Over 30 industry experts, 100+ B2B platform founders, and 800+ manufacturer and distributor friends gathered in Fuzhou to discuss the internet transformation of the FMCG industry. The shift of FMCG to the internet and the transformation of channels to B2B have become a consensus among most manufacturers and distributors. Many distributors with a strong sense of crisis have recognized this trend and proactively come out to learn and investigate. In the four B-end e-commerce study tours I organized, over 400 distributors from across the country visited more than 10 B2B platforms with me. However, I found that distributors observe a lot but act very little. I have also exchanged ideas with dozens of distributors. Today, I will share the problems and difficulties distributors face when building their own B2B platforms, summarized from my communications with them: First Test: Mindset Distributors have been in business for decades. Facing the surging wave of the internet, some with a strong sense of crisis can step out, willing to change and proactively learn. But such distributors with internet transformation willingness are a minority. Most distributors have not yet crossed this mental threshold. Although the market environment is not good, it hasn't reached the point of being unsustainable, so the motivation to learn is not strong. They read articles online and think about it, but that's it. Some distributors, having worked hard to grow their business, consider their existing scale—tens of millions or even hundreds of millions in revenue—and realize any change would be a major upheaval. The risks of transformation are not something everyone can bear. Moreover, after decades of ups and downs, they are older, and their children are unwilling to take over. They may be considering retirement in a few years, so they seek stability and are unwilling to take risks. Of course, some children are willing to take over, and they can wait for them to take the reins and make changes. Some distributors know this is a trend and want to change and learn, but they truly don't understand the internet and have no feeling for these new terms, nor do they have a path or method to learn. Many distributors, for various reasons above, put this matter off. Seeing that people around them haven't moved, they don't feel urgent, so they keep watching, watching, and watching. Second Test: Unity Doing B2B in any market is not a small business. A distributor going it alone will find it very difficult to succeed. The probability of successfully operating a platform alone is extremely low. First, traditional offline competitors won't join your platform. Second, it's hard to cover all categories, so stores will still need to source from elsewhere. Thus, this self-built B2B becomes just the distributor's own ordering software. The chance of success is almost zero. The success of B2B in a regional market requires collaboration among many distributors to jointly make it happen. However, most distributors find it impossible to unite and collaborate. There are two issues here. First, should companies be merged? Or should a new company be registered? If merged, physical assets are easy to handle, but how do you calculate the value of brand resources? My brand is small but has high product margins; your brand is big but has low product margins. How do you assess that? If cooperation fails, how do you exit? Many distributors, for safety, choose the second option: register a new company. When it comes to equity in a new company, as long as there are many distributors, it's extremely difficult to reach consensus. In front of interests, few major shareholders are willing to sacrifice themselves. During the bargaining process, enthusiasm is exhausted, and distributors lose confidence and patience with each other, eventually fizzling out. Third Test: Warehousing and Distribution The first issue before merging warehouses is: what to do with existing warehouses after merging? After merging, drivers and vehicles are leased under unified warehousing and distribution, and you lose your own logistics system. If cooperation fails, what if someone cuts off your retreat? So many distributors are trapped in hesitation and anxiety over warehouse merging, unable to extricate themselves. Also, during the merging process, can your sales staff adapt to changing from vehicle sales to visit-based ordering? If visit-based ordering leads to a sales decline, how do you handle manufacturer accountability? One person, one route, and if the driver leaves, how do you replace them? Fourth Test: Reform Distributors' original assessment methods are basically centered on sales volume, including single-product profit, new products, key products, returns, etc. Those with higher levels might assess some routes, visits, and merchandising. But since salespeople no longer sell from vehicles, sales-oriented assessment methods become ineffective. Not only the sales team but also the distributor themselves need to shift from a "sell it out" mindset to "make consumers buy it" actions. Through the service of salespeople, enhance the terminal's competitive advantage to gain sales. This requires the distributor company to completely change employee performance assessment methods from top to bottom. The problem is that distributors, who are anxious daily, looking up at manufacturers' faces and down at employees' emotions, lack the ability to reform and cannot bear the pressure of manufacturers' sales targets or the risk of employees threatening to resign. Many distributors, even after forming partnerships and leasing warehouses, encounter difficulties in warehouse merging and reform, ending up with much ado about nothing. Fifth Test: Technology Even if the above issues are resolved, internet technology is a big problem: Should you join a franchise or build your own? Buy an off-the-shelf SaaS platform or develop your own? Many distributors have two concerns about joining a platform: first, if it grows big, will they dump me? Second, if the platform fails, what about the large resources I invested? Building your own or buying a SaaS platform is fast, but the platform's usability, integration with WMS, integration with the distributor's existing varied inventory systems, integration with sales staff and vehicle delivery, and the internet company's understanding of the industry and transactions—these issues make it difficult for distributors to operate smoothly. The platform's various promotional tools may not meet transaction needs. Some distributors are uneasy about putting data on others' servers, worrying about leaks and that their transaction data might be used by others. So they grit their teeth and develop their own. But without development, they don't know about the various technical issues, bugs, endless upgrades and revisions. They might throw in three to five million yuan and still not know if it can go live. Sixth Test: Market When you finally get online and operate, installation, ground promotion, operations, and maintenance—these massive and tedious tasks require professional talent. But internet technical talent is in first-tier cities; locally, you can't find that many high-end talents. Even if you find them and teach small stores to order online, then big external platforms come, using low-price promotions and scale to suppress your platform... I believe many distributor friends are almost desperate after reading this, realizing that this business is very difficult for distributors to do alone. In fact, I want to tell distributor friends that Chinese distributors are the most "wealthy" group. They have teams, vehicles, warehouses, brands, money, connections, and resources. As long as these resource controllers are open-minded, willing to learn, and willing to unite, I believe no competitor can shake this group. The problem is that distributors think too much and do too little. They only focus on the immediate interests in front of them, not considering how to gain more benefits by doing bigger business in the region. PiDuoDuo CEO Guo Decang once posted this in our community when discussing the problems distributors face in doing B2B: "The internet makes traditional enterprises miserable, and they complain 'it's all the internet's fault.' In essence, it's not the internet's problem, but the traditional enterprises' own problems: either business can't keep up with changes in user needs, or management can't keep up with market changes, or the business model can't keep up with the times. The internet just ignited these problems. Like in a flu epidemic, why do some people catch it and others don't? The focus is on their own resistance. In this internet+ flu, some enterprises with poor quality, ignoring advice to build internal strength, with rough management and low efficiency, get the flu and even fall. Isn't it deserved?" So, distributors should still go out more, see and learn, see how these internet companies do it, and how distributor friends across the country do it, and keep up with the big trends of the times. On October 16, during the Autumn Sugar and Wine Fair, this public account held a thousand-person B2B conference at the Fujian Grand Theatre with the theme "New Food Era, New Distribution: 2016 China 'FMCG + Internet' Summit Forum," focusing on the internet transformation of enterprises and distributors. At the conference, we invited founders of over 100 domestic B2B platforms involving FMCG categories to participate. We also set up a B2B special introduction session on site. Interested friends can see the operating models, franchise policies, and more of many excellent domestic B2B platforms at once. What are you waiting for? If you want to attend, please long-press the QR code below to register. You can also click "Read Original" to learn more about the conference. New Food Era, New Distribution — 2016 China "FMCG + Internet" Summit Forum — This is a grand event focused on how the FMCG industry channels should transform under the trend of internet+ transformation Conference Agenda 09:00-09:30 Registration 09:30-09:35 Host opening 09:35-10:05 2016 China FMCG Industry Trend Analysis Report—Zhao Bo 10:05-10:25 FMCG Enterprise Transformation Strategy and Path—Liu Chunxiong 10:25-10:45 Opportunities and Challenges Brought by FMCG Channel Transformation—Field 365 CEO Liu Zhao 10:45-11:25 Alibaba Retail Link All-Round Empowerment—Alibaba Retail Link Guo Kunkun 11:25-12:00 Roundtable Forum—Brand Transformation: Improvement vs. Reconstruction? (Guests TBD) 12:00-13:30 Lunch 13:30-14:00 Distributor Transformation: City Distribution Trends—Weijie City Distribution CEO Wang Qi 14:00-14:30 Roundtable Forum—Why Should Distributors Do Logistics in Transformation? 14:30-15:00 Detailed Explanation of Zhongshang Huimin's "One Machine, Two Wings" Strategy—Zhongshang Huimin Vice President Su Xiaoxin 15:00-15:30 Detailed Explanation of Zhanghe Cloud Factory Strategy—Zhanghe Tianxia Yang Lixiang (Content TBD) 15:30-16:00 Supply Chain Finance: Lubricant for B2B Driving Traditional Business—51 Order CEO Chen Xian 16:00-16:30 2B Investment Principles and Ideas—ZhenFund Founder Xu Xiaoping (Guest TBD) 16:30-17:00 Small Retail, Big Business Opportunities: China Retail Transformation and Upgrade—Yurun Group E-commerce Division General Manager Wang Jianfeng 17:00-17:30 Roundtable Forum—Who Is the King in FMCG B2B Models? (Guests TBD) 18:00-20:00 Dinner For manufacturer and distributor friends who want to transform, this grand event is not to be missed. Interested friends can long-press the QR code below or click "Read Original" to register. Registration: Long-press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]