From March 23 to 25, the 2017 National Spring Sugar and Wine Fair was held in Chengdu, a venue full of turbulence and smoke, gathering heroes from all walks. Is the future of the FMCG distribution sector a gentle spring breeze or a bloody storm? When traditional brands and industry newcomers all board the high-speed train of the Internet, differing voices are inevitable. Several senior executives of Eternal Asia also elaborated on Eternal Asia's O2O supply chain strategy at professional summits with different themes during the fair. Is Eternal Asia's O2O supply chain strategy truly enlarging the pie or just drawing a pie in the sky? Everyone is waiting to see. What does Eternal Asia rely on to grow?

  1. Eternal Asia advocates building a new ecosystem ◆ Is building an ecosystem a belief or an 'ambition'? In November last year, Eternal Asia held a grand launch event for its new business ecosystem products. Zhou Guohui, the founder of China's supply chain services and chairman of Eternal Asia, released the ecological strategy of supply chain + Internet, comprehensively promoting the integration of O2O supply chain (online and offline), and elaborated in detail on what Eternal Asia intends to do and the goals it aims to achieve. Eternal Asia emphasized that the ecosystem belongs to everyone and that it will establish a new business order to change the current state of small, scattered, and chaotic distribution in China. What Eternal Asia is doing is undoubtedly awe-inspiring and a force driving China's commercial transformation. (Zhou Guohui, Chairman of Eternal Asia Supply Chain Co., Ltd.) Eternal Asia's first future goal is to achieve 1 trillion yuan on its O2O platform, which will be realized through ten major platforms nationwide. In the future, nearly 600 partner companies will join Eternal Asia in operating this platform, effectively covering millions of terminal stores. Eternal Asia's strategic partners are all top three in their respective sub-sectors, and Eternal Asia's goal is to become the largest O2O commercial ecosystem company in China. Thus, a behemoth connecting upstream brand owners and downstream terminal stores through the supply chain has emerged. What will manufacturers, distributors, and terminal stores involved face? They are still uncertain... ◆ Concerns about integration with traditional distributors: How does Eternal Asia cooperate with distributors? The specific operating model is: Eternal Asia cooperates with excellent distributors, sub-distributors, and retailers in 380 cities across the country, establishing joint venture subsidiaries with each, where Eternal Asia holds 60% and the local partner holds 40%, thereby connecting millions of retail terminal stores. For most distributors, sub-distributors, and retailers, the benefits of cooperating with Eternal Asia naturally include access to beneficial experience in supply chain, finance, brand resources, media, and many other fields. The purpose of cooperation is basically the same: to develop, grow, and make money. However, due to differences in philosophy and specific demands, there are still varying difficulties. For example, in the joint venture company, financial and commercial, HR and administrative, and logistics and warehousing management personnel may be dispatched by Eternal Asia, at which point the old team of the distributor and the new team of Eternal Asia face the challenge of integration. In response, a relevant person in charge of Eternal Asia stated that Eternal Asia helps integration through the 'Three Integration Actions' of 'platform integration, business integration, and cultural integration.' The new company not only needs personnel, financial resources, and materials in place, but information management and unified fund collection and management are the areas with the most integration challenges. Judging from completed cooperation projects, the pace of integration varies, and operational improvements differ. The first key principle of Eternal Asia's cooperation is: selection is the most important.
  2. Eternal Asia's strategy and thinking Regarding brand owners' concerns, Tang Linming, President of Eternal Asia's Capital Platform, made an apt analogy at the meeting: 'Eternal Asia provides services. If we are water, we hope to carry better ships.' Eternal Asia hopes to convey consumer needs to brand owners, open the collected data to manufacturers, interact with them, and enable brand owners to innovate at the core, helping them improve production. For example, since 2013, Eternal Asia has maintained an annual growth rate of over 40%. In the alcoholic beverage distribution channel, Eternal Asia's sales were nearly 8 billion yuan in 2015, and by 2016, they had reached nearly 14 billion yuan. The high growth in the alcoholic beverage distribution channel is the reason why listed alcoholic beverage companies maintain impressive high market values. Looking at the development of liquor companies through distribution channels, first-tier brands need cultural accumulation and sustainable innovation to maintain their leading positions. Supply chain services help brand enterprises focus on developing their core competitiveness. Regarding the concept of mutual integration and symbiosis, Wen Xiaolin, President of Eternal Asia's Brand Service Platform, pointed out in a speech titled 'Building a New O2O Supply Chain Business Ecosystem' that Eternal Asia's O2O supply chain business ecosystem aims to work with partners to enlarge the market pie and help brands create value. Supply chain value. Eternal Asia is a listed supply chain service enterprise in China. Since its establishment 20 years ago, it has always focused on supply chain service innovation, which is also the greatest advantage of Eternal Asia's advocacy for a new ecosystem: supply chain. Eternal Asia's supply chain model benefits both upstream manufacturers and downstream terminal stores. First, it helps brand owners improve production. Eternal Asia hopes to convey consumer needs and visions to brand owners, open the collected data to manufacturers, and enable brand owners to innovate at the core, helping them better improve their production. Second, it creates value for terminal stores. As a shared platform company, Eternal Asia's services currently effectively cover millions of terminals. Any brand, whether in the daily chemical industry or a certain brand in the food industry, will always have some blank channels. Eternal Asia can help manufacturers cover and extend these blank areas. Supply chain thinking. Eternal Asia's supply chain thinking does not emphasize 'fighting' but rather 'connecting.' Wen Xiaolin stated: Eternal Asia does not regard anyone as an opponent; every person, collective, organization, and enterprise is a partner of Eternal Asia. Because in the current market environment, there are numerous opportunities for mutual cooperation between enterprises, and there is no need to fight to the death. Creating value for consumers together is the essence. Therefore, the ultimate goal of Eternal Asia is to work together to change the current state of China's supply chain. Wen Xiaolin emphasized that friendly competitors need not worry about what Eternal Asia will eventually become. The only benefit of Eternal Asia's growth is to help manufacturers provide better services and help them realize their own value. Because Eternal Asia can create additional value through the supply chain model, and value creation is the core! Ten platforms supporting the business ecosystem 'In the FMCG ecosystem, from manufacturers (brand owners) to distributors, and finally to end consumers, within the entire supply chain, every company is a part of the ecosystem and can find mutual support points and their own positioning.' Wen Xiaolin believes that what Eternal Asia wants to do is to connect this ecosystem through supply chain thinking and, in the coming years, build a cross-border integrated, platform-sharing, co-prosperous, and symbiotic supply chain business ecosystem. So, how exactly is this supply chain business ecosystem to be built? Let's look at the ten platforms that Eternal Asia uses to serve this ecosystem! The first is the logistics platform: The logistics platform is the foundation. Since 1997, Eternal Asia has regarded supply chain as its founding business model, so it has developed a very rich supply chain model. Eternal Asia has 6 distribution centers nationwide, ensuring seamless connection from trunk transportation to transit warehouses. Because it covers distribution services in more than 380 cities across the country, 60% of provincial and municipal cities have established distribution centers, which can help manufacturers with trunk services and provide urban distribution for final B2B partners and other distributors. Eternal Asia hopes to provide corresponding logistics services to all partners. The second is the breadth supply chain service platform: This is the earliest mature business model of Eternal Asia. It provides supply chain services such as procurement execution + VMI, sales execution + DC, etc., for production-oriented enterprises, brand enterprises, or agents. Through deep integration of industry resources and efficient collaborative strategic cooperation with customers, it helps customers focus on core business and improve market competitiveness. Currently, it has established in-depth cooperation with customers in multiple fields such as IT, communications, medical, chemical, and mechanical equipment. The third is the 380 distribution platform: covering millions of terminal stores. By establishing deep distribution platforms in 380 cities across China covering 1-6 tier towns, it provides one-stop services such as market, distribution, logistics, business, settlement, and information, helping brand owners flatten channels, quickly supply directly to terminals, effectively sink, win huge business opportunities in China's third to fifth-tier markets, and grow stronger. Currently, the '380 Platform' has become China's largest FMCG distribution service platform, achieving five national firsts: First, the network is the largest, now covering 300 cities. Second, the number of cooperative terminal stores is the largest, now covering nearly 1.5 million terminal stores. Third, the business scale is the largest, reaching 45 billion yuan in 2016. Fourth, the number of cooperative brands is the largest. Eternal Asia's partners are mostly top three brands in their sub-sectors, including more than 100 Fortune 500 companies such as P&G, Unilever, Nestlé, Yihai Kerry, COFCO, Abbott, Johnson & Johnson, Dumex, Danone, Wyeth, and 2,000 well-known domestic and international brands, with nearly 300,000 product categories distributed. Fifth, the business team scale is the largest in the country, with nearly 30,000 professional service personnel. The fourth is the global procurement platform: With a global perspective, Eternal Asia effectively allocates resources for advantageous integration, creating a procurement platform with both cost leadership advantages and product resource coverage advantages. It builds a platform for global purchasers, retailers, and brand owners to connect with product providers in China and around the world for product supply, product integration and customization, and transactions, helping partners achieve global procurement and sales. The fifth is the capital service platform: Eternal Asia uses professional means and capital operation experience to provide professional services for industry integration, industrial integration, and capital integration. Through efficient capital operations, it improves capital structure, promotes capital flow, and promotes capital appreciation. The sixth is the Yusun Financial Control Platform: It is committed to solving the financing difficulties of small and medium-sized enterprises through online + offline supply chain financial service models, providing financial support for the consumption upgrade of our citizens, and providing one-stop financial services for small and medium-sized enterprises and high-end individual consumption. The seventh is the 380 Financial Services Platform: Eternal Asia deeply mines supply chain big data, integrates financial institutions, peer institutions, and other social financial resources, and provides comprehensive financial services for ecosystem partners. The eighth is the brand service platform: It aims to incubate 10-30 local brands. This platform is to customize brands for products with strength together with manufacturers, thereby bringing value-added services to manufacturers. For example, brand incubation: brand development in China is very difficult. Eternal Asia plans to incubate 10-30 Chinese local brands in the future, hoping to help Chinese brands increase market share through the new ecosystem of supply chain + Internet, accelerate the process of capitalization, and help the rise and development of Chinese national brands. The ninth is the marketing platform: Four marketing platforms work together. Eternal Asia is shifting from basic distribution services to distribution + marketing. If the platform can only help manufacturers solve distribution problems, it is fine for many well-known brands, but in China, a large number of brands do not have such conditions. Therefore, Eternal Asia has four marketing platform products: Xinglian Media, Sudong Media, Terminal Media, and Integrated Marketing. Of course, Eternal Asia is not limited to non-well-known brands; for many well-known brands, it can also undertake distribution and marketing activities in third and fourth-tier cities. This service is provided not only to Eternal Asia's own branches but also to manufacturers and distributors that are not part of Eternal Asia. The tenth is the omni-channel operation platform: online and offline linkage. Eternal Asia's 'supply chain + Internet' omni-channel operation platform. The national alliance of small and medium-sized retailers, 'Xingmeng,' helps small and medium-sized retailers move from fighting alone to alliance. Eternal Asia provides Xingmeng members with comprehensive upgrades in a series of aspects, from store image, product procurement, value-added business development, operation management to financing channels, improving the pain points faced by small and medium-sized retailers due to small scale, lack of bargaining power in product procurement, limited product categories, single profit model, backward operation methods, and financing difficulties. Xingmeng provides Internet platforms for different customers through three Internet platforms: Xinglian Cloud Business, Xinglian Cloud Store, and Xinglian Life. ◆ Xinglian Cloud Business: An open full-process service system. It is a complete service system that solves from the most front-end raw material procurement to final distribution. This platform is open. If there are distributors who are not part of Eternal Asia but need the services of Xinglian Cloud Business, Eternal Asia will also open it to them. For manufacturers who are unwilling to use their own systems or lack the ability to develop their own systems, Xinglian Cloud Business is also open to them. ◆ Xinglian Cloud Store: Doing O2O differently from Taobao. Xinglian Cloud Store does things differently from Taobao. Eternal Asia encourages 1.5 million, or even 2 million, offline terminal stores to open stores on Xinglian Cloud Store to achieve true O2O. Eternal Asia's O2O is different from traditional O2O. It hopes to focus on developing offline small and medium-sized stores, then leverage the Internet dividend to go online, and jointly develop online-to-offline services. ◆ Xinglian Life: Community + enterprise community. Xinglian Life's products highlight the concept of community, which is not limited to the most basic residential community but also includes enterprise communities. For example, cooperating with China's largest OEM factories, all employees' lives in the factory area can be well served on the platform. In recent years, Eternal Asia has launched new platforms every year. As Chairman Zhou Guohui said: 'The platform is our own, the ecosystem is everyone's. Eternal Asia serves different partners and creates new platforms as needed. We adhere to the concept of integration, innovation, and sharing, continuously adapting to, satisfying, and even creating customer needs.' Perhaps the question of whether Eternal Asia's O2O supply chain strategy is enlarging the pie or drawing a pie in the sky is itself a false proposition. As Chairman Zhou responded to doubts with a faint smile: 'When I achieve it, you will believe it!' Source: First Logistics Network -END-