---
title: "B2B E-commerce: Friend or Foe? A Distributor's Perspective"
description: "One's stance determines one's perspective. B2B e-commerce is viewed differently by different channel players. From a distributor's viewpoint, this article addresses two key questions: Is B2B e-commerce a friend or foe to distributors? And can it solve distributors' current pain points?"
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-12-21"
language: "en"
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# B2B E-commerce: Friend or Foe? A Distributor's Perspective

> One's stance determines one's perspective. B2B e-commerce is viewed differently by different channel players. From a distributor's viewpoint, this article addresses two key questions: Is B2B e-commerce a friend or foe to distributors? And can it solve distributors' current pain points?

One's stance determines one's perspective. B2B e-commerce is viewed differently by different channel players. Just as Alibaba and JD.com eliminated intermediaries, from the intermediaries' perspective, C-end e-commerce is disadvantageous.

Today, I will discuss B2B e-commerce from the distributor's perspective. Due to time constraints, I will only address two critical questions.

First, is B2B e-commerce a friend or foe to distributors?
Second, can B2B e-commerce solve distributors' current pain points?

1
**Is B2B e-commerce a friend or foe?**

The traditional channel is roughly as follows: **Manufacturer (F) – Distributor (B) – Secondary wholesaler (b) – Retailer (R) – Consumer (C).**

B2B e-commerce involves combinations among F, B, b, and R. Since B2B no longer precisely describes which links are combined, we use the symbols F, B, b, and R to be more precise and easier to understand. Based on these combinations, I categorize the main B2B e-commerce models into three types:

1**Type 1: F2R**
**F2R, i.e., Manufacturer (F) – Platform – Retailer (R)**
Representative platforms: Alibaba's Ling Shou Tong (Retail Link), JD's New Channel (Xin Tong Lu)

New Channel and Retail Link follow the C-end e-commerce mindset of "de-intermediation," but while C-end e-commerce removes both distributors and retailers, B2B e-commerce only removes distributors.

In early 2016, JD's Liu Qiangdong said about New Channel: "Mom-and-pop stores are hard for other formats to penetrate... In small communities, they have a unique survival model. It's hard for us to compete with them. This goes beyond price, quality, and service."

I interpret this as: Retailers are hard to replace, but distributors can be replaced.

The core approach of JD New Channel and Alibaba Retail Link is: Manufacturers supply the platform directly, and the platform supplies retailers directly. This replaces distributors.

If C-end e-commerce is "holding manufacturers hostage with consumers," then F2R B2B e-commerce is "holding manufacturers hostage with retailers." Therefore, the main strategy of F2R is to ally with and integrate retailers.

Of course, in regional markets, they may also allow distributors to join the platform. But if they are de-intermediating, once they get manufacturer resources, how can distributors still join?

**Conclusion: F2R is a competitor to distributors.**

2**Type 2: b2R**
**b2R, i.e., Secondary wholesaler (b) – Platform – Retailer (R)**
Representative platform: Yijigou (defunct).

Why use a defunct platform as an example? Because for those still alive, I can't say they're bad—it's taboo. But there are many such models.

Why do I call this model b2R? Because they don't source goods from manufacturers or distributors. So where do they get goods? From parallel imports (gray market). Their role is that of a secondary wholesaler.

Some may ask: If they are secondary wholesalers, how do they gain competitive advantage? This is the logic of reverse forcing. Remember how Alibaba used C2C to force out B2C?

Interestingly, this model is quite popular with venture capital. I think there are two reasons: First, b2R platforms are mostly self-operated, buying traffic with money, so traffic grows quickly, and VCs value traffic highly. Second, few VCs understand the B-end; B-end requires specialized knowledge, while C-end is less specialized, so VCs have a C-end mindset.

The biggest impact of b2R on distributors is disrupting the price system, due to parallel imports and subsidies.

**Conclusion: b2R is a competitor or disruptor to distributors.**

3**Type 3: B2R**
B2R means the original channel structure remains unchanged. That's why Liu Zhongmin of Yantai Yishang calls this model BSB, where the S stands for Service.

Of course, there are many variations of this model; not all B2R are service-oriented.

Representative model: Yantai Yishang.

This is a true platform. The platform only provides services; distributors still sell goods themselves. Some classify this as a matching model.

So, what is the platform's value? It reduces costs, improves efficiency, and enhances value.

**Conclusion: Service-oriented B2R is a partner to distributors.**

2
**Can B2B e-commerce solve distributors' pain points?**

Currently, distributors as a whole face four major pain points:

Difficulty in increasing sales: Sales growth is hard, and decline is common.
Difficulty in shifting gears: Promoting high-end new products is difficult.
Low efficiency: Personnel efficiency is relatively low.
High costs: Especially logistics costs.

Can B2B e-commerce solve these four pain points?

1**Pain Point 1: High logistics costs**

Currently, the average delivery cost (last mile) for FMCG distributors is 6%-8%, and for snack foods it exceeds 10%. If B2B e-commerce centralizes delivery and shares logistics, once scale is achieved, saving half is feasible—meaning the reasonable cost for B2B delivery is 3%-4%. Anything above that is abnormal.

What does saving 3%-4% in logistics costs mean? Even under normal circumstances, distributor profits are only about 3%-4%. Therefore, the biggest highlight of B2B e-commerce is delivery.

Even without B2B e-commerce, outsourcing delivery and third-party logistics is a major trend. So, most B2B e-commerce platforms use delivery as an entry point.

**Conclusion: B2B e-commerce can save delivery costs.**

2**Pain Point 2: Low personnel efficiency**

The deep distribution model promoted for over a decade has now degenerated into vehicle-based selling. This is a distribution model characterized by a sea of people, regardless of cost. When labor costs were low and sales were growing, this wasn't a problem, but now it has become a serious issue.

According to my research, each vehicle makes 4-8 transactions per day, averaging 5-6, which is inefficient and wastes personnel.

When I present these figures, many manufacturers and distributors don't believe them.

If B2B e-commerce or SaaS systems are used, with order-taking or self-ordering methods, efficiency can double, and order volume can more than double—that should be no problem.

If efficiency doubles, it means half the personnel can be saved. Even if personnel aren't reduced, they can do more important work with improved efficiency. It can be said that because of low efficiency, personnel are held hostage by vehicle-based selling.

**Conclusion: B2B e-commerce can improve personnel efficiency.**

3**Pain Point 3: Difficulty in increasing sales**

Honestly, increasing sales is not B2B e-commerce's strength. Of course, the large food industry is currently in a downturn, and there are no other means to solve this problem.

If B2B e-commerce or SaaS systems are adopted early, efficiency gains can lead to sales growth. But if everyone uses them, since market opportunities are limited, there will be no incremental growth.

**Conclusion: B2B e-commerce is unlikely to increase sales.**

4**Pain Point 4: Mainstream shift and difficulty in new product promotion**

Since the beginning of this year, many manufacturers have failed to launch new products, especially high-end ones, because they still follow old methods: first distribute, then promote.

This method was effective in the past for promoting "low-quality, low-price" products. Now, launching new products requires precise distribution, so old methods no longer work.

Can B2B e-commerce solve this problem? This is precisely B2B e-commerce's strength.

JD New Channel recently proposed a "Huiyan System" (Insight System), which I believe is a system that uses big data to achieve precise sales.

Jack Ma once said that all internet companies will eventually become data companies. I think in this sense, the ultimate value of B2B e-commerce is also big data.

If big data can be used to achieve precise distribution, precise marketing, and precise visits for product shifts, then this system will be incredibly powerful.

**Conclusion: B2B e-commerce helps complete the mainstream shift.**

**Overall Conclusion**
1. Whether B2B e-commerce is a friend or foe to distributors depends on the platform model.
2. B2B e-commerce can basically solve the four major pain points of distributors.
3. It's best not to view B2B e-commerce as just an e-commerce system; it's actually an efficiency system—a new system that uses the internet to change traditional efficiency.

**Source: Teacher Liu's Forum (liuchunxiong1964)**

-END-

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