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THE WEEK IN RETAIL ISSUE 48

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RAJ AGGARWAL

RAJ AGGARWAL

EDITOR’S COMMENT

D2C? C2M? WTF?

Covid has a lot to answer for, as we all know only too well. But one of the more concerning consequences has been a massive blurring of the traditional supply chain lines as manufacturers, suppliers, brands, wholesalers and retailers all to try to find new ways of getting customers to part with their hard-earned wedge.

We’ve known about D2C – direct to consumer – for a long time, but it’s becoming much more of a thing these days with many big brands bypassing retailers and selling their products straight to consumers. That solution solves a lot of short-term problems for manufacturers – shifting hospitality stock for instance – but it also opens up murky new worlds where the brands start building deeper, direct relationships with the end user.

It all comes down to data, of course, as so much of retail will in the future. But by selling direct to consumers, brands can start capturing all sorts of juicy data, big and small, that will help inform their decision-making going forward. There’s also the additional benefit of not having to lose a slice of margin to retail middlemen.

But there’s a new trend on the horizon now: C2M. What is C2M? Well, it stands for consumerto-manufacturer and it’s huge in China. How does it work? Essentially, it’s an interesting solution that lets consumers use apps and websites to pool their buying power and secure better pricing direct from manufacturers off the back of it.

Concerned? You should be. It’s predicted to be worth billions of dollars in the next 18 months or so in China alone where the leading C2M app – Pinduoduo – is already the world’s largest online grocery retailer and brazenly states its goal is to become the world’s largest grocery retailer full stop.

Users can group together with friends – real ones or social media ones – or can simply join other existing groups that exist. And this isn’t offer-based, like most other digital sales solutions. The consumer has full control. Whatever it is they want to buy, they can set up a group for it. And while it sounds like it’s probably better suited for big ticket items like televisions or sofas, that’s not the case. Grocery and takeaways feature prominently.

The common thread here is that, once again, the model cuts the retailer out. Covid has helped accelerate change like nothing in living memory and there are both threats and opportunities out there that could have very significant impacts on our sector. As the ancient Chinese curse would have it, may you live in interesting times. There’s little doubt that we do indeed live in interesting times. Whether they’re cursed or not remains to be seen.

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