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- After teaching for 10 years and starting a business for 10 years, why did he choose to enter B2B after 20 years?
- In just one year, sales exceeded 300 million yuan, covering 15,000 outlets. What enables this B2B platform to achieve 6-hour order delivery?
- Not content to stay in Southwest China, he plans to go global and expand into South and Southeast Asia. Where does his confidence come from?
“We are just high-tech farmers!”
When communicating with Tang Yibing, founder of Yunshangliu, he repeatedly emphasized to New Distribution his self-positioning. In his view, although the internet has a high technical threshold, it is ultimately just a tool and means to solve problems. However, supply chain work is very demanding, requiring solid dedication to service and internal strength. At the same time, when other industry players are aggressively expanding, companies should not blindly follow trends; only then can they achieve long-term sustainable development.
Furthermore, Tang Yibing positions himself as a "high-tech farmer" because he can leverage his market advantages. He not only acts as a connector between brand owners and traditional retail stores, improving the efficiency of local FMCG distribution, but also uses the spirit of a farmer to deeply cultivate terminals without seeking shortcuts. With a farmer's mindset, he aims to bring local resources out and drive rapid development of local industries.
1 From University Teacher to B2B Platform Entrepreneur
In 1997, the domestic internet environment was not yet mature. At that time, Jack Ma, who was a university teacher, had just founded China Pages; Robin Li was still focused on research in California; and Ma Huateng was just a small employee at a telecom company in Shenzhen.
At that moment, Tang Yibing, who had just graduated in computer science, faced two paths: find a job or stay to teach. Facing an uncertain future, he chose the latter and stayed at the university for 10 years. During his tenure, he witnessed the rapid development of China's internet technology and began to actively accept and learn new things and technologies from the outside world.
After staying in his comfort zone for too long, the desire for change grew stronger. In 2007, Tang Yibing officially resigned from his teaching position and, leveraging years of technical accumulation, started his own business, founding Kunming Aomu Technology Co., Ltd. In its early stages, Aomu Technology was a software service provider for e-commerce companies and offline supply chain enterprises. In good years, the company's sales even exceeded 100 million yuan.
The real turning point came in 2013.
In 2013, by chance, Tang Yibing began cooperation with Sinopec Easy Joy convenience stores in Yunnan and Guizhou. This opportunity allowed Tang Yibing, with nearly 20 years of technical development experience, to formally enter the FMCG supply chain field. Through extensive market visits and communication with grassroots business departments, he saw opportunities in the traditional FMCG supply chain: During cooperation with Sinopec Easy Joy, Aomu Technology used technology to increase delivery efficiency by 20% and warehousing efficiency by over 50%.
In May 2016, after three years of cooperation with Sinopec Easy Joy, the Yunshangliu B2B platform was officially established. At that time, Yijiupi and Zhanghetianxia had just entered the Kunming market.
After more than two years of development, as of now, Yunshangliu has covered over 15,000 outlets in the Kunming market. The platform offers more than 2,000 SKUs across all categories, including beverages, convenience foods, snacks, rice, flour, oil, daily care, and cleaning products. It has over 400 upstream suppliers and a warehousing area of 20,000 square meters.
In 2017, Yunshangliu achieved annual GMV of over 300 million yuan, with an average order value of over 600 yuan. All orders are basically delivered within 6 hours after the user places the order on the same day.
2 Using AI Technology to Connect All Business Processes
Efficient logistics and delivery systems and high-quality user experience are closely related to the company's internal business processes. For internet companies, technology is the skeleton and cornerstone of all business architecture.
Tang Yibing, founder of Yunshangliu
“The role of the internet is twofold: one is to create new things from nothing, and the other is to improve existing things from good to better.” Tang Yibing believes that most companies are currently only internetizing existing business modules, that is, digitally upgrading a single business process through the internet. What Yunshangliu aims to do is to reconstruct the entire business process through the internet, re-engineer the whole process, and ultimately achieve the effect that “new employees do not need training and can fully understand the entire business process in half an hour.” At the operational level, Yunshangliu has made the following attempts:
1. AI Prediction of Store Purchase Volumes
Generally, internet companies predict store purchase volumes based on past purchase data and the frequency of small store owners' orders to forecast the next order's products, time, and quantity. However, Yunshangliu uses a more intelligent order recommendation method than typical internet companies.
“Our platform currently has over 2,000 SKUs, but we serve over 15,000 stores downstream. The correspondence between stores and products is actually over 30 million combinations. We have built a massive neural network to model whether a merchant will purchase a specific product, and each data combination represents a product sales plan.”
Tang Yibing believes that factors affecting whether a store makes a purchase are diverse, including gender, weather, competitors, and customer relationships. The big data system can arrange all variable factors in combinations and maximize the accuracy of store order predictions based on the weights of different factors.
In actual operation, Tang Yibing identified over 60 factors that may affect store purchasing, divided into three categories:
Passive objective factors: For example, store area determines the upper limit of purchase quantity; different weather conditions may affect the types of products purchased; competitors such as distributors, wholesalers, and other B2B platforms' promotions may affect whether a store places an order; and gender may affect the frequency of purchases, with male owners tending to order in larger quantities but less frequently, while female owners often order in smaller quantities but more frequently...
Subjective factors: Factors that the platform itself can change, such as platform promotions, product stockouts, and business service personnel's customer relationships.
Temporal factors: For example, if a store owner purchases 10 boxes of beverages today, it is highly likely that they will not order that brand again in the near future.
“After business personnel collect all the above information, our backend processes it in a timely manner and incorporates the data into our final decision-making. When we find that a certain time period or a certain product differs significantly from our predicted sales value, business personnel receive alerts and promptly follow up. If it is due to competitor promotions, we can also respond in a timely manner.”
Through continuous modeling and improvement, Yunshangliu's prediction accuracy for user orders has reached over 85%. The high prediction accuracy for store orders significantly improves the efficiency of the entire business process, specifically by enabling reasonable product procurement based on predicted orders, accelerating product turnover, and improving warehousing and capital utilization efficiency.
2. Consolidating Orders for 6-Hour Delivery
“Many peers in the industry understand the market but not technology, or understand technology but not the market. This leads to fragmentation between business modules. Market personnel only want to clarify the entire business process, while technical personnel only support single modules. The result is a very complex system with low usability.”
Due to his technical background, Tang Yibing not only highly digitizes individual business modules but also connects the entire business process through technology, shortening the entire decision-making chain and minimizing coordination costs between different parts.
The efficiency improvement brought by technology to Yunshangliu is reflected not only in significant personnel reduction but also in order delivery experience. While most B2B platforms still achieve 24-hour delivery, Yunshangliu has achieved 6-hour delivery.
“Based on automatic prediction and recommendation, all orders are consolidated by the system. When a customer places an order and the order volume reaches a certain level, the system automatically pushes the delivery order to the warehousing department and drivers. The warehousing department and drivers do not need to focus on the order itself; they only need to focus on the delivery order.”
In addition, differences between product categories lead to differences in loading and transportation. For example, a standard truck can load 100 cases of water, but 250 cases of food. With a mix of products, it is difficult for drivers to predict when to deliver.
To solve this problem, Yunshangliu introduced the concept of a “standard box.” For example, a case of water is considered one standard box. For light bulky goods like snacks, they are converted into standard box units based on the volume of a case of water. Products that do not fill a standard box can be freely combined to fill one.
This way, after a user places an order, the driver can immediately know the order quantity, whether it can fill a truck, and whether it is time to dispatch for delivery.
“The direct result is improved fulfillment efficiency in the backend. When receiving a delivery order, drivers can immediately decide whether to deliver, with low communication and learning costs,” Tang Yibing told New Distribution.
3 Multi-Channel Coverage and Broad Market Layout
1. Expanding into the Catering Channel for Multi-Channel Coverage
Traditional FMCG distribution has complex layers, and although profit structures vary across channels, overall profit margins are already small. In contrast, fresh food and snack brands have low concentration, high frequency, and relatively high gross margins, which has attracted more and more B2B platforms to this internet depression.
In this industry context, Yunshangliu also chose to participate. Besides gaining larger profit margins, covering the catering channel has deeper significance for Yunshangliu, which is located in Southwest China.
“The number of traditional retail stores in Kunming is between 13,000 and 15,000. In fact, we have covered about 80% of retail stores in the Kunming market.” In Tang Yibing's view, the advantage of the internet is not only efficiency improvement through technology but also economies of scale: the more stores covered, the lower the marginal costs of warehousing, distribution, technology, and personnel. Moreover, traditional stores and catering channels have a sufficient number of standard products. In this context, nearly 20,000 catering stores in Kunming represent a huge opportunity for Yunshangliu.
“We started the catering channel this year and have already covered over 5,000 outlets. During this process, we found that the catering channel and the distribution channel do not conflict. Moreover, catering outlets often require delivery in the morning or evening, which complements the working hours of the distribution channel, greatly improving the utilization efficiency of warehousing, logistics, and vehicles.”
In addition, category complementarity is another important reason for Yunshangliu to enter the catering channel. The nature of different outlets determines that brand owners often have different market strategies for the catering channel. For channels with low coverage like catering, brand owners are often willing to invest more resources in market cultivation. In this case, the platform can gain sufficient bargaining power and larger profit margins.
2. Radiating to South and Southeast Asia, Yunnan Products Going Global
Unlike most B2B platforms that focus on regional markets and gradually expand outward, Yunshangliu not only deepens its layout in the Kunming market and strengthens its radiation to other parts of Yunnan Province but also sets its sights on South and Southeast Asian markets.
Tang Yibing told New Distribution that due to geographical location, trade between Yunnan and Southeast Asian countries is very frequent. Many people in Kunming speak various foreign languages, which lays a foundation for Yunshangliu to expand into South and Southeast Asian countries.
“The business environment in South Asian countries is generally not as good as in China, but the population and demand for consumer goods are growing rapidly. After a period of investigation, we believe these markets present a huge opportunity for us.”
Currently, Yunshangliu has begun market promotion in Vietnam and expects to cover 3,000-5,000 stores by the end of the year.
“Many people understand Yunshangliu as 'cloud-based business flow,' but that is not the case,” Tang Yibing told New Distribution. Because he is from a Yunnan ethnic minority, the original meaning of Yunshangliu is 'business flow based on Yunnan.' The platform's future development strategy is rooted in Yunnan, not only to improve the efficiency of the local FMCG distribution industry but also to use its technical capabilities to bring Yunnan's advantageous resources such as fruits, vegetables, flowers, and tea to more places, achieving 'Yunnan products going global' and allowing more people to experience precious and pure Yunnan products.
Final Thoughts:
Solidly building the market and achieving economies of scale through regional outlet density and order density is valuable. The digitalization and automation of the entire operational and decision-making processes through technology may become the greatest value of the internet in the traditional FMCG distribution field. From the development case of Yunshangliu, it is not difficult to see that the ways for a platform to improve its competitiveness are as follows:
- Must understand the FMCG industry and be clear about the various links and processes in the FMCG distribution channel;
- Solid technology, not only improving the digital capability of individual business modules but also the connection and automated processing capability between entire business processes;
- Clearly identify your own strengths and weaknesses, find growth points for the platform's business development, and continuously reduce operating costs;
- Root in the region and maximize the efficiency of the regional market. Only after achieving self-sufficiency should you expand externally.
For Yunshangliu's own development, it is not easy to build a B2B platform with such high digital capability in the Southwest region. At the technical level, Yunshangliu even surpasses most industry participants.
However, in the long run, the upfront investment in technology is large, and the density of outlets in the regional market and their contribution to profits will become important factors testing the platform's long-term development.
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