---
title: "The Consumption Awakening of 200 Million New Urban Residents: Who Will Reap the Benefits?"
description: "This article, sourced from Fengrui Capital, analyzes the evolution of China's consumer and retail industry, highlighting three macro factors driving growth: urbanization, rising disposable income, and financial structure adjustments. It introduces a framework of 'know-get-do' to identify opportunities, emphasizing the importance of supply chain, new traffic, and rapidly growing categories."
author: "李翔"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-06-05"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/the-consumption-awakening-of-200-million-new-urban-residents-who-will-re-8b0285af/"
markdown: "https://xinjignxiao.com/en/articles/the-consumption-awakening-of-200-million-new-urban-residents-who-will-re-8b0285af.md"
original_source: "https://mp.weixin.qq.com/s/_2zyh8m-DFpex2kfQe7SeA"
translation: "https://xinjignxiao.com/zh/articles/2%E4%BA%BF%E6%96%B0%E5%A2%9E%E5%9F%8E%E9%95%87%E4%BA%BA%E5%8F%A3%E7%9A%84%E6%B6%88%E8%B4%B9%E8%A7%89%E9%86%92-%E8%B0%81%E6%9D%A5-%E6%94%B6%E5%89%B2-8b0285af.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-consumption-awakening-of-200-million-new-urban-residents-who-will-re-8b0285af/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# The Consumption Awakening of 200 Million New Urban Residents: Who Will Reap the Benefits?

> This article, sourced from Fengrui Capital, analyzes the evolution of China's consumer and retail industry, highlighting three macro factors driving growth: urbanization, rising disposable income, and financial structure adjustments. It introduces a framework of 'know-get-do' to identify opportunities, emphasizing the importance of supply chain, new traffic, and rapidly growing categories.

Click to read the original article for details.
Source: Fengrui Capital (ID: freesvc)
Amid the renewed tensions in the Sino-US trade war and its impact on trade, we invite you to take a look at their analysis of China's retail and consumer industry:
From Taobao, JD.com, to Vipshop, and then Pinduoduo, what framework should we use to view the evolution of the consumer and retail industry?
When we all agree that the trade war is a long-term variable and the export market is showing signs of gloom, what huge and certain opportunities exist in China's consumer retail sector?
In the next 10 years, facing the consumption awakening of 200 million new urban residents, who can seize this new demographic dividend? And what does an effective down-market strategy look like?
**Why Will China's Consumer Market Continue to Grow?**
Li Feng is the founding partner of Fengrui Capital. He is a very thoughtful investor. We have previously introduced his thoughts on the macroeconomic situation in 2019. The 'Time's Friend' New Year's Eve speech has also cited his views more than once.
The profession of an investor has shaped Li Feng's way of thinking: first, quickly form a macro understanding of a field from history to the present; then, make judgments on whether to invest in companies in this industry and based on what criteria.
If this way of thinking is expressed in terms relevant to everyone, it is essentially judging whether an industry has prospects and where the opportunities lie. Therefore, whether you want to start your own business or seek a career in a rising industry, you can benefit from his sharing.
This time, Li Feng wants to share his thoughts on the consumer and retail industry.
In 2018, China's total retail sales of consumer goods grew by 9%, higher than the GDP growth rate, reaching 38.1 trillion yuan. If nothing unexpected happens, this number will surpass the United States in 2019. China will then become the world's largest consumer market.
Although in 2017 and 2018, many investors and internet entrepreneurs have stated that opportunities in the consumer internet field are limited, and greater opportunities in the future belong to the industrial internet, historically, retail and consumer sectors have almost been the areas with the most opportunities in China and have continuously produced star companies. From Gome, Suning, Wumart to Alibaba, JD.com, Pinduoduo; from Haier, Gree, Mengniu to Xiaomi, Haidilao.
Li Feng has always been very attentive to the consumer and retail industry. He also invests in companies in this industry, such as the nut retail brand Three Squirrels. He clearly believes there are still many opportunities in the consumer retail field. Li Feng once said that from a global perspective, before World War I, Britain exported Lipton and some liquor brands to the world; after World War II, the United States exported brands like Walmart, KFC, and McDonald's; in the 1980s, Japan rose and contributed brands like Sony and Panasonic. Given the current speed of China's economic growth, it is foreseeable that in the future, Chinese brands will have a place in major global consumer categories. The 'Time's Friend' New Year's Eve speech in 2017 cited this view of Li Feng.
**What framework should we use to view the evolution of the consumer and retail industry? How to find opportunities in the consumer and retail industry?** This is what Li Feng will share this time.
With a total retail sales of 38 trillion yuan, China is already the world's largest consumer market besides the United States. Even if it stops growing, minor adjustments within this huge market will create enormous opportunities. Moreover, it is still growing at a rate higher than GDP growth.
Li Feng said that three factors determine that China's consumer market will inevitably grow. These three factors are:
**First, the increase in urban population due to continued urbanization.** According to the National Bureau of Statistics, by the end of 2018, China's urbanization rate of permanent residents was 59.58%, with urban permanent residents exceeding 830 million (831.37 million). According to the 'National Population Development Plan (2016-2030)' issued by the State Council, by 2030, China's population will increase to 1.45 billion, and the urbanization rate of permanent residents should reach 70%, which is 1.015 billion people. That is to say, in the next decade, China will add nearly 200 million urban residents. This is equivalent to adding nearly 200 million urban consumers.
**The second factor is the increase in per capita disposable income of Chinese residents.** Referring to China's economic growth rate and past government economic plans, China's per capita disposable income doubles every decade. In 2020, China's per capita disposable income will double compared to 2010; in 2010, it doubled compared to 2000. It is expected that this speed will continue. Moreover, some investment banks have already given such numerical expectations. Morgan Stanley predicted in a 2017 report that by 2030, the per capita disposable income of residents in China's second-tier cities will double.
**The third factor is the adjustment of the financial structure of Chinese residents.** After the government clarified that houses are for living, not for speculation, the investment attribute of real estate has been suppressed. The result is that in the liability structure of residents, the increase in liabilities used to purchase real estate will no longer rise. This is equivalent to freeing up space in the personal financial structure of residents, transferring it to other consumption.
These three factors combined, **simply put, more people will have more money to spend.** This is a huge market that is constantly growing. This is the macro-level consideration.
**Taobao, Pinduoduo, and China's Real Estate**
Then, we can look at the development of China's consumer retail industry over the past decade or so. From the early Taobao, later JD.com, Vipshop, Pinduoduo, to today's new retail combining online and offline.
The development of the consumer retail industry over the past decade can be described as follows:
> Urbanization and income growth have created new retail and consumer demand;
>
> The previous players in the retail and consumer industry were not prepared to meet this demand, thus creating a gap between demand and supply;
>
> This gap can be filled by new players using new channels, new traffic, and new business models;
>
> At the same time, the supply chain capabilities developed by China's manufacturing industry can cooperate with new players on the manufacturing side to meet this demand gap.
In short, **economic growth and urbanization create demand, and when the existing consumer retail industry cannot meet this demand, that is the opportunity for innovative models to emerge.** At the same time, China has developed strong manufacturing capabilities and supply chains due to foreign trade. This manufacturing capability and supply chain can, under appropriate circumstances, support the faster development of innovative models.
Li Feng provides an interesting perspective to observe how the gap between supply and demand arises. That is, to look at the progress of real estate in cities of different tiers.
An interesting sequence is: with urbanization, residential real estate first begins to sink, followed by commercial real estate. The development of residential real estate means that the income and consumption level of this tier of cities have developed to a certain extent, and residents can afford good houses. Then, the development of commercial real estate means that residents in this tier of cities, after housing, begin to pursue better living consumption, such as retail, entertainment, services, education, etc.
Every step of commercial sinking is preceded by real estate and commercial real estate, from first-tier cities to second-tier, to third- and fourth-tier, and then to county towns. Wanda's development of Wanda Plazas is like this. Starting from Beijing Wanda, it continued to sink to third- and fourth-tier cities to develop Wanda Plazas. In 2014, Wanda had already set the goal of opening Wanda Plazas in third- and fourth-tier cities and even county towns. At that time, Wang Jianlin said: 'Wanda's business model can also be done in small towns; we are already doing it in some county towns. Wanda Plazas are divided into four levels: A, B, C, D, and eventually Wanda Plazas will enter many county towns.'
The rise in housing prices is also the same. From the rise in Beijing, Shanghai, Guangzhou, and Shenzhen, to the rise in second-tier cities, and then to the rise in third- and fourth-tier cities. Every time this phenomenon occurs, it means that the living standards of the people in that place have reached a level, and new consumer demands begin to emerge.
The prosperity of real estate and commercial real estate in a city is a signal, marking that the income level of residents in this city and their willingness to pay for a better life are ready. The demand side is in place.
Next is the supply side. If commercial real estate companies are strong enough, they can of course bring some good supply and brands to lower-tier cities through investment attraction. But the problem is that in many cases, these brands are often not prepared to sink to these cities.
Real estate can go down, but retail cannot. **Real estate can go down means demand exists, retail cannot go down means supply cannot meet demand.**
At this time, a gap between demand and supply arises. This gap is the difference between the local consumption level and the services and goods that local consumers can obtain. This is also the time when the dividend and window of opportunity for innovative companies emerge.
The development of China's consumer and retail industry over the past two or three decades has been like this. Real estate and commercial real estate were first developed in first-tier cities including Beijing, Shanghai, Guangzhou, and Shenzhen. The providers of goods and services for consumers in first-tier cities included many international brands and early large retail companies in China.
Then, residential and commercial real estate development began to sink to second- and third-tier cities. However, many brands and retailers did not sink accordingly. At this time, new business models will emerge to fill the gap between supply and demand. If at this stage, there are corresponding changes in the supply chain, making companies with manufacturing capabilities willing to cooperate with these new business model consumer retail companies, the opportunity will be even better.
For example, the prosperity of China's B2C e-commerce was after 2008. Companies including JD.com and Vipshop rose during this period. This period coincided with the time when China's commercial real estate development began to sink to second- and third-tier cities. Consumer demand in these cities had emerged, but offline retail such as department stores did not effectively meet this demand. At the same time, the 2008 financial crisis forced domestic factories with strong manufacturing capabilities to turn to the domestic market. The emergence of the supply-demand gap, the cooperation of the domestic supply chain, and the new model of internet e-commerce contributed to the success of companies like Vipshop and JD.com.
Representative e-commerce companies:
> Taobao was founded in May 2003, and the predecessor of Tmall, Taobao Mall, went online in 2008;
>
> In 2007, the predecessor of JD.com, JD Multimedia Network, was officially renamed JD Mall;
>
> On December 8, 2008, Vipshop went online;
>
> In 2010, Jumei Youpin was established, focusing on cosmetics group buying;
>
> In 2015, Pinduoduo was founded.
The latest e-commerce company that has attracted attention, Pinduoduo, is also an example. Pinduoduo founder Huang Zheng once expressed a similar idea. He said that in fourth- and fifth-tier cities, people have become much richer than before, and demand for consumption upgrades has begun to emerge, but the local variety of goods is still far behind cities like Beijing and Shanghai. At the same time, China has a large number of factories that do OEM for brands, with very strong manufacturing capabilities. 'There is demand on one side, and supply on the other.' At this time, 4G networks, smartphones, and logistics networks make new business models possible. In Huang Zheng's words, 'It may use new methods to promote the generation of different new-era brands.'
However, Li Feng said that in this context of the supply-demand gap, there are two noteworthy changing factors.
**The first changing factor is that the gap between supply and demand created each time will close faster and faster.** That is to say, the window of opportunity for new players is getting shorter and shorter. Because more and more players will compete for the same opportunity.
In the early days, Taobao's competitors were basically only offline retailers. For many of Taobao's early users, they faced expensive and poor-quality offline products. When offline retail could not meet their needs, they quickly switched to online.
For the wave of B2C e-commerce that rose around 2008, its competitors included both other e-commerce companies and a small number of offline retailers. These retailers, on the one hand, tried to provide better offline services, and on the other hand, also tried to go online, whether by doing e-commerce themselves or relying on platforms like Tmall.
As time progressed, after 2015, competition became even more intense. If you are a new player, your competitors for users in fourth- and fifth-tier cities include e-commerce companies like Taobao, Tmall, and JD.com, new retail companies combining online and offline, pure offline companies, and companies with the same model as yours.
**Therefore, if you only seize an opportunity to fill the supply-demand gap through innovation at the traffic end, then when more and more players realize this opportunity and flood in, your living space will be squeezed.**
The most typical example is the earliest batch of large merchants on Taobao. Li Feng said that if you look at the first few years of Tmall's Double 11, the top ten in all categories were almost all internet brands; after 2015, in most category rankings, internet brands were no longer present, and traditional big brands like Uniqlo began to counterattack. 'What happened in between is that offline retailers with supply chain and brand capabilities learned the online playbook.'
Corresponding to the present, Li Feng said that new players who have risen with the traffic dividend brought by WeChat face competition from online, offline, and 'online + offline' players, and this dividend window may only last one or two years. If counted from 2018, then by 2019 it will basically be gone.
The most typical representative of this wave of dividend is the so-called community retail. Li Feng's view is that history has proven that newly emerging traffic forms will only lead to a very small proportion of success cases, even if they seem very successful in the short term.
**The second changing factor in this framework is that the demographic structure of users facing each wave of players is also different.**
The earliest users attracted by Taobao were all young people born around 1985. This user group is the one with the most growth potential. In the next 15 years, they will be a user group with both purchasing power and consumption decision-making power. As long as Taobao's own iteration speed can meet the constantly emerging needs of these users, Taobao will have a user group with the highest customer lifetime value.
Later, when e-commerce companies like Vipshop and Jumei Youpin rose, facing white-collar workers in third-tier cities, it was found that the growth space of this user group was not so large. Because she may already be a young mother, and a large part of her consumption structure is occupied by expenses around children.
Then, in the next wave, the users that new players have to face are likely to be middle-aged and elderly user groups in lower-tier cities who have just connected to the mobile internet. The consumption growth space of this user group is even smaller.
These two changing factors—the time window for the supply-demand gap is getting shorter, and the different user structures leading to different customer lifetime values—will affect the value of an innovative company.
**New Framework: 'Know-Get-Do'**
At the meso level, Li Feng said that the development of the consumer retail industry can actually be considered within a framework.
In this field, as long as there is a gap between supply and demand, opportunities will exist. Specifically, when consumer demand has emerged or been created, but the supply of existing brands and retailers has not kept up, this is the opportunity for new brands and new retailers. As analyzed before.
**The essence of the consumer retail industry is to use supply to meet demand.** Li Feng divides this process into three links and summarizes them with three words: know, get, do. 'Know, get, do' is the meso framework he constructed to understand the consumer retail industry.
Know covers media, content, and information industries related to consumption;
Get covers channels and brand fields, involving issues such as logistics and fulfillment;
Do refers to production and manufacturing fields, also involving issues such as inventory.
All opportunities in this industry emerge from the 'know' link. This link is also what internet people often call the traffic end.
In the era when television was the most powerful traffic end, China's consumer retail industry popularized the term 'bid king'. Bid king refers to the advertiser who bids the highest in the bidding for prime-time advertising slots on CCTV. Almost all bid kings were consumer brands, including some liquor brands, milk beverage brands, and home appliance brands.
At that time, the 'know' link was relatively simple. Because the entrances were large traditional media, including television, radio, and newspapers. Consumers learned about brand information through these traditional entrances, awakening demand. Then, traditional channels met these demands.
After the emergence of the internet and mobile internet, both the content forms and the entrances to obtain content have changed. The changes in the 'know' link are quite fast. Changes in this link have created many opportunities for the consumer retail industry. Looking back, every major change in content platforms has created opportunities for the 'get' link.
For example, when Weibo emerged as a major 'know' platform, many consumers began to 'know' consumption content from internet celebrities and opinion leaders. This traffic combined with the 'get' link as a channel gave rise to influencer e-commerce. Then came WeChat. As a major 'know' platform, WeChat not only created e-commerce based on the WeChat platform but also brought about the trend of social e-commerce.
Next are short video platforms like Kuaishou and Douyin.
**When consumers 'know' but cannot 'get', it indicates a mismatch between demand and supply, and this is the opportunity for new consumer retail companies.** The situation of knowing but not getting will manifest as the market sinking speed of existing consumer retail companies not keeping up. The simplest example is how the yearning for a better life in fourth- and fifth-tier cities can be satisfied. They have already learned from TV and the internet what good consumption looks like, and when their consumption capacity also begins to rise, but the existing consumption channels cannot meet it, a gap between knowing and getting will arise.
Mutual blocking between internet giants for competitive purposes can also create situations of knowing but not getting. For example, the relationship between large traffic platforms (i.e., 'know' platforms) and large e-commerce platforms (i.e., 'get' platforms). The mutual blocking between WeChat and Taobao created opportunities for other 'get' platforms. The most famous new platform is Pinduoduo.
Correspondingly, as a major 'get' platform, Taobao's strategy is also obvious. It is adopting various methods to purchase traffic entrances, trying to smooth the path from 'know' to 'get'. Alibaba has invested in Weibo, Bilibili, and Xiaohongshu, and has also established cooperative relationships with the short video platform Douyin.
Then, in the 'get' link, if a company can help consumers better obtain goods, it can also create its own opportunities. The most typical example is the rise of JD.com in the early years. JD.com invested heavily in logistics, allowing users who value speed to 'get' goods better and faster. This move created a company with a market value of tens of billions of dollars.
In the early years, Taobao also made many efforts in the 'get' link. For example, using Alipay to solve fulfillment issues. At the same time, Taobao also leveraged third-party logistics companies to solve distribution issues.
Changes in the 'do' link can also create opportunities. The most typical example is the e-commerce company Vipshop. When the 2008 financial crisis affected the export of clothing brands, a large amount of inventory appeared on the supply side of clothing brands. At this time, helping factories and brands sell this inventory at a discount became an opportunity.
Another variable in this framework is consumer growth. For example, as mentioned earlier, e-commerce companies like Vipshop and Jumei Youpin captured the opportunity of the supply-demand gap and built a platform from know to get. The behavior of users on their platforms is like many Chinese people who, after going abroad for the first time, like to shop at outlets, buying well-known brands at the cheapest possible price. But when consumers grow, they no longer pursue buying well-known brands at the cheapest price. They become more rational and mature consumers, choosing products and brands they like within a reasonable price-performance range. Therefore, they will move to a better 'get' platform.
The hottest e-commerce startup in 2018 was Pinduoduo. A major reason Pinduoduo became a new 'get' platform is the mutual blocking between WeChat and Taobao. Thus, the user demand cultivated by the WeChat 'know' platform was met by Pinduoduo. It is equivalent to WeChat + Pinduoduo helping many consumers complete the process from zero to one.
The next challenge is that when these users become mature users, they will pursue better 'get'. At this time, will they go to better 'get' platforms, such as Taobao and JD.com? **To not be abandoned by users, you must move towards the more backend 'do' and create better supply.**
That is to say, obtaining users through innovation at the traffic end and stopping at the 'know' and 'get' levels can capture opportunities in the consumer retail industry. But when consumers complete the process from zero to one and become mature consumers, many of them will turn to pursue better 'get'. At this time, the company must continue to move backward to the 'do' level, meeting the needs of mature consumers by doing better supply. Taobao has always talked about C2B, from consumers to factories, which is an effort to move to the 'do' level.
**Consumer growth is the key variable driving the acceleration of the 'know-get-do' process.** We can use this framework to look at some current hot topics.
For example, sinking. Li Feng said that good brands will definitely have a huge opportunity. The reason is very simple: after consumers complete the enlightenment from zero to one, they will definitely pursue better 'get'. Those brands that have advantages in 'do' and can provide better 'get', if they can successfully sink, will gain a huge market opportunity.
Of course, this also faces a series of problems: for example, what methods to use to sink, what channels to choose; how to adjust products, whether the same brand should adopt the same product form and pricing strategy in cities of different tiers?
For example, social e-commerce. Social e-commerce has captured the opportunity in the 'know' link very well. The problem is the same: after users have been educated by social e-commerce, they will inevitably pursue better 'get'. At this time, can social e-commerce meet the needs of mature users? At the same time, in comparison, in the United States, direct selling is legal, and social network company Facebook is very powerful, but why has large-scale social e-commerce not emerged in the United States? And to this day, the United States only has a few well-known direct selling brands. These questions need to be answered.
**How to Find Opportunities in the Consumer and Retail Industry**
Finally, what inspiration can this framework provide for us to discover and explore opportunities? Li Feng's answer is: if the supply chain or manufacturing capability is in China, the category also belongs to a consumer demand category that can be quickly activated, and at the same time, you can grasp the current characteristic traffic, then, with high probability, you are in a big business.
You need to be able to grasp the emergence of new 'know' platforms, utilize existing 'do' platforms, and quickly provide consumers with a 'get' channel.
It can be described as a formula: **New opportunity = supply chain + explosive category + new traffic.**
For example, cosmetics. In 2017, China's cosmetics market size was approximately 361.6 billion yuan, and by 2021, the market size is expected to approach 500 billion yuan. Among them, the proportion of cosmetics e-commerce sales is also increasing year by year, from 2.6% in 2010 to 23.3% in 2017. This is a very large market. If you can fully utilize the traffic dividend of WeChat public accounts, plus the fact that consumer demand in this category is being rapidly activated, and cosmetics are indeed 60-70% OEM in China, if you were doing cosmetics business from 2017 to 2018, you would definitely grow rapidly.
Another example is coffee. This is a rapidly growing category, the supply chain can be solved in China, and if new traffic forms are also applied, it can also rise quickly.
In short, if the front end uses new traffic forms, the middle end happens to have consumer demand in this category rising rapidly, and the back end has a supply chain that is world-class in China, then there are big opportunities in this field.
In contrast, although convenience stores have also grown rapidly in the past, Li Feng does not think this is an easy business model.
He analyzed that when 7-11 rose in Japan, there was a background: 7-11 was born with a silver spoon. It was a subsidiary of Ito-Yokado, which gave it a supply chain advantage from birth, allowing more than 30 ready-to-eat factories to accompany it in developing ready-to-eat foods, and allowing ATMs of Ito-Yokado's own bank to be placed in stores. Moreover, Japanese food was already highly standardized at that time, and most of what Japanese people eat is cold food, so it could be completed by the backend supply chain. These supply chain factors are difficult to replicate in China.
Another factor is that Japan's population is highly concentrated, with about 80% of the population concentrated in the three major metropolitan areas. This also makes it easier for convenience stores to achieve high-density coverage.
The dispersion of Chinese cities determines that it is difficult for a few large companies to achieve sufficient high-density coverage. A bigger challenge is that China's food standardization is not that high. The backend standardization process of Chinese food is still developing. What poses a greater challenge to this backend standardized industrial process is that Chinese people want to eat hot food, and Chinese food has significant regional differences. For example, in Hangzhou and Chengdu, consumer demand for food can be very different. In this case, 'even if the backend is industrialized, it is difficult to achieve unified product supply.'
Moreover, before the development of convenience stores, food delivery developed first in China. Consumers can order in advance and wait for delivery to their door, without even needing to walk to the convenience store downstairs.
In the case of convenience stores, Li Feng believes that supply chain difficulties and other special factors in the Chinese market make it difficult to become a model as successful as in Japan.
**In short, the combination of supply chain, new traffic, and rapidly startable categories can form a windfall in the consumer and retail industry.** However, Li Feng also reminds that such companies will face two problems next. Both problems are related to how the company grows after consumers complete the process from zero to one.
**The first problem is pricing strategy.** To put it bluntly, as a company, you choose whether to sell products at a high price or a low price. The advantage of selling at a high price is that you can choose to do boutique products and obtain good profits. The disadvantage is that scale will hit a ceiling. Ultimately, this business is more like a niche brand with high gross margins.
The advantage of selling cheap is that you can use China's demographic dividend and manufacturing advantages, potentially achieving a large company. But its disadvantage is that it is more difficult to build a brand. The challenge you face is: you educate users with cost-effective products, but after users are educated by you, in the process of consumption habit growth, users will not stay at your cost-effectiveness. Consumer awareness changes very quickly. The growth rate of consumers is much faster than your iteration speed.
**The second problem is that you must quickly find a second growth driver before the supply-demand gap closes.** Otherwise, you can only be a phenomenon-type company that enjoys a short-term traffic dividend.
Li Feng places supply chain capability in a very important position, that is, to move to a better 'do' link. A new consumer retail company can rise quickly because it has seized new channel or traffic dividends. As long as there is a traffic dividend, there will definitely be companies that can rise. But the opportunity window brought by pure traffic dividends will become shorter and shorter. If you do not establish your own supply chain capability, you may soon find yourself abandoned by users, or at least no longer as popular as at your peak.
The early Taobao big sellers and the later cosmetics e-commerce company Jumei Youpin will have deep feelings about this. In contrast, early offline giants like Suning, because they have strong supply chain capabilities, even if they missed a wave of new traffic and channel dividends, they stubbornly survived to the next wave of dividends. For Suning, it may be this wave of online-offline integration.
Text / Li Xiang, Editor-in-Chief of Dedao
First published in the Dedao APP 'Li Xiang's Knowledge Internal Reference'


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671