---
title: "Achieving 300 Million in Sales in 2 Years: How One FMCG B2B Platform Grew Against the Tide in the 'Deep Water' Period"
description: "In 2019, distributors faced a tough year as market downturn and internet disruption forced transformation. While many traditional distributors failed in their B2B pivot due to incomplete product ranges, weak customer loyalty, and poor logistics, Xi'an-based Jiapin Yunshi achieved over 300 million yuan in sales in just two years by focusing on product strength, efficient supply chain, and excellent store service."
author: "李青林"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-12-28"
categories: "Dealer Operations, Management & Methods, Supply Chain & B2B"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/aIqaGRAzv7QtoaGMvNiWXg"
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citation: "李青林. “Achieving 300 Million in Sales in 2 Years: How One FMCG B2B Platform Grew Against the Tide in the 'Deep Water' Period.” New Distribution, 2019-12-28. https://xinjignxiao.com/en/articles/achieving-300-million-in-sales-in-2-years-how-one-fmcg-b2b-platform-grew-dcf12f0f/"
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---

# Achieving 300 Million in Sales in 2 Years: How One FMCG B2B Platform Grew Against the Tide in the 'Deep Water' Period

> In 2019, distributors faced a tough year as market downturn and internet disruption forced transformation. While many traditional distributors failed in their B2B pivot due to incomplete product ranges, weak customer loyalty, and poor logistics, Xi'an-based Jiapin Yunshi achieved over 300 million yuan in sales in just two years by focusing on product strength, efficient supply chain, and excellent store service.

2019 was a relatively "difficult" year for distributors. The market downturn and the impact of the internet have brought this century-old group face-to-face with a new round of transformation.
In the FMCG industry, new products change rapidly, traditional channels are saturated, and new retail channels are dominated by capital and internet players, forcing traditional distributors to transform.
Among them, some traditional distributors have caught the fast train of the internet, transforming into B2B platforms, shifting from delivery providers to platform service providers.
However, the harsh reality tells distributors that the risks of transforming to B2B are far greater than those faced in traditional channels.
Without capital support, many transformed distributors burned through years of accumulated funds and quietly exited.
According to New Distribution statistics, in 2019, the number of B2B platforms in China was 130, while a year earlier it was as high as 260.
Apart from consolidation by leading platforms, many B2B platforms transformed by distributors also disappeared.
But in the ancient city of Xi'an, there is a B2B platform enterprise that has grown against the trend. In just two years, its sales exceeded 300 million yuan. After in-depth research, New Distribution reporters uncovered the secrets behind its rapid growth, which may provide some ideas for distributors about to transform to B2B or those struggling in B2B.
**-01- Why Do Distributors Fail in B2B Transformation?**
**What is the logic of B2B?**
**It is to increase transaction volume, achieve economies of scale, reduce marginal costs, and generate profit from it.**
To increase transaction volume, a distributor's B2B platform needs a rich variety of categories and brands.
Because B2B customers are not secondary wholesalers or distributors in the channel, but store owners in the terminal market.
**What do terminal store owners need?**
**Favorable purchase prices, convenient one-stop procurement solutions, and thoughtful after-sales service.**
Among purchase price, procurement solutions, and service, store owners value procurement solutions first, then service, and finally price.
If distributors can provide terminal stores with one-stop procurement solutions (complete categories and products) and efficient, thoughtful after-sales service,
then store owners will not mind paying one or two yuan more than other platforms.
Unfortunately, after traditional distributors transform to B2B, they only change the model, moving traditional distribution channels online, but they do not change their operational thinking.
**The thinking flaws of distributors are mainly reflected in the following points:**
**1. Incomplete categories and items**
After transforming to B2B, traditional distributors still do not break away from their original category labels. For example, snack food distributors still focus on snack foods, condiment distributors still focus on condiments, and daily chemical distributors still focus on daily chemicals.
They all fail to meet the one-stop ordering requirements of terminal stores.
**2. Low stickiness with small stores**
With the aggressive entry of JD New Channel and Alibaba Retail Link, digital ordering tools for terminal small stores have been well cultivated nationwide. Therefore, in major cities across the country, small store owners have gradually adapted to ordering through B2B platforms.
But for distributors transforming to B2B, this is not a good thing.
Why?
**Because small store owners have no stickiness to your B2B platform, and there are three reasons for this:**
> (1) Incomplete categories and insufficient products: Small store owners will choose B2B platforms with complete categories and products.
> (2) Price comparison: Currently, small store owners have at least three ordering apps installed on their phones, and they compare prices across platforms, choosing the platform with the most attractive promotions.
> (3) Service perfection: Slow delivery and troublesome returns are direct reasons affecting small store owner satisfaction.
**These three seemingly unrelated reasons are actually interlinked.**
Because categories are incomplete, distributors engage in price wars to attract store owners, which inevitably erodes profits, and without profits, there is no service. Without service, naturally no small store is willing to order from you.
So this is a vicious cycle.
**3. Incomplete logistics**
The development path of traditional distributors is from sitting merchants to traveling merchants. A few vehicles, a few salesmen, and a few routes constitute the daily visit work of distributors, but this role is merely that of a delivery provider, not supply chain logistics.
Delivery is the end of the supply chain logistics, but more importantly, a complete supply chain logistics system should be formed from aspects such as inventory turnover rate, inventory management, and order fulfillment management. This requires not only digital tools but also professional warehouse management personnel.
**4. Lack of service awareness**
For distributors, service is not just simple customer relationship maintenance, shelf arrangement, and promotional item distribution, but **providing practical services to terminal stores, such as returns and exchanges, handling of near-expiry products, and handling of damaged products.**
The above points are the problems faced by most distributors transforming to B2B. So how did Fan Qi, the founder of Jiapin Yunshi, solve these problems? What actions did he take to enable Jiapin Yunshi to grow rapidly?
**-02- What Conditions Are Needed for Distributors to Transform to B2B?**
Through on-site visits to Jiapin Yunshi and in-depth conversations with Fan Qi, the secret of Jiapin Yunshi's counter-trend growth gradually surfaced.
**1. Product strength is the core competitiveness of distributors**
With a 12,000-square-meter warehouse and over 5,500 SKUs, covering 7 major categories including snacks, grain and oil, daily chemicals, alcoholic beverages, and low-temperature dairy products, with 46 mid-level categories and 228 sub-categories. First-tier brands account for 40%, second-tier brands 35%, and third-tier brands 15%.
First-tier brands drive sales, while second- and third-tier brands generate profit.
This multi-brand, multi-category product architecture of Jiapin Yunshi basically meets 80% of the ordering needs of terminal small stores.
Selecting competitive products from thousands of brands and tens of thousands of products tests the purchasing capability of distributors.
Product selection means starting from the store's perspective, understanding their needs. The embodiment of product selection capability requires purchasers to have a complete procurement plan, and the core is product strength.
Selling the products in the distributor's warehouse to the right customers at the right time, at the right price, in the right way, and in the right place is the embodiment of product strength.
For example, Fan Qi requires his team to match different products according to different store types. For community stores, grain, oil, condiments, and daily chemicals account for a larger proportion, while convenience stores focus on snack foods, beverages, and alcoholic drinks.
For example, the team will formulate different activities according to different solar terms and festivals.
To bring more comprehensive choices to terminal customers, it is necessary to improve the dimension of product strength through the width and depth of products.
Width refers to how many major, mid-level, and sub-categories there are, which is the primary condition for terminal store owners to order.
Depth represents how many brands are covered under each category, price band distribution, flavors, and specifications. This is the secondary condition for small store owners to order.
Different types of store owners will choose suitable products based on different dimensions of the products.
In addition, to attract store owners to order, it is necessary to build a reasonable product structure.
Traffic products as the mainstay, explosive products for traffic, using product combination differences and competition between different brands to meet the daily ordering needs of store owners, and regularly eliminate slow-moving products to ensure product freshness.
**2. Revitalize inventory and build an efficient supply chain**
If product strength is the hematopoietic function of distributors, then an efficient supply chain is the blood transfusion function, and terminal small stores are the organs at the end of the blood vessels.
Managing a 12,000-square-meter warehouse with over 5,500 SKUs requires an efficient logistics system and sound inventory management.
Through 85 vehicles from third-party logistics and 95 warehouse management personnel, operating in two shifts (10:00-19:00 and 20:00-24:00), they ensure that customers receive goods within 12 hours after placing an order.
In the warehouse, picking personnel use electronic labels and assembly line picking, which speeds up the picking process. Even during peak seasons, there is never a shortage of goods.
**3. Cooperate with local distributors**
In addition to direct cooperation with first-tier brands, Fan Qi also has over 100 suppliers, who come from local distributors. Fan Qi told New Distribution that this is a win-win cooperation. "I provide local distributors with warehouse space, helping them distribute products and complete tasks. And because of their supply, we can fulfill our promise of no stockouts to our customers."
**4. Provide good store service**
"Not expensive, no stockouts, no delays" is Fan Qi's promise to terminal store owners.
Relying on Jiapin Yunshi's strong product strength and efficient logistics system, this promise can be fulfilled.
Youthfulness and specialization are the characteristics of current terminal store owners. They are more receptive to new products and also value service quality.
Among the more than 6,700 small stores cooperating with Jiapin, any product that meets the return standards will be returned unconditionally, and the return amount will be offset against the corresponding order amount.
In addition, Fan Qi's team will also carry out different display arrangements according to different store types to help customers improve product turnover rates.
Covering more than 6,700 terminal small stores, with over 4,300 active users, warehouse turnover days of 18 days, and comprehensive gross profit exceeding 9%. These are the achievements Fan Qi has made in the past two years.
**New Distribution Commentary:**
At present, most distributors transforming to B2B mainly rely on digital tools to achieve distribution, but in essence, they still play the role of distributors. Traditional distributors' transformation requires not only changing the model but also changing their thinking.
The model is a car on the road of distributor transformation, while thinking is the driver.
**In the future, distributors will compete on product strength and supply chain. Only with strong product strength can they build a competitive product system, and the final output requires distributors to have complete supply chain capabilities. It is necessary to break down the barriers between warehouse and logistics to provide terminal customers with fast, accurate, and efficient logistics services.**
Once the tip is adopted, a reward of 400-2000 yuan will be paid.


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## Citation metadata

- Publisher: New Distribution
- Author: 李青林
- Published: 2019-12-28
- Canonical: https://xinjignxiao.com/en/articles/achieving-300-million-in-sales-in-2-years-how-one-fmcg-b2b-platform-grew-dcf12f0f/
- Original source: https://mp.weixin.qq.com/s/aIqaGRAzv7QtoaGMvNiWXg

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