---
title: "Traffic Peaks, Dividends Fade, Channels Fragment: Time for FMCG Companies to Build 'Private Domains'!"
description: "In 2019, the topic of 'private domain traffic' suddenly became hot, and many companies are talking about it. Why is 'private domain traffic' being proposed at this time? There are three key nodes: market environment, internet penetration, and operating costs. Tencent has elevated the concept of 'private domain' to a 'private domain business format', aiming to promote the large-scale development of the private domain ecosystem and reshape the growth pattern of retail enterprises."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-09-15"
language: "en"
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# Traffic Peaks, Dividends Fade, Channels Fragment: Time for FMCG Companies to Build 'Private Domains'!

> In 2019, the topic of 'private domain traffic' suddenly became hot, and many companies are talking about it. Why is 'private domain traffic' being proposed at this time? There are three key nodes: market environment, internet penetration, and operating costs. Tencent has elevated the concept of 'private domain' to a 'private domain business format', aiming to promote the large-scale development of the private domain ecosystem and reshape the growth pattern of retail enterprises.

In 2019, the topic of "private domain traffic" suddenly became hot, and many companies are talking about private domain traffic.
Many companies have been increasing their investment in the past two years, investing people and money, visiting everywhere, learning new ways to play with private domain traffic, and even many companies have put it in a strategic position, which shows how much they value it.
Why is "private domain traffic" being proposed at this time? I think there are the following three key nodes:
**1. Market environment**
In the past, enterprises' large-scale production, large-scale communication, and large-scale distribution, against the background of demographic dividends and consumption dividends, from a business perspective, were the most efficient and productive.
At the same time, consumer demand was single and certain at that time. Enterprises did not need to connect with consumers. They could produce reliable and guaranteed products, build brand trust, and set up channels. Consumers were there, with certain scenarios and certain needs.
But now the environment has changed. The dividend of consumption increment has disappeared, and the diversification, niche, and personalization of consumption stock have become prominent. The large-scale communication form represented by CCTV is gradually weakening. The retail format is complex, with online, offline, online+offline, offline+online, etc., and channel fragmentation is obvious.
In short, consumers are changing, communication is changing, and channels are changing. For enterprises, instead of grasping what is changing, it is better to grasp what is not changing—consumers.
**2. Internet penetration**
With the popularity and maturity of the mobile Internet, the mobile social ecosystem represented by WeChat has made 1.2 billion+ people all online, without the limitation of physical space, making it possible for brands to directly connect with consumers online.
**3. Operating costs**
From the perspective of enterprise operating costs, whether it is the offline in the past or the e-commerce that is now mature, the cost of customer acquisition and operation is getting higher and higher.
A professional consulting agency once conducted a survey. Before 2014, the customer acquisition cost of online e-commerce platforms did not exceed 30 yuan/person. By 2018, the customer acquisition cost exceeded 300 yuan/person, a tenfold increase in five years. Of course, this is also the basic law of business operations, and it is understandable.
External traffic costs continue to rise, so turn inward and pay attention to private domain traffic. The above three points, whether from the perspective of industry development, technology popularization, or cost operation, all point to the topic of private domain traffic.
△ Lin Jinghua, Senior Vice President of Tencent, Head of Tencent Advertising and Tencent Smart Retail
At the just-concluded **CONNECT+ Tencent Smart Retail Digital Growth Summit, Tencent executives elevated the concept of "private domain" to "private domain business format". The goal is to promote the large-scale development of the private domain ecosystem and reshape the growth pattern of retail enterprises.**
How to understand this specifically?
This is not a simple traffic logic. The core of traffic is the number of people reached and the quantity of information. In enterprise operations, "traffic" is only a part of the marketing strategy, while the private domain business format takes private domain traffic and private domain users as core assets, allowing brands to have their own operating positions and realize online and offline integrated operations.
At the summit, Tencent Smart Retail also upgraded its positioning from the past "digital assistant" to "business growth partner". Whether it is the goal or the positioning, its importance is evident.
Based on this, New Distribution, from the perspective of an industry observer, talks about the value and significance of "private domain business format" to the FMCG industry, and also discusses how to apply it to the FMCG industry in combination with the new product system released by Tencent Smart Retail this time.
**-01-**
**What is the real value of building a "private domain business format"?**
In Tencent Smart Retail's understanding, private domain is not only a form of traffic, but also a business format. Its core has three points:
**First, high cost-effectiveness. Displaying and recommending information to target users does not require additional payment. Compared with public domain, the cost of private domain is lower;**
**Second, strong sustainability. As long as users do not leave, you can continue to recommend to users, whether it is promoting new products or conveying promotional activities;**
**Third, two-way communication. The relationship between brand and users is an equal relationship. Mutual communication, immediate feedback;**
Based on these characteristics, what is the value of private domain business format to FMCG enterprises? I summarize two major values:
**1. Consumer insight and brand value output;**
**2. Sell more goods, sell goods more efficiently, and sell goods at lower cost.**
Guided by demand insight, it continuously provides enterprises with product R&D decision-making guidance. In the past, our FMCG enterprises took at least 18 months from developing a product to launching it, with a cost of tens of millions. Even if it was made, it was not necessarily accurate. Whether consumers were satisfied was often known after the fact.
But now, through the private domain ecosystem built by WeChat, the R&D time is greatly shortened. 9 months, 6 months, or even shorter, can be fully realized. Through real-time communication and feedback, simulation tests, user analysis, and mining consumer needs. At the same time, users are more willing to spread the product.
Take Perfect Diary as an example. Through the private domain business format represented by super communities, combined with broad-spectrum and diverse social media, Perfect Diary can quickly reach consumers and interact. At the same time, with the product thinking of small steps, fast iteration, and continuous iteration, it quickly became a dark horse in the industry.
According to Chen Yuwen, co-founder of Yixian E-commerce, the parent company of Perfect Diary, "In the past, brand owners did product testing by entrusting consulting companies or third-party agencies, through telephone, interviews, and other sampling surveys. Not only was the cycle long, but the results were quite different from the actual market situation. Now, we can send product plans to WeChat communities and let consumers make choices directly."
At the beginning of the business, choosing a product polishing experience different from traditional beauty products made Chen Yuwen talk about it with relish—Perfect Diary's first batch of 10 products, only 3 were retained in the end, "the other 7 were eliminated with the help of consumers." It is understood that as of June 2020, Perfect Diary has more than 25 million fans across the entire network.
In addition, brand is the cornerstone of enterprise operation. In the past, brand communication could only be done through large media such as TV media. Facing a wide and large consumer base, the loss of information efficiency was serious. Now through private domain, it is not only accurate, but also the first time, without waste, to convey to consumers, ultimately allowing consumers to fully understand, recognize, trust, and be loyal to the brand.
Ultimately, the goal of enterprise operation is: sell more goods, sell goods more efficiently, and sell goods at lower cost. In the past, FMCG enterprises offline often had a very shallow understanding of users.
Based on third-party research institutions, or the enterprise's marketing department, with a relatively limited sampling method, they roughly grasped what the portrait was and what specific type of people it was. Of course, this was also limited by technical conditions. Enterprises usually could only continuously acquire customers and wait for customers.
Now, through Internet tools centered on the WeChat social platform, enterprises can deposit users in their own private domain ecosystem. In the past, a consumer might buy 50 yuan of goods and then disappear. Next time when they buy, where they buy, and what they buy, the enterprise had no chance to grasp.
Now, you can find him anytime, anywhere, through various operational means, reach him with information, and through instant connection, he may buy 1,000 or 3,000 yuan of goods a year, or even because of your high-quality products and brand value that matches his preferences, he can become your "recommender".
This is the value of the "private domain business format" proposed by Tencent Smart Retail.
**-02-**
**The path and method to realize the "private domain ecosystem"**
After understanding the value of the private domain business format, the next step is to see how enterprises actually implement it in their actual operations to achieve the above goals and values.
The typical characteristics of the FMCG industry are randomness, immediacy, and low concern. Most FMCG brands do 90% of their business offline, and they all achieve sales through local retail stores. FMCG enterprises face the problem of "having goods but no place".
Therefore, **when a brand wants to build a private domain business format, it must not only connect with consumers, but also connect with retail stores. If both parties are not connected at the same time, the real "private domain business format" cannot be realized.**
This is the first pain point. After the connection is completed, the next problem is operation. After consumers are pulled into the private domain pool, it does not mean the work is over. On the contrary, it is a new beginning. Operating private domain is a very complex and systematic work.
Regarding these two points, connection and operation, how does Tencent Smart Retail solve them?
In response to the difficulty of online and offline connection, Tencent Youma enables brands to directly connect with consumers through product coding, deposit data assets, and make consumers be insight, reached, and operated by brands.
The newly upgraded Youma 2.0 version, compared with 1.0, in addition to connecting consumers, also adds the capability of Youma digital channel.
Brands achieve direct connection with terminal store owners through the lightweight connection of box code + B-end mini program. Then improve management efficiency, promote sales, and truly realize the upgrade of full-chain connection.
How to understand this specifically? Taking the beverage industry as an example, brand owners can attach a QR code to a piece (box) of beverage, and trigger the retail owner to scan the code in the form of scanning the code to receive red envelope rewards. Opening the box means putting it on the shelf, thereby improving the product's shelf placement rate.
In the past, in order to put products on the shelf faster, the conventional approach was either the brand's salesperson proactively opening the box and putting it on the shelf during visits, or giving the terminal owner fees, display fees, shelf fees, etc., but this form often had drawbacks: fees were intercepted. Whether it is a salesperson or a distributor, it is easy to exploit loopholes.
Through the code in the box, fees can be accurately reached to the terminal. According to Tencent Smart Retail, through a series of supporting store owner operation mechanisms such as rewards for opening boxes, store owner registration, store owner ranking, and store verification, enterprises have achieved efficient terminal channel management. In the case of a certain liquor brand, it has connected more than 500,000 terminal stores cumulatively.
In addition, after reaching the store, through the design of incentive mechanisms, whether it is the store actively recommending consumers to scan the code, or through the store to let products reach more consumers, it is a form of effectively connecting the C-end through the B-end.
At the meeting, Mr. Su Wanghui, CIO of Luzhou Laojiao, shared **how Luzhou Laojiao used Tencent to build the Youma system, forming a five-code association of bottles, boxes, boxes, caps, and logistics codes, plus the front-end application of mini programs, APPs, and official accounts, which well solved the problem of channel cross-selling and product traceability.**
In terms of operation, Tencent Smart Retail launched the "Zhixiang" series, namely "Zhixiang Marketing" to solve the problem of private domain touchpoint operation; "Zhixiang Hao" to solve the problem of private domain channel operation; and "Zhixiang Mall" to provide retailers with more complete transaction service capabilities.
In short, **when brand owners connect with consumers and retailers, they can move a series of B-end and C-end marketing activities that could only be done by people in the past to the online, around consumers and retailers. At the same time, they can also achieve precise reach without waste.**
Take a new product promotion activity of the Naixue brand as an example:
> 1) For users who purchased for the first time and did not repurchase, push a 50% discount new product tasting coupon;
>
> 2) For users with 2 to 5 repurchases, stimulate purchase with a buy-one-get-one-free coupon for new products;
>
> 3) For loyal users with more than 5 repurchases, push the incentive of 10 times points for purchasing new products.
It is understood that under such refined marketing, Naixue's repurchase rate increased by 35% that month, an increase of more than 40% compared with the historical peak, with significant results.
Another example, with the help of Zhixiang Hao, Tencent provides brand owners with a one-stop private domain content delivery solution with distribution capabilities. Brand owners can give play to their advantages in goods and content, while channel retailers can use brand content to monetize private domain traffic.
Brand owners can quickly put products on the shelves through Zhixiang Xiaodian and Zhixiang Anchor APP, and start broadcasting with one click. In the live broadcast settings, for example, you can choose various interactive gameplay such as limited-time red envelopes and coupons.
Then, brand owners can share the live broadcast content to channel providers through mini programs. After association, the brand's content can be directly packaged into the channel provider's own live broadcast room for distribution. In this way, the traffic in the live broadcast room is still the channel provider's own.
At the same time, channel providers can get additional commissions for sharing and bringing goods. For retail store owners, business is not only based on geographical location, but also can do business online through communities or Moments.
In addition to connection and operation, at the meeting, Tencent Smart Retail also launched the "Tencent Youshu" product, providing a platform for brand owners' data analysis and management. Enterprises can efficiently analyze their operating data within Tencent's entire domain on the platform, manage consumer assets, make private domain operations "have data to rely on", and achieve full-chain efficiency improvement.
**Summary:**
The above is the implementation methodology of the "private domain business format" proposed by Tencent Smart Retail. In the view of New Distribution, the biggest advantage of such a private domain ecosystem is that the retail terminal has no migration cost and no learning cost.
Terminal stores can understand promotional activity information in real time online, and all transactions are real-time online, precise and controllable. Brand owners can use various capabilities of the WeChat ecosystem to maximize efficiency.
**Brand owners can imagine the WeChat ecosystem as a super connector, which can connect infinitely and integrate infinitely. This connector can link all supply chain members. Once this network is built, for FMCG enterprises, it can form a new business format. This is the real value reconstruction!**
Regarding the ins and outs of the "private domain business format" proposed by Tencent Smart Retail, I recommend everyone to pay attention to the book "Super Connection", the first methodology book after Tencent entered the industrial Internet. It contains very rich practical cases in the retail industry and is worth reading.
Once the tip is adopted, 400-2000 yuan will be paid.


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