500,000 influencers bring 4 billion sales, one article reveals the secret of "deep distribution"

With the changes in the market environment and the diversification of digital channels, deep distribution has become an important means for brands to expand their influence and increase sales. By analyzing the successful cases of brands such as Wahaha and Notland, we understand how precise distribution strategies and clever use of social media can help brands grow rapidly.

In 1994, when the sales situation of Wahaha products was grim, Zong Qinghou decisively implemented channel changes. Relying on a directly established distribution team and a flat management model, he covered the sinking markets and township areas that were difficult for dealers to reach, completed the comprehensive deployment of Wahaha outlets, and laid a solid foundation for the subsequent wealth empire.

With the changes and development of the market, this deep distribution strategy is currently widely used by major brands in online channels. According to Xie Shuang, the head of Chanquanquan, a talent marketing service platform under Chanmama, from 2021 to 2024, the number of influencers on the Douyin platform will generally show a fluctuating growth trend.

In terms of hierarchical distribution, the proportion of small/low-end influencers has increased and remained stable at more than 90%. For brands, small/low-end influencers have become an indispensable and important role. More and more brands are shifting influencer marketing from external cooperation to in-house models, using influencer resources as the core competitive barrier of the brand, and using tens of thousands of commission-based influencers to form online sales "outlets".

"It is currently recognized that Coca-Cola has the largest offline network coverage in China, with approximately 8 million retail terminals. It is the overlord of the offline deep distribution era. But today, the number of online influencers is in the tens of millions. According to the deep distribution model, the influencers and KOCs below the waist who account for the largest proportion of creators are just like the small grocery stores and mom-and-pop stores that account for the largest proportion of Coca-Cola channel sales." said Li Hao from CASS Consulting.

In Li Hao's view, not only in-depth cooperation with influencers, but all brands that have sufficiently wide coverage of online channel resources, sufficiently in-depth operations, sufficiently high operating efficiency, and have derived relatively complete digital management models for channel partners are all engaged in "full-area deep distribution" in today's era.

Brands such as Notland, which has achieved annual sales of 4 billion through in-depth cooperation with more than 500,000 influencers across the entire network; YaYa, which recruited hundreds of DP service providers to create a 100-store live broadcast matrix managed by the middle platform; and Balabala, which converted thousands of offline franchise stores into a Douyin 1,000-store live broadcast matrix. These are all representatives of deep distribution in different ways based on their own brand models and development stages.

In the process of visiting multiple brands and service providers, Spicy found that deep distribution is an important trend for brands to conduct online marketing in the next stage. Start-up brands can use this to achieve a small win-win situation and complete the original brand accumulation; developing brands can achieve performance acceleration and create hot products, overtaking on the curve; many old brands can also use this to realize channel reform and re-enter the fast lane of the times.

In order to achieve deep distribution, three characteristics are required:

1. The brand attaches great importance to it, and the internal team is responsible for the construction and operation management of online outlets, and the cooperation has both depth and breadth.
2. The cooperating online terminals need to open up sales and have clear sales and conversion data feedback.
3. Gradually form a management and incentive model that combines the brand development system.

01

From the development story of Notland, we can fully see the huge impact that deep distribution by influencers can have on start-up brands.

As a health care product brand founded in 2018, Notland achieved an annual revenue of 2.4 billion in 2021 and revenue of over 4 billion in 2022, becoming a dark horse in the health care product market. Its explosion is precisely due to its expert distribution product model built across the entire network.

Currently, Notland has more than 500,000 experts working with it, and has built a solid brand barrier with time and experience. At the Chanquanquan Expert Marketing Practice Conference, Notland's VP of Marketing Strategy Ai Xu said when explaining the company's marketing strategy: "Many people think that we have a lot of partners, but we have a very careful consideration of the entire expert."

It is reported that almost all the mid- and low-end influencers that Notland cooperates with are commission-based influencers. Apart from the content costs such as short video production, there is no need for slot fees, and the commission logic is based on sales. Notland almost does not look at the number of fans or the type of account. As long as commission-based cooperation can be carried out, it will roll out outlets. Then, influencers with good sales effects are screened out layer by layer for repeated cooperation.

Although the traffic is far less than that of the top influencers, the huge number of commission-sharing influencers has helped Notland to establish dense online sales points, and with the "mom-and-pop shop" model, it has contributed a huge total GMV. It is reported that in 2022, Notland's Douyin revenue reached 2.4 billion, of which Dabo contributed as much as 70.53%.

It was also in the process of cooperating with a large number of influencers that Notland formed a unique expansion path of small-batch products - testing products in influencers' live broadcast rooms - expanding production of hot products - and strengthening brand momentum.

Similarly, Ding Ding Lazy Food also achieved rapid growth in its early stages by cooperating with a large number of mid- and low-level influencers on Douyin.

"We tried to select big anchors at the beginning, but on the one hand, as a new brand with no popularity, it is very difficult to enter the live broadcast room of the top anchors, and on the other hand, it is easy to lose money. So we finally chose the bottom-up approach, 'surrounding the city from the countryside'. These influencers with only a few thousand or tens of thousands of fans can also place orders and sell goods. As long as the number is large enough, they can get things running, and if they encounter explosive content, they can achieve a wave of sales explosion. In the end, relying on this model, we increased our monthly sales from hundreds of thousands to nearly 10 million in more than three months." Mumu, former marketing director of Dingding Lazy People's Cuisine, told Doujiao.

In Li Hao's opinion, it is very extravagant for brands with annual sales of less than 500 million to spend money on branding. However, online deep distribution partners can complete the planting of products and even brand minds while selling goods, helping brands accumulate crowd assets. "Influencers need to rely on content + algorithms to impress users. They will definitely help brands convey minds, which is also impossible for traditional offline distributors to achieve."

At the same time, rapidly developing brands can also use the deep distribution model to further spread product reputation when creating blockbuster products. The long-tail effect and cost-effectiveness of a large number of mid- and low-level influencers and KOCs at this stage are higher than those of top influencers.

A typical example is Proya, which adopted the strategy of "a small amount of top-level + a moderate amount of middle-level + a large amount of tail-level" when promoting its product "Black Sea Salt Bubble Mask" in the early stage. After relying on top influencers such as Mr. Ye and Wang Zulan to promote it, it relied on 917 tail-level KOLs and 2,088 KOCs in the middle stage of promotion to continuously maintain brand volume and create a sense of authenticity. This strategy of large-scale and in-depth cooperation with tail-level influencers has successfully reached a large number of consumers in the sinking market and achieved a continuous flow of new customers for the brand.

After verification, this strategy was also reused by PROYA in the double-antibiotic essence series launched in 2020. It was also with the help of a large number of KOC dissemination that the "morning C and evening A" functional skin care, which is relatively unfamiliar to the Chinese people, was popularized through repeated reminders, creating concrete perception, becoming a popular skin care formula in the entire industry, and completely bringing PROYA's trump card product into the spotlight.

There is also Fangli, which has emerged as a dark horse in the foundation market after 2020. During the 618 period this year, Fangli's Douyin sales reached nearly 100 million yuan, successfully jumping to the top 3 of Douyin's makeup market, which is also closely related to the brand's extensive use of a large number of mid- and low-level influencers to bring goods. It is reported that from January to July this year, influencers' sales accounted for 2/3 of Fangli's total sales. Among the 7,580 KOLs/KOCs in cooperation, influencers with more than 100,000 fans accounted for only 8.73%, while influencers with less than 10,000 fans accounted for as high as 65.63%.

A large number of Douyin influencers that Fang Li has collaborated with

In addition, with the shift of user consumption behavior online, a large number of traditional old brands with poor performance and strong reliance on offline channels can also use deep distribution to complete the online migration of sales positions.

A typical example is the old national brand YaYa down jackets. After a second reorganization in 2020, it landed on Douyin at the end of the year to deepen its interest e-commerce. By recruiting DP operators, YaYa established a "hundred-number self-broadcasting matrix" on Douyin, exploring the traffic patterns and user preferences of Douyin through different scenarios, product combinations, anchors, and duration differences.

Each live broadcast room operated by a DP operator can be regarded as an online sales outlet of YaYa, with a unified middle office management behind it, responsible for product supply, sales guidance and traffic support. In the end, under differentiated operations, on August 18, 2021, YaYa Douyin's GMV exceeded 100 million. In the same year, YaYa moved this set of tactics to Kuaishou, and in 3 months it became the first on Kuaishou's clothing self-broadcast list. In this way, with the help of the deep distribution of live broadcast operators, YaYa has also completely completed its online digital transformation.

“No matter what stage a brand is in, as long as they want to do it and are aware of it, they are suitable for deep distribution. It’s just a matter of difficulty. After all, there are enough celebrities in the market, and brands always have the opportunity to use them to capture new markets,” Li Hao concluded.

02

According to Xie Shuang, currently, more and more brands are paying more and more attention to deep distribution by influencers, especially the cooperation with KOC, the frequency and quantity are increasing.

“Overall, brands with a lighter SPU that can launch new products quickly and regularly, such as food and beverages, daily necessities, beauty and skin care, and medical and health care, will have a higher proportion of influencer distribution.”

The so-called light SPU refers to brands with low entry costs. The time cycle cost, replenishment cycle and inventory capital occupation from new product development to launch are relatively small. Sometimes, new product reserves can be completed only through joint brands, light combinations and micro-innovation of packaging materials. This also involves the characteristics of deep distribution channels - if you want to cooperate with a large number of KOCs over a long period of time, you must ensure the continuous launch of new hot products.

"The life cycle of a single hit product is limited, and user repurchases will settle on the brand's own broadcast, and the efficiency of Dabo in attracting new users will become lower and lower." Mumu said. According to him, because of the consistent adherence to the model of pickled fish as a large single product, by 2023, the Dabo model of Dingding Lazy Food will be transformed from KOC Dabo to special Dabo. More than half of Dabo's revenue comes from special contributions, and at the same time, the proportion of brand self-broadcast revenue continues to rise.

Notland is another representative of continuously developing new products and rotating stock. In order to adapt to the distribution model dominated by mid- and low-end influencers, the brand R&D team reserves thousands of product formulas. Every year, the sales team selects and requires factories to produce more than 800 new products, which are continuously delivered to KOCs, and then the next production is determined based on product performance. This sales-based product model ensures the birth of new hot products and the rotation of stock in the hands of high-quality influencers, preventing influencers from being "squeezed dry" by a hot product.

Of course, brands that focus on big single products are not without opportunities. A typical example is the previous "Adopt a Cow". It seized the channel operation model of giants in the dairy industry such as Mengniu and Yili that focused more on offline than online. It relied on adoption in online channels and seized the distribution dividend of private domain users on WeChat. In the process of development, it cooperated with experts in batches and signed exclusive agreements. Finally, it relied on differentiated channels to grab more than 2 billion in incremental revenue in the narrow market.

Similarly, in 2023, Three Squirrels, which faces huge industry competition pressure, also relied on the distribution strategy of cooperating with small and medium-sized influencers on Douyin, and cooperated with the large single product macadamia nuts to take the lead in its peers and complete the online explosion. In the first half of this year, its revenue growth rate on Douyin was as high as 180.73%. According to Douyin data, among the 12,200 Douyin food influencers with annual sales of more than 500,000, Three Squirrels has a penetration rate of 51%, exceeding its peers.

It can be seen that as long as the timing is right and one can be one step ahead of "competitors" and seize the mid- and low-end channels of influencers, deep distribution can also be very effective in boosting single product sales and shaping brand awareness.

It is worth noting that the team's execution and organizational efficiency will greatly affect the implementation of the deep distribution strategy. "We need an efficient team that can quickly connect with partners, implement cooperation, and build a talent pool and accumulate resources," Xie Shuang said.

Doujiao learned from Mumu that when Dingding Lazy Dish implemented the KOC influencer distribution strategy, it established a sales "corps" within the company. The team had as many as 60 people at its peak and reached more than 30,000 influencers in two years, of which nearly 20,000 were delivery influencers. "In the early days, we required a salesperson to send private messages to at least 100 influencers every day, and half of them could be further communicated with. After sending samples, about 30 were willing to cooperate. The KOC model is a huge funnel, so operations need to continuously build connections during the accumulation stage."

Similarly, YaYa once told Doujiao in an interview that by 2022, the brand had established an operation and control team of more than 50 people to monitor the traffic and GMV of matrix stores in real time. "Although the distributors have their own operation teams, they may not be TPs in down jackets and do not have much operation experience, so the middle platform will have strong control. Once the traffic decline is found, the brand operation will contact the distributors point-to-point and one-to-one for operation adjustments."

Notland, which has cooperated with more than 500,000 influencers, is said to have a highly professional sales team of more than 300 people responsible for connecting with influencers. Spicy also learned from an insider that in order to save labor costs, Juduo and Yase's parent company Juyi Group plans to set up KOC cooperation centers in Hangzhou and Henan to further deepen cooperation with mid- and low-end influencers.

03

"Brands at different stages of development and with different product characteristics face completely different challenges when adopting deep distribution. But they all have a common difficulty, which is finding as many influencers and resource deployments as possible. Resource anxiety is a proposition that no one can escape," said Xie Shuang.

“The current market environment is no longer the same as it was two or three years ago. There are more merchants entering the market, but the number of KOCs and KOLs that can bring products is still limited. Brands need to snatch up influencers and explore ways to build their own influencer database.” Mumu told Doujiao.

It is reported that a domestic beauty brand, when cooperating with KOCs, after using beauty experts, life experts, and emotional experts, tried to start from the interest circle and include comedy experts in the scope of consideration, "because the overlap between brand users and talk show users is very high."

Unfortunately, for many foreign brands and domestic top brands, the talent cooperation team is still managed by external service providers. This also means that the most core resources are in the hands of middlemen and can be taken over by competitors at any time.

"The core is still concepts and awareness. Many more traditional brands still don't realize the value of distribution by mid-level influencers. They only see the value of the top brands, but ignore the millions of 'mom-and-pop stores'," said Li Hao.

According to Xie Shuang, many brands are currently experiencing a shift from external to internal distribution teams for influencers. Brands are trying to start with building an internal team of more than ten people to bring KOC distribution in-house. However, this also puts forward higher requirements for resource coordination and cross-departmental cooperation.

Taking the seemingly simple sample sending process as an example, it requires the sales team to register the sample sending list, supervisor approval, inventory communication, manual registration and tracking of logistics order numbers, and anchor signature and delivery communication. It involves collaboration among multiple departments and is prone to problems such as low efficiency and long communication links.

More and more brands are trying to adopt digitalization of influencer distribution business management and collaboration. "At present, the SaaS software within Chanquanquan can realize the automatic management of the entire process of brand influencer cooperation. Taking sample delivery as an example, we have opened up the mainstream ERP system on the market. After the supervisor approves it, the sample will be automatically entered into the system, and the order number will be updated in time after delivery. At the same time, it can also track the overall sample delivery rate, duplicate sample delivery, etc., to help optimize the internal efficiency of the brand." Xie Shuang introduced.

Chanquanquan Command Center (the pictures shown are all simulated data)

Doujiao also learned that mature brands in the deep distribution field, such as Notland, have developed complete digital operation and management systems internally to achieve full-process docking with business partners.

After finding a matching partner, establishing a complete incentive system is also a "long and arduous task". It is reported that after years of running-in, YaYa has created a DP operator grading model, which divides the levels according to the sales performance of different operators. Those with higher levels enjoy benefits such as priority selection of cargo trays and traffic support.

"YaYa, as a brand middle platform, will aggregate the traffic purchases from hundreds of live broadcast rooms, negotiate with the platforms centrally to obtain discounts, and then return them to the DP in proportion." said Li Hao.

At the same time, according to him, Notland will also choose to launch content with "leverage effect" created by high-quality influencers with potential for blockbuster sales and good cooperation, to help the birth of blockbuster sales. In Li Hao's view, in the process of deep distribution, brands must gradually establish a unique cooperation mechanism, which is also a reflection of the platform's capabilities.

However, no matter how it is managed, the problem of price cutting is a difficult problem that brands cannot avoid. Mumu told us in an interview that when Dingding Lazy Food adopted KOC distribution, it encountered a situation where influencers took out part of the commission subsidy and secretly sold products at a lower price in other e-commerce channels.

Adopt a Cow also had a serious problem of product jump due to a large number of adoption partners selling their rights and reselling products, resulting in a huge price disparity in online channels, and eventually the original private distribution system was completely closed.

It is worth noting that during the communication, many interviewees told Doujiao that there is no universal formula for deep distribution. They can refer to the gameplay of similar brands, but combined with the specific demands of different brands, customized strategies must be adopted in the end.

Li Hao told us that a long-established men's clothing brand once tried to reform its online channels, but due to the impact on offline dealers, it had no choice but to shelve it. "You can refer to Balabala in this regard. They took a slower but more suitable route."

It is reported that Balabala, which mainly sells children's clothing, is facing huge traffic difficulties due to channel changes and the epidemic. In response, Balabala has systematically trained offline dealers, expanded offline stores to online stores, promoted stores to conduct live broadcasts, established a Douyin live broadcast matrix of thousands of stores, and finally made up for offline losses with the help of online business, and established a deep distribution model combining online and offline.

"In the final analysis, the core is awareness. As long as the number one brand realizes the need to do so, there will always be ways to promote it. At present, most brands are still aware of the importance of deep distribution due to external forces such as business difficulties. As the trend becomes more apparent, more and more brands will participate because of internal drives."