---
title: "The World Is Changing: How Can Distributors Transform in the New Mobile Internet Environment?"
description: "After a year of OTO hype and industry disruption in 2014, Chinese entrepreneurs are pondering how to navigate the future if OTO becomes essential. This article explores redefining business, trade, and marketing in the mobile internet era, and outlines the future role of distributors as operators and service providers."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2014-07-08"
language: "en"
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# The World Is Changing: How Can Distributors Transform in the New Mobile Internet Environment?

> After a year of OTO hype and industry disruption in 2014, Chinese entrepreneurs are pondering how to navigate the future if OTO becomes essential. This article explores redefining business, trade, and marketing in the mobile internet era, and outlines the future role of distributors as operators and service providers.

**Warm Tip: Click the blue text above “FMCG Distributor Professional Consulting” to learn more about marketing and distributor internal management.**

In 2014, after a year of OTO concept hype, the birth of new brands, and the disruption of old industries, Chinese entrepreneurs began to truly think: if OTO is a necessary model or tool for future channels and marketing, how should we proceed, and what layout is needed now?

**I. Re-understanding Business**

The business world is changing rapidly. I want to share with you how to re-understand business in the new mobile internet environment, because re-understanding business helps us make new thoughts and judgments about the future.

**1. The decline of traditional business has no safe haven**

The impact of the internet and mobile internet on traditional business is obvious. Offline foot traffic is decreasing, business costs are rising, consumers are increasingly picky, and online shopping habits have formed. Along with this, business stances and values have changed. A large number of brands have entered B2C platforms, building their own direct sales networks and platforms. In this process of change, **intermediate channel distributors are constantly being eliminated, and the last safe haven is already in a storm.**

**2. Channels are further flattening, and the space for distributors is shrinking**

Traditional business goes from manufacturer to regional general agent, then to second-tier market general distributor, to terminal, and then to consumer. From factory price to retail price, there is a ten-fold or five-fold gross margin space. But today, we find that **the territory of distributors is not expanding but shrinking.**

In the internet era, all value is transparent. When information becomes transparent and symmetrical, competing on display, environment, promotion, decoration, etc., cannot become core competitiveness, **as homogenized actions can be quickly replicated.**

So, where is the future competitiveness of distributors? The future channel model is from enterprise directly to terminal, then to consumer. The radius of business circles will be completely broken. Enterprises use internet thinking to connect a city, a center, and a point. The old business centered on commercial real estate radiation radius faces huge problems. **For distributors, how to provide follow-up continuous services will become the core competitiveness.**

The entire channel is being reshaped, and the value of terminals is weakening.

**3. Mobile internet is reshaping the new business ecosystem, with closer connection and communication with users**

The rise of mobile internet has broken the concept of geography. Micro-shopping platforms allow distributors to ship directly from manufacturers without stocking, only needing to manage orders, making user consumption more convenient.

Micro-shopping transforms the original single service and product formats into a borderless all-internet format, bringing new business changes. Mobile internet is not just a chat tool but a means of obtaining a large amount of information. And information is money. **The entire flow of society has turned to the internet; business, goods, and services are all part of information.** Previously, changes in business forms that took five or ten years can now be achieved in just one or two years.

**4. The rise of social networks will establish new interactive relationships with consumers**

**Traditional customer relationship management is a weak relationship building that is about to be eliminated.** Simple greetings and promotional information recommendations have no effect. Vague consumer profiles such as age, gender, region are far from enough. **What replaces them is precision marketing and a member management system settled on mobile.** The entire internet, especially the rise of social networks, has completely changed our relationship with consumers, from weak to strong.

**5. Operators and service providers will rise, replacing traditional retailers**

In the future, distributors will have two roles: operator and service provider.

What is an operator? What do they operate? They operate consumers. The organizational structure must undergo profound changes, from simple terminal maintenance to operations such as physical store and mobile art design, content planning, real-time customer reviews, online customer service, precise customer promotion, and customer relationship maintenance. **To directly acquire customer traffic, you must become an operator that develops and establishes close customer relationships.**

What is a service provider? In the case of product homogenization, **provide deep services to customers**, bring more value-added benefits, thereby acquiring and retaining customers, ensuring not to be diverted in similar competition, **and turn customers into your “loyal fans.”** Distributors play the role of retailers and retail service providers.

**6. OTO is becoming the new standard for all businesses**

Mobile internet makes OTO possible, connecting online and offline, forming a sales system of “same product, same price, same promotion,” gathering all information on a large platform, establishing relationships with customers, and remotely processing orders, becoming a new port and carrier.

**II. Re-understanding Business (Trade)**

In the era of deep mobile internet development, how should we view today's business? How to think about tomorrow's business? Can we connect with the future, and how?

**1. All businesses are facing internet invasion**

In the past, Fetion was great, but when WeChat came, Fetion plummeted. When mobile internet came, third-party payment platforms rose, and the financial industry was severely impacted. In China, which two industries are the most profitable? – Finance and real estate. They bypass service retail and occupy the most prosperous locations. This abnormal development brings extremely high prices and business costs, but all this is about to change: **mobile internet can turn traditional high costs into low costs.**

**2. Profit opportunities from information asymmetry will no longer exist**

When mobile internet had not yet exploded, relying only on PC, due to high traffic costs, business changes were not drastic. However, mobile internet is borderless and low-cost, breaking the original communication methods of information asymmetry, avoiding the phenomenon of profiting from information asymmetry, and establishing a more honest system. As long as you present the multi-layered value of customers authentically, through mobile internet, let others understand more deeply and interestingly, **information symmetry becomes the golden egg of business and will be the biggest new business opportunity.**

**3. The era of consumer sovereignty has arrived**

The era of consumer sovereignty has arrived. All relationships have become reverse relationships, with consumers as the origin, and consumers have greater voice and right to know. The era of relying on deception and highlighting product functions is gone forever. The consumption orientation of the post-90s generation will receive unprecedented attention. They crave community, participation, and voice, and understand consumption. Any marketing system that entertains itself and shields consumers is doomed to decline and collapse.

**4. Offline retail terminals will face rapid iteration within 2 years, and intelligent retail will appear in batches**

In the future, online and offline will be integrated. Upon entering a store, identity and consumption records are all presented, and all purchase behaviors are pushed to the phone in real time, establishing strong relationships with consumers. Offline will increasingly evolve into an information terminal, not just a retail and physical display terminal. You only need to think about **how to use the two points of tangible and intangible terminals to achieve unlimited revenue in multiplied marginal markets.**

**5. The networked business structure of mobile internet is coming soon**

The networked business structure is a demand-driven business of intelligence, a business of big data, a huge new network business structure. Mobile internet has several standard configurations: first, the H5 platform, so others can search for you; second, the APP, a platform for building trust relationships and deep services with customers; third, the WeChat platform. These three platforms will become the entry points and connection points for connecting with others in the internet networked business structure.

**III. Re-understanding Marketing**

**1. The way of brand building is changing**

In the era of information overload, short-term memory is quickly erased, and spending more on advertising has minimal effect. Today, brand building relies on customer reviews, comprehensive service capabilities, and the depth of relationships with customers. Based on trust, customers are willing to recommend your product in their circle of friends, so one sentence from them may equal 10,000 or 100,000 yuan of advertising. **Today, attention is a large scarce cost, and trust is a higher level.**

**2. The way of acquiring users is changing**

In the past, we attracted traffic through advertising, activities, promotions... but today, we rely on users, friend circles, and direct and indirect interactions. In an era where everyone can become a profit chain, we can market in a more proactive, precise, forward-looking, and smarter way.

**3. The way of promotion is changing**

In the internet era, we must use mobile internet platforms to acquire new customer resources. Use QR code promotions to directly lock in users, connecting online and offline. The new promotion method is to directly establish contact with target customers and give them advertising discounts. For marketing personnel, the cost of customer acquisition, quantity, conversion rate, transaction ratio, and sales are the most critical indicators. **The way of communication and promotion is reversing, oriented towards customer acquisition, not brand building.**

**4. The product sales model is changing**

In the self-brand era, the company, chairman, and store staff are all brand individuals, thereby establishing their own sales chains and networks, achieving near and remote synchronous shopping, breaking the concept of space and time. The changes of the internet will reshuffle the profiteering land prices of large commercial real estate. The era of crazy grabbing of prime locations is over. **What we are grabbing now is the deep interaction between online and offline customer service.**

**IV. The Future of Distributors – Small Centralized Distribution Service Platforms Will Emerge in Batches**

We face the situation: distributors are flattening, the internet is invading, and mobile internet is replacing. Do distributors still have value? I think they are very valuable. So where is this value?

**1. From porter to small platform, small center**

In the past, distributors were not a platform, still relying on enterprises to operate. What are the attributes of a small platform? Having an independent marketing center, service center, and communication center, through which to establish deep relationships with customers. Products are built around customers and the responsible region, thus transforming from porter to small platform. What is a small center? With the arrival of the self-brand era, **personal information is a brand, self-media is a brand, and distributors are bound to become regional small marketing centers.**

**2. From individual business to organized, professional**

The most complex ecological operation in this society is business operation. If not organized, corporatized, and professionalized, there will be no ability to acquire customers, develop markets, serve customers, or conduct deep marketing. Then distributors will have no future. The essence of the internet is small front desk, big backstage. In the entire social ecosystem, the core cell is business.

At present, we must think about the future business model – establish strong relationships with customers, shift everything to directly serving users, and transform from a company that simply earns price differences to a branded marketing institution.

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