At the end of April, Reignwood struck hard!
Nashi learned that on April 18, Reignwood FMCG Group will completely shut down the national 2B, 2C and regional community e-commerce platforms. For this action, Reignwood also divided the specific time nodes: within two weeks, it will first complete the comprehensive shutdown of Taocaicai, Duoduo Buy, Meituan Preferred, and Xingsheng Preferred, and within one month, the war zone and all business units will complete the closure of all 2B platforms, 2C 10 billion subsidy platforms, and community e-commerce platforms. The speed and scope of the action exceeded everyone's expectations.
In the past, online channels were regarded as the next growth point of the food industry, many food companies have embraced e-commerce platforms, and there are even some "offline is dead" voices.
Completely withdraw from e-commerce platforms
The notice pointed out that since April 18, all 2B, 2C and community e-commerce platforms across the country have been completely shut down and banned, and within one month of the issuance of this notice, all e-commerce platforms involved in low prices and disrupting market order will be completely shut down. With the production date of April 10, 2024 as the boundary, the products before this date will be severely punished according to the highest penalty standard of the "2024 Cargo Flow Management System".
It is reported that Reignwood's punishment this time is also unprecedented. For example, the general manager of each business unit of Reignwood is the first person responsible for the suspension of the supply of the e-commerce platform, and if it violates the rules, the general manager of the business unit will be given an internal punishment for the first warning, the second time the quarterly evaluation amount will be deducted 20,000 yuan, the third time the quarterly evaluation amount will be deducted 40,000 yuan, and more than three times, depending on the severity of the circumstances, the general manager of the business unit will be demoted and transferred according to the cadre management system...... It is not difficult to see Reignwood's determination to retreat from the e-commerce platform.
In fact, this is not the first time that Reignwood has rectified e-commerce platforms: at the end of July last year, Reignwood FMCG Group issued a notice on the special rectification of e-commerce, with the purpose of "maintaining the price market of the national channel and ensuring the reasonable profits of customers at all levels", with the ultimate goal of "jointly maintaining our price lifeline". As early as March 2018, Reignwood Guangzhou Branch also announced that it would stop cooperating with Alibaba Retail Connect in the whole region.
According to Zhu Danpeng, an analyst in China's food industry, Reignwood's move is essentially to clean up the chaos of the entire channel and curb the illegal operation of low-price platforms. On the whole, Reignwood's emphasis on the entire price plate not only guarantees the profits of dealers, but also allows consumers to enjoy high-quality products in a timely manner. With the further stabilization of the entire price system, this also provides a very good top-level design for the sustainable development of Reignwood in the future.
Interruption of supply and cancellation of distribution rights......
Many brands say "no" to e-commerce platforms
Now food companies can be said to "love and hate" e-commerce platforms, and love that these former emerging channels do bring a certain increment to manufacturers, but they hate the price and market competition chaos they bring. As the high growth of the e-commerce era has become a thing of the past, manufacturers have begun to disenchant e-commerce platforms, and many companies have banned the supply of "seriously low-priced" community group purchases and e-commerce platforms.
For example, COFCO Coca-Cola Beverages (Xinjiang) Co., Ltd. issued a notification letter saying that the online platform of Duoduo Grocery sold our products at low prices, which seriously affected the market price. Our company communicated with this platform after understanding the situation for the first time, and requested that our products be removed from the shelves immediately. At present, Duoduo has removed all low-priced products from the shelves.
Yihai Kerry (Urumqi) Food Co., Ltd. issued a penalty letter to the agency trading company, stating that the trading company provided traditional channel products of Arowana and Xiangmanyuan for the e-commerce platform without permission, and the platform subsidized low-price sales to attract customers, resulting in damage to the interests of our company and terminal stores.
Weilong said in the "Notice on Prohibiting the Supply of Community Group Buying Platforms" that the company has recently received many complaints, and community group buying platforms represented by "Duoduo Buy" and "Meituan Preferred" have serious low prices, and even individual items are far lower than the factory price, which has a serious impact and damages the interests of customers. At the same time, the notice sets a guide price for the company's star products.
In addition, many food companies such as Xiangpiaopiao, Zilin Vinegar Industry, and Tianrun Dairy have also taken action to control supply prices.
Zhu Danpeng believes that there are pros and cons to everything, and e-commerce platforms and community group buying have a certain value for the convenience of consumers' purchases, but many companies are also plagued by the low prices of these platforms. From the perspective of sustainable development as a whole, how to regulate these community platforms is a very important starting point. At the same time, he predicts that in the future, more brands will have corresponding measures.
In recent years, high inventory has become a prominent problem faced by dealers, and in order to complete the sales tasks set by manufacturers, they have to turn to e-commerce platforms, community group buying and other channels to sell goods at low prices, resulting in serious product price inversion, and the profit margins of manufacturers and offline dealers have been squeezed. Next, as Reignwood fired the first shot again, which companies will have relevant actions in the future, and Nashi will continue to pay attention.