Introduction: Alibaba's New Retail concept carries a huge amount of information! It is a hundred percent new concept, a hundred percent disruptive, and a hundred percent breaking the original supply chain, value chain, and consumption chain order. Now Alibaba has already begun experimenting with New Retail in various aspects. So, what impact will New Retail have on the FMCG industry?

Overall Impact of New Retail on the FMCG Industry Whether it is happening now or may happen in the future, the author believes that New Retail may have the following impacts on the FMCG industry:

  1. Application of new tools: Mobile internet is about to become a traditional industry, and if you haven't gotten started yet—whether it's mobile internet marketing, sales, or methods and tools for attracting fans and interacting—how embarrassing will that be in the future!
  2. The impact of consumer sovereignty on large-scale fixed production and sales. Direct C2F (Consumer to Factory). Whether it's right, possible, or to what extent, Alibaba's New Retail seems to have always wanted to move in this direction. If you don't pay attention, and it just happens to disrupt your industry or directly hit you, what will you do?
  3. The reversal of value chain operations, just like how we used to do channels in reverse. Traditional enterprises focus more on the interests of intermediate channels, and for consumers, advertising to make them familiar with the brand is enough. Now it seems the era of consumer sovereignty is coming, and New Retail seems to focus on consumer experience!
  4. Intermediate levels are not only being compressed but also deprived by giants like Alibaba. The original "channels are king"—is it going to become "Alibaba is the biggest channel"?
  5. The original organization and operations are being broken. This is clearly about breaking up and starting over, designing marketing, sales, customer service, logistics, and other departments according to New Retail!
  6. The operational and management changes brought by data are causing the FMCG industry to face reconstruction: price systems, channel systems, and product development are all facing major changes. If data is in your own hands, it's okay; but if it's basically in Alibaba's hands, this major change may deepen further!

In short, Alibaba's New Retail always links various business elements more easily than we can. The FMCG industry originally had each enterprise building its own closed business operation system. How much impact will this have on consumer goods enterprises, both openly and secretly? We think it's best to plan for the worst!

Impact of New Retail on Enterprises From the current perspective, Alibaba's New Retail seems to mainly involve some Taobao brands, fashion categories, etc. But we all know that no business revolution has been as devastating and reconstructive as the internet and mobile internet:

  1. Enterprises become data sources and databases, which makes large-scale production no longer the dominant model of the times, nor can it form the core development advantage of enterprises. We must know that there are still many enterprises that have data but don't use it, still making decisions by gut feeling.
  2. They are truly pushed to meet the high requirements of satisfying consumer needs. This is a real challenge to enterprise capabilities, bringing those enterprises that simply copy products and sell them to the brink of death.
  3. Self-indulgent product development, low-margin large-scale sales models, and pyramid-shaped channel structures and distribution are all facing disintegration and new development. And these also make the original pyramid-shaped communication model ineffective. ...... From the situation of FMCG industry enterprises going online and embracing mobile internet in recent years, first, among such large FMCG enterprises, there are not many categories that do well, mainly cosmetics, tea, dried fruits, etc. Compared with always leading traditional marketing, the industry is still far from leading internet marketing and sales. Second, recently more and more FMCG enterprises are involved in B2B e-commerce. How long it will take and to what extent New Retail will affect the FMCG industry is still undetermined. But the traditional FMCG tricks such as big communication, strong channels, and aggressive promotions have already been severely challenged and hit!

Impact of New Retail on Consumers According to reports, New Retail aims to give consumers the best experience. From this sentence, we know that New Retail hopes to have a very positive and beneficial impact on consumers. It seems that the previous "brand is king" and "channel is king" are clearly going to be changed to "consumer is king"! The newness of New Retail is the process, the internal, and what it wants to achieve is the result that consumers think is "good":

  1. Consumer sovereignty has been developed unprecedentedly. Alibaba is educating consumers to become increasingly mature.
  2. The trust of family and friends makes them more susceptible to recommended purchases. Perhaps the self-praise-style communication of manufacturers is really becoming less and less useful!
  3. After purchase, enjoy integrated services. But the reconstruction of the trust relationship between sales and consumption will be a longer-term issue, and it is also easy to produce more supply, sales, and consumption problems. Due to customization or C2F, the customization requirements for F put consumers in a huge dilemma of unmet demand and disputes.

Obviously, if New Retail truly gives consumers a better experience as Alibaba claims, this will directly drive enterprises to transform into a 360-degree, no-dead-angle consumer-oriented management and service!

FMCG New Retail: Hesitant In short, New Retail, no matter how you talk about it, seems to try to turn all of China into Alibaba's own retail. Because you are using its basic business architecture. Consumers and sellers are on this architecture system, constantly buying and selling, constantly accumulating data, and constantly nourishing Alibaba's "New Retail" system...... For the consumer goods industry, the original low-value, low-margin, large-scale distribution is a complete subversion! How to go forward may be an exploration of more than ten years, or, the New Retail proposed by Alibaba may be basically unsuitable for the FMCG industry, and it is definitely a road to no return! What do you think?

Introduction: Tan Changchun, committed to selling any product as a fast-selling product. General Manager of Huaxia Jishi Marketing Consulting Company, Chief Consultant of the Group, Special Expert Consultant of Kotler Consulting Group, Project Director of TNS Market Research Consulting Company. Founder of the Integrated Marketing System. Well-known marketing expert and trainer; specially invited lecturer for the China Marketing Director Qualification Certification Exam, and specially invited lecturer for "Frontier Lectures". Weibo: http://weibo.com/1159426107. WeChat public account: chnstone1. China Sales Force: http://t.cn/RtRxd99 -END-