The 6th China FMCG Channel Innovation Conference, hosted by New Distribution, a professional new media platform for FMCG, was grandly held from April 1 to April 3 at the Chengdu Agile Howard Hotel. The event attracted 3,000 industry professionals from across the country, including distributors, community e-commerce platforms, brand owners, and internet companies, with a full house and an unprecedented scale. On April 1, at the O2O forum of the China FMCG Channel Innovation Conference, Mr. Tian Hao, Vice President of Dmall, delivered a keynote speech titled "Retail Digital Transformation Empowers FMCG." Dmall is an omnichannel retail digital platform that has covered 3 countries and regions, served 120+ chain retailers, reached 190 million C-end users, with over 23 million monthly active users and GMV exceeding 70 billion RMB. In the process of committing to omnichannel digitalization, how does Dmall empower brand owners and retailers through its digital platform? New Distribution has carefully organized and excerpted the essence of Mr. Tian Hao's speech at the conference for our readers.

-01- Challenges Facing the FMCG Industry in the Omnichannel Context Over the past few years, the entire retail industry has developed rapidly, especially in terms of channels, with online and offline integration and omnichannel becoming a development trend. In this environment, the FMCG industry faces a severe situation, and the challenges cannot be ignored. Tian Hao stated that over the past six years, Dmall has conducted in-depth research on retailers and brand owners, analyzed the industry status and pain points of all related parties, and concluded that the low degree of digitalization in the retail industry chain is an urgent issue to be solved. Retail digital transformation is an inevitable trend for future industry development.

China's retail industry is vastly different from that of other regions globally. For example, in the United States, Walmart holds a very high share of the local retail industry, but the domestic offline retail market is fragmented, with industry concentration far lower than that of developed countries. (China CR10=5% vs. US CR10=36%)

Due to significant differences between the southern and northern markets in China, each region has a different business environment, and each region's retail business format is different, making it difficult for particularly large retailers to emerge. This also leads to extremely fragmented traffic entry points for local retail. Both retailers and brand owners are in a painful situation. Retailers want to find good products, but the cost of connection is high. First, they need to judge which products are good, which requires data collection, a process that consumes significant resources. Then, connecting with products requires time and resources. Similarly, brand owners also face this: they develop excellent products, but when they reach the terminal, they find the entire chain is long, costly, and inefficient. Many brand owners should deeply feel that this process is like "hitting a mountain to strike a cow"—for example, investing 100 yuan in marketing expenses, but only 20 yuan actually shows up at the terminal, with the remaining 80 yuan taken by various "gray" costs.

Returning to the essence of the problem, China's regional characteristics make it difficult to change this retail business format. However, the current situation is that domestic retailers generally have low digitalization levels, and traffic is fragmented, making user operation and monetization difficult. On the other hand, offline retail channels have long lacked digital precision marketing tools and methods, preventing brand owners from achieving precise reach and limiting conversion efficiency of their investments.

Therefore, both retailers and brand owners need to make changes. Over the past period, Dmall has been experimenting with retailers and found that there is an opportunity to solve the pain points of both parties in the future. The solution is to improve the efficiency of the entire chain through retail digital transformation.

-02- Comprehensive Digitalization to Reconstruct the Retail Ecosystem Since last year, the industry has been talking about digital transformation. So what exactly is digital transformation? Mr. Tian Hao shared his understanding: In the past, retail operated in a physical world, where the cost of connection was very high. Digital transformation is about turning the physical world into a digital world, converting the complex links and processes of the physical world into the 0s and 1s of the digital world. Through a digital platform, brand owners, retailers, and end consumers are connected. In the digital world, the cost of connection is low, the speed is fast, and the depth is broad.

Dmall has also been committed to connecting partners at all stages of retail through a digital platform, forming a growth flywheel to achieve a dual-wheel drive of empowering the B-end and serving the C-end.

First, industrial internet, empowering the B-end. The B-end includes both retailers and brand owners, making their business truly more efficient and simpler. Second, consumer internet, by empowering the B-end, ultimately drives the C-end, serving C-end users well and achieving two-way growth. Through digitalization, people, products, and places are connected, achieving the transformation of focusing on place, coordinating product, and connecting people.

1. Connecting People In member digitalization, the time needed for promotion is infinitely compressed, and the most efficient way is used to achieve precise marketing push.

Take a real scenario: a brand owner launches a new red wine and wants to find C-end users who like red wine. In the past, to achieve this, they needed to find suitable retailers, suitable stores, suitable shelves, and suitable users. This process took at least three days and consumed manpower and resources. But now, with such a digital platform, in just one minute, you can precisely find the users corresponding to the product, their consumption habits, consumption scenarios, etc.

Suppose the red wine is priced at 100 yuan and is suitable for the petty bourgeoisie. Combine the relevant tag queries, and the system will benchmark products with similar historical sales and match corresponding marketing plans.

This is the first method. Another method is through user profiling. Step one, precise profiling: use three profiling dimensions—basic profile, consumption profile, and user consumption environment profile—to filter out matching users, such as age 20-40, petty bourgeoisie consumption, convenience stores, etc. Step two, custom user segmentation: based on consumer behavior, consumption channels, consumption location, consumption cycle, etc., segment users and dynamically track the behavior profiles and indicator data statistics of designated groups. Step three, custom statistical indicators for repurchase analysis: use 108 related indicators in various combinations to conduct multi-dimensional analysis of collected user data. Finally, based on these digital analyses, achieve personalized precise push, precise marketing, and track and analyze the effects.

2. Coordinating Product At the end of the transaction is product delivery; users ultimately purchase products. Therefore, in product digitalization, Dmall has also conducted meaningful exploration.

Dmall's digital product system is similar to a hospital "physical examination." Based on a category framework and combined with AI algorithms, it conducts a physical examination of the retailer's product library. The full score is 100. When the score is below 100, detailed details are provided below the score, telling the retailer where the problems are. For example, which products are missing in each category, which are redundant in each category segment, price segment, and function segment, etc., and telling merchants how to solve the problems.

Of course, the accuracy of the data is also guaranteed. These data come from the accumulation of big data from many retailers over several years, such as what to sell in each season, each region, and at what time, all of which have accumulated a large amount of data.

Moreover, through cooperation with Nielsen, Dmall can quickly find products that sell well in the market and accurately recommend them to retailers' procurement, quickly introducing products. Through such digital methods, inefficient manual product selection is replaced, and merchants can adjust their product structure in a timely manner.

3. Focusing on Place The digitalization of place is essentially store digitalization. In the past, managing the store end was difficult because it was hard to avoid dependence on people. Receiving goods, replenishing, organizing, cashiering, inventory counting, inspection, picking, and delivery—these actions could not be precisely managed, leading to low store operation efficiency.

But now, Dmall uses a store brain system to standardize store operations and quantify work, reducing the impact of human factors. For example, convenience stores can have one person in multiple roles: organizing goods in the morning, cashiering at noon, picking goods in the afternoon, and doing inventory at night, precisely controlling employees.

Moreover, Dmall is cooperating with a top global convenience store chain to auction off all shelf positions in the store's planogram, similar to Baidu search bidding. Brand owners can choose to purchase display positions themselves; the more they pay, the more display they get. Each brand owner can see the display surface in the backend. This forms a virtuous cycle, where good products can be presented to users in a timely manner.

-03- Retail Digitalization Empowers Brand Sales Growth Dmall currently serves more than 120 retailers, including international large merchants like Metro, as well as domestic large merchants and regional large merchants. They all use Dmall's underlying digitalization, essentially through one system for end-to-end connection, from C-end users to the supply chain, based on information flow for two-way connectivity.

For example, in the merchant recruitment part, a good product, even if well-known in the market, requires time and fees to enter retailers, especially large retailers. Now, through the merchant recruitment system, automatic recommendations can help retailers introduce more suppliers and brand owners.

After recruitment, involving supplier and brand fees, Dmall also has a complete system, from contract signing to automatic settlement, achieving closed-loop fee control, while also saving 30% of financial staff workload.

In the future, whether retailers, suppliers, or brand owners, they can all see every marketing expense invested on the system—where the money is spent, the effect, and supporting documents—all clearly visible.

For example, before using the system, a large retailer undercharged suppliers by 30 million yuan a year in fees. After using the system, the 30 million yuan in fees was additionally recovered. In fact, the brand owners had invested the 30 million yuan in marketing expenses before, but it was not on the surface, and much of the gray area could not be accounted for.

Now, through system data, all of this can be presented. The investment in marketing expenses can be fed back in real time to terminal store sales displays and promotional activities, completely digitizing and closing the loop for each link.

Moreover, retail digitalization is not only for retailers but also for all suppliers and brand owners. Brand owners can clearly see your product's inventory in the warehouse, store inventory, shelf quantity, display position, online and offline sales, and even the situation of competitors.

Take display as an example. In the past, the display fee brand owners paid to retailers was fixed, such as 100,000 or 200,000 yuan. But now, based on this digital system, a change has been made: it is no longer a unified fixed value. Instead, brand owners can choose how much display they want and in which stores, with combined quotes.

Then, each brand's quote is also different. Brands with good sales and high consumer acceptance get lower quotes, while new brands needing exposure get higher prices.

After quoting, the retailer's stores must take photos of each shelf every week. The system has an image comparison function that automatically compares with the display diagram made by headquarters.

If it is green, it proves the store's display matches headquarters; if it is red, the store needs to reorganize. These images can be seen by both retailers and brand owners, effectively avoiding the situation where fees are invested but not executed.

Not only that, retail digitalization can also help brands create integrated online and offline marketing plans. For example, Mengniu launched a new product with good offline sales but poor online local retail sales. Dmall and Mengniu jointly created a coupon for consumers who had previously bought the product offline but not online, sending a precise online coupon. After doing this, data analysis showed that the brand's UP value was much higher than when only offline or only online.

Precise marketing must be built on digitalization. Only by mastering these precise data can brand owners achieve incremental growth through marketing.

Final words: In the past, digitalization was a natural advantage of online platforms. Whether it was consumers or consumer behavior, compared to traditional offline, e-commerce platforms had a natural advantage in user retention. Taobao's Zhitongche and JD's Fast Car both reflect the advantages of online data. As physical retail integration intensifies, the digital reconstruction of traditional retail has become an urgent task. Both brand owners and retailers should seize this opportunity to achieve leapfrog development.

Tips will be paid 400-2000 yuan upon adoption.