When Deep Distribution Is a Thing of the Past, What Are the Sales Tactics of New Distribution?

***Click the image for details If you were given a startup cookie brand, how would you sell it? For traditional marketers, the basic operational logic might be: first, based on product characteristics and consumer insights, establish brand positioning and strategy, hire a celebrity spokesperson, and shoot video ads. Then, online, run national advertising on TV and high-traffic platforms; offline, recruit regional managers and sales representatives by region, and through thousands of distributors, get the product into millions of mom-and-pop stores to reach consumers. This is the distribution method that the food industry has been best at and which was relatively most efficient in the past—deep distribution. Based on deep distribution theory, by optimizing terminal layout (distribution), terminal construction (merchandising), terminal incentives (profit), distributor empowerment (skills training), and sales management, brand owners could essentially rest easy and make money effortlessly. Following this marketing logic, there are numerous success stories. But if a startup brand still does this today, it would likely be "a dead end." Since 2013, China's FMCG market has seen large-scale sales ceilings. With market saturation, rising costs, and the impact of the internet on the industry and consumers, the deep distribution system that FMCG companies once relied on is gradually failing. When deep distribution fails, marketing loses its grip. At the same time, FMCG giants completed capital accumulation and consumer mindshare in the early years. Do small or startup brands still have a chance? 01*A Cookie Brand's Road to Success AKOKO, a cookie brand founded in June 2016, achieved a valuation of 400 million yuan in just over two years. Many distributors and brand owners may not have heard of it, but that doesn't affect AKOKO's rapid growth. Here are a few data points:

AKOKO was founded in June, and within just one month of launch, achieved 50 million yuan in sales;

Within three months of launch, the repurchase rate among target consumers reached 60%;

Two months after launching its Tmall flagship store, it ranked first among 1,700 cookie category stores;

Just one year after launch, it secured a tens-of-millions-yuan angel round of financing. Four months later, it received a 50 million yuan Series A round;

During the 2018 11.11 shopping festival, according to Tmall data, AKOKO ranked first in the cookie category, with a 600% year-on-year sales increase compared to 11.11 the previous year. While the traditional offline FMCG market is saturated and online traffic dividends have disappeared, AKOKO has grown against the trend. A quote that validates AKOKO's market potential: "Do you know what food brand Zhang Liaoyuan of Three Squirrels is most focused on now? AKOKO cookies, that little cookie company that did nearly 100 million yuan in one year (2017)." Recently, New Distribution had the privilege of interviewing AKOKO's CEO, Su Mu. As a startup FMCG brand, AKOKO has shown explosive growth in three years. How did he do it? Looking back at AKOKO's growth over the past two years, Su Mu told New Distribution that AKOKO, from 0 to 1, successfully captured three turning points and dividends from external environmental changes. Start-up phase: Converting loyal fans into micro-agent distributors For a new brand to gather a group of loyal fans, a good product is the first priority. AKOKO not only put effort into the product's core (craftsmanship, raw materials, taste) but also made significant innovations in packaging. With high aesthetics and romantic, childlike packaging, AKOKO personified rabbits and elephants, creating various themed tin box illustrations that made consumers want to share on social media immediately. It was this good product that allowed AKOKO, in its early days, to gain a group of loyal fans through word-of-mouth on WeChat Moments. Su Mu told New Distribution that AKOKO developed micro-agent distributors from repeat customers who had purchased more than three times. Compared to traditional individual micro-businesses, these customers were familiar with the product, loved the brand, and were more loyal. Through micro-agent distribution, AKOKO achieved over 100,000 yuan in sales in the first month, accumulating its first pot of gold. Growth phase: Cross-border cooperation and content-driven sales via official accounts Considering the limitations of the micro-agent system itself, and as the product was iterating and maturing, half a year later, AKOKO shifted its distribution focus to "people and accounts." People referred to KOLs and influencers on various social platforms such as Weibo, Douyin, and Bilibili; accounts referred to content media represented by WeChat official accounts, such as Yitiao, Wu Xiaobo Channel, and Toutiao. It's important to note that these people and accounts were not AKOKO's advertising media but distributors. Su Mu told New Distribution that in the early stages, they made significant efforts to persuade these KOLs and content media to become AKOKO distributors. To ensure that these KOLs' distribution income exceeded one-time advertising fees posed a challenge to AKOKO's content and copywriting. Additionally, determining which types of KOLs were suitable to become AKOKO distributors required continuous exploration by the team to find KOLs whose tone matched the brand and audience. In New Distribution's view, in the past, traditional marketing strategies built brand awareness mostly through large-scale advertising, with transactions happening offline. Advertising came first, then business was harvested. AKOKO, on the other hand, used online KOLs to integrate awareness, relationships, and transactions into one, achieving transactions while also building brand momentum. With the brand endorsement of KOLs, AKOKO captured its second pot of gold with almost zero investment. Expansion phase: E-commerce transformation and brand matrix With initial brand momentum, the next step was to "officially debut"—enter comprehensive e-commerce platforms and open a Tmall flagship store. Su Mu told New Distribution that when AKOKO entered Tmall in 2017, there was almost no organic traffic. Following traditional e-commerce practices, one would continuously spend money on in-platform (Tmall traffic) slots. If AKOKO had done the same, they couldn't have overtaken competitors and achieved category first in two months. Since in-platform traffic costs were high and limited, it was better to attract traffic from outside and feed it back to the platform (Tmall). AKOKO linked all fragmented external traffic—such as KOLs, self-media, Douban, Zhihu, Toutiao, Weibo—through a profit-sharing model to Tmall, and transactions were completed on the flagship store. If AKOKO was just a product during the micro-agent and content-driven sales phases, entering comprehensive e-commerce platforms marked the official transformation from product to brand. Of course, AKOKO didn't abandon offline channels either. In 2018, AKOKO successively entered new retail channels such as Hema Fresh and Super Species. According to Su Mu, AKOKO has already reached TOP5 in the biscuit and puffed food category at Hema Fresh. 02What Is the Underlying Logic Behind AKOKO's Success? Looking at AKOKO's rise from 0 to 1, you might notice that the channel-driven, channel-is-king approach that traditional marketers believe in is rarely involved in AKOKO's case, or rather, there is no strict channel concept. On this point, Su Mu explained, "In the past, our structured understanding was that there were online and offline channels; offline had KA supermarkets, CVS, traditional trade, and various new retail; online had platform e-commerce, social e-commerce, content e-commerce, etc. Frankly, AKOKO didn't think much about channel types in the early days. We only focused on whether the consumers in each channel were AKOKO's target consumers." AKOKO clearly knows who its consumers are and what their profiles look like. So what AKOKO needs to do is continuously discover and find the channels where these consumers appear. Wherever people are, we go to build the brand. Without channels, giants have no direction to intercept, allowing AKOKO to grow rapidly. Summarizing the underlying logic of AKOKO's success, New Distribution believes there are three key points: First, product: Mr. Zhao Bo, founder of New Distribution, once said, "A product that consumers don't want to photograph and share on social media after the first purchase is not a good product." Product quality is the basic guarantee. In terms of packaging, AKOKO designed IP themes and iterated them, combining different festivals and collaborating with external quality IPs to achieve spontaneous word-of-mouth seeding among consumers. Second, turnover: When awareness, relationships, and transactions are completed in one line, rapid turnover can be achieved. In the past, awareness, relationships, and transactions were often fragmented: advertising on CCTV, offline distributor distribution, and sales promotion could take from a month to a year to know the ROI (return on investment), and then decide whether to continue investing. However, in AKOKO's view, this approach is very inefficient. Through online content and social platforms, even when the brand is not well-known, AKOKO can get feedback in a very short time through KOL endorsements for sales (integrating awareness, relationships, and transactions). As long as the ROI is positive and meets the set standards, it can be determined within less than 24 hours whether such a format is worth continued investment. Third, iteration: When there are no standard distribution channels and channels are increasingly fragmented, AKOKO's team must constantly push itself to iterate quickly. They continuously look for traffic entrances that match AKOKO and have positive ROI. After one wave of traffic is exhausted, they must find the next. Su Mu shared at a forum, "The core of competitiveness is rapid learning and rapid execution." 03Implications of AKOKO's Brand Success Although AKOKO's three phases (developing micro-agents, content-driven sales, and entering platforms) are considered three waves of dividends captured due to environmental changes, New Distribution believes these phases still offer significant reference value for startup brands and new products from mature brands. Phase one, developing micro-agents: Use micro-agents to complete product iteration testing. Micro-agents are not just a distribution chain; they can also build a core fan pool based on people, helping to test and iterate the product and brand. Being people-centric and transaction-oriented is the only way to continuously validate product quality.

Phase two, content-driven sales: After completing product iteration testing and having a loyal fan pool, the company can also grasp the true user profile of the product. With the product and consumer knowledge, through KOLs on social, content, and entertainment platforms, and through profit-sharing cooperation, quickly cover potential target consumers and gradually build brand momentum.

Phase three, entering platforms: With brand momentum, the effect of word-of-mouth will be amplified. At this point, the brand needs platform e-commerce to provide a carrier for search and transactions. Of course, another purpose of entering platform e-commerce is to establish a brand display window. New Distribution believes that if a startup brand puts itself on the same platform as mature brands and competes on the same stage, it will undoubtedly die. Only by using different strategies, deeply connecting with consumers, and leveraging different platforms and carriers can there be an opportunity to overtake on the curve. Finally, borrowing a quote from teacher Zeng Ming: Traditional brands can still survive with new methods, but new brands using traditional methods truly cannot rise! New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar Fair from March 16-18. This conference will focus on the topic of "Breaking the Game" , with in-depth discussions among brand owners, supply chain service providers, distributors, and retailers. Compared to previous conferences, this summit will be fully upgraded. In addition to original topics like channel innovation, city distribution logistics, and distributor transformation , it will add multiple parallel forums on new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail . Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert insights, and practical methods, finding new tools and methods to break the game in 2019 and return to a track of rapid growth. Review of Previous Conferences -END-