In the current macroeconomic environment, the strategic importance of expanding domestic demand is self-evident. The general trend of activating effective demand and expanding domestic demand with a focus on boosting consumption is also becoming more and more clear. This also reveals where the opportunity lies. In my opinion, it may mean that the sinking consumer market has great potential and is expected to become the “main battleground”. As a result, the potential of related ToB service tracks may be unleashed at an accelerated pace. Companies such as Huitongda Network are worth focusing on.

It combines growth rate and scale, highlighting the potential of the main battlefield

In the past few years, with China's integrated urban-rural integration and coordinated regional development, etc., many non-first-tier cities and rural areas have received more development opportunities, achieved healthier economic growth, and the income and consumption capacity of local residents have increased accordingly. Combined with the popularity of the Internet and the improvement of infrastructure, it has jointly triggered the acceleration key for the development of the sinking consumer market.

Today's sinking consumer market can be described as “growing faster+high ceiling”. In terms of growth rate, in the first seven months of this year, consumption growth in second- and third-tier cities was relatively fast; consumption growth in rural areas was 1.1 percentage points higher than in urban areas, and 2.2 percentage points higher in July alone. As a result, the market size has been steadily expanding, and the domestic market has 1 billion consumers. The overall consumption structure is showing an upgrading trend, providing a broad space for development.

McKinsey also predicted in the report that by 2030, more than 66% of China's personal consumption growth will come from a sinking market.

This means that the sinking market is increasingly becoming a new driving force and main battleground for consumption and economic development, and the policy side and market side are bound to focus deeply on exploring this market.

At the same time, the sinking market has long been characterized by fragmentation, a society of acquaintances, and a focus on physical shopping experiences. It still lacks high-quality supply, and cannot copy the big city model. In other words, it is difficult for traditional e-commerce to completely sink, and it is necessary to embrace new models and new business formats.

One of the key points is that 70% of small B-side stores in the sinking market are husband and wife stores. This format has an innate advantage in reaching out to consumers in a society of acquaintances. It is still difficult to replace in the long run, but it has obvious shortcomings in the supply chain and digitalization, and requires the use of platform power. This demand is huge and rigid.

As a result, whoever can provide an efficient platform to handle the decline in production capacity can gain more room for growth. In particular, there is a high degree of certainty about the development of the sinking retail ToB service market, and it will also have both growth rate and scale.

Efficient platforms are gradually being created to enhance the appeal of both parties

Focusing on market participants, Huitongda Network thoroughly understands and empowers township couple stores, and directly targets key market segments. It is certainly one that cannot be ignored.

According to the business model division, Huitongda Network is positioned as an online and offline full-link enabling service provider, not only covering a wide range of categories, ranking first in the industry, forming an advantage in the three categories, but also promoting B2F reverse customization, providing digital tools, marketing training and other support, effectively solving the pain points of the supply chain and digital needs of husband and wife stores, and improving operating efficiency and profitability.

Source: Edited by the official websites of various companies and Toubao Research Institute

In terms of business scale, Huitongda Network is in the “first tier”, leading in transaction scale, and has built a huge network of member stores. This also makes it more capable of taking on the decline in production capacity and helping brands to better match declining consumers.

Judging from the performance in the first half of the year, Huitongda Network also continues to consolidate its capabilities and scale advantages to enhance platform efficiency.

According to the data, in the first half of the year, Huitongda's online trading sector revenue was 32.39 billion yuan, and the service sector revenue was 0.38 billion yuan. The cumulative number of SaaS+ subscribers and paid users increased by 5.1% and 28.8%, respectively. By the end of the first half of the year, Huitongda Network had more than 0.246 million registered member retail stores, an increase of 13.2% over the previous year, and more than 0.092 million active member retail stores, an increase of 19.3% over the previous year. The overall business ecosystem is growing and dynamic.

In terms of business layout, Huitongda Network is actively seeking changes, making every effort to build more autonomous and controllable supply chain capabilities, upgrade SaaS+ products, and further enhance customer service value and platformization capabilities. Also, it is worth noting that this process simultaneously drives the model to high value and high profit.

During this period, Huitongda Network deepened cooperation with top brands in various industries, such as Gree, Midea, Apple, BYD, etc., and expanded cooperation with resource-based enterprises and regional retail companies. At the same time, Huitongda Network continues to promote the integration of production and marketing and its own brand, implementing a B2F model that requires customization, refinement, and production to achieve mass production of “Altisha” air conditioners; laying out new industries and categories, including expanding high-margin categories such as personal care, household cleaning, and beauty in the daily chemical industry.

Huitongda Network also develops and upgrades system tools around “explosives and AI”, insists on going deep into the frontline, and organizes and carries out high-frequency, effective training and activities, etc., thereby providing member stores with more efficient full-link capabilities.

This will also continue to enhance its appeal to both sides of supply and demand, form a positive business cycle, determine that it can actually achieve sustainable development, and gain immeasurable growth space as a solid platform to take on the decline in production capacity.

Overall, macroeconomic structural changes are leading to a new business era, and Huitongda Network's strategy is probably more in line with this era. Furthermore, its platform characteristics are becoming more and more clear, and platform capabilities are constantly being enhanced, laying a solid foundation for long-term development. It is also expected to occupy an advantageous position in the new value system, and the future is worth looking forward to.