---
title: "A Frontline Entrepreneur Tells You How to Play the FMCG Channel in 2017"
description: "As a startup in the FMCG channel e-commerce platform, we have been operating for a year and would like to share our views and feelings about the FMCG channel. We believe that 2017 will be a breakthrough year for FMCG B2B, and various platforms will reach more consensus on the path of seeking common ground while reserving differences. To this end, Pi Duoduo has summarized three trends in the future development of FMCG B2B, hoping to exchange ideas with peers."
author: "郭德苍"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-11-24"
language: "en"
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# A Frontline Entrepreneur Tells You How to Play the FMCG Channel in 2017

> As a startup in the FMCG channel e-commerce platform, we have been operating for a year and would like to share our views and feelings about the FMCG channel. We believe that 2017 will be a breakthrough year for FMCG B2B, and various platforms will reach more consensus on the path of seeking common ground while reserving differences. To this end, Pi Duoduo has summarized three trends in the future development of FMCG B2B, hoping to exchange ideas with peers.

> As a startup in the FMCG channel e-commerce platform, we have been operating for a year and would like to share our views and feelings about the FMCG channel.
We believe that 2017 will be a breakthrough year for FMCG B2B, and various platforms will reach more consensus on the path of seeking common ground while reserving differences. To this end, Pi Duoduo has summarized three trends in the future development of FMCG B2B, hoping to exchange ideas with peers.
**FMCG B2B will eventually move towards industrial internet**
We believe that the development of FMCG B2B e-commerce must be fundamentally aimed at improving efficiency and reducing costs. Moreover, FMCG B2B e-commerce should not only improve the efficiency of a single link in the supply and marketing channel, but also be an "Internet+" solution based on the entire FMCG industry. In other words, FMCG B2B will inevitably move towards the industrial internet model.
After more than 30 years of development, China's FMCG industry has formed a supply and marketing channel structure of manufacturer (F) - distributor (B) - retail terminal (R) - consumer (C). However, at present, all links in the supply chain face the problems of high cost and low efficiency:
First, under the traditional distribution model, manufacturers face huge channel recruitment and marketing costs, channel dividends decline, new product survival rate is low, and market growth hits a ceiling.
Second, under the operation mode of vehicle sales and visit sales, distributors have high labor, storage, transportation, and management costs, fierce competition among peers, and low profitability, urgently needing transformation.
Third, terminal stores have single procurement channels and fragmented targets, bloated inventory but no independent sales promotion capability, accompanied by operating pressure from rising rents and consumption diversion.
At the beginning of Pi Duoduo's establishment, we proposed that FMCG B2B and traditional FMCG channels are not in a subversive or opposing relationship, but rather use Internet tools to optimize existing stock and improve efficiency. Therefore, in actual operation, Pi Duoduo always advocates an operation model of no burning money, no subsidies, no robbery, and no price chaos. In response to the core needs of manufacturers, distributors, and retailers, we developed the Pi Duoduo mobile internet application platform to create a full industrial internet of F2B2R2C.
In fact, our idea is simple: if with the help of a B2B platform, manufacturers can easily complete channel recruitment and cost control, distributors can reduce personnel and distribution costs, and terminal stores can grasp consumers' purchasing needs in the first time, then the platform has value for existence and potential for growth.
Conversely, when a B2B platform, in the name of the Internet, wantonly impacts the market price system of brand products in exchange for "price advantages", but its own operating costs are even higher than those of traditional distributors, and finally burns through capital subsidies but cannot fill the stomachs of small stores, it precisely shows that a B2B model lacking industrial thinking and ignoring business logic will inevitably drift away from the FMCG industry.
**Distributors are the best entry point for FMCG B2B**
As the saying goes, Rome was not built in a day. To achieve a breakthrough in the FMCG industrial internet, finding the right entry point is particularly important.
In this regard, different B2B platforms have different paths. Some platforms choose small stores as the entry point, pushing the supply chain from bottom to top; some platforms start from products, building new channels from top to bottom; Pi Duoduo chooses to start from distributors who connect both ends of the channel, building a distributed e-commerce platform.
The so-called distributed e-commerce is to build a localized B2B terminal procurement platform through the "distributor + Internet" approach. Platforms in various regions operate independently without interference. The platform is open, and all distributors in the region can join or settle in. By transferring offline transactions online, it improves efficiency, reduces costs, saves expenses, and expands sales. In other words, distributed e-commerce is the platform-based transformation of distributors.
Pi Duoduo believes that distributors integrate information flow, logistics, and capital flow into one. Their natural stock and traffic advantages make them the best entry point for FMCG B2B.
In fact, distributors have innate B2B platform genes. On the one hand, as agents, distributors control the supply of goods. Moving offline stock online can achieve rapid accumulation of platform scale; on the other hand, distributors control local market terminal resources. Importing these terminals into the platform naturally generates traffic. In this way, the two key issues restricting the development of FMCG B2B e-commerce - "supply" and "users" - are both solved.
Of course, whether to choose distributors as the entry point for FMCG B2B depends on the platform company's business model and the platform's own technical architecture and operational capabilities. In fact, the complexity of FMCG B2B operations is determined by the market itself. If the technical level cannot provide operational support, and the operational level cannot fit the reality of distributors, then even if starting from distributors, it cannot truly achieve the goal of improving efficiency and reducing consumption, let alone extend and integrate to both ends.
**Comprehensive FMCG B2B platforms are more valuable**
As we all know, FMCG involves many categories. So should FMCG B2B be a vertical e-commerce for a specific category or a comprehensive platform for multiple categories? Ultimately, it depends on who your target users are and what their needs really are.
As an FMCG B2B e-commerce, if your target users are mainly tobacco and liquor stores, then focusing on alcohol and beverages is basically enough. If your target users are various circulation stores with thousands of SKUs, then a vertical e-commerce for a single category obviously cannot meet the one-stop procurement needs of small stores. If all B2B platforms become vertical, it is hard to imagine how many apps a small store owner would need to install on their phone.
Looking at the current retail landscape of the FMCG industry, circulation retail terminals still hold an absolute advantage in both scale and sales proportion, and their procurement needs are not only huge but also diverse. Therefore, comprehensive FMCG B2B platforms have far greater development potential and commercial value than vertical B2B e-commerce for specific categories.
In fact, whether it is a comprehensive platform or vertical e-commerce, the prerequisite for success is ensuring product richness, that is, the ability to integrate upstream supply chains. From this perspective, vertical e-commerce seems much less difficult than comprehensive platforms. But is that really the case?
In reality, vertical e-commerce generally operates nationwide, and its main categories are high-margin, high-value products, thereby supporting its high operating and logistics costs. But essentially, vertical e-commerce is no different from distributors. To be precise, vertical e-commerce is an internet-based distributor, with the difference from traditional distributors being no regional restrictions. This also determines that vertical e-commerce aims to earn price differences, which will inevitably impact the existing price and distribution system, leading to resistance from upstream manufacturers. It can be seen that vertical e-commerce is not smooth sailing on the road of supply chain integration.
In contrast, comprehensive platforms, due to involving more categories and more users, must adopt different approaches in supply chain integration.
First, comprehensive platforms must be locally operated, that is, local supply, warehousing, and logistics. Only by starting from local supply, i.e., distributors, can supply chain integration be fastest and products be more complete; only by grafting local warehousing and distribution facilities can logistics costs be minimized and efficiency be higher.
Second, comprehensive platforms must not subvert the existing distribution pattern, but rather strive to build a new distribution ecosystem for the industry and improve the overall operational efficiency of the supply chain. Therefore, the role played by the platform is not any "B" in B2B, but "2".
**Source: Sales and Marketing**
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