---
title: "The Three Core Points of BC Integration Marketing in GT Channels"
description: "In recent years, the FMCG industry has witnessed significant events, including the rise of Zhong Shanshan as China's richest person and the emergence of new brands. This article explores the current state of GT channels, the necessity of BC integration, and provides a framework for implementing it through infrastructure, operations, and specific cases."
author: "科特勒增长实验室"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2022-05-19"
language: "en"
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# The Three Core Points of BC Integration Marketing in GT Channels

> In recent years, the FMCG industry has witnessed significant events, including the rise of Zhong Shanshan as China's richest person and the emergence of new brands. This article explores the current state of GT channels, the necessity of BC integration, and provides a framework for implementing it through infrastructure, operations, and specific cases.

In recent years, several major events have occurred in the FMCG industry.
First, at the end of 2020, according to Forbes' real-time billionaire list, 66-year-old Zhong Shanshan, founder of Nongfu Spring, surpassed Ma Yun to become China's richest person. Previously, the top spot on China's richest list was long dominated by people from the internet, real estate, and financial industries. This was the first time the title went to someone in the FMCG industry, and it has remained so from 2020 to today.
At the same time, emerging brands such as Saturdance and Lamian Talk have also forcefully entered the FMCG industry, achieving remarkable results in recent years. This is the second event.
The third event is that BC integration, which has been very popular, has consistently ranked among the top searches in the FMCG industry.
BC integration has actually become popular in recent years. In the previous chain, we often talked about channels and brands, to distributors, to terminal stores. In this process, everyone has found some pain points. Now, with BC integration, we hope to solve these pain points.
**So why do we set the precondition on GT channels?**
According to incomplete statistics, GT channels, as one of the most important channel types in the FMCG industry, account for more than 60% of sales in the entire FMCG industry, and for some FMCG brands, this proportion can reach over 75%. Therefore, GT channels such as mom-and-pop stores or community convenience stores are very important channel types for FMCG brand companies.
Today, we will combine GT channels to discuss how to implement BC integration marketing. Next, I will explore and research this from three dimensions.
******What is the current state of GT channels? What recent changes have occurred?**
**First, GT channels refer to traditional circulation channels (Gross Ton)** , which include places like Hema Fresh, Century Mart, and RT-Mart, all belonging to the GT channel type. They also include community convenience stores in residential areas. According to statistics, there are about six million GT channel terminal stores nationwide, meaning that GT channels have spread like capillaries to provinces, cities, districts, streets, and villages, covering every corner of China, forming a huge consumption volume.
**Second, the scale tends to be small.** Some stores may only be 30-40 square meters, and some may be run by elderly people. These scales are relatively small, but the number of such stores is very large. Just as ants are small but can destroy a thousand-mile dike, the total volume in the entire GT channel is very considerable.
**Third is its convenience.** Convenience is reflected in the fact that you can see it downstairs from your home. Its inherent advantage is that it occupied excellent golden locations early on, making it easy for consumers to purchase products anytime, anywhere.
**Fourth is category support.** The categories operated are very concentrated. Generally, daily necessities like toothpaste and toothbrushes, and daily consumables like rice, oil, salt, water, and cola are mostly its main operating categories (excluding regional brands and pharmaceuticals).
This is what we see in GT channels; they have significant core competitiveness in China.
**So, let's look at the typical changes in GT channels over time.**
**First, we used to think that these operators had relatively low education levels or low acceptance of new things. Is that still the case now? Can these operators undertake BC integration?**
From the statistics from 2017 to 2022, we can see that in 2017, the age distribution of store owners was led by the 40-49 age group, accounting for nearly 30%. The second was those over 50, and the combined proportion of these two groups was nearly 60%. That is, nearly 60% of store owners were older, and only 40% were relatively younger. But in just a few years, significant changes have occurred.
In 2022, when we look again, the top proportion is the 30-40 age group, which is the post-80s generation, which is surprising to many. The second is the 40-50 age group, while the proportion of those over 50 has gradually decreased. This shows that store owners are becoming younger.
**Second, what is their knowledge structure?**
In terms of education, we found that even master's degree holders run small stores, but the proportion is relatively small. Looking back, in 2017, the largest proportion was store owners with high school education or below, exceeding 50%, and the second tier was those with associate degrees.
But in 2022, education levels have also changed significantly. You will find that the proportion of store owners with associate, bachelor's, or higher degrees is steadily rising, and this change is very obvious.
So, in terms of knowledge, it is completely different now.
**Third, what is the level of internet information access for these store owners? Or, how high is their acceptance of new models?**
In terms of smart hardware configuration, the proportion and improvement are relatively large. Previously, we worried whether store owners still used non-smartphones. Now, that is not the case; almost all store owners have upgraded to smartphones, and some have more than one, using them for restocking, browsing the internet, and playing games.
In addition, almost all supermarkets are now equipped with mobile payment. If you talk to them about community group buying, the answer is often: "I understand." So, their overall cognitive level has changed significantly. Correspondingly, their upstream salespeople are also younger now, not necessarily "the older the ginger, the spicier." In fact, the turnover of salespeople is also very fast. The new generation of salespeople naturally has some internet thinking, which drives store owners to accept new ideas.
**Fourth, there are consumers.** The consumer group has also changed significantly. The original young people have risen to the mother level; the original children have started school and are representatives of the new generation; and because of consumption upgrades, they are more pursuing personalized things. So, to some extent, this also affects store owners, who improve themselves to meet customer needs.
**So, when we look at GT stores now, they may not be as low-end or closed-minded as you previously understood. They actually have great potential for transformation.**
Consumers are constantly exposed to new things. For example, our B2B customers are not only contacts of these models but also the advertised, educated, and practitioners. When others are only at the theoretical level, they have already combined theory with practice. Among them, there are even innovators who, when you talk to them, can tell you how to do it, and their depth of thinking may not be inferior to some professionals.
At the same time, I have also contacted some deep participants in B2B community group buying. They have also changed, becoming younger and more personalized. Also, due to the normalization of the pandemic, which has limited many offline activities, they are also thinking about how to go online and internetize to some extent. To some degree, the pandemic will also bring upgrades to these GT stores and BC integration. So, I think there is great potential in the GT channel.
******How to build BC integration based on GT channels? What work needs to be done for BC integration infrastructure?**
The main purpose of our content infrastructure is to enable everyone to be online. The core of being online is:
**"Four-end role online" is the foundation of BC integration.** People need to participate to build the entire BC integration. Is "people" limited to terminal stores?
Of course not. Because in the entire channel chain, stores are just one link; they have upstream, further upstream, and the product developers. So, we believe that this B is not limited to the b-end but includes brand companies, distributors, wholesalers, and terminal stores. Even consumers should be included because they represent C. Also, it is not like the previous linear chain of "F2B2b2C"; it is more about simultaneous online presence, building a grid-like "four-end simultaneous online" group role.
So, what work needs to be done for BC integration infrastructure?
Usually, in our daily work and marketing activities, we hope to achieve "four modernizations," which are: **process-oriented, standardized, tool-based, and integrated.**
**First is process-oriented.** Whether you adopt a distribution model, direct sales model, or e-commerce model, you need processes. Establishing your own process-oriented content is the most important.
**Second is standardization.** Processes need standards. Standards help us solidify content, and quickly replicate the content, methods, and approaches we want to execute to every team. To some extent, standardization means you have a coach who can always teach you to adjust and optimize, and manage projects.
But standardization does not mean one-size-fits-all, especially in complex market environments. We believe **standards should also be classified and graded; classification does not mean you lose flexibility.**
For example, in FMCG companies, we often carry out a task called "display." How should the display standard be set?
**Display 5 SKUs (Stock Keeping Units) with 20 facings rewards 3 boxes of products; display 10 SKUs with 50 facings rewards 5 boxes of products, etc.**
You can classify the standards to see if they are suitable for A standards or B standards.
**Third, after standardization, you need to use tools for sedimentation. It is more like an excellent coach, transmitter, assistant, and project manager.**
**Fourth, integration.** If all tools are scattered, they are fragmented. So, you need to combine them to avoid information silos, decision or execution breaks, and ensure operational integration and even benefit integration.
**During operation, we cannot be "picky eaters"; our interests must be integrated, and we must jointly promote the construction of the four roles in BC integration.**
We hope to build not a **point-to-point** model—brand to distributor, brand to store—but a **point-to-face** three-dimensional integrated marketing platform. For example, if I want to reach some consumers, I can interact with them through platform coupons or one-code-per-item on products, and finally let these consumers feed back to terminal stores to boost sales.
******How to operate BC integration?**
**After the foundation is built, we need content for operation. What specific content? How to operate BC integration?**
In the FMCG industry, there is a term that everyone is familiar with—**4P, which stands for Product, Price, Promotion, and Place.** We need to consider how to make the BC integration infrastructure cover these contents. Because these contents drive products to flow to terminals, build brand image and status, and promote consumer purchases. We believe it needs a carrier.
Which carrier is better? Through practice, we found that the product itself is the best carrier. We can put QR codes on products, making them the entrance to online traffic, letting products speak, enhancing product value, and combining products with marketing activities. This way, we can achieve precise marketing reach for a specific channel, accurately delivering our promotional activities to consumers, terminal stores, distributors, and wholesalers.
The integrated operation of the platform hopes to make 4P "online" simultaneously, which is equivalent to the shell and content of our entire infrastructure.
So, next, I want to share **how to operate BC integration?**
No matter how good something is, if you don't operate it, it's like doing nothing. The era of "good wine needs no bush" is over. Many things need to be promoted and spread, especially in the current era of oversupply. We need to touch customers' nerves, let them know our products, and take action.
When talking about operations on the internet, several operation methods naturally come to mind—**product operation, user operation, content operation, and activity operation.** But these operations are more internet-oriented. In the FMCG industry, how can we integrate online and offline? It may be different.
In our actual operation process, including when we contact customers, they ask questions like: **Who will do this operation? When to do it? What content to do? What is my regional scope?**
Here, I will answer these questions.
**(一)Who—Who exactly operates this work?**
Generally speaking, for the operation action, we now see more headquarters doing the entire integrated operation and coordinating all things. Rarely do we see regions doing it. Even if regions do it, they often do it independently, completely unrelated to headquarters. But this, to some extent, fails to achieve integration, fails to achieve upper-lower coordination, and even fails to achieve online collaborative work among the "four ends." This will cause many deficiencies and even greatly reduce the effect.
Actually, it can be headquarters, distributors, or even terminal stores. Because headquarters cannot accurately grasp the precise profiles and needs of each region and group. Only by delegating these permissions and coordinating can we better achieve precise operation. We believe headquarters should do more overall planning and set the big direction and principles.
**(二)When—When to operate? This is also a question.**
You might have planned an activity once every three months, six months, or even a year, but is this frequency enough? It depends on what content you are operating. There is also a nuance here. We believe user operation and content operation are long-term processes, but activity operation is phased, so you need long-term actions to run through continuously.
Some brand companies, we see them using points for content, which is one way; some even use celebrity schedules for content operation, which is long-term; some companies use points throughout the entire process, which is also a way... But no matter what, they are actually operating all the time.
**(三)What—What content to operate?**
For example, if my goal is repurchase, can I directly use repurchase methods for operation? Directly giving consumers "coupons" is one option, but not necessarily the best. What do our customers and consumers need? We need to classify and grade them, and then recommend products based on their needs. Match their pursuit points to form a 1+1>2 effect. So, the content of operation needs to be based on user segmentation analysis to precisely stimulate consumers' pain points. Now, many generalized methods are gradually failing.
**(四)Where—How large should the operation scope be?**
At the same time, this scope can be large or small. Some brand companies are national, so they must play a big game; but for some small scopes, we can appropriately expand. Combining them is a three-dimensional, grid-based operation, which can maximize the effect of BC integration operation. This is about operation.
**At the very beginning, besides my product, I don't know anything else. What does the operation side use to operate?** In this process, data plays a very important role. We have a term called **"data bank."**
In the early stage, we may need to do a lot of basic user behavior analysis, through WeChat official accounts, Weibo, etc., to tag users with profile labels, and then based on these data, do targeted operation actions. Attribute profiles, behavior profiles, and even preferences can together form profile labels.
It is worth noting that sometimes what you hear is not necessarily true. Through data, you can truly understand what customers want. For example, when we visit stores for interviews, store owners feel that the opening box red envelope is too small, only one yuan, and they usually earn two yuan from selling goods. But in reality, after the activity started, many store owners actively participated to earn this "one yuan" small advantage.
So, in our operation process, sometimes we need to look at what the data performance is specifically, and do it through the data bank. Although some people worry about "big data price discrimination," there is a premise: you need to have data and specific profiles. Of course, we hope not to do price discrimination, because there is another path corresponding to it—**membership system. After having a data bank, using a membership system may be better. It can help you gradually form a marketing closed loop, and even in the future, become automated marketing.**
Generally speaking, in the initial marketing process, we have four links:
**The first is called crowd selection, the second is strategy, the third is reach, and the fourth is feedback.**
"Crowd selection" means identifying which people are suitable to be selected, and then doing some operation actions and strategic goals for them; strategy is using methods to attract and convert; after forming a strategy, we need to reach both online and offline—sending text messages or push notifications to consumers, or even face-to-face communication offline, all are options.
Different people, different roles, different strategies require different reach methods; after reaching, we need to form feedback on the strategy effect, which feeds back into our next crowd selection strategy.
In the early stage, it may be through manual or semi-automatic methods. But in the future, after these are accumulated, we can form an automated marketing closed loop, letting AI intervene to achieve marketing automation and integration.
******Specific Cases and Chain Summary**
We have talked a lot about concepts; let's talk about our specific cases.
In 2016, I co-founded Hangzhou Huihe Technology Co., Ltd. with some partners. Huihe has been committed to using internet technology and concepts to empower the FMCG industry and build a digital marketing service platform for channels.
Over the years, we have achieved certain results. For example, we obtained national high-tech enterprise certification and have obtained more than 30 software copyrights and invention patents. At the same time, our business has expanded nationwide, with two branches in Guangzhou and Shanghai.
Since 2016, our company's core product has been to build an integrated marketing service platform with "four ends online": brands, distributors, terminal stores, and consumers.
We hope to break the original single-chain path from brand to distributor, then to channel, then to store, and then to consumer, and build a three-dimensional, grid-based service system with "four ends online." At the same time, in this system, we will connect several "flows" to achieve systematic operation with "four flows in one": information flow, management flow, capital flow, and data flow.
Currently, I am happy to report to you the results we have achieved in recent years and where Huihe's core business is as of now.
So, how do we connect with various stores and consumers? How do we combine them to do some operation actions?
Many brands, when carrying out marketing activities, such as discount activities, will post posters in stores to attract customers, converting existing store traffic. Now, are there other ways to truly link each other? Are there specific cases?
In-store traffic is always limited because once consumers enter the store, they just choose A or B. For store owners, the value point is roughly the same, but **the unlimited increment of in-store traffic is outside the store. How to turn consumers outside the store or tourists into customers is very important.**
So, we are thinking, can we turn tourists outside the store into customers entering our terminal stores? At the same time, how can we make good use of previously accumulated consumer traffic resources? We used to have WeChat official accounts; can we use them, or even third parties, to drive traffic to our terminal stores?
For example, using Alipay's precise user profiles for targeted placement, driving consumers to our terminal stores, increasing in-store traffic for redemption, and terminal stores can then verify product sales with distributors. At the same time, in the process of driving traffic, to some extent, it is also converting public domain traffic into private domain. For example, the **"in-store verification"** project that Huihe is currently carrying out with Alipay.
Finally, let me briefly summarize. In fact, the BC integration chain in GT channels mainly has three points:
**First, "four ends online."** Enable our brands, distributors, stores, and consumers to be online simultaneously, not just one role online or point-to-point online between two roles. We hope it is simultaneous online and in a grid-like manner.
**Second, content online.** There are several core points in marketing content, namely 4P—product, price, promotion, and place. We need to think about how to achieve online presence through content, that is, 4P online.
**Third, operation online.** With content value, when we think about how to do BC integration, hierarchical, grid-based, and refined operation, we can form a self-closed loop through crowd selection, strategy, reach, and feedback. Even in the future, we may form marketing automation or AI automated marketing, and the entire BC integration chain will tend to be more benign and three-dimensional.
Source: Kotler Marketing Strategy (ID: kmg1981) Author: Kotler Growth Lab
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