---
title: "An Online Distributor for Mondelez, PepsiCo, and Perfetti Van Melle, with Annual Sales of 250 Million Yuan: How Does He Divide Work with Traditional Distributors?"
description: "Distributors are familiar in the FMCG distribution field, traditionally referring to offline distributors operating within cities or regions, equipped with capital, vehicles, warehousing, and sales staff. With the rise of FMCG B2B, a new type of distributor emerged: E-distributors, or internet distributors, who leverage platforms to connect upstream manufacturers and downstream retail outlets, differing from traditional offline distributors by lacking physical assets but using internet tools to distribute products widely."
author: "新经销100人"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-06-22"
language: "en"
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# An Online Distributor for Mondelez, PepsiCo, and Perfetti Van Melle, with Annual Sales of 250 Million Yuan: How Does He Divide Work with Traditional Distributors?

> Distributors are familiar in the FMCG distribution field, traditionally referring to offline distributors operating within cities or regions, equipped with capital, vehicles, warehousing, and sales staff. With the rise of FMCG B2B, a new type of distributor emerged: E-distributors, or internet distributors, who leverage platforms to connect upstream manufacturers and downstream retail outlets, differing from traditional offline distributors by lacking physical assets but using internet tools to distribute products widely.

Distributors are a familiar concept in the FMCG distribution field. In the past, distributors typically referred to offline distributors operating within a city or a specific region. They have capital, vehicles, warehousing, and sales personnel, shuttling through the streets and alleys of cities every day to distribute products to various retail outlets.

With the emergence of FMCG B2B, a new type of distributor has appeared: E-distributors, commonly known as internet distributors. They rely on platforms to connect upstream manufacturers and downstream retail outlets. Unlike traditional offline distributors, they may not have vehicles, warehousing, or sales personnel, but they leverage internet tools and platform power to distribute tens of thousands of products to retail outlets across various regions.

Shanghai Liangyi International Trade Co., Ltd. is such an internet distributor. Currently, Liangyi represents well-known domestic and international first-tier brands such as Mondelez, PepsiCo, and Perfetti Van Melle. It has joined platforms including Alibaba Retail Link, JD New Channel, Best Store Plus, and other new retail channels like Hema Fresh, Guoxiaomei, and Ele.me.

In 2017, Liangyi's annual sales reached 250 million yuan, and it is expected to double in 2018.

Recently, New Distribution exclusively interviewed Wang Chunxiao, CEO of Shanghai Liangyi International Trade Company. As one of the earliest internet distributors to enter the FMCG B2B platform, how does he operate? Facing conflicts with offline distributors, what model has he and the brand owners developed to resolve these conflicts?

01
**Spotting the Trend, Shifting from B2C to B2B**
Before starting his business, Wang Chunxiao worked in offline channel management at Wrigley and Mondelez. He started his business in May 2014, doing Tmall B2C e-commerce. At the end of December 2015, Wang shifted from representing daily chemical products to the snack food category, winning the B2C agency authorization for Perfetti Van Melle (brands including Alpenliebe, Big Babol, and Mentos) through bidding.

Wang told New Distribution that Perfetti Van Melle, as the first brand to strategically cooperate with Retail Link, gave Liangyi the opportunity to board the Retail Link train and become one of the earliest TP merchants on Alibaba Retail Link.

Thanks to past experience in B2C operations, Liangyi quickly became familiar with Retail Link's B2B operations. By March 2016, Liangyi obtained the B2B agency for PepsiCo (brands including Lay's potato chips and Quaker), and in June, signed with Mondelez (brands including Oreo, Stride, Chips Ahoy!, and Ritz).

Wang told New Distribution, "Having nearly 7 years of brand-side work experience, I am very familiar with channel distribution development. In the past, channel management and efficiency improvement were spontaneously organized by brand owners, with channel distribution entities passively receiving. The overall industry still operated in a multi-tier distributor and wholesaler model. Now B2B has arrived, using internet technology to reconstruct the channel distribution system and improve distribution efficiency. I believe this is the general trend."

At the end of 2016, because Liangyi was simultaneously representing both B2C and B2B businesses for brand owners, it faced the issue of allocating personnel, resources, and energy. After careful consideration, at the beginning of 2017, Liangyi decisively reduced its B2C business agency and shifted its focus entirely to B2B platforms. Wang recalled that even though Tmall business reached 50 million yuan in 2016, much larger than the B2B business, they still chose B2B.

02
**New Product Launch: 15,000 Stores Ordered on the First Day**
Although proficient in B2C operations, B2B differs from B2C because the target users are "professional" consumers. Wang told New Distribution that the key difference lies in promotional tactics; brand owners are most reluctant to see direct price cuts, so Liangyi and the platform explore new promotional formats.

In May 2017, Liangyi, together with Mondelez's Stride brand, launched a "Moonlight Box" display activity, covering 10,000 stores in the first month, effectively adding 10,000 terminal display points.

In November 2017, Liangyi, together with Lay's potato chips, organized the first live-streaming event on the Retail Link platform. At that time, over 10,000 store owners watched, with thousands of online interactions and comments, a transaction conversion rate of nearly 20%, and sales increased threefold compared to usual.

Recently, in May 2018, Perfetti Van Melle's Alpenliebe brand attempted its first new product launch on the Retail Link platform. Wang told New Distribution that on the first day, over 10,000 stores placed orders within 13 hours, and a total of 15,000+ stores purchased the new product that day.

Wang told New Distribution that Retail Link's rapid growth over the past two years has strengthened his confidence, and he is willing to invest manpower, materials, and time to explore, test, and optimize with Retail Link, such as how to attract store attention, improve conversion rates, and increase average order value.

03
**Division of Functions Online and Offline, Reasonable Profit Distribution**
With the increasing sales on online platforms, the conflict between B2B platforms and offline distributors is an unavoidable issue.

Wang told New Distribution, "As first-tier well-known brands, they have been in the Chinese market for decades and have been deeply cultivating traditional offline distribution channels. This is the part with the highest weight for brand owners and the largest contribution to sales and profits. Now that B2B has arrived, both offline distributors and brand owners have concerns. How to balance, avoid conflicts, and optimize channel efficiency is a problem we need to solve together with the brand owners."

Because there was no B2B in the past, there was no standard solution. After multiple communications, Liangyi and Perfetti Van Melle, based on the characteristics of existing platforms, explored a "collaborative cooperation" model:

That is, the brand owner selects core local distributors. Based on past sales data in the region, Liangyi regularly places orders with these core distributors. The distributors deliver goods weekly to Retail Link's physical warehouse, and then Cainiao logistics delivers to various outlets.

This cooperation model has three benefits: First, existing sales still belong to offline distributors. Although profits may be partially reduced, incremental outlets that were previously unreachable will be appropriately supplemented. Second, although the distributor's front-end gross profit decreases, back-end costs also decrease, saving on personnel and delivery costs. Third, after batch delivery to the warehouse, the transaction ends, eliminating the burden of after-sales service.

Wang told New Distribution that from the above cooperation model, it can be seen that Liangyi Trade is not trying to encroach on offline distributors' business but is genuinely helping them increase sales, even bringing incremental volume. Local sales remain in the hands of local distributors. In terms of profit, brand owners will redistribute the profit structure based on the contribution of both channels and redefine functional divisions.

In the past traditional offline distribution system, brand owners often could not see or accurately assess marketing expenses, and the only criterion for evaluating effectiveness was sales volume. Considering the uneven execution capabilities of offline distributors and personnel, promotional formats were often monotonous. However, through internet distributors like Liangyi, diverse promotional activities can be carried out using platforms, and manufacturers' expenses can be used more precisely and efficiently. These functions cannot be performed by offline distributors, who lack operational experience in this area.

Additionally, all of Liangyi's operational data is open to manufacturers. Brand owners know where every penny goes, which small store it reaches, and how much is spent. This operational data effectively helps manufacturers manage marketing expenses and formulate marketing strategies and decisions. In the view of New Distribution, to a certain extent, Liangyi undertakes the function of online planning for enterprises.

04
**How Traditional Distributors Face the Online Impact**
Wang believes that traditional offline distributors must first identify their positioning. In the past, distributors might take on everything after obtaining regional agency authorization. Now, distributors must clearly recognize that in the face of the general trend of online distribution, finding their core competitive advantage is key.

Professionals do professional work; this is the iron rule of social division of labor. If a distributor's advantage lies in warehousing and delivery, strengthen that capability; if the advantage is in outlet service and customer relationship maintenance, strengthen promotional functions. Only by establishing their own core competitive barriers can they avoid being abandoned by the times. Of course, this does not require distributors to transform immediately or even abandon their main business. Currently, B2B is still in the development stage, and distributors still have time to think and prepare. They can gradually establish direction and build core competitiveness in daily operations.

**Final Thoughts**
In the view of New Distribution, internet distributors have gradually risen with the emergence of FMCG B2B platforms. This new channel entity carries internet genes from its inception, using the digital characteristics of the internet to help brand owners operate channels more efficiently. Around offline outlets and upstream manufacturers, internet distributors configure multiple operational capabilities to provide in-depth services.

1. Through exploration and experimentation with platforms, internet distributors have mastered many effective promotional strategies for specific categories or brands, including attracting small store attention, maximizing brand exposure, enticing small store purchases, and improving conversion. Accumulated data operations help internet distributors build a complete user purchase decision model, providing precise planning services for brand owners.

2. For top-tier well-known brand owners, even if they have independent "new retail" operation teams on platforms, internet distributors can still provide various services, such as selecting/procuring promotional gifts, secondary packaging to differentiate product specifications from offline distributors, and designing and producing display materials suitable for online channels.

3. For many mid-tier and tail-end brand owners, due to limited sales volume that cannot support establishing a "new retail" department, internet distributors can help brand owners undertake online planning functions and increase online sales share.

It is worth noting that we often say offline distributors cannot be replaced, with the key being their offline business promotion function. But what if similar internet distributors move offline? When unified warehousing and distribution develop into mature infrastructure, and order aggregation is realized by platforms, will these internet distributors, with data and operational experience, have incomparable advantages over offline distributors in professional business promotion?

Could these internet distributors hidden behind platforms become the real rivals that "eliminate" offline distributors? What do you think? Feel free to leave a comment to discuss with us.

In late August, the "2018 China Digital Innovation Conference (2018FDIC)" with the theme "Finding New Engines for Growth" will be held in Shanghai, hosted by the China FMCG Industry Association and organized by New Distribution.

This conference will last 3 days, focusing on two main themes: marketing and supply chain, with six parallel forums on brand, channel, communication, B2B, same-city logistics, and innovative retail. We will invite industry experts, CEOs, and brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry.

The conference will have over 5,000 enterprises participating. This grand event brings together outstanding explorers and promoters of digital transformation across industries, sharing case practices of digital transformation for industry enterprises and partners, discussing digital technology development trends and cutting-edge applications, and building a bridge for brand owners, distributors, retail enterprises, and marketing agencies to help FMCG manufacturers obtain the latest information and understand best application practices. It helps brand owners and distributors find new engines for digital growth in the internet era!

**The following is the list of invited enterprises**

Conference Time
August 22-24, 2018

Conference Venue
Shanghai Baohua Marriott Hotel

Conference Content
8.22 All-day check-in
Afternoon 14:00-17:30
Distributor Same-city Logistics Parallel Forum
Evening 18:30-21:00
New Distribution Night Gala Dinner

8.23 Theme: Marketing Digital Innovation
Morning 9:00-12:00
Marketing Digital Innovation Main Forum
Afternoon 14:00-17:30
Brand, Channel, Communication Parallel Forums

8.24 Theme: FMCG Supply Chain Digital Upgrade
All day: FMCG Supply Chain Conference

Registration Method
Registration is now open. Long press the QR code below or click "Read Original" to register. Limited early bird tickets: only 200 tickets at half price, available while supplies last!

Registration Consultation
Ticket inquiries:
Media cooperation inquiries:

Highlights of New Distribution's Previous Conferences
Click the links below to review the highlights of the 1st, 2nd, and 3rd FMCG + Internet Conferences:

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