At the 2016 Yunqi Conference, Jack Ma stated that in the next 30 years, humanity will witness five major transformations: new retail, new manufacturing, new finance, new technology, and new energy. The global internet will undergo innovation, with technology application becoming key, and new technologies will be applied across all industries.
"As the national supply-side reform drives consumption upgrades, millions of community retail stores across the country will embrace new development opportunities," said Tian Yuan, General Manager of Alibaba Retail Link's backend operations, at the 2016 "New Food Era · New Distribution" China FMCG + Internet Summit. "Alibaba Retail Link will leverage new technologies to serve new manufacturing and practice new retail. New technologies will transform traditional field sales models and the ancient multi-tier agency channel system into low-cost, high-efficiency coverage methods. In the future, e-commerce platforms will disappear, and even ordering will be automated through store inventory monitoring, truly achieving zero inventory and credit-based delivery. Emerging manufacturers will use POS data provided by Retail Link to adopt C2B models and flexible production lines to meet consumers' upgraded demands. The positioning of retail stores will also change: the richness of products brought by virtual shelves will expand, in-store advertising systems will become new revenue sources, and deep integration of community services such as laundry, home appliance repair, pet care, logistics pickup, and ready-to-eat meals will give consumers an upgraded experience beyond e-commerce." The forum was hosted by Field 365, Boshihui, and New Distribution, serving as a warm-up for the 2016 Fuzhou Autumn National Sugar and Wine Fair. Over 800 attendees, including executives from major domestic FMCG companies, B2B platforms, consulting firms, investment institutions, chain convenience store executives, distributors, logistics providers, and media, gathered at the Fujian Grand Theatre in Fuzhou to discuss how traditional FMCG companies can leverage the Internet+ transformation and improve supply chain efficiency amid the economic downturn.
Products Are Just the Door Opener for Alibaba to Build Relationships with Retail Stores
Currently, e-commerce has become the fastest-growing channel in the FMCG sector. However, many immediate needs still rely on small retail stores. In reality, many small retail stores struggle to do good business. Tian Yuan stated at the forum, "Retail Link, backed by the Alibaba Group, has no profit pressure, allowing us to calmly think about what customers truly need. We found that product sourcing is just one pain point; more importantly, we need to help traditional retail stores solve issues such as sourcing, supply chain, product selection, location, capital, decoration, marketing, and value-added services, allowing store owners to return to their core duties: marketing, customer relationship maintenance, collecting consumer demands, and serving every customer with care." Alibaba has been deeply involved in the B2B industry for years, with strong accumulation in exports, imports, and international trade. Tian Yuan said that Retail Link's natural advantage lies in having access to millions of source factories and brand resources, which will serve as a great supplement to consumption upgrades. At the same time, Tmall has established good cooperative relationships with tens of thousands of international first-tier brands, enabling Retail Link to quickly complete brand introduction. Many Tmall brands are also eager to join Retail Link. Therefore, Retail Link has an absolute advantage in product sourcing, but this is only the first step; we are not just selling goods.
Supply Chain Is Key to Upgrading Product Mix in 3rd to 6th Tier Cities
Tian Yuan stated at the forum: "Except for tobacco and some companies that can push channels down to such deep levels, most companies cannot do it because it is no longer profitable. If they must cover these areas, they can only rely on wholesale markets, but that causes channel chaos. To solve this problem, Alibaba has decided to build over 200 warehouses nationwide in the first phase to help brand owners push products down to lower-tier cities."
Value-Added Services Are Key to Bringing Incremental Profits to Stores
Alibaba-backed hot imported product consignment, pre-sale of rural specialty products, fresh food purchasing, recharge and ticket booking services, as well as coffee machines, fresh food equipment, central kitchens providing cooked food, and Alibaba-provided advertising screens, will all bring new revenue to retail stores. Retail Link's attitude toward distributors is cooperation without disruption, innovation without replacement. Many distributors worry about being replaced in the future. At this forum, Tian Yuan's speech alleviated their concerns. Tian Yuan said: "What we want to do today is simple: help distributors improve their efficiency and capacity, and give them more valuable functions. For example, in terms of sales representatives, previously one sales rep could only sell products from one manufacturer. But Alibaba Retail Link's city partners will help store owners learn to independently purchase all products, eliminating the need to go door-to-door selling. Sales reps will be able to transition to helping brand owners complete tasks such as store displays and promotions." He further explained: "Retail Link operates as a platform; we do not take ownership of goods, we do not set prices, and we do not earn gross margins. We have the capability to do this. On Taobao, none of the products are ours; we do not need to earn price differences. Functions such as category management and brand manufacturer capital pools are irreplaceable, and every role in the B2B chain has its significance. Therefore, our attitude toward legitimate distributors authorized by brand owners is cooperation without disruption, innovation without replacement." Turning Retail Stores into Small E-commerce Platforms In the past, retailers did business on Alibaba's platform; in the future, we hope Alibaba's suppliers will do business within small stores. We will use new technologies to help retailers and consumers interact, and also enable interactions among consumers. For example, in the future, store shelves can initiate reward-based votes on products, and customers who have purchased at that store can vote, thereby making customers loyal to the store rather than to Alibaba. In the future, stores will be offline traffic entry points. Brand owners can collaborate with stores for new product promotions, market research, and customer feedback, which in turn helps stores enhance customer stickiness. In addition to stores' offline traffic, Alibaba's national apps like Mobile Taobao and Alipay will also bring incremental customers to stores. Retail Link City Partners Work for Themselves Tian Yuan explained this team as follows: "City partners are not Alibaba employees. Unlike brand owners' DSRs, city partners work for themselves; they are their own bosses and have no employment relationship with Alibaba. Alibaba Retail Link only provides them with a complete toolkit, hoping and helping them become FMCG supermen. City partners do not need to stock large amounts of inventory to sell a wide variety of products. They can also use the tools provided by Retail Link to help small stores choose locations, optimize product mix, and create more vivid displays. For city partners who are their own bosses, Alibaba has found that their work enthusiasm and creativity are fully mobilized. They visit customers late at night, even helping store owners watch the store, feed their children, install Alipay on their phones, or download mobile games." Tian Yuan also highlighted an example to illustrate what it means to work for oneself: "Our partners have a secret weapon called the mobile workbench, which provides many tools, such as red packet distribution. Previously, this was done by the platform or brand owners, but now the authority is delegated to partners. Partners have the right to directly send red packets to retail stores, truly feeling like they are their own bosses." The layout revealed by Alibaba Retail Link at this conference aligns with the direction defined by Jack Ma's new retail: making online and offline unified and professional. The future has arrived, the battlefield has changed, and beauty is imminent. The entire consumer retail industry is undergoing comprehensive business internet transformation, and the full integration of online and offline is an inevitable trend. Retail Link will reconstruct the distribution channel system, promote urban retail upgrades, and usher in a new era of Internet+ new retail. -END- The best learning platform for FMCG distributors in China Focusing on providing professional, practical, and actionable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Volume Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brands | 016 Distributor B2B Transformation | [Long press QR code to follow]