Introduction From August to November 2017, the New Distribution team selected 22 cities from China's top 40 economic cities as survey targets. Collaborating with multiple brand owners and distributors, they conducted a market survey on the overall situation of China's FMCG B2B platforms. Based on actual market research data, they released the '2017 China FMCG B2B Industry Competitiveness White Paper' at the '3rd China FMCG + Internet Conference' hosted by New Distribution.
The report conducted in-depth research and evaluation on various dimensions such as coverage, penetration, supply chain organization, platform operations, delivery capabilities, and service visits of each FMCG B2B platform in various cities, comprehensively assessing the competitiveness of each platform in the surveyed cities.
The following content is the Chongqing market research report obtained by the New Distribution team after visiting nearly a thousand retail stores and based on actual questionnaire feedback from the stores.
I. Background Analysis of the Chongqing Market 1. Overview of Chongqing Chongqing is one of China's four municipalities, with a permanent population of 28.8462 million. Preliminary statistics show that in 2016, the city's GDP reached 1.75 trillion yuan, an increase of about 10.7% year-on-year. Major economic indicators continued to improve: the added value of industries above designated size increased by 10.3%, profits increased by 12%, fixed asset investment increased by 12.1%, total retail sales of consumer goods increased by 13.2%, and general public budget revenue reached 222.8 billion yuan, an increase of 7.1%.
2. Development of the Retail Industry in Chongqing In recent years, competition among foreign retail enterprises in the southeastern coastal areas has intensified. As an important transitional city in the central and western regions, Chongqing enjoys a superior geographical location. This special geographical position has made it a battleground for major retail enterprises. In addition to multinational giants such as Carrefour, Metro, Walmart, Lotus, Mei Mei, Parkson, and Trust-Mart, well-known domestic merchants such as Shanghai Bailian, Maoye Department Store, Beijing Hualian, Wangfujing, Intime, Yonghui, and Zhongbai Warehouse Supermarket have also opened stores in Chongqing to expand their influence.
In the small-format sector, foreign convenience store brands Lawson and 7-Eleven have also entered the Chongqing market. In April 2010, Chongqing Lawson Convenience Store Co., Ltd. was established in Chongqing. As of now, the number of Lawson convenience stores in Chongqing has reached 109. Compared to Lawson, 7-Eleven arrived late. According to relevant data, 7-Eleven entered Chongqing in 2013 and currently has 26 stores.
Compared to foreign convenience store brands Lawson and 7-Eleven, local convenience stores in Chongqing are blooming everywhere. According to incomplete statistics, local chain convenience store brands in Chongqing include Heika, Jianfu, Rendaomei, Kego, Yishenghuo, Ruojia, etc., with Kego being the most representative.
II. Survey and Analysis of Mom-and-Pop Store Operations in the Chongqing Market During the Chongqing market survey, the research team first investigated the operating conditions of mom-and-pop stores, understanding the current market development, employee situation, and the awareness of B2B platforms among these stores.
1. What is your current average daily sales per store? Chongqing market stores have relatively high sales output: Most mom-and-pop stores have daily transaction amounts between 3,000 and 5,000 yuan, accounting for 40.2%. Stores with daily average transaction amounts below 1,000 yuan account for 5.6%, and those with daily average turnover exceeding 10,000 yuan account for 3.6%.
2. What is your age? Store owners in the Chongqing market are mainly middle-aged and young: In terms of age distribution, people aged 30-50 are the main force, accounting for 66.8%.
3. What factors do you mainly consider when stocking up? Store owners in the Chongqing market focus on price and delivery speed when choosing supply channels: The main factor affecting store owners' stocking decisions is price, followed by delivery speed, product completeness, return/exchange policies, and service attitude.
4. Where do you usually stock up from? Currently, delivery by sales representatives is the main form of stocking for stores: In terms of supply channels, sales representative delivery remains the mainstream and primary method. However, with the continuous penetration of the internet in various fields, 78.4% of store owners have begun to order on B2B platforms.
III. Survey on the Overall Development and Operations of FMCG B2B Platforms in Chongqing As the focus of this survey, the research team investigated the market coverage (installation rate), current development (proportion of store purchases from B2B platforms), competitiveness (price advantage, delivery efficiency, service capability), and the development of advantageous platforms (which platform has better advantages?) of FMCG B2B ordering platforms in the Chongqing market.
1. Have you ever ordered from a B2B platform?
2. Which apps are installed on your phone? Currently, there are 16 B2B platforms in Chongqing. In addition to national platforms such as Diangshang Hulian, Zhongshang Huimin, and Huidanxia, a large number of local FMCG B2B platforms have emerged, such as Yishenghuo, Huida Wan Dian, and Shiji Longmao. In terms of market coverage, the local platform Yishenghuo has the highest installation rate at 74%, followed by Diangshang Hulian at 71%, and Zhongshang Huimin ranks third with 49.6%.
3. In the last six months, which platforms have you ordered from? Diangshang Hulian's penetration rate is slightly higher than Yishenghuo's. Yijiu Pai has a significant gap compared to Diangshang Hulian and Yishenghuo, ranking third at 36.6%.
4. In the last six months, from which platform did you order the most in terms of amount and frequency? In terms of order volume and frequency, Yishenghuo and Diangshang Hulian have obvious advantages, at 32.6% and 25.3% respectively, with other platforms far behind.
5. What percentage of your total orders do you place on B2B platforms? Local FMCG B2B platforms educated the market early, and some terminals, especially young store owners, have developed the habit of ordering online, with the proportion of online orders gradually increasing. The proportion of stores with more than 20% of their purchases from platforms exceeds 70%.
6. How often do you order from B2B platforms? The frequency of terminal orders is basically consistent with the platform sales representatives' visit cycles. However, as ordering habits and dependence on platforms gradually form, the frequency of orders is increasing. Many terminals have shortened their ordering frequency from once a week to once every 2-3 days.
7. In the past six months, how much did you order from B2B platforms each month? Distributor sales representative delivery and wholesale market purchases remain the main supply channels. However, with the increase in order amounts on B2B platforms, the channel role of B2B platforms is strengthening. The proportion of stores ordering more than 10,000 yuan from platform enterprises exceeds 50%.
8. What types of products do you order from B2B platforms? Mineral water and beverages, snacks, instant noodles and ham are absolute necessities and are the main categories for B2B platforms, as well as the main products ordered by stores.
IV. Survey on the Operational Capabilities of B2B Platform Enterprises in the Chongqing Market During the Chongqing market survey, the research team focused on the operations of B2B platform enterprises to compare their competitiveness in the Chongqing market:
1. Which B2B platform's sales representatives do you think visit the most? Sales representative visits remain the main method for platforms to increase market coverage. Diangshang Hulian-Dinghuobao, Zhongshang Huimin-Huipeitong, and Yishenghuo rank in the top three in terms of sales representative visit rates.
2. Which B2B platform do you think has the fastest delivery? There is little difference in delivery speed among platforms. Except for the local platform Yishenghuo, which has an obvious advantage, other platforms have almost no difference in delivery.
3. How long does it usually take for delivery after ordering from a B2B platform?
4. Which platform do you think has the most complete products? Except for Yishenghuo and Diangshang Hulian, which have slightly more categories, other platforms are reported by terminals to have incomplete products. Due to supply chain constraints, no FMCG B2B platform can currently meet the one-stop shopping needs of terminals.
5. Which B2B platform do you think has the lowest prices? Price remains the main factor affecting store stocking, with Yishenghuo and Diangshang Hulian having obvious advantages.
V. Comparison of Service Capabilities between B2B Platforms and Distributors in Chongqing During the Chongqing market survey, the research team also compared the operations of platform enterprises with those of distributor enterprises:
1. Which is more convenient for ordering: B2B or distributor business?
2. Which delivers faster: B2B or distributor business? B2B platforms have more promotional activities, which gives them an obvious price advantage compared to distributors and secondary wholesalers.
VI. Comprehensive Competitiveness Comparison among Platforms in the Chongqing Market Comprehensive analysis: Based on 309 terminal survey responses, considering seven dimensions—installation quantity, order quantity, order frequency, product richness, delivery speed, product price, and service visits—the conclusion is as follows: The top three FMCG B2B platforms in the Chongqing market in terms of comprehensive strength are Yishenghuo, Diangshang Hulian, and Zhongshang Huimin.
Overall, Yishenghuo, as a local platform in Chongqing, entered the market earlier and has good supply chain organization capabilities, with good terminal reputation and high market acceptance. During the market survey, we found that Yishenghuo has begun to rebrand mom-and-pop stores, but its terminal control capability is still weak. Diangshang Hulian entered the Chongqing market later but has developed rapidly and has a high market share.
There are many local B2B platforms represented by Yishenghuo, including some transformed from traditional distribution channels, such as Shiji Longmao. More and more industry practitioners are beginning to realize the impact of the internet on traditional distribution channels and are starting to adapt, embrace change, and make changes.
VII. Main Reasons Why Store Owners Do Not Stock from B2B Platforms: 1. Price: "The usual price is higher than the distributor's price. There are many promotions, but in the end, the price is not much different from the distributor's delivery." Price is the primary factor affecting store stocking. Without obvious advantages, many store owners still choose traditional stocking methods.
2. Product Completeness: Currently, no e-commerce platform can provide one-stop supply, which leads store owners to adopt multi-channel stocking methods. They order from traditional distributors and wholesale markets as well as B2B platforms. Distributors and wholesale markets are long-established channels, and older store owners are generally unwilling to change.
3. Safety: "Products sold online may be counterfeit. At the wholesale market, you can see the products with your own eyes and reject those with bad dates. Online ordering, you can't see the product, it's not reassuring, and returns are troublesome." After-sales return and exchange issues remain one of the main factors hindering some store owners from stocking on B2B platforms.
Final Thoughts Chongqing is one of China's four municipalities and an important economic city in the southwest. The development of B2B in the Chongqing market has significant reference value for the development of the FMCG B2B market in the southwest region.
During our market survey, on one hand, we saw the rapid development of FMCG B2B in the Chongqing market, with increasing acceptance among stores and the rise of regional platforms such as Yishenghuo. On the other hand, problems in the development of FMCG B2B are gradually emerging. There is still a long way to go for China's FMCG B2B to effectively improve the stocking efficiency and increase operating profits for the vast number of mom-and-pop stores.
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