The post 80s generation

Soy sauce man III: Manager Zhang and the shopping guides

manager zhang.JPG
Meeting manager Zhang, a Xingtai business woman

During the Spring Festival, I took a trip across a large part of China, with short stays in three prefecture-level cities: Xingtai in Hebei, Mianyang in Sichuan, and
Rizhao in Shandong. This article is the first of a series depicting my firsthand observations of these lesser known Chinese cities.

Li, the central character, is a former-classmate of mine who has been a traveling salesman for a Guangdong-based soy sauce brand.

See also Part I and Part II of The true story of a soy sauce man, and the companion video.

Li invited me to live with him in his office. I asked if that would be too much hassle. He assured me that I should save the money that I would otherwise spend on a hotel to do something else. "Here on my turf, I will take care of you".

We went up several flights of stairs to the top floor of an apartment complex and we were at Li's office which doubled as his home. Local property prices are fairly low, so with a modest rent of 580 yuan per month paid by the company, Li lived in a spacious apartment with two bedrooms. There was once another senior colleague lived with Li, but a few days before I arrived, he received orders to work in another city and the company hadn't yet sent anyone else to replace him.

"This is not my own house; had my boss been here, I would perhaps not be able to let you live here because the company has rules. But now he is gone. I am taking charge."

With no time to catch my breath from climbing the stairs, Li picked up an advertising flier from the floor which had been slid through the door and started to read it. Part of Li's job was to make sure that his company's brand was present on such fliers printed by supermarkets.

But Li couldn't find his brand among the promotional items on the flier. He called up the distributor who was apparently responsible. The man on the other end of the phone promised that Li's soy sauce would definitely be there on the next issue and a photo copy would be sent to Li as a proof.

After lunch, Li was to meet another distributor at their office. After zigzagging through some decrepit residential alleys, we arrived at a yellowish two-story building. At an office overlooking a cluster of warehouses, Mrs. Zhang, the "big stores and supermarkets" manager of the local distribution company, received us.

Asides from Li's soy sauce, Zhang's company also distributes a brand of tea-flavored diary drink. Li's company bans distributors from selling other condiment brands, but take a hands-off attitude towards the other categories of products.

The warehouses under manager Zhang's office

The top issue of the meeting was a contract dispute. The distributor had previously signed a contract with Li's company including a provision stipulating that the distributor would buy one "strategic display position" at each of eight local stores for product display, and Li's company would cover part of the cost.

It has become a common practice in the Chinese retail business that suppliers pay extra to display their merchandise in more visually attractive ways. Specially designed stacks of products, often decorated by loud, eye-catching banners and posters and placed in areas with high customer concentration have a better chance than regular shelves to grab people's attention.

Li was tasked with checking compliance of such contracts. One big shopping mall that the distributor promised would start operating in March, turned out to still be a construction site. For the rest, Li found that his brand had only one such "strategic display position". Apparently, the distributor failed to fulfill their obligations.

Zhang argued that she misread the contract, misinterpreting "in each of the eight" to "in one of the eight". Li was not going to buy her story; he insisted firmly that her company do exactly what it promised, otherwise it would not get the refunds. Another problem with the contract, Zhang said, was that the local authorities didn't approve the location of the uncompleted shopping center for commercial use, so the planned mall would probably have to be relocated. In the end, Li had to concede a little; they agreed that another store of similar size be found to replace the shopping mall that would not come to be.

Another big issue was supply delay. In China, people tend to defer their consumptive gratification until the Spring Festival. For people of my age, many had fond memories of getting new clothes and other gifts from parents for the festival. It seems that the festival was designed to give people a taste of prosperity in spite of the harsh reality so they know there are better life to expect and the hardship is always more bearable as long as there is hope. I remember that my family used to consume what must be half of the total year's ration of meat during the half month around the Chinese New Year. Despite the improvement of people' living standards, such traditions still persisted.

Walking through alleys in Xingtai

As the festival approached, market demand for almost everything exploded, which stressed the company's supply chain greatly. To make things even worse, the railway, which is still the major form of freight transport, would give its priority to accommodate passengers during the famous Spring Festival exodus. As a result, every year around this time, order delays become common.

Manager Zhang placed an order a week ago, and she still hadn't received it. She was anxious to know where the goods were and how much longer she had to wait. The company has a logistics call center, so it only took a phone call from Li to locate the position of the cargo: it was still in a railway station in the company's home base of Foshan, waiting its turn to be delivered.

The problem, Li later told, was that the factories of his company were too far away in the far south. The longer distance is translated to higher costs and longer delay. In fact, Li's products are generally slightly more expensive than its arch rival in Xingtai, a condiment brand based in Hunan. To solve this problem, Li's company is planning to build a new factory in Anhui to better cover the northern market.

A few other peripheral issues, including some promotional activities during the festival were also discussed but they seemed to be of relative small importance. When Li walked out of the warehouse, there was a triumphant smile on his face.

On our way back, I made a casual remark about my impression with manager Zhang: soft-speaking, always smiling, she must be a nice person. "Maybe... she is very tactful (圆滑)" Li said.

I asked Li how did his company locate and select distributors. "When we first came to Xingtai a few years ago, we had to go from store to store to find out their suppliers. Then we would decide who we'd like to build partnership with... All we care about is how big they are ... You can tell this quite easily by checking out their warehouses, evaluate their stocks and find out how many people they hire." "Would you like to be a distributor for your brand?" I asked. Li shook his head.

Baozhu: one way to display your products

Some first generation distributors reaped lucrative profits from the soy sauce business but many of them no longer work with Li's company. There is an elimination mechanism at work. Li's company set up sales goals and kicks out those who fail to meet the goals without mercy. Since Li's brand is one of the biggest with high brand recognition and a large budget on marketing, they never need to worry about not being able to find new distributors as the small brands do.

On our way to his office, I realized that I needed a toothbrush so we went to a local store to get one. A girl whom I assumed must be a shop assistant approached us and asked us what we were looking for. After explaining to her my need she recommended that I should buy a brand which I had never heard of.

I took her advice without a second thought. After all, it was just a toothbrush, there isn't a big difference between any brands and her pick was not too expensive. Later on, Li told me that the girl who gave me advice must have been paid by the brand and just made a small profit from my purchase. "They are called shopping guides" Li said.

Li took me to the condiment aisle where he started to chat with a girl wearing the same uniform with the store's logo. The way Li talked was like a boss to a subordinate, and the girl was apparently deferring to his authority. Turned out that the girl was a shopping guide on the pay roll of one of Li's distributors.

While they were talking, a customer came and checked the soy sauce bottles out, Li went over, suggesting she buy his brand.
"But I have always been using Jiajia" the customer said.
"Well, I think it's time to try a different flavor. Trust me, you won't regret this choice." Li told the customer with a confident smile. Eventually, the customer left with a bottle recommended by Li. In high spirits, Li launched into a lesson for the shopping guide on how to be more confident and persuasive dealing with customers.

"Some times customers ask me the difference between Jiajia and our brand, and I am not sure what to tell them". Without much thinking, Li said "One big difference is consistency. It was like eating tangyuan (sweet dumplings). The good ones are made of finer rice flour so you can feel it is slippery in your mouth. It was the same for the soy sauce." While I was not fully convinced by such an analogy, the shopping girl nodded in agreement.

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Duitou: one type of display stack in a supermarket

I asked Li what he did about competitors who may hire shopping guides to promote their brands in the condiments department at the same time. But Li told me that the brands bid and pay the supermarket for the right to have shopping guides.

"As the top bidder who paid the highest price, we expect our right to be respected by our competitors, just as we would do theirs if we were outbid by them. Plus the supermarkets would never allow competitors to have turf wars in their aisles." But no one cares of consumers actually need these shopping guides and their dubious advice.

I was surprised that a shabby practice like this has become the accepted rule of the trade and there is no noise of protest on the mainstream media, no demand for passing a new law to end it or whatsoever.

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