hall 6 Internet Technology Exhibition strengthens docking

  • Alibaba Retail Link, Puhua Finance, Eternal Asia Supply Chain, Baishidianjia, Yijiupi, Unilever, Haiding Technology, Yunmei Shares - leaders from the most well-known enterprises in various fields will give on-site speeches and present pioneering views.

October 17-18, 2017 Chongqing International Expo Center Registration is now open. Long press the QR code below or click "Read Original" to register. Early bird tickets before September 15 enjoy a 30% discount! Add friend and note "Conference Registration" Click the links below to review the highlights of the first and second FMCG + Internet conferences: 2016 "FMCG + Internet" Summit Forum 2017 (Second) China FMCG + Internet Conference Click the links below to review the highlights of the first and second FMCG + Internet conferences: 2016 "FMCG + Internet" Summit Forum -END-