Click 'Read Original' for details -01- The counterpart to private-domain traffic would seem to be public-domain traffic. Public versus private—a neat parallel. But wait! Is there still public-domain traffic? Traffic that has not been sold is public-domain traffic; traffic that has been priced and sold is commercial-domain traffic. Does unsold traffic still exist? It's not entirely absent, but it's scarce. Even when it exists, it's traffic with low commercial value. -02- What is public domain, and what is private domain? In short: Private-domain traffic: people are the channel, people are the relationship, people are the traffic. Public-domain traffic: stores are the channel, stores are the trading area, stores are the traffic. This is the first definition. People as channels, stores as traffic—this is clearly a concept from the retailer's perspective. So, the subject of private domain is the retailer. Can brands and distributors do private domain? Of course. For example, direct selling, or micro-commerce targeting C-end consumers. Clearly, brands can't scale private domain. If they can't scale, why discuss it? From the brand's perspective, a bunch of suppliers carving up retailer traffic naturally sees this as public-domain traffic. In other words, what is private domain from the retailer's view is actually public domain in the eyes of the brand. Thus, public and private domains differ by subject and perspective. This is the second definition. -03- A retailer's private domain is its bargaining chip in negotiations with the supply chain (brands, distributors). What are chips used for? To sell at the right price. To exchange for money and resources. Whoever pays the highest price gets it, even through bidding. That's why traffic fees keep rising. The first method is to charge traffic fees directly, as e-commerce platforms do. The second is to charge resource fees, such as supermarket display and shelf fees. The third method doesn't charge fees but costs time. Like customer relations. Deep distribution relies on customer relations because stores have private-domain traffic. Customer relations means exchanging relationships for traffic, time for resources, or getting traffic at a lower cost. I've always emphasized that in deep distribution, the human chain is the channel. Use customer relations to keep the channel smooth. -04- Public-domain traffic bought with money and resources is actually commercial-domain traffic. The first to shift from public to commercial domain were KAs (key accounts). Western KAs earn front-end fees (markup margins). After entering China, they shifted to back-end profits, which are essentially traffic fees. Displays are traffic, shelf placement is traffic, promotions are traffic—anything that brings traffic is charged. There are dozens of fee categories, too many to count. Carrefour was the first Western giant to compromise with this Chinese model; Walmart woke up later. So, Walmart, the world's largest company, lagged behind Carrefour in China for a long time. Not doing supermarkets is waiting to die; doing supermarkets is seeking death. The reason is that KAs shifted from public to commercial domain. Without KAs, no sales; with KAs, no profit. -05- Alibaba's earliest public-domain traffic was somewhat like 'public welfare traffic.' Free traffic is 'public welfare.' Taobao brands benefited from 'public welfare traffic,' truly making 'business easy.' But Alibaba's platform traffic is closed. From the moment Alibaba blocked Baidu's search traffic, it was inevitable that Alibaba would shift from public to commercial domain. It's said—just hearsay, not verified in the US—that US e-commerce platforms don't block external traffic. That's because most of the top 10 US e-commerce companies have physical stores; for instance, Walmart is one of them. As long as platform traffic is closed, it will inevitably shift from public to commercial domain, unstoppable. Even if Jack Ma didn't charge traffic fees, merchants would still offer 'resource fees' to platform staff. That's also a disguised traffic fee. In a closed traffic system, traffic fees will rise until no one makes a profit. As long as there's profit, some merchant will bid up traffic prices. Hence, 'not doing XX is waiting to die; doing XX is seeking death.' This time, XX is the e-commerce platform. Alibaba's acquisition of RT-Mart was a major integration of commercial-domain traffic. Alibaba learned KA's online tactics, and KA learned the platform's offline tactics. The choice between 'waiting to die' and 'seeking death' is precisely the dilemma commercial-domain traffic creates for brands and distributors. -06- If KA and e-commerce traffic are commercial, then street corner mom-and-pop stores should be public domain. They used to be, but not anymore. Deep distribution's customer relations refer to these small shops. Exchanging relationships for traffic indeed gets public-domain traffic. So, the essence of customer relations is 'exchanging relationships for real traffic.' Soon, industry giants found customer relations too troublesome and simply paid for shelf space and displays, using stocking policies to occupy storage. As a result, some brands could sell a year's worth of inventory from a single pre-Spring Festival stocking. KA's expansion into rural areas squeezed the living space of street shops. Now even small shops have become commercial-domain traffic; perhaps only village-level shops remain un-commercialized. -07- There is no more public-domain traffic. All valuable terminal resources are being sold at marked prices. Customer relations can't be ignored, but to get traffic, you still have to pay. 'Make money from suppliers, not consumers.' The business rule Walmart created now applies to all retail systems in China. This is the reality of Chinese business. Denying it won't work; complaining is useless. But there must be a way to crack it. -08- Business is a game of negotiation, ultimately reaching a balance. Public-domain traffic becomes commercial because between brands and consumers stands a retailer (terminal). Even on e-commerce platforms, merchants think they can reach C-end directly, but a platform still stands in between. Without traffic fees, it's technically impossible to reach C-end. That's why platforms demand 'choose one' from merchants. From this perspective, the so-called disintermediation of e-commerce platforms actually makes them a more domineering 'middleman.' Where do bargaining chips come from? Retailers (including platforms, KAs, and small shops) control C-end, but brands also influence C-end. Bargaining chips come from C-end. User orientation, consumer orientation—these are not noble business values but necessities for business negotiation. Brands and IPs are factors that give brands influence over C-end and serve as chips in negotiations with terminals and platforms. In this, big brands have an advantage. -09- As public domain becomes commercial, all traffic has a price. So, should brands go into private-domain traffic? I'll elaborate in another article: Brands shouldn't do private domain; it won't scale. Private domain—people as channels, people as traffic—is the retailer's right. Besides influencing C-end through brands and IPs, do brands have other ways to gain bargaining chips? Of course—marketing digitalization. Marketing digitalization is not another form of e-commerce but the digitalization of traditional channels, i.e., BC integration. BC integration means channels still go through B-end (terminals), but touchpoints reach C-end. At least technically, C-end is reached. Once, at an industry conference, I talked about marketing digitalization, and a chain terminal was panicked: Does it mean brands will bypass terminals to directly contact users? Some brands might, but truly ambitious companies won't. BC integration lets brands reach C-end, thus gaining chips to balance commercial-domain traffic. BC integration is not simple 2C. It includes 2B, 2C, and BC linkage. BC linkage empowers B-end. Retail terminals hold C-end hostage to command brands, but they also face a dilemma: private-domain traffic is limited, making growth difficult. With limited private-domain traffic, they try to shift difficulties to suppliers, such as raising traffic fees. If brands can empower retail terminals—for example, by bringing incremental traffic—then brands will be welcomed by retailers. -10- Business negotiation is never about one side dominating the other. Terror balance, mutual fear—this is the optimal game. Internet technology gives all business parties the opportunity to reach C-end users. The ability to reach C-end determines business discourse power. Terminal monopoly over users and platform monopoly over traffic will change with marketing digitalization. -11- Finally, my conclusion: There is no more public-domain traffic. All traffic is for sale at marked prices. Traffic that can be bought with money is commercial-domain traffic. Ambitious brands will not do private-domain traffic. Private domain—people as channels, people as traffic—is the unique traffic logic of Chinese small shops. Reaching C-end is now technically possible for all business institutions through marketing digitalization. With such an opportunity at hand, institutions that don't act have big problems. Competition to influence C-end will intensify. With chips to influence C-end, whether public, commercial, or private-domain traffic, none will be a problem. Source: Liu Teacher's Digital New Marketing (ID: liuchunxiong1964) Major Conference Announcement! January 19-20, Jiangsu, Wuxi New Distribution will join 500+ FMCG distributors from five provinces in East China in Wuxi, Jiangsu, for a conference aimed at product selection, cooperation, and exchange for brands and distributors. Plan before the New Year, start after! Don't wait until after the Spring Festival to plan! Interested brands or distributors are welcome to contact us. Please scan the WeChat QR code below to register or exhibit. Exhibition Contact: Tips will be paid 400-2000 yuan upon adoption.