In 2015, I joined my current company: Danlu.com, a third-party service platform for the alcoholic beverage industry. Over the past three years, I have worked as a product manager and operations manager, and I believe I have a deeper understanding of alcoholic beverage e-commerce than the average product manager. The following are 9 problems that B2B practitioners may encounter, and I hope my answers can provide some inspiration. Special note: Unless otherwise specified, the following content uses the alcoholic beverage B2B industry as an example, where distributors equal sellers and terminal stores equal buyers.

  1. Why have so many B2B companies emerged in recent years?

  2. Which model is better: self-operated or matchmaking?

  3. What are the differences between 2B and 2C users (decision-making)?

  4. Is it necessary to move transactions online?

  5. How to acquire sellers and buyers?

  6. What are the differences between B2B and B2C operations?

  7. What kind of products do users need?

  8. How to build core competitiveness?

  9. What impact will new retail have on B2B? 1. Why have so many B2B companies emerged in recent years? Businessmen pursue profit. Currently, the market landscape in the C2C and B2C fields has little room for change; even if there are missed niche markets, their market capacity is very limited, so few players enter this field. The B2B market is different. Although Alibaba has been established for many years, it provides general solutions. Each vertical market in B2B has a sufficiently large share, such as the alcoholic beverage industry with a capacity of over a trillion (GMV). JD.com and Alibaba have only captured a small portion of the 2C and 2B market share, which is why so many players have entered. Another reason is the sluggish real economy, declining deposit interest rates, and the surge in investment institutions. This has led investment institutions to have a large amount of hot money that needs to be invested somewhere. The high market value of JD.com and Alibaba and the ultra-high returns after listing have given them unlimited confidence. So, with mutual interest, B2B companies in various niche fields have sprung up like mushrooms after rain. Newly established e-commerce companies in recent years (data from IT Juzi, only partial screenshot) At the same time, there are some common problems that have existed for many years in this field that need to be solved:

  • The traditional (offline) channels in this field have too many intermediate links. For example, the wine industry has a five-layer structure: manufacturers, provincial distributors, second-level distributors, third-level distributors (commonly known as second-tier and third-tier wholesalers), terminal stores (convenience stores, supermarkets, etc.), and consumers. Each layer adds a markup, affecting the final price of the product.
  • The efficiency of information flow, logistics, and capital flow in the entire transaction chain is low.
  • Existing websites such as Alibaba have not provided effective solutions that conform to the industry's characteristics. 2. Which model is better: self-operated or matchmaking? I tried to sort out the advantages and disadvantages of the self-operated and matchmaking models, and found that both have pros and cons, making it difficult to choose. At first glance, it seems almost unsolvable, but is it really like this? The answer is no. Self-operated and matchmaking are not opposites; these two models can coexist completely, that is, the "self-operated + matchmaking" model. It can focus on self-operated at one stage and matchmaking at another, or "grasp both hands, both must be hard." The self-operated + matchmaking model combines the advantages of both and can achieve the following goals:
  • Matchmaking can provide rich SKUs to meet users' one-stop procurement needs.
  • Matchmaking forms scale, and self-operated contributes profits. That is, attract customers online through commission-free matchmaking, then use high-margin self-operated products to contribute profits, thereby subsidizing the platform's development and maintenance costs, and achieving profitability. 3. What are the differences between 2B and 2C users (decision-making)? There is a big difference between B2C and B2B buyers when making consumer decisions. The former is individual decision-making, which may focus on logistics/product quality and price, while the latter is multi-person (collective) decision-making, with more points of focus. If I were a B2C user (individual consumer), I would consider:
  • What wines do I usually like to drink / which wines do I often buy (customer habits / frequent purchases);
  • What wines are recommended by the website, APP, or friends and colleagues;
  • Whether these wines are self-operated by the platform or provided by third-party sellers;
  • Logistics, price, after-sales, promotions, free shipping, etc.; If I were a B2B user (supermarket owner / convenience store purchaser, etc.), I might consider:
  • Recently hot-selling wine categories, gross margins of products, etc.
  • Recent weather/current affairs: for example, hot weather or the World Cup will increase beer sales; for example, the hit drama "Ode to Joy 2" will drive the sales of Umeet;
  • Recent holidays and social hotspots: for example, local tourism festivals or large national exhibitions can boost sales of local brand wines, such as Emei Snow in Leshan and Bingfeng in Xi'an. For example, as Spring Festival approaches, sales of mid-to-high-end wines and gift sets will increase; during National Day, good-looking and prestigious Honghua Lang will see increased sales due to wedding gatherings;
  • What wines are promoted/displayed by neighbor Wang: if others have it, I must have it; if others have it, I must have better. I must also have inventory of others' bestsellers;
  • Have regular/new customers mentioned any wines they need: recently, many people have been asking if there is Lu Xiaoer or sparkling wine; should I stock up?
  • Ask upstream distributors which wines sell well: will wines that sell well in District A also sell well in my district?
  • Find new channels or suppliers for suitable new products: has the manufacturer launched new products? For example, small bottles, vintage wines, health wines, etc. Would it be cheaper to get a certain small wine from another distributor?
  • Hot items on major networks such as JD.com, Taobao, Douyin, etc.: like the Douyin shrimp that was popular in March, a certain wine might become popular due to a certain platform, such as Laoshan Snake Grass Water, which became popular due to Zhihu discussions;
  • Upstream distributors' credit terms and manufacturer policies: both Distributor A and Distributor B sell Lu Xiaoer small wine, but their credit terms differ, which will also affect my purchase decision;
  • Information on gifts and rebates: are there gifts/bundles/attached goods, what is the gift ratio, for example, 2 boxes of Feitian Moutai bundled with 1 box of Moutai Yingbin, and are rebates monthly or quarterly? The above are just some decision factors. There are also soft factors such as personal relationships, for example, the relationship/private friendship/customer service relationship with the distributor boss/salesperson, the boss/salesperson's character, and the distributor's scale/reputation. It is possible that the only reason I purchase from a certain distributor is the good customer service relationship with the salesperson, and the dozens of factors above may have no impact. 4. Is it necessary to move transactions online? First, the conclusion: theoretically, it is not necessary. Buyers are enterprises, and sellers are also enterprises (industrial and commercial individual businesses). Everyone can complete transactions through phone, IM tools, ordering meetings, email, or contracts. The most recognized payment method for both buyers and sellers is "cash on delivery, money and goods clear." In many vertical B2B fields, such as the alcoholic beverage industry, buyers and sellers already know each other offline. Even if they don't know each other before the transaction, they can connect through three degrees of separation. So it seems that moving transactions online is not necessary. Back to the question itself: why do B2B platforms require transactions to be moved online?
  • The needs of investors. This is easy to understand: only by moving transactions online can scale be reflected, and can the company's development speed and market share be demonstrated. You can say the alcoholic beverage B2B market is huge and you are the No.1 in this field, but how big is "huge"? How do you prove you are the leader and not the second or third? But if you say a platform has X sellers, annual transactions of X billion, and cumulative transactions of X billion, this data is more convincing, making it possible to obtain further financing and tell a better story.
  • The needs of platform development. As mentioned earlier, it is difficult to make money by charging commissions on transaction matchmaking. To achieve profitability, other paths must be considered. If there is enough user transaction data and behavioral data, it seems possible to do other things, such as supply chain finance, big data, value-added services, etc. But without this data, these potential business directions become sources without roots. If you want to do finance, but you don't know the true scale and capability of this buyer or seller (annual transaction volume of ten million or one million), how can you do it?
  • Other reasons. Is it to increase user stickiness? To improve customer recognition? It seems not. Different industries have different reasons. I will leave this as a question or homework for the readers. So what are the pros and cons of moving transactions online? Based on the above, the advantages are not prominent, and the disadvantages are quite obvious. Moving online is thankless and almost does not meet the interests of various roles. Without other interest points or external forces, promoting "transaction online" is almost difficult. "There is nothing in the world that a hot pot cannot solve; if there is, then two." This problem is the same. Although money is not omnipotent, in this case, money seems to be the best solution, and there is no other. I believe everyone can guess how to promote this: subsidies. Not everyone knows how to make money, but I guess everyone knows how to spend money. Isn't there a transaction fee? I'll subsidize it. POS has costs? I'll provide it for free. Salespeople resist? Then I'll give cash subsidies based on transaction traffic, and give salespeople commissions based on transaction terminals or registered terminals. This can push the matter forward. Of course, this is just the most basic and common approach. The advanced approach is to bring in the top merchants in each region to form a community of interests, whether through equity participation or joint ventures. As long as they become one family, these big merchants will be willing to promote the onlineization of transactions. Please use your imagination here; I won't elaborate. However, old problems are solved, but new problems arise. I believe smart readers have already got it: it's what we commonly call fake transactions, or "shearing the sheep." How to solve this problem? There is no standard answer; it can only be analyzed and handled dialectically based on the company's industry and stage. If I have to say it, it's four words: handle according to circumstances. So is there a way or channel to make users willingly use online transactions? The answer is yes. Provide products or services that customers need, as illustrated below:
  • Provide price and promotion display: the traditional way is to call/IM to inquire about prices and promotional policies of various products, but the B2B platform provides online display. After viewing, you can add to cart and pay in one go, right?
  • Provide WeChat/Alipay payment: now many C-end customers pay with WeChat/Alipay when consuming at B-end merchants (cigarette and liquor stores, supermarkets, etc.). B-end merchants also need to spend this money, and they can pay upstream sellers with it;
  • Provide business allocation and performance statistics: traditionally offline, salespeople are responsible for some customers and products in some areas, and sales performance (commissions) cannot be counted in time. But with this system, at least salespeople are willing to promote buyers to use online transactions;
  • Financial products and services: we provide financial (loan) products of 50,000-200,000 yuan for buyers, and financial (loan) products of 1 million-50 million yuan for sellers. These products require the borrower to meet certain transaction amount requirements on the platform, which will promote their transactions to move online;
  • Other feasible solutions: the above are existing products or services. There are actually other ways. For example, customers who complete online transactions of XX yuan within a certain period can receive the 2017 XX Province Alcoholic Beverage Industry White Paper, or enjoy XX% discount on warehousing and logistics fees, or enjoy more quotas or higher discounts on self-operated products; The B2B service model is based on the industry chain. Online transactions are only one link of B2B and part of the complete industry chain. Only by fully and deeply understanding the interest demands and pain points of various roles can we make corresponding strategies, closely link the transaction link with other parts, and thus make users willingly use online transactions. In the long run, online transactions are needed and necessary. 5. How to acquire sellers and buyers? Before answering this question, we need to answer three other questions:
  • Who are our users (customers)?
  • What are the customer profiles of these people?
  • What are their information acquisition channels? The first question: our users are thousands of distributors nationwide (sellers with annual sales of tens of millions or hundreds of millions), and hundreds of thousands of terminal stores (various restaurants, famous cigarette and liquor stores, convenience stores, supermarkets, etc.). The second question: first, distributors. These people have assets of at least ten million, mostly middle-aged, mostly male. The post-60s and post-70s account for the vast majority, with only a small number of post-80s. But now post-80s and post-90s have begun to gradually take over these businesses. These people have a deeper understanding of the Internet, and communication with them is obviously easier. We do not have detailed information about terminal store customers, so the answer to this part is unknown/uncertain. The third question: they watch Toutiao, browse Douyin, watch live streams, and use WeChat. They rarely use "high-end" channels like 36Kr, Wine Industry, and Zhihu. They are ordinary businessmen, no more ordinary. In summary, customer acquisition in the B2B industry is destined to be a tough physical job, especially in vertical industries. The national Internet users are 500-600 million, but the customers in the alcoholic beverage B2B industry are only hundreds of thousands to millions, which determines that it is impossible to adopt the operation model of Tmall and JD.com, and it is also impossible to increase volume in a short time like B2C. JD.com's ads on Baidu
  • Advertising is almost useless: vertical B2B industries are not like other products where the core selling point can be extracted and conveyed to users in a few words. This requires extremely high advertising design. Even if you can "squeeze" it out and think of it, how do you place this ad? Online or offline? How can you accurately hit these hundreds of thousands to millions of users nationwide? If you can't hit them, then you can only do brand exposure ads, but is this money worth it?
  • Customer growth is slow: as mentioned earlier, the customer decision chain is long and has many influencing factors, which makes B2B customer acquisition not as easy as games or O2O. Sellers needless to say, distributors willing to join the platform almost all require several rounds of visits and communication, followed by cumbersome onboarding processes and training guidance. Only after there are sellers in a certain region can buyers be expanded. This work cannot be completed by the platform's own market personnel alone. After all, there are so many scammers and competitors, and more often, it is completed with the assistance of distributor (seller) personnel.
  • Large-scale ground promotion team: as mentioned above, customer acquisition online is difficult to achieve. Even if there is online understanding, more offline one-on-one visits and communication are needed, so a large-scale ground promotion team is required. Just as Alibaba had a ground promotion team of 5,000-6,000 people at its peak. And through our company's practice over the past few years, the most effective method is still the ground promotion team.
  • Seize the main contradiction: in the early stage, when we entered a new region, we generally first communicated with the biggest players. This communication usually requires several rounds. Then the big players will take the lead to join and conduct online transactions (jointly expanded by both customers), and then the big players will take our market ground promotion personnel to communicate with the smaller players, and then the smaller players will also enter. Later, we found that one-on-one customer visits were inefficient, so we switched to a more efficient conference marketing method, namely the "XX Regional Partner Recruitment Conference." Through the conference, we concentrated on explaining the company's development history, business model, short-term and long-term benefits for sellers after joining, etc., and then conducted second-round visits offline to break through. 6. What are the differences between B2B and B2C operations? There is a lot of content about operations on the market, such as the well-known user operations, activity operations, content operations, and data operations. But there is very little truly about B2B operations, and the B2C operation methods we are familiar with cannot be directly applied to B2B. User operations For the seller side, B2B and B2C user operations are actually similar: maintain the top 20% of big sellers, meet their reasonable needs as much as possible, and tilt more resources to the top big sellers. For the remaining 80%, as long as they don't have second thoughts and don't churn, it's OK. The bigger difference is in the operation of the buyer side. At this point, you will find that the various online customer acquisition methods available for B2C are difficult to implement in the B2B industry. Search bidding, advertising alliances, PR releases, encyclopedias and Q&A, self-media + Moments, etc. seem to fail in the B2B industry, especially in the alcoholic beverage industry. Moreover, B2B does not have natural traffic like B2C; every buyer who joins is brought in by sellers or ground promotion personnel with great effort. What does B2C user operations, or specifically the customer acquisition stage, rely on? A landing page that touches people's hearts. If it doesn't touch you within 5 seconds, then basically this action or step fails, and the advertising fee is wasted. What does B2B rely on? A set of standard scripts + market personnel's sales skills. The following is a "Terminal Store Market Communication Script" I made before, which is a script template for market personnel to communicate with terminal store buyers. Due to the user volume, B2C buyer operations may not be refined enough, after all, thousands of people have thousands of faces, with tens of millions of users. B2B buyer operations can be refined. Content operations As a vertical industry B2B platform service provider with hundreds of thousands of users, the regions, levels, and structures of these users are different, and the difficulty of content operations is self-evident. Behind these B-end users are actually living C-end customers. This customer may be a salesperson, purchaser, financial officer, or manager. It is impossible to expect them to produce content; it can only be produced by the official or platform. What themes/types does the content mainly focus on? Industry news updates, company news releases, new feature introductions, or others? In what form? Simple graphics and text, or video, or comics, or others? What style? Serious or fresh and literary, or others? This is really different from B2C content operations. B2C content operations can hitchhike on various trends and change styles every day, but B2B cannot. Activity operations As mentioned earlier, B2C users have a relatively short decision chain and relatively few influencing factors, making them prone to bargain hunting or impulse consumption. B2B user decisions are not like this. Although the promotion methods of the two have many similarities, they are really quite different from B2C. The purposes of B2B activity operations are nothing more than: increasing new terminal stores, improving activity, increasing transaction volume, etc. Different stages and different regional market activities have different purposes. For example, in emerging markets, the proportion of these three is 523, and in mature markets, it is 253. This requires that the activity operation plan be tailored to the person and time, changing with the region and stage. We have also tried some common B2C activities such as full reduction and full gift. The final conclusion was as expected: different regions and different types (scales) of distributors use different activity types, and the results may be two extremes. For example, for large distributors in Hunan mainly operating Luzhou Laojiao, full gift has almost no effect, but full reduction works very well. For example, for medium-sized distributors in Jiangxi mainly operating local famous wines, full return is the most effective. But it is certain that rational and shrewd B2B buyers will not buy a bunch of toilet paper that can't be used up in two years like B2C buyers. Without too much external stimulation or influence, B2B buyers' annual demand for alcoholic beverages is relatively stable. Promotional activities may promote an increase in sales in a certain month, but this is at the cost of overdrafting the purchase volume for the next few months. 7. What kind of products do users need? I have been thinking about this question since I joined the company. Before answering this question, let's answer another question: what is the core need of users? Why do you go to JD.com or Taobao to buy things? Because I need this thing, and buying it on JD.com has quality assurance, is more convenient, and has faster logistics; because this thing is only available on Taobao, and Taobao is cheaper. What is the core need of alcoholic beverage B2B users? They all hope to make more money. But making money is only the ultimate goal. Through what methods/ways to achieve this goal? Nothing more than increasing revenue and reducing expenditure. What are the more detailed indicators for these two ways? Let's break it down in more detail. 【Increase revenue】 Expand new customers: more incremental customers; Increase revenue: act as an agent for products with higher gross margins, such as Lu Xiaoer and Junding red wine; 【Reduce expenditure】 Improve efficiency: use systems or tools to improve input-output ratio and hire fewer people; Danlu Logistics: co-build and share warehousing and logistics to reduce costs; Financial products: faster and lower-interest financial loan products; Previously, Yu Jun proposed a viewpoint: product value = (new experience - old experience) - replacement cost. Although the three factors in this formula are not quantifiable, I personally think the B2B product direction should not deviate too much. If I expand on this, there is too much content. If I have time later (if I don't have lazy cancer), I will write a new article to discuss it. 8. How to build core competitiveness? The construction of a company's core competitiveness is a process of continuous investment. As long as the company can find a "fulcrum" for continuous investment, allowing the company to continuously create core value for external users and significantly improve internal operational efficiency, the company's core competitiveness can be built successfully. JD.com's core competitiveness has three points: user experience, logistics and distribution, and cost reduction (from Liu Qiangdong's self-description in the "Dialogue" program in September 2016). What about Alibaba's core competitiveness? Ma Yun's own statement is "values and thoughts" (from Ma Yun's public speech at Peking University's Centennial Lecture Hall). What about Huawei's core competitiveness? Ren Zhengfei's viewpoint is "talent is not the core competitiveness of a company; the talent management system and talent management capability are." Speaking of this, I think of a question often asked when startups raised funds in the early years: if BAT enters this business, what will you do? Although in recent years BAT will not casually enter emerging markets/fields (becoming the leading/potential players in this field), it is possible that other companies will enter this field. What to do? Build your own core competitiveness. So what is the core competitiveness of the vertical B2B industry? Platform system? I believe that a company like BAT, with money and people, can build a better platform system than ours in at most half a year. Talent? My intuitive feeling is not. So what is it? I think it might be: the ability to integrate resources differently from others based on a deep and thorough understanding of the industry. Those obvious platform systems, operations, or marketing and operations systems are attached to this. 9. What impact will new retail have on B2B? In 2016, Ma Yun first proposed the concept of "new retail" at the Alibaba Cloud Computing Conference. He said: "In the next ten or twenty years, there will be no e-commerce, only new retail." This immediately sparked heated discussion. There are many interpretations of "new retail." In March 2018, the Alibaba Research Institute defined it as: a data-driven pan-retail form centered on consumer experience. Its core value is to maximize the operational efficiency of the entire social circulation retail industry. Alibaba is doing Retail Link and Tmall Small Stores, and JD.com is also doing New Road. However, I have briefly analyzed the "Retail Link" APP's product and operation promotion model, and found that it seems not much different from our APP. I have also experienced JD.com's "JD Supermarket" created by New Road, and it feels not much different from 7-11, FamilyMart, etc. Maybe it's more about procurement, warehousing, and distribution. Perhaps the power of new retail has not yet been fully demonstrated. Regarding this discussion, there is a post on Zhihu called "What is New Retail? What are the key points?" If you are interested, you can go and check it out. Back to the question itself: what impact will new retail have on the B2B industry? To be honest, I don't know myself, but I think the "new technology" and "new ideas" brought by "new retail" will definitely promote positive and beneficial impacts on the B2B industry, improve efficiency, and increase revenue. Source: Teacher Zhan (ID: zhanlaoshi007) -END-