Thirty years east, thirty years west. The troubles online companies face today are the same ones that plagued offline companies five years ago. As the online traffic dividend fades, not only are latecomers who missed the trend finding it increasingly difficult to gain a foothold on e-commerce platforms crowded with brands, but even pure e-commerce brands that hitched a ride on the online growth bandwagon are sensing their living space shrinking day by day. Faced with the endless stream of marketing concepts and tricks, internet brands, like offline brands, are gripped by a deep-seated, inexplicable panic. Whether offline companies should embrace the internet and establish sales channels online is probably beyond question. Building channels around consumer scenarios has been a consensus since the concept of channels was born. In fact, the hotter topic in the past two years has been whether those online companies that have already taken the lead and basked in glory on the internet should, with a grass-is-greener mindset, also grab a piece of the pie in offline channels. Online companies moving offline isn't necessarily about hedging their bets. From the companies I've dealt with, the main reason is that life online is getting tougher: costs are rising, traffic is peaking, competition is intensifying, and the once "zero-cost storefront" advantage has vanished. In fact, abandoning the "asset-light" strategy typical of online sales is a painful, bone-deep decision for many online companies. The Fading E-commerce Dividend The heyday of pure e-commerce companies was around 2013. After 2013, although e-commerce sales figures continued to climb, subtle changes were underway in public opinion, player mentality, and the rules of the game. It is on this basis that I typically divide e-commerce development into the following five stages: Grassroots Brand Development Stage (2003–2006): To clearly explain China's e-commerce business, one company is unavoidable: Alibaba. In 2003, Alibaba's Taobao was founded. As a pioneer, Taobao faced immense difficulty attracting its first seed customers without a credit foundation, brand endorsement, or even a fully developed online payment tool. As a result, it was a bunch of "middlemen" without legitimate distributor status who, lacking formal channels and authorized products, sourced various goods from Guangzhou's Baima or Beijing's Xiushu and began groping their way forward on the internet. Of course, early Taobao needed support, and this group of "middlemen" surviving in the cracks of society naturally became the exclusive beneficiaries of Taobao's early traffic dividend. Taobao Brand Development Stage (2006–2008): Platforms evolve, and so does the competitive ecosystem. Among the earliest sellers on Taobao, some who first recognized the importance of brand, service, and product quality began to stand out, gaining favorable positions both in the platform's scoring rules and in consumer word-of-mouth. During this stage, traditional offline brands still refused to enter the fray, and online sales were still labeled as counterfeit or street-stall goods. To reverse this unfavorable situation, Taobao launched "Taobao Brands" (today's Tmall Original), implying: if you won't come in and build brands, we'll create our own. In this stage, any seller meeting the criteria for Taobao Brand creation received the traffic dividend of that period. Offline Brand Development Stage (2008–2013): This stage can actually be divided into two periods: 2008–2010 and 2011–2013. In the first period, although Taobao launched "Taobao Mall" (today's Tmall), there were internal debates about whether to divert Taobao's traffic to the mall. Fortunately, Alibaba made the right call, and this became a key step in turning the company profitable. During this stage, especially in the later period, a large number of strong offline brands became the primary targets for recruitment, and the massive traffic accumulated during the Taobao era ensured rapid growth. The first batch of traditional offline brands willing to cooperate with Alibaba and move online, especially strong brands, reaped the benefits of Tmall's advantageous traffic. Overseas Brand Development Stage (2013–2018): If things had gone smoothly, with the trend of consumption upgrading, overseas brands' products could have seen a sales boom in China. For platforms, when domestic brands' online sales began to peak, making overseas brands' products a new growth point was an inevitable choice. The emergence of overseas shopping (haigou) was a response to this trend. But fate had other plans: after 2013, the global economy faced downward pressure, international trade suffered, domestic investment confidence waned, and retaining domestic consumption became crucial for the country. Overseas brands that tried to use pure price advantages to impact the domestic market saw those advantages vanish under the shift from spot-checking to full inspection of mailed parcels. So, while overseas brands did receive some traffic dividend, overall, due to changes in the macroeconomic environment, the overseas brand development stage was not fully realized. Luxury Brand Development Stage (2018–Future): Of course, precisely because the overseas brand stage was incomplete, the luxury brand traffic dividend phase has not arrived as expected. Looking back today, the 2016 spat between Jack Ma and the International Anti-Counterfeiting Coalition seems to have been in vain. So I won't dwell on this stage. In fact, from the rise and fall of online brands, the internet follows the same pattern: "One dynasty, one minister; when a new emperor ascends, he changes the staff." When we cling to past successes and count our days, being abandoned by traffic—in other words, by growth—is not far off. With the popularization of the omni-channel concept, new retail is accelerating the integration of online and offline. Not only do offline companies need to move online, but online companies moving offline will also become an inevitable trend. Many pure e-commerce companies worry: "I fought hard to secure a place online; if I now move offline, won't I be fickle and lose the big for the small, picking up sesame seeds and dropping the watermelon?" The Fiercer Offline, the More Stable Online 1 Only by insisting on the coordinated development of offline and online channels can we provide consumers with ultimate service. To this day, I still believe the internet is just one sales channel. Sticking to a single-channel sales strategy has inherent flaws, both in precisely targeting consumers and in professionally matching products. Especially in today's highly developed internet era, new retail and new technologies are transforming channels, requiring companies to build a 3D surround-sound environment for consumers. Whoever can give consumers the ultimate experience across visual, auditory, gustatory, tactile, and olfactory senses will be the one who gets consumers to open their wallets. And the deployment of offline channels is key to making this model work. Conversely, a robust offline channel is crucial for bringing a human touch to online channels in consumer service. 2 In today's consumption environment, offline and online channels have actually become mutually endorsing. In the past, many of us may have had this experience: when seeing a new brand or product online, the most common way to build trust was to check if the company had a physical store. If not, the consumer's impression of the company would drop. Today, the reverse also applies. When we see an unfamiliar new brand offline, many people will instinctively search for it on Tmall or JD.com. If it doesn't have a store there or sells poorly, consumers will doubt the company's strength. Mutual endorsement between online and offline has become one of the trends in channel sales. Offline channels are not only a way for e-commerce companies to serve consumers at a closer physical distance but also the cornerstone for building sales trust. In a reality where the broader social credit environment is still imperfect, "buy with confidence" is not just a slogan. 3 From a competitive standpoint, offline brands, having gone through the five stages of e-commerce development, have already built a dual-channel structure of online and offline. Pure e-commerce companies that remain entrenched online will only find themselves falling behind step by step. Reviewing the five stages of e-commerce development today is not just to show how the traffic dividend shifted, but more importantly to reveal the risks pure e-commerce companies face as traffic trends change. During the offline brand development stage, most offline companies evolved an online gene, especially the traditional strong brands that enjoyed the traffic dividend. To secure a strong position in future competition, pure e-commerce companies must seek breakthroughs offline, or they will face the awkward situation of a one-legged cripple competing against a two-legged able-bodied person. 4 As for the biggest concern of online companies: "If I go offline, will I be abandoned by the big online platforms?" My view is: the fiercer offline, the more stable online. Since ancient times, weak nations have no diplomacy; the same applies to the battlefield and the marketplace. If a company has only an online channel and is completely dependent on it, even if we are obedient and submissive to the channel, being cast aside is only a matter of time. Any cooperation thrives on mutual benefit and dies on unilateral gain. Without leverage, how can there be cooperation? Brands that cannot provide value to online platforms cannot become long-term partners. Let's revisit the five stages of e-commerce development: why did offline brands become the focus of the traffic dividend? The most important reason is that the reputation strong offline brands accumulated offline served as a quality endorsement for the online mall's credibility. Let me bring up another past event: after Dong Mingzhu fell out with Gome, besides the big-box channel, she also overrode objections to vigorously develop a franchise store channel. Look at today: Gree not only hasn't disappeared from major retail outlets but has also become the most profitable brand among home appliance companies. 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