---
title: "Yili, Mengniu, Nongfu Spring, Tsingtao Beer, Snow... All 'Open Groups' - Is It a Temporary Rescue or a Model Exploration?"
description: "As the epidemic has not fully subsided and FMCG manufacturers have not fully resumed work, home delivery services have surged across regions due to lockdown measures. Manufacturers are now recruiting community partners to extend home delivery, which serves both short-term inventory clearance and long-term strategic exploration."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-02-14"
categories: "Consumer & Categories, Dealer Operations, Management & Methods"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/72xwFdZd34YkQmgp2tFhGQ"
translation: "https://xinjignxiao.com/zh/articles/%E4%BC%8A%E5%88%A9-%E8%92%99%E7%89%9B-%E5%86%9C%E5%A4%AB%E5%B1%B1%E6%B3%89-%E9%9D%92%E5%B2%9B%E5%95%A4%E9%85%92-%E9%9B%AA%E8%8A%B1-%E7%BA%B7%E7%BA%B7-%E5%BC%80%E5%9B%A2-%E6%98%AF%E4%B8%B4%E6%97%B6%E6%95%91%E6%80%A5-%E8%BF%98%E6%98%AF%E6%A8%A1%E5%BC%8F%E6%8E%A2%E7%B4%A2-778bb074.md"
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citation: "袁来. “Yili, Mengniu, Nongfu Spring, Tsingtao Beer, Snow... All 'Open Groups' - Is It a Temporary Rescue or a Model Exploration?.” New Distribution, 2020-02-14. https://xinjignxiao.com/en/articles/yili-mengniu-nongfu-spring-tsingtao-beer-snow-all-open-groups-is-it-a-te-778bb074/"
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---

# Yili, Mengniu, Nongfu Spring, Tsingtao Beer, Snow... All 'Open Groups' - Is It a Temporary Rescue or a Model Exploration?

> As the epidemic has not fully subsided and FMCG manufacturers have not fully resumed work, home delivery services have surged across regions due to lockdown measures. Manufacturers are now recruiting community partners to extend home delivery, which serves both short-term inventory clearance and long-term strategic exploration.

The epidemic has not fully subsided, and FMCG manufacturers have not fully resumed work. It was assumed that manufacturers would focus on internal training while working from home, waiting for the turning point of the epidemic before making a big push. However, the keen market insight of manufacturers was underestimated. With the implementation of lockdown measures in various regions, home delivery services have seen a surge across the country.
According to insiders, taking Hunan Bubugao as an example, the proportion of home delivery business was only in single digits in the past, but during the epidemic, it rapidly grew to over 10%.
**The surge in home delivery has brought hope to manufacturers who were at a loss. In the past week, manufacturers of various categories have been 'opening groups' one after another, with sales representatives and distributors posting on social media to widely recruit community partners, promoting the slogan of 'zero risk, zero investment'. They are mobilizing all staff to shift to online home delivery.**
A distributor told me that his WeChat Moments have been filled with 'recruiting community partners' these days, feeling that brand owners have gone crazy, all rushing into 'community home delivery'.
What are the actual results? New Distribution also randomly asked a few distributor friends, and the results are mixed. In some places, a mid-to-high-end community can sell half a truckload of goods, while in others, orders are scarce.
Undoubtedly, affected by the epidemic, home delivery will become the hottest business topic in 2020, and can even be called a milestone turning point for home delivery, worthy of close attention from all FMCG manufacturers.
Returning to the present, with so many brand owners doing this, we can examine the feasibility of FMCG manufacturers 'opening groups' to extend home delivery from **two dimensions: short-term purpose and long-term value.**
**-01-** **Short-term purpose: inventory-oriented, temporary rescue**
**Doing it is definitely better than not doing it; that's the baseline.**
Affected by the overall epidemic, almost all FMCG categories have been impacted except for grain, oil, and noodles, directly leading to a problem: **inventory backlog**, especially for dairy products and gift boxes.
With inventory backlog, manufacturers are panicking as tasks cannot be completed. Coupled with objective factors such as restricted resumption of work, employees need something to do, and the only sales-related activity is home delivery.
Taking beverages as an example, Mr. Zhang Yu, a frontline researcher in FMCG, told me that many beverage distributors currently have inventory from September and October 2019, with relatively old stock. This water is not suitable for the 'water war' in March 2020.
Products from December 2019 and January 2020 will definitely see sales affected if they cross the year. If this inventory is not cleared during this period, it will be a major problem. So in the short term, manufacturers need to solve the inventory problem.
Therefore, **in summary, public welfare promotion, inventory clearance, and employee training are the short-term purposes of manufacturers.** According to a distributor in a certain region, many manufacturers acted on a whim, without even issuing formal documents or having complete plans, relying solely on WeChat and phone calls for verbal communication, with distributors and employees forced to execute.
Of course, this process will also face a problem: **conflict of interest. The relationship between the role of community partners and local community supermarkets. The interests of community partners and nearby community supermarkets can be accepted in the short term, but it is not a long-term solution.**
But from another dimension, after the epidemic ends, the 'community partners' with side jobs will disappear, and nearby community supermarkets will take over. At this point, another problem arises: for FMCG products that pursue coverage density, there are multiple community supermarkets nearby. Who will do this business? This is also worth pondering.
Treating a dead horse as if it were alive, making a last-minute effort, and getting on the bus first—this may be the mentality of most FMCG manufacturers.
What are the actual results? From what we know so far: average. This is affected by multiple factors, including epidemic prevention and control in various regions, and the execution ability of distributors and sales representatives (without standardized models and methods).
At this time, the duration of the epidemic's impact also matters, but from the latest data, the turning point of the epidemic is just around the corner.
**-02-** **Long-term value: exploration and attempts, establishing standards**
Undoubtedly, **the long-term value far exceeds the short-term purpose.**
Even if inventory is not cleared, at least all FMCG manufacturers have learned one thing: **online home delivery must be taken seriously.**
First, from the consumer side, Toshifumi Suzuki, founder of 7-Eleven, said in 'The Essence of Retail': 'Human beings, once they enjoy convenience, will have further expectations.' The epidemic has restricted consumers' freedom, forcing them to consume online. Especially in second-, third-, and fourth-tier cities, the high-frequency trial of home delivery may lead consumers to form consumption habits.
According to Mr. Xu Xiang, South China Sales Director of Unilever, **once consumer mindset is established, FMCG manufacturers must pay attention. In the past, although they paid attention, it was often just understanding without a good opportunity. Affected by this epidemic, various online home delivery and store-based e-commerce explorations may be put on the agenda.**
Previously, brand owners did not have a sense of urgency or pressure. Community group buying and O2O new retail businesses were only given appropriate attention at the headquarters level, as their business volume was still small compared to offline. Cooperation with online new retail platforms was still a simple supply relationship, a one-off transaction.
But after this epidemic, local branches of FMCG manufacturers will closely monitor regional or local new retail platforms, proactively engage, and even provide preferential fees.
With all-staff attention, getting on board first and then exploring, from this perspective, the value of FMCG manufacturers opening groups has far-reaching significance.
Of course, the significance here is not limited to brand owners, but also distributors. This epidemic has caught distributors off guard, with stores closed, leaving them unable to move. But the mandatory orders from brand owners have led many distributors to go online for the first time, which is a 'new continent'.
In the past, distributors' business was mostly in stores, and they never considered directly connecting with consumers, nor did they think they could directly do consumer business. But regardless of the outcome, at least it will trigger more distributors to become aware of digital transformation, even if it means doing business in WeChat communities.
Regarding home delivery, Xu Xiang told me that we can foresee that **brand owners will conduct comprehensive and in-depth cooperation with national home delivery platforms such as Taoxianda, JD Daojia, and Wumart Duodian; for regional or local community group buying and new retail platforms, brand owners' local teams and distributors will adopt a one-region-one-policy approach for joint deep operation.**
**-03-** **Can manufacturers 'directly operate' consumers be realized?**
Due to the epidemic, using community groups to directly reach C-end consumers may be a first for many brand owners. Perhaps some brands have achieved good home delivery sales in certain regions, but does this prove that manufacturers can establish their own private domain traffic, 'directly operate' consumers, and completely open up the channel?
Frankly speaking, although we have seen some brands, such as Three Squirrels and Bestore, achieve direct connection with consumers through retail self-operation or franchising; and some brands like Lidu and Taishan Original Pulp have achieved direct connection. But for most essential FMCG products, the private domain traffic established during the epidemic is unlikely to be utilized.
**Most FMCG products, or mass essential products, are low-involvement and highly homogeneous, with consumption accompanied by uncertainty. It is difficult for a single brand owner to truly achieve sustained and certain consumption through direct operation.**
The most appropriate way is to guide and support distributors, enabling local partners to have the ability to deeply connect with various online platforms.
In summary, due to the epidemic, various FMCG manufacturers have opened groups to extend home delivery. The short-term purpose is task and inventory orientation, but whether this can solve the practical problem remains to be tested. From the overall feedback so far, the effect is minimal, with only local areas being effective.
In terms of long-term value, manufacturers have already taken action. After the epidemic recovers, online business will become a key focus from headquarters to local offices and partner distributors. The goal is clear; the next step is to implement specific strategies and actions.
What do you think about FMCG manufacturers opening groups to carry out home delivery? Welcome to add the author's WeChat for discussion. Recently, New Distribution will also launch a series of special content to discuss with manufacturer friends how to correctly carry out home delivery during and after the epidemic. Interested friends, please stay tuned!
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## Citation metadata

- Publisher: New Distribution
- Author: 袁来
- Published: 2020-02-14
- Canonical: https://xinjignxiao.com/en/articles/yili-mengniu-nongfu-spring-tsingtao-beer-snow-all-open-groups-is-it-a-te-778bb074/
- Original source: https://mp.weixin.qq.com/s/72xwFdZd34YkQmgp2tFhGQ

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