The digitalization of FMCG distribution channels is a long and complex process, with constant entries and exits. In this process, a company securing financing doesn't necessarily mean B2B has succeeded; similarly, the failure of some companies doesn't mean the entire B2B industry has collapsed! What's wrong with B2B? This article mainly discusses the operational issues currently faced by self-operated B2B platforms. Undeniably, many leading B2B platforms have encountered problems to varying degrees, with news of closures, shutdowns, and transformations frequently appearing in the media. Moreover, based on New Distribution's market research data this year, the monthly purchase volume from B2B platforms by small stores has not seen rapid growth compared to a few years ago. This has cast a shadow over the development of B2B platforms, prompting more people to think: What's wrong with B2B? This needs to be analyzed from several dimensions. First, after years of development, FMCG B2B has entered a deep-water zone. Competition is intensifying, and platforms that lack deep industry understanding, blindly advance, seek quick profits, or misjudge market trends will inevitably be eliminated at this stage. Meanwhile, relatively cautious platforms, upon hitting development bottlenecks, are adjusting their operating models to improve efficiency and reduce operational costs—such as JD New Channel's joint warehouse and distribution system—while also exploring new businesses like community group buying to find more suitable growth paths. B2B's rapid growth has, in a sense, eaten into the market share of about 500,000 second-tier distributors and dealers in China, leading to direct conflicts between B2B development and dealers and second-tier distributors. However, because B2B models inherently cannot provide deep marketing services for brand owners, resistance from dealers, second-tier distributors, and even brand owners is inevitable, which has also slowed B2B's development pace from another dimension. In general, digitalizing FMCG distribution channels is not a purely internet business; it leans toward the supply chain side, and transforming the existing industry is extremely difficult. Entrepreneurs hitting walls and the market returning to rationality are inevitable stages in the development of any industry. This industry requires slow internal adjustments and external pressure to work together. However, we must clearly recognize that the HBG model (mass production, mass communication, mass distribution) of the entire FMCG industry has become ineffective. New consumer demands have brought about new retail transformations. To adapt to the market and meet consumer needs, brand owners must adopt flexible production, precision marketing, and precision distribution. This requires FMCG companies to gradually complete digitalization in production, marketing, and distribution, achieving an integrated supply chain model that unifies manufacturers, distributors, and stores. Therefore, online transactions, public-transit-style logistics, and digital distribution are inevitable trends, regardless of who succeeds or fails. You can't say that because 5,000 group-buying companies went bankrupt, Meituan's business model at the time was flawed. B2B itself is also evolving through trial and error, gradually embedding from pure transactions into industry internet, shifting from earning transaction margins to achieving value-added profits through systematic industry services. Technological advantages will gradually emerge as practitioners' operational levels improve. More critically, we believe the B2B industry is not unprofitable; the key lies in whether the business model can match actual market demand. Let me first cite some currently profitable cases: Yueheji under Caihua Commercial Trade, E-Lufa under RT-Mart, Shanghai Kuaile Zhanggui, Furong Xingxing Abida, Hunan Xingaoqiao, and Yijiupi, which has achieved profitability in over 100 cities. Profitable B2B platforms are no longer isolated cases in the industry. Summarizing the characteristics of these platforms, they have several advantages:

  1. Some naturally have lower warehousing and logistics costs;
  2. Some have relatively low backend costs (technology, logistics);
  3. Some can gain price advantages through centralized procurement;
  4. Some lock in small stores' purchasing rights by empowering retail;
  5. Some have a certain density of scale effects, acting as absolute leaders in their regions with large-scale promotional investments;
  6. Some have obtained regional agency rights for certain brands;
  7. They insist on building regional platforms and expand cautiously;
  8. They possess precise product selection capabilities. Of course, these are not all the reasons for their profitability, but the industry has basically reached a consensus: If B2B doesn't operate stores or control small stores in the future, it will be difficult to achieve large-scale profitability. Are small stores really B2B's target? Recently, I visited some stores in Shijiazhuang and Baoding and found that small stores now have a very broad awareness of B2B, but regarding ordering experience, price, product availability, and delivery speed remain their key concerns. In today's environment where dealer supply proportions are increasing, second-tier distributors have dense coverage, and salespeople continuously visit to take orders, it is indeed very difficult for B2B to rely solely on online promotions and discounts to increase the proportion of small stores' purchases. At this stage, B2B's advantages can be reflected in certain categories that don't require deep distribution, but for categories with low value, high logistics costs, and emphasis on deep distribution, it remains difficult to gain significant supply chain advantages. However, because these categories have high sales volume and low value, and store owners pay high attention to them, B2B platforms have to devote most of their energy to these categories. As business operators, small store owners consider not only purchase prices but also return risks and terminal service quality. These are areas where B2B is relatively weak. From a model perspective: national or regional? Self-operated or matching? The core issue currently is that simply cutting one layer of the supply chain cannot break the traditional brand → dealer → second-tier distributor → small store interest chain. We can draw a simple conclusion: B2B platforms that don't start from a single category but operate across all categories, without deep intervention and empowerment in store management, will find it basically impossible to sever ties with dealers and second-tier distributors. But self-operation is both heavy and has scale bottlenecks, making rapid development difficult unless the platform secures very large financing to expand nationally. What will the future supply chain look like? I think it should ensure both the advantages of centralized procurement and the density and professionalism of localized operations. A national supply chain + localized retail platform might be one of the true solutions. A large central platform has technical talent advantages, and national centralized procurement has scale advantages, ensuring efficient capital turnover and full data utilization, while also truly providing one-stop solutions for upstream partners. Localized retail small stores with deep operational empowerment—from brand output to product selection, store decoration, operational upgrades, and final supply chain management—provide multi-level, three-dimensional operational guidance to entrepreneurs, which is the only way to sever the connection between small stores and other suppliers. In summary: Small stores are not impossible to serve, but the wholesale business is certainly just an entry point, not the ultimate form; the final form will definitely be chain supply chain integration. Looking back, Yijiupi started with alcohol, engaged in FMCG cross-regional sales, built scale, and then gradually penetrated retail—this is truly a very clever path. Has B2B empowered brand owners? At the New Distribution conference in Chengdu in March, a report stated that 74% of brand owners have gradually established new retail teams, but currently, whether in terms of authority, resources, or team size, they are still in the testing phase. Most companies have not regarded B2B as a core future development strategy. However, the rapid rise of B2B in recent years has alerted many brand owners: if only one or two B2B platforms remain in the industry, it would not be good news for any brand owner. Therefore, while actively cooperating with B2B platforms, brand owners are also beginning to upgrade their distribution systems and build their own digital channel systems. Although I have always held reservations about this, not believing that brand owners can successfully build B2B systems like New Channel or Retail Link, channel digitalization is something every brand owner must consider. This is not directly related to success or failure. From a future perspective, the fragmentation of retail scenarios has caused existing distribution systems to lag severely behind external market demand. So, the question is not whether to build your own, but when the existing distribution system cannot support the company's rapid development over the next decade and adapt to market changes, how should we redesign and transform our existing channel model? In summary: In the future, all businesses will be supply chain businesses, and innovative retail scenarios will inevitably require digital supply chains to solve empowerment issues. Conclusion The term "FMCG B2B" has misled many people. What practitioners in this industry do should be called FMCG industry internet. The need for industry upgrading has always existed; the key lies in how and under what logic success is achieved. That is the core of the issue. Extended reading of B2B series articles: Tips will be paid 400-2000 yuan once adopted. China FMCG + Internet Professional New Media Dedicated to FMCG manufacturer and distributor transformation and channel digitalization solutions