Originally Posted by
Ferg
Something I take issue with is the criticism of the systems (not) used to track inventory in the daigou channel. Once a business has sold something, especially FMCG, it is extremely rare to track the movements of that inventory within a third party organisation. The level to which some posters here expect ATM to track inventory would necessitate installing something like a GPS tracker onto every can. Dramatic example aside, the level of inventory tracking expected by some here is beyond reasonable and, at the risk of being blunt, naïve to actual business practices.
Sellers of FMCGs into wholesalers should (must!) have a close relationship with them. This would give a general sense of the age of the stock, checking the wholesaler is not over or under ordering, the product is fairly positioned/promoted and ensuring older stock is sold first etc. That is dependant on reps servicing such clients. But those function are not, and cannot be, done using any sort of ERP system, unless there is some sort of integration between systems of the two businesses. Such a goal would remove a % of the role of the rep but carries the risk of unintended consequences and a soul-less business relationship. Automation of ordering was the goal many years ago but, in my experience, is still a pipe dream for many organisations. If it were done it is expensive to implement but I can honestly say there is not a huge appetite for such closely integrated systems. Businesses generally like their independence and lack of transparency to others.
That said, there were issues with the amount of stock in the daigou channel and we all know why that happened. The closure of the borders impacted daigou trade resulting in an over-stock situation within that channel. Their sales obviously collapsed and they were left carrying excess inventory. That inventory is now classified as excess, but it wasn't at the time it was ordered. No ERP system would have prevented that from happening.
The positive from this is that COVID has highlighted a blind spot for ATM, and I fully expect they will do what they can to a) remedy the situation and b) come out of this a better business.
I would happily stand corrected if someone has any facts on actual inventory tracking at ATM within wholesalers/daigou, as opposed to conjecture and supposition. I freely admit I do not know the extent of the relationship between ATM and wholesalers/daigous; I can only share what I have seen at other FMCG companies.