Note: The alcohol industry's B2B is one of the few blue-ocean opportunities in the industrial internet. Projects from different fields—alcohol merchants, consulting, capital, and IT—are competing fiercely, making the space seem crowded. But the real drama of the alcohol internet is just beginning, as the industry's pain points have not yet been accurately understood or effectively solved. At a recent 'Yewen' event in Xixi, Hangzhou, Zheng Guangxian, founder of Jiuqu Technology, shared his views. The full text follows.
Dear friends from the alcohol industry, investment community, and media:
The flood of the internet will inevitably soak every inch of land. The penetration rate of the alcohol internet is less than 5%, making it appear as a blue ocean to many. Many alcohol internet projects have surged forward, attempting to solve industry problems from different angles. But only a few have succeeded. This is not because the industry is stubborn or conservative, but because most projects fail to address the industry's real needs.
I. Brand concentration continues to rise; wrestling with brand giants will end badly.
Domestic alcohol producers have revenues of nearly 800 billion yuan, giving rise to a handful of powerful brand giants. Moutai alone has gross profits of over 30 billion yuan.
The distribution scale is about 1.3 trillion yuan, shared by countless obscure 'porters' (channel and retail distributors). How can a nascent alcohol B2B challenge manufacturers? It's like an ant trying to shake a tree!
Respecting business laws is the prerequisite for a project's healthy development.
II. Suppliers need a sharper knife, not to be sent to the guillotine.
Distributors play important roles in brand promotion, taste introduction, last-mile logistics, and advance payment financing. The market has settled into a relatively stable state. Many B2B projects proudly claim to 'disintermediate,' only to become 'big second-tier wholesalers'; they emotionally pursue 'closed loops,' but unconsciously become 'toll booths.'
Terminal fragmentation does create a window of opportunity, but the channel needs a '2' (connection), not another 'B' (business). Any B2B that cuts off the connection between suppliers and retailers is playing dirty.
Between the vast number of suppliers and the massive number of retailers, what is most urgently needed is a platform for free connection and efficient transactions. Suppliers can present supply information to terminals in a timely manner, achieving sales transparency and solving problems like insufficient distribution, salesperson order skimming, promotion interception, and orphan customers.
III. Retailers' real pain points are often replaced by imagined entrepreneurial itches.
After visiting countless retailers, the most common complaints are 'business is sluggish' and 'customers are hard to find.' Few mention 'can't source good products.'
Information asymmetry is more of a pain point for suppliers and brands, as not finding supply is a rare event:
- Severe overcapacity;
- Extremely rich categories;
- Sufficiently refined cultivation.
For retailers, the real pain is the lack of 'customers,' not 'supply.' There needs to be a connection point between 'customers' and 'supply.' If we must focus on improving retailers' purchasing experience:
- Remove the 'psoriasis' visit cards on counter walls;
- Upstream fees should be matched to retail terminals for direct consumer promotions;
- One-stop autonomous purchasing with more, faster, better, and cheaper options;
- The platform should supervise suppliers' quality, integrity, and timeliness.
These would be good directions.
IV. 90% of alcohol B2B projects will die on the seemingly beautiful road to success.
- Greedy for scale, with millions of SKUs, self-purchasing, self-selling, self-delivering;
- Double subsidies, using C-end thinking for B-end, burning the candle at both ends;
- Blind expansion, fabricating capital stories, and rough data consolidation;
- Continuous burning of cash, lacking profit sources, hoping for capital's folly;
- Brand blockade, believing in 'no destruction, no construction,' and being abandoned by manufacturers.
These are the standard ways B2B dies.
Alcohol distribution has its peculiarities:
- Domestic brands are far from consumers but have strong voice;
- Imported products are extremely fragmented but growing fast;
- Alcohol consumption has high scene dependence and after-sales service requirements;
- Distributors' reservoir and incubator functions are hard to replace in the short term.
Therefore, in the current stage of alcohol B2B entrepreneurship:
- Building tool platforms is more reliable than self-purchasing and self-operating;
- Starting with solving information flow is easier than starting with logistics and capital flow;
- Solving 'more, faster, better, cheaper' in order is more pragmatic.
After all, 'empowering people' is a higher-level industrial internet ecosystem; a one-size-fits-all approach will only emerge in 'small but beautiful' niche categories.
V. Small tools, big platform, making selling alcohol more interesting.
The alcohol industry should have a B2B2C e-commerce trading platform.
Start with order information flow, only as a connection tool, not purchasing, warehousing, or logistics;
Upstream, connect local suppliers (respecting manufacturer authorizations), quality importers, and brand owners, helping suppliers solve information asymmetry with retail terminals and build their own B2B systems;
Downstream, serve retailers, helping them serve local consumers through social marketing and build merchant-specific O2O retail systems.
With an altruistic heart, form synergy, connect existing stock, stimulate incremental growth, and serve the transformation of alcohol suppliers and the upgrade of retailers.
Jiuqu Technology hopes to use technology to boost industry progress in this direction. It has already received strategic investment from industry capital led by Shangyuan Group and state-owned funds mainly from Zhejiang Financial Holdings.
Thank you.
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