Click to read the original article for details 01 If Huang Mingduan had retired as planned, his career would have been perfect, but unfortunately, life offers no 'ifs.' In the eyes of the outside world, RT-Mart has always been synonymous with the 'retail empire.' With over 380 hypermarkets nationwide, RT-Mart is truly the king of land warfare. Three years ago, Huang Mingduan would never have imagined selling the company to Alibaba. A widely circulated anecdote online claims that Huang Mingduan once lamented at an internal meeting: 'We beat all competitors but lost to the era.' Although it was later confirmed that Huang did not say this, it still illustrates the characteristic of this era: it's not that you don't work hard, but that your opponents simply don't give you a chance. The FMCG industry has undergone significant changes in the past two years, with declining sales, and almost all established companies are struggling. Internet companies are clamoring to move offline, bypassing middlemen to eliminate price differences, and they have money, traffic, technology, and talent. Alibaba acquired Intime and RT-Mart, and Tencent took a stake in Yonghui—examples abound. We are facing an unprecedented revolution in the reorganization of social division of labor. Old, traditional business models are being disrupted by internet thinking, and new digital economies are already redrawing the landscape of interests. The traditional agency and wholesale model for distributors is indeed coming to an end. In recent years, the media has continuously reported distributors fleeing or going bankrupt and committing suicide: January 2016: Wei Guanghua, a distributor in Huangshantou, Hubei, and his wife committed suicide after borrowing millions in loans to stock up, unable to repay! February 2016: Liu, a Moutai distributor in Chengdu, lost nearly 2 million yuan in three years! February 2016: The general agent for Six Walnuts in Binzhou fled! October 2016: The owner of Daokejia Supermarket in Zhengzhou fled, owing 1-2 million yuan in wages to over 300 employees and over 14 million yuan to more than 100 suppliers! End of 2016: An Yili distributor in Hebi lost 16 million yuan and fled! Spring Festival 2017: Distributor Peng in Xuchang city collapsed! July 2017: An Yili distributor in Qinyang, Henan, collapsed! March 2018: A C'estbon distributor in Bengbu collapsed! ....... Apart from poor management, they all share a common trait: failure to adapt to external environmental and economic changes. The recent Sino-US trade war has made it clearer that China's economy is not as strong as it appears externally. With foreign capital withdrawing and economic deflation, it is believed that a new round of economic winter will soon make distributors' cash flows even more fragile. The traditional agency business is indeed becoming increasingly difficult. 02 Undoubtedly, the traditional agency business must transform and upgrade in this era. The internet claims to disrupt the industry, but it does not mean eliminating the role of middlemen. Distributors need not panic; middlemen have inherent value. What is certain is that middlemen will not disappear, but the organizational form of these middlemen will change. We believe there are two underlying logics for change in this era: 1. Socialized professional division of labor This era requires us to shift from bucket-type companies to long-board companies: In the past, businesses were large and all-encompassing, handling warehousing, logistics, capital, marketing, customer service, etc. Whatever manufacturers asked, distributors provided, but they were jack-of-all-trades and master of none. Now, specialized warehousing and logistics companies are more efficient and cost-effective, and dedicated third-party marketing agencies are more professional and scientific. Through a large internet infrastructure, all the boards are connected. Each role only does what it excels at, together forming a larger bucket. All work is accomplished through socialized division of labor. Social progress itself is a process of more refined social division of labor. 2. Businesses must be embedded in the internet Before WeChat became widespread, people thought it was fine to communicate by phone. But now, when everyone uses WeChat for communication and daily life—your classmates, friends, family, and business partners are all there—you find you cannot live without it. This is the characteristic of internet infrastructure: it naturally has network effects. The internet is infrastructure; it's no longer a question of whether you want to be on it. In the future, anyone not within this infrastructure will inevitably be eliminated by society. For distributors, business inherently serves brand owners and retail stores upstream and downstream. When they start to go online, you cannot afford to stay offline and not embed yourself in this vast network. In summary, every link in the FMCG industry must undergo a digital upgrade. Brands, channels, and communication all need to be restructured and embedded in the internet. What abilities and traits are required to become an internet-based distributor in this era, also known as a new distributor? 1. Continuous learning ability In the era of information explosion, products, markets, and marketing iterate at an incredibly fast pace. You must keep learning to keep up with the changes. You need professional theoretical knowledge and understand concepts like dimensionality reduction attacks, traffic thinking, communities, IP, and scenarios. Acquiring these concepts and understanding information is not difficult; the challenge lies in having the ability to continuously learn and apply what you learn to your own business. 2. Ability to quickly capture opportunities New distributors must keenly perceive changes in this era, adapt quickly, and be adept at seizing new opportunities. They should dare to experiment and not fear failure. A typical thinking pattern in the internet era is 'small steps, fast iteration,' meaning when a business opportunity arises, as long as the direction is roughly correct, don't first consider how to do it or wait until the plan is complete and everything is ready. Instead, start doing it and continuously adjust your running posture and methods during the process. Improve problems through rapid iteration. Otherwise, at internet speed, your opponents won't give you a chance. 3. Professional operational capabilities Competition in this era has shifted from idea-driven, opportunity-based markets to increasingly professional markets. This requires new distributors to have professional marketing capabilities, digital operation capabilities, and your business model itself must be supported by professional theoretical knowledge at its core. 4. Ability to gather talent using new organizational forms In this era, traditional employment systems make it difficult to retain excellent talent to work for distributors. That's why Amoeba and partner models have become popular in recent years. Through equity incentives, internal entrepreneurship, and external incubation, large companies are split into small organizations and teams, allowing them to work for themselves and achieve personal life value, then achieve the company's big goals. 03 This industry transformation and upgrade occur against the backdrop of China gradually entering a dual overlay of post-industrialization and the internet era. It may also be the last major upgrade in the next 20 years. If distributors do not keep pace with this industrial upgrade, they may indeed have only five years of business left. In August, the FMCG Industry Branch of the China Electronic Commerce Association, together with New Distribution and multiple media outlets, organized the '2018 FDIC China FMCG Digital Innovation Conference,' inviting almost all first-tier well-known internet company executives, heads of new retail departments at leading brand owners, founders of FMCG B2B companies, and successful distributor transformation representatives to exchange and share. Through this conference, we hope to showcase the most advanced ideas, cutting-edge information, and latest insights from industry leaders, providing a beacon for distributors' internet transformation in this era. Finally, let me reiterate: The new distributor is not just a model but also a mindset and habit. In this era, we must continuously learn, keenly perceive external changes, rapidly iterate our cognition, apply learned skills to our own businesses, and through innovative organizational forms and professional operational capabilities, ensure we do not fall behind or drop out in the internet era, but forge ahead. -END-