---
title: "Unilever: How to Scale Digital Channel Distribution from '0' to '10'?"
description: "At the 5th FMCG + Internet Conference held in Chengdu on March 16, Shi Xiajun, Head of Unilever's Overall E-RTM Channel, shared insights on digital channel distribution. He emphasized the importance of embracing B2B, scaling quickly, and achieving volume to gain influence, while highlighting the need for C-level support and an independent team."
author: "时夏君"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-03-17"
language: "en"
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# Unilever: How to Scale Digital Channel Distribution from '0' to '10'?

> At the 5th FMCG + Internet Conference held in Chengdu on March 16, Shi Xiajun, Head of Unilever's Overall E-RTM Channel, shared insights on digital channel distribution. He emphasized the importance of embracing B2B, scaling quickly, and achieving volume to gain influence, while highlighting the need for C-level support and an independent team.

The **5th FMCG + Internet Conference**, hosted by New Distribution, was grandly held at the Chengdu Longemont Hotel on March 16! The event attracted thousands of industry professionals, including distributors, manufacturers, and internet companies from across the country, filling the venue to capacity.

At the afternoon forum on "Brand Channel Digitalization" on March 16, the following is the speech delivered by **Shi Xiajun, Head of Unilever's Overall E-RTM Channel, organized by New Distribution for our readers.**

Today, my topic is how digital channel distribution goes from 0 to 10. Frankly, Unilever still has a long way to go to reach 10, but we are firmly moving in that direction.

Let me first discuss: Why does Unilever do B2B? First, traditional offline distributors have pain points, such as the slow and inefficient process of reaching down through first-tier distributors. Second, there is almost no channel data; wholesalers and downstream small distributors do not share data with brand owners, let alone digitalize. Third, investment in channels is not transparent; for example, we invest fees to reach downstream outlets but do not know if the channel actually uses them. Fourth, there are too many distributors, each different; some are strong in various capabilities, while others have various issues. With hundreds of distributors, standardization is difficult. Additionally, pricing can be problematic; the last mile cannot be delivered because distributors are unwilling to deliver as it is not profitable. For 100,000 traditional grocery stores, sales might be only two to three hundred units, making costs too high and coverage difficult for many stores.

**Based on these considerations, Unilever established the E-RTM department two to three years ago, growing together with the B2B ecosystem.**

So before discussing channel digitalization, we must first think about why we do B2B, embrace B2B, and consider your coverage strategy and barriers. Previously, I chatted with some brand owner friends, and this channel coverage model is only suitable for personal care and home care categories. For Unilever, the opportunity in B2B lies in the long tail; we can now cover hundreds of thousands of outlets, but there are too many blank markets. Previously, Unilever used various methods for coverage projects, both direct and indirect, but they were generally not good. For example, vehicle sales, second-tier distributors, and branch warehouses were all unsatisfactory. Now, through the E-RTM team and the B2B ecosystem, we have finally found a way. Our team has grown from just 3 people when I took over on January 1 last year to over 20 now, which shows that the investment model in the B2B field has been fully recognized over the past year.

Last year, we did many things in B2B. Let me share an experience: **When you find out whether something should be done, you should choose to do it quickly first.** Today, Mr. Wang (Wang Chaocheng), founder of Yijiupi, made a profound point: **First, you must scale up; second, you cannot think in bed. No matter how well you think through a model, there will be problems; you must test it.**

Last year, Unilever contacted over 20 B2B clients, including some familiar ones and others in different fields. We also contacted system service providers like Hd, and even considered doing B2B ourselves, which would require building systems and conducting research. We also reached out to Haipaike, a maternal and infant B2B platform. **If your team is unsure about which partners to choose or what to do in B2B, you must adopt the attitude of doing it first.** So over the past year, we visited over 20 B2B clients, some in cooperation, some trying to find ways to cooperate. **Because we believe digital channel distribution is the trend, and we must embrace it quickly.**

Last year, Unilever achieved some small successes. We worked day and night, achieving 800% growth. From initial contact in 2017 to now in 2018, we have a business scale of about 450 million yuan. Frankly, 450 million is not enough for us; in the B2B field, we need to do 3 to 4 billion to be sufficient. So last year was just the beginning.

In the past, the company often asked me: Is your B2B a stock or an increment? I think from the result perspective, if the result is positive, meaning the entire offline distributor system plus the B2B system is positive, then it represents an increment. Actually, besides looking at stock and increment, there is a key point: **How to use current digital technology to optimize your entire coverage efficiency.** Today, we are also thinking about how to use the B2B ecosystem to optimize the coverage efficiency of the entire chain for current distributors. For example, can the coverage path of distributor salespeople be maximized through digital calculation? Can the in-store order taking by salespeople be digitalized through system upgrades, directly returning demand to distributors and brand owners?

We will have a model to explain how to use B2B for refined operations, continuously approaching from 0 to 10.

First, regarding business goals, I think achieving volume through B2B is no longer very difficult; the challenge is the activation of category coverage. Through the platform, we have already covered about 700,000 stores after deduplication, which is very efficient and exceeds Unilever's coverage over the past decade. However, there are still big gaps in coverage between categories, so improving efficiency in each category's coverage is a focus this year.

Second, in the infrastructure of B2B, price stability is very necessary. Brand owners will not give the lowest price, nor a price that cannot sell; we will give a reasonable and stable price structure. Past experience tells us that variable pricing strategies are not suitable in the current B2B field.

As a brand owner, I want to share several business drivers: **First, category optimization.** We must first understand what products are suitable in the B2B field. For the B2B supply chain, some special products are needed. At the same time, this year we will try "category captain" with some core B2B platforms, working together to develop important categories and deeply improve the full-chain operation of these categories.

**Second, deep coverage.** First, county areas are a very large region for us. There is huge space for distribution in county markets. How to seize the opportunity in county areas is what we consider. I believe matching has value; each party has interests and is willing to invest, which can last long. There will be deepening of matching models in county areas, and we can try breakthroughs from this dimension.

**Third, marketing co-creation.** I will not elaborate much on this. I believe there will be new plays for small B-end marketing plans this year. Brand owners should welcome, embrace, and co-create, combining merchant and buyer thinking.

Fourth, I think technology application is very important. Last year, we tried placing promotional trays on small B shelves and doing roadshows, but these were useless and could not be scaled or replicated sustainably. So we will reflect on all our selling plans from last year and understand that we must use new technology to solve old problems. This year, we focus on two dimensions: **First, how to cooperate with B2B platforms on data; second, joint development of new products.**

Of course, the most important foundation is: **deep supply chain work and regional deep cooperation.** Without deep supply chain cooperation, everything mentioned above is useless; your goods still cannot reach the terminal. As a brand owner, in the B2B channel, we basically do not just talk with platforms about what price I will give you; that is the 1.0 stage. Now we talk more about cooperation in other areas, and deep supply chain cooperation is very important. In regional cooperation, each B2B platform has regional teams. Based on last year's experience, if your organizational structure can support penetrating regions, you must do so. Regional connection, influence, and training are very helpful for strengthening regional markets.

Finally, my summary experience in digital distribution is: **The central idea is that volume gives you the right to speak.** If today you talk to the company about B2B accounting for only 1%, that may not work. **Why did our team work from dawn to dusk last year? Because we must create volume so the company values you more. If your volume is not enough to support, you have no bargaining power.** Last year we did over 400 million, and this year we aim for over 1 billion. So I think volume gives you the right to speak; that is certain.

It is especially important to emphasize that C-level leadership support is crucial. C means CEO, CFO, etc. If you want to do B2B and reform your distributors, but your boss does not support you consistently, it is hard to do this business. Because you would spend time convincing him, making reports and PPTs, instead of spending time on the market.

Unilever is a big company, and big companies inevitably have process issues. Last year, we spent time talking with our senior management about how to support our business, and we received full support and some flexible budget. The market changes daily; if you need over 30 days to approve a process, you cannot do this business. So C-level support and flexible budget are very important. Another point is that in the early stage, scale is more important than precision. I personally do not agree with precision marketing; precision marketing does not exist without scale marketing. Without scale, what is the point of precision? So last year, we spent a lot of time on scale. Is your activity precise? It does not need to be too precise; you must first have scale.

Additionally, **an independently operated team is very important.** The entire ERTM department is basically fully independent and reports to me, with independent strategy formulation, independent category channel operations, independent key account operations, and some people doing data. Data modeling happened in the second half of the year; in the first half, without scale, we do not talk about data or precision distribution. After having scale in the second half, we look at data usage and study problems between data groups. An independent operation team or independent reporting relationship and clear KPIs are very important.

There are two more points: One is that "not getting it done" is the norm. Last year, most things were not done; no one understood this channel, and no one said how to operate it. Not getting it done is the norm. We only got about 40% done, and 60% not done. The last point is that we must be fast, fast, fast. We are not smarter than others; we just sleep less, act faster, and try more. All the peripheral things we do serve the central goal: to build volume in a short time.

Finally, I will use a phrase I learned from an interview in Brazil: **If you want to go fast, go alone; if you want to go far, go together.** If you want to go faster, you go alone; if you want to go farther, you go with others. Unilever very much hopes to go farther together with everyone in the B2B ecosystem and the field of digital channel distribution!

Click **Read Original** to see more highlights from the 2019 5th FMCG + Internet Conference...

**-END-**


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