The 3rd "FMCG + Internet Conference" hosted by New Distribution was grandly held at Chongqing Yuelai International Conference Center on November 8-9, 2017! It attracted thousands of distributors, manufacturers, and internet companies from across the country, with a full house and spectacular scenes. The following is the speech delivered by Mr. Yang Hua, General Manager of Alibaba Retail Link West Region, at the conference, specially organized by New Distribution for our readers.
Dear brand owners and distributor friends, good afternoon! Today, everyone is discussing B2B solutions. Facing this market, where should brand owners and distributors go? Next, I will share Alibaba's solution with you. Actually, the answer is right here: Trees make a forest, streams merge into the sea. Each of you is a small forest, a small mountain stream. The B2B market is the jungle and the sea.
As everyone knows, in recent years, costs have been rising, channel control has become increasingly difficult, and efficiency has been declining. Downstream distributors are naturally having a hard time. Now the internet has arrived. What to do? Not embracing the internet is suicide; wanting to embrace it but not knowing how is also a problem. So everyone is anxious.
The current traditional offline market is vertical: a distributor represents one to several brands, with a set of warehousing, distribution, and team covering the local market. In the future, under new retail, the so-called 'people, goods, and places' will undergo changes. Simply put, the B2B trend will be a gradual shift from vertical to networked, driven by data and technology.
I want to introduce Alibaba Retail Link with a few core words: what kind of platform are we? First, Retail Link is a compatible, intelligent, rich, and professional platform. In the past month, we have reached strategic cooperation with the most famous and largest deep-distribution brands in China, such as Uni-President, Master Kong, Jinlongyu, and Mengniu, in areas like products, warehousing, and distribution. This is a typical example of compatibility.
We provide products, logistics, finance, data, and more. Retail Link is a platform driven by data and technology. Thanks to the development of smartphones, data enables us to better reach, identify, gain insights into, and serve every end consumer. Data helps us better understand ourselves and serve others.
We provide a variety of products to retail terminals. Besides major FMCG brands, Retail Link also offers high-quality selected products from the 1688 industrial belt, rural Taobao, Tmall, Taobao, and imports. So on the Alibaba platform, our product sources are very rich—this is the power of the Alibaba ecosystem. Also, there are the recently popular Tmall Xiaodian (Tmall stores); hundreds of them are entering our communities and starting to serve every consumer. So professionalism goes without saying.
The images mostly show products from industrial belts and rural areas. For example, salted duck eggs are from Gaoyou and are now sold on our platform. On the left is Baicaowei, an online brand. Through three months, we sold its products to hundreds of thousands of offline stores in China, bringing them 100% incremental business. Of course, there are many other brands.
How to make retail small stores become brand marketing and operation positions?
We will do product innovation, brand marketing, consumer operations, and channel management. Traditional offline enterprises talk about distribution, shelves, pricing, and resident sales. Actually, on this platform, all business will be digitized, enabling us to better promote brand marketing, enhance connections with consumers, and improve efficiency. Because every penny you spend goes directly to the terminal and connects with consumers without intermediate links, efficiency will become higher under the push of big data.
How to empower brand owners? On Retail Link, we have built a brand owner workbench, including daily operation workbench, business advisor, and brand station. On the platform, brand owners can put all marketing plans in the brand station to reach buyers.
This is a simulated display image. Now every brand owner can see their daily performance on the workbench. All business can be observed in real time, knowing what your business performance is like.
There are many distributors here. I have met many distributors; every day someone shouts, "Are they going to eliminate us?" In the morning, I heard Teacher Liu ask distributors how they handle this relationship. Actually, I think they didn't give an answer. Let me give you a clear answer: We will not eliminate you, and we cannot eliminate you. What we want to do is build together, compatible and mutually empowering. This is Alibaba's choice: to embrace new retail with everyone and co-create new retail.
Distributor friends, what do you have? You have agency brands, warehouses, distribution, terminal service teams, and good local relationships. We hope to connect your brands, integrate your systems, and help you utilize your warehousing and distribution resources. We hope to provide various services to you and retail terminals, including C-end consumers.
Imagine a scenario: at the entrance of a retail store, at a red light, there are brands like Yili, Mengniu, Uni-President, and Master Kong. Four drivers are waiting at the same red light, heading to the same destination—delivering to the same warehouse. Is it necessary? Think about this. We believe that in the future, suppliers' products, distribution, and services should have a funnel-type structure: from multiple points to one point, then from one point to multiple points. This is integrated. Services to retail terminals will be integrated in the future. Actually, everyone understands this is just a matter of time. If every child needs a teacher to teach, how many teachers would China need? So we have schools and classes, right? How to integrate? That's what everyone cares most about.
Our solution: First, look at what distributor friends have. At the bottom of the pyramid, what do we have? We are doing business; we have warehouses, products, distribution, and terminal services. The first step is the simplest: connect to Alibaba's platform. You set the price, because in China, no one or no enterprise knows better than you about the local market competition and consumer demand for the brands you represent. You are the true experts and leaders of China's local and regional markets. So we trust you.
Earlier, someone said professionals do professional things. You are the most professional! So, Alibaba Retail Link will give orders to you, you deliver, and you set the price. We know that different brand owners have different tiers for different stores; this is a tiered pricing issue, and we have solutions.
The next step includes overall integration of warehousing and distribution systems. Utilize your warehouses and vehicles as Alibaba's forward warehouses, responsible for distribution in a certain area, and earn logistics commissions. You still do your previous business, but you utilize your warehouses and delivery vehicles. Retail Link just connects orders from other brands into the system.
Additionally, there are people—people are the most precious asset. People do terminal customer service and service. Some simple marketing tasks can be completely solved through internet means. Through our platform, we can assign tasks to small stores and partners. Small stores can solve them by uploading photos, without the need for signing contracts or taking photos as before. Simplify complex things and invest human resources in places that truly create value for brand owners, small stores, and consumers. Your people can not only sell your products but also sell thousands or tens of thousands of products on the platform. You help the platform with distribution, and the platform gives you commissions. You help the platform sell goods, and the platform pays you commissions. In this way, your products, warehousing, distribution, and people are all utilized. This is compatibility and co-construction. How beautiful!
What about the brand owners' biggest worry—cross-region sales? Some platforms sell goods to wholesale markets. No problem. Retail Link can reach four-level addresses, down to the street level, so you can rest assured!
Previously, we had a traditional saying: "Buy cheap, sell cheap; buy expensive, sell expensive." Distributors' profit model is earning the price difference. In the new retail model, we hope to transform the business model from simply earning buying and selling price differences and marketing fees to providing services to gain revenue—from earning price differences to becoming creators of service value. Also, change from a vertical system to a cross-network system, not just selling and delivering goods, but serving the market as the core and serving the entire chain.
How do we empower distributors? Your systems are diverse; it doesn't matter. We'll do it together. On the Retail Link platform, there is a supply chain system, a distributor workbench, and process management and business advisor. You know your business performance every day. No need to ask finance or make phone calls. Just open your phone and know everything: receivables, how many products buyers purchased, and there will be no bad debts or dead accounts. If you lack funds, we can also provide financial services, because we are partners.
Where do we stand today? Building an intelligent distribution network platform—that's the key. How to build? Do well in information flow, capital flow, and logistics: get orders, deliver goods, and collect money. That's the essence of business. We are here to help you solve these problems.
The future has arrived. Because we believe, we see. We are already at the door of new retail, not the wind gap. Let me share a phrase with you: Let us embrace change, embrace new retail, and work hard!
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