The 'Digital New Infrastructure · 2020 (3rd) China FMCG Conference', hosted by New Distribution, was grandly held from August 24-26 at Shanghai Fuyue Hotel. The event attracted 3,000 industry professionals including distributors, manufacturers, and internet companies from across the country, with a full house and unprecedented scale. The following is the speech content of Mr. Yan Dong, head of Youzan New Retail Academy, at the parallel forum 'How Digital New Channels Build New Brands', organized and published for readers. Let's first review the seemingly long but actually short seven to eight months: what exactly have we experienced? And how do we view future consumers, future stores, and chains? First, let's look at consumption, which can be summarized in four words: 'reduced volume, upgraded quality.' Consumers now shop via mobile phones, regardless of age. I used to teach my parents how to shop on Taobao; now my parents are teaching me how to join group buys on Pinduoduo, completely overturning my understanding. Moreover, their frequency of using mobile phones and mini-programs to place orders has exceeded my imagination. Second, we talk about the weakening of physical stores. It's evident that consumers are waiting until after the pandemic to spend. Food and daily necessities are okay, but apparel and beauty have seen significant declines. Consumers no longer actively seek to visit stores or experience products in person. Third is the shift in media. You can see where future consumers will spend. Previously, it was e-commerce: consumers viewed products, clicked into details, read text and images, and placed orders—no human role in that process. Now, suddenly there are shopping guides like Li Jiaqi and Viya, greatly shortening purchase decisions. The rise of short videos and live streaming is definitely a new model that China must try in the next three to five years or longer. Pay close attention to the post-95s. We used to talk about post-80s and post-90s; now that's outdated. We're talking about post-95s, as this young generation represents the future main consumer force. What's striking is that they grew up with the internet; they love being 'planted' (influenced), they love being part of communities, they love good content, and they share and create viral trends. These young people are driving it all. Finally, they cut back on non-essentials but not on food and daily necessities; food is the priority. For online consumption, the National Bureau of Statistics Q1 figures were quite striking. Spending on clothing, supplies, culture, and entertainment has increased significantly, including online content consumption. Online content refers to virtual items like audio, fitness courses, office software, etc. This consumption is growing, and people are even setting up stalls online. Online consumption has deeply penetrated everyone's mind. Now let's look at stores. Our future predictions for stores are mainly these: First, going online. During the pandemic, many stores couldn't operate normally. What they could do was reach out via WeChat to customers they had added (i.e., existing customers). Here, going online is a crucial capability for connecting with consumers, whether for your store or brand. Then, the size of the reachable consumer base. Beyond going online, whether brands and retailers can reach consumers 24/7 through various channels will be a severe challenge. If you don't do it, others will, and your consumers will be intercepted. Since product categories are similar, but they can reach consumers 24/7, that's a distinct advantage. Next, shopping guides and consumers. If your category and business model are like beauty and apparel, you need shopping guides to mediate and maintain social relationships. Guides are important drivers of online-offline integration. That's why we talk about digitizing guides: why we assess how they post on Moments, how content is created, and what marketing plans to offer them. Many brands are already trying this. No one knows how many new consumers China will have, but we must focus on where they are and ride the trend. Based on Youzan's base of over 5 million merchants, 70-80% have physical stores. Among those with stores, in February, online GMV exceeded offline GMV. How were orders or products delivered to consumers? Two core methods: store pickup and same-city delivery. This year's New Distribution conference theme also reflects that thanks to China's good infrastructure, we can fulfill such services. As consumers, besides e-commerce logistics, do you offer store pickup or same-city delivery? In January and February, for major brands and business types, especially store-related ones, the core concern was cash flow. Without cash flow, a store is dead; only cash flow can save it. Many companies in the image above hoped to avoid losing too much during the pandemic. You can see that even in the US, stores stayed open due to the pandemic. Youngor, Septwolves, and Anta quickly jumped in because cash flow truly saves lives. Whether you're a chain brand or a store format, these three steps are universal. First, you see 1, 5, 3: the first is top-level design, the middle five are key results or steps, and the last three are long-term actions. For top-level design, let's ask six soul-searching questions. What is the relationship between online and offline business? This represents the operational concerns everyone cares about. Some see online as a sales channel; some brands like Wangfujing see true integration for new retail; some see a new media matrix with an online mall. Different business types have different relationships. Second, how do headquarters and stores divide and collaborate? Some headquarters are strong in fulfillment and marketing strategies. But most are weak, with newly established departments of 2-3 people called 'Retail Growth Center' or 'New Retail Division.' Yet their stores are strong. So how do they collaborate? Third, what is the customer relationship between stores and brands? For example, Wangfujing is a client we serve, a 65-year-old enterprise. But Estée Lauder is also a Wangfujing client. If Estée Lauder wants to connect with its customers, and we serve Wangfujing, what is the relationship between Estée Lauder's customers and Wangfujing's? Whose private traffic is it? How to handle this relationship? Fourth, what are the possible product sources? Besides the counters and brands in a place like Wangfujing, moving online offers more space, like a virtual 24-hour shelf. Should you expand categories beyond counter products? FMCG products are now entering department stores and supermarkets, which is clearly an opportunity. Fifth and sixth, if you are headquarters and distributors, how to distribute benefits between self-operated and franchise? This is very difficult and challenging. On the right side of the image above is a framework by American change scholar Kotter, outlining eight key steps for enterprise transformation. Here, I emphasize three: 1. Build a leadership team. In China, we're trying new retail models; no one has done it before, unlike e-commerce which has years of scale and patterns. There's no such team in China. Based on your situation, find leaders for this role. The team's assessment target must not be fixed numbers but growth rates, like monthly growth. The team must have strong collaboration and communication skills to break boundaries across organizations. 2. Accumulate short-term wins. Enterprises have tried many software, consultants, and trainers. People are tired; you can't take long to experiment. You must quickly achieve short-term results to build confidence. Negative voices will diminish, and collaboration will tighten. Building a leadership team is a top leader's project, not something a small division can handle. 3. Empower with professional operations. You need a tech team to implement tools, marketing tactics, and other empowerment. So on the left are operational concerns; on the right, if you want to break boundaries for change, you must go through these eight core steps. I've only covered three. Below are the five key steps for quick start. Everyone knows them, but the logical order needs to be set right. First, build an online platform. For example, AFU Essential Oil's official account. No need to stress its importance. WeChat has 1.2 billion monthly active users; Taobao, JD, Tmall, and Pinduoduo combined don't match that number. It's unimaginably large. Everyone says where there's traffic, there's business. In the WeChat ecosystem, like AFU's official account, from follow to auto-reply to mini-program mall, it's like going to IKEA: you don't buy what you intended, but spend more by the end. This is like when a person enters a store: lighting, staff, product display, location. When products are displayed, you must set up the browsing path. One key step is having an online platform; the best carrier is a mini-program. This mini-program is your brand's best official website, with transaction and interaction capabilities. Greentown Commercial, part of Greentown Group, has commercial and e-commerce operations. They have many property owners and wanted to quickly build a mall, putting public welfare activities and categories on the platform, leveraging Greentown's brand endorsement, achieving good progress. Wentian Dashijie, a supermarket-convenience-department store, quickly built its online mall. Upgrade offline stores. Some call it transformation or upgrade; I think it's an upgrade. What efficiency improvements can we make on existing business?

  1. Self-pickup process: like Wangfujing, where do consumers pick up online orders? In supermarkets like Walmart, Intime, Parkson, there are customer service centers.
  2. Fulfillment process: This is challenging. In large department stores, a person buys from various counters; someone must pick goods from each counter, arrange them, check orders, and deliver to pickup points. Many haven't done this before; it's new and hard. Taking ten days to fulfill is a happy problem because orders come but there's no such organization. Some companies had e-commerce divisions with warehouses and fixed processes, making it easy to provide good fulfillment without delays.
  3. Have a live streaming space. Does your company have one? Who streams? Store guides, the young ones. They just need to introduce products well. Let guides stream during off-peak hours, bringing in old customers and attracting new ones. Some say guides are paid anyway, they're relaxed, but bosses are anxious. Guides also want to do more and earn more.
  4. Guide training is crucial. As mentioned, digitizing guides. In Wangfujing, young girls are fine, but in supermarkets, it's older staff. Teaching them is hard, like teaching your parents to use a phone: they learn today, forget tomorrow. So train guides well, create Moments copy and materials, and provide targeted training on how to sell and post.
  5. Finally, prepare materials. Previously, we did offline materials; in the future, we'll do online materials like posters on Moments, handled by dedicated people, so guides can do different things in different stores and regions. Today, many FMCG companies follow Peter Drucker's advice to focus on strengths. A company's strength can mobilize everyone to act and grow. Everyone can open their own distribution shelf, share to Moments, and sell more. For example, Shandong Inzone took about 15 days to get 13,000 guides into a live stream, selling a lot in one day—BeLLE shoes. This is built on employee strength, not one person. So, all-staff distribution is the third step. Fourth, community operation and activation. As we all know, official accounts, personal accounts, WeChat groups, live streaming, and mini-programs each play different roles. In the WeChat ecosystem, these form a good matrix to deploy and try. Official accounts have been around for about 8 years; mini-programs have been hot for 2-3 years. Not doing them isn't wrong, but doing them is definitely right. For example, Greentown Commercial did targeted activities: poverty alleviation, school resumption, Qixi Festival. They planned ahead, anticipating consumer needs. Next, how to build your persona on Moments: your WeChat name, avatar, signature, cover, and first greeting should be unified from bottom up. It represents the brand, not you. If an employee leaves, it's fine, but damage to your brand image is not. I no longer recommend using personal WeChat accounts for private traffic. If the scale exceeds 200-300 people, use WeChat Work. Guides can build their own shelves, share to Moments, and add to WeChat groups—all via WeChat Work. There's a dividend in this process. So what to post on Moments? Daily assessments: what to post from what time to what time, what to do in the afternoon, what at night. Because even with personal accounts, few do it well. They post what they want, not what customers want to see. So besides business relationships, there's no interaction. It's a plastic relationship with no substance. Why isn't anyone buying? It's no wonder. SMS is ignored, so everyone uses WeChat. Good fine-grained operations require tagging: different tags for different customers, what information they've seen, and careful management. WeChat groups: for chain brands or stores, I suggest short-term groups. Don't make groups too long; 10-20 days is enough. Quickly build a group, sell products, then transition to personal accounts by adding as friends. This is what successful short-term groups do. Because long-term groups, except for family groups, almost always sink. If you don't post ads, others will. So view communities correctly: they have a birth and a death. Don't think a group will sell forever. Fifth, live streaming. If you haven't built an online mall, haven't activated all-staff distribution, haven't trained guides, and haven't done the previous steps, live streaming won't work. Many say find influencers to stream. That's not wrong, but think about celebrities this year: no shows, no filming, only brand partnerships for two streams. So I don't recommend that. For long-term stability, have your own guides stream in-store, in real sales scenarios, for existing customers, who bring new ones. No one watches a stream for more than 15 minutes. Unless you're Jay Chou or Li Yuchun, don't do it. In 15 minutes, you can say what you need. Some stream for 4-5 hours and sell one pair of shoes, bought by their own people. Not everyone can stream. Based on accumulated old customers, you can do targeted streams. Without coordination of product selection, community, and distribution, live streaming sales equal zero. Look at Wangfujing: Chengdu same-city events, promoting via other channels that Wangfujing is streaming. The stream is pushed via official account and community, with a schedule of what's sold at what time. No time to linger; 15 minutes is enough. At 10 AM, women's clothing; 11 AM, beauty. After selling, they activate the community. Live streaming is a great format to drive atmosphere. E-commerce ordering lacks feeling, but ordering in a live stream feels different: shouting and selling, bombarding the group to order and cheer, sharing and spreading, attracting more people. It feels good. After the five key steps, the three long-term things: growth and fission, retention and activity, conversion and repurchase. This requires long-term, fine-grained operation. These 12 characters seem simple, but they require many tools and organizational change. Find the starting point. For your chain brand's digitalization, truly achieve 1-5-3: top-level design, five key steps, and three long-term strategies. Youzan Chain tools can help with brand digital empowerment, covering channels, stores, guides, and consumers. This airplane diagram looks complex, but it's about marketing digitalization, membership digitalization, live streaming shelves, 24-hour online shelves, and digital guide management. Guides know their earnings and how to withdraw; bosses know which stores connect with new consumers and how many new customers were acquired. Once the mall is opened, Youzan Chain or Youzan Retail can seamlessly connect. If your fan base is there, you can link the mall, letting customers order directly. Where there's traffic, there's business. Competitors in the same category are already deploying across channels; if you don't, your consumer reach is smaller. If a merchant's headquarters wants to run a marketing campaign, they can choose stores or online shops, use various marketing methods, achieve unified online-offline management, and consumers can buy directly, with delivery via express or SF, or store pickup and verification. Youzan Chain is helping many chain brands complete digital operations. These brands are already partners. Each brand understands this differently: some as growth channels, sales channels, new retail transformation, new media matrices, or simple marketing tactics or membership management. Each brand's connection with Youzan is unique. Finally, a message for you: extend scenarios, deepen private domain, and leverage precisely. Tips will be paid 400-2000 yuan upon adoption.