The 3rd 'FMCG + Internet Conference' hosted by New Distribution was grandly held at Chongqing Yuelai International Convention Center on November 8-9, 2017, attracting thousands of industry distributors, manufacturers, and internet companies from across the country. The venue was packed, and the event was unprecedented. The following is the roundtable discussion on the morning of November 8, where marketing expert Liu Chunxiong, Youqingxu Technology founder Li Qian, JD Business Unit's Wu Shuangxi, Dinghuobao CEO Jiang Tao, and Yili Group Liquid Milk Business Unit Channel Director Zhang Zhenhua discussed 'How Should Brand Owners Complete Channel Transformation?' at the conference. New Distribution has organized the content for our readers.

Liu Chunxiong: Just now we discussed a topic: how brands and platforms can jointly reconstruct channels. Today's guests on stage are from two sides: two brand owners and two platform companies, which is balanced.

Jiang Tao: Hello everyone, our Dinghuobao mainly provides a user-friendly, stable, and low-cost ordering platform for brand owners and distributors. Simply put, we provide weapons and solutions. We have successfully helped some local B2B platforms in certain regions build their own B2B ecosystems, including in Chengdu, Wuhan, and Jiangsu. These successful platforms have used Dinghuobao's powerful IT system to support their own B2B systems. I'm glad to share here how, in the era of Internet + FMCG, we can use operational and IT thinking to solve current transformation and upgrading issues. Thank you.

Zhang Zhenhua: Hello everyone, I am Zhang Zhenhua, Channel Director of Yili Group's Liquid Milk Business Unit. As Yili, we build 2B and 2C platforms to provide consumers with the healthiest dairy products. I am very willing to embrace internet platforms, and through online-offline channel integration and cooperation, provide consumers with convenient and fast services. Thank you.

Wu Shuangxi: Hello everyone, I just spent a long time introducing JD New Channel and JD Convenience Stores. I joined JD in 2011 and have been doing B2B business since New Channel started. I will continue in the future, and I believe we will have many opportunities to communicate. I won't say more. Thank you.

Li Qian: I just got off the stage. I am Li Qian, founder of Hetun Youqingxu. Previously, I was in investment, and before that, I did content and was in charge of the news center at Tencent. Thank you.

Liu Chunxiong: I want to ask the brand owners two questions first: How do you view B2B platforms? What countermeasures do you have for B2B platforms? What are your views on channel conflict and price chaos?

Zhang Zhenhua: We have always been embracing this. We do corporate Internet+ and our own marketing data. Regarding terminal B2B management, we are currently embracing it enthusiastically, but we are still in the exploration and groping stage. Only with a win-win value chain can we achieve a win-win relationship among online and offline, partners, brand owners, and platform companies, and maximize the channel's power.

Liu Chunxiong: I'm not satisfied with that answer. I don't want to hear vague terms like value win-win. Have you internally established a B2B response department?

Zhang Zhenhua: Our company has always had an e-commerce department and a channel department that have been paying attention to B2B development for many years. We have been paying attention since 2007. We have been exploring the connection with channels, with many communications and collaborations. We also have our own platform control from company to terminal.

Liu Chunxiong: You haven't fully answered. Have you had long-term cooperation?

Zhang Zhenhua: We are still in the research stage.

Liu Chunxiong: If you don't enter the platform, the platform will definitely come to you, because you are Yili.

Zhang Zhenhua: We have always cooperated with JD, and we have also cooperated with Zhongshang Huimin.

Liu Chunxiong: How do you view price chaos?

Zhang Zhenhua: Our food is fast-selling and consumer-demanded. Price chaos indeed impacts us greatly. This impact ultimately manifests as channel balance issues, including the 2B direct operation model in shopping malls. This situation exists, but we will solve it collaboratively. Such cases are relatively rare.

Liu Chunxiong: Ms. Li, your brand is different from Yili. Yili is a mature brand, and price chaos occurs because it's a necessity. Your product is not a necessity. When you cooperate with platforms, what expectations do you have for the platform?

Li Qian: I believe that times create heroes. Whenever a new wave trend rises, there must be a wave of complementary people cooperating. We have seen that some channel stages have achieved some brands. So I believe that every good channel's rise, or every good brand's rise, is not done independently. It must be the result of combining with current trends and dividend platforms, and the result of cooperation. I believe that under this wave, new brands belonging to this wave will also rise. Hetun Youqingxu has been committed to the strict selection and incubation of these brands. In this process, we very much welcome and are willing to cooperate with current B2B channel platforms. Even in this process, we are willing to share brands. The brand can be co-owned, or you can take it.

Liu Chunxiong: I find that the more senior the executive, the more they like to play tai chi. Let me ask more directly: Have you approached B2B platforms?

Li Qian: Yes.

Liu Chunxiong: Have B2B platforms approached you?

Li Qian: Because after today, many people will approach me.

Liu Chunxiong: If a platform cooperates with you, what functions do you expect the platform to undertake?

Li Qian: As I said, professionals do professional things. Coming to this professional venue, I see many platforms emphasizing efficiency, the last mile of service, and service refinement. This is also our demand for B2B platforms. We hope you can truly do efficiency well, and everyone can pay more attention to brand connectivity. Don't just be responsible for efficiency. Channels with true brand stickiness can last long. This is also our demand for channels.

Liu Chunxiong: I turn to the platform side. Mr. Wu, you emphasize more the benefits brought to stores, because benefits to stores bring benefits to consumers. You rarely talk about cooperation with brand owners. For these two companies, you expressed what you can bring to them. First, for Ms. Li, if her product goes to your platform, what do you do? Do you accept it?

Wu Shuangxi: Professor Liu, that's a great question. It's a question we thought about from the beginning. When New Channel was first established, we borrowed many industry models and researched the pain points of many brand manufacturers, including brands like Yili. In the PPT just now, due to time constraints, I focused more on empowering small stores. But there is also our data system. Our data system is fully open to manufacturers. It contains all supply chain processes, including inventory data, sales, and sell-through. Brand manufacturers can see the flow of all goods. Second, we also provide a very transparent platform for brand manufacturers, where all resource allocation is visible: what regions, what stores, and what types of consumers are covered. So you can lock in your investment direction based on your product characteristics and target user groups.

For Ms. Li, I strongly agree with a viewpoint: whether doing retail or channels, ultimately we must pay attention to consumer trends. What is the consumer situation? What should our sales be? Originally, people looked for goods; in the future, goods may look for people. The premise of goods looking for people is that your brand has a precise positioning: what consumer group is targeted, and what channel to use to sell the product. I also agree that not every brand can be a first-tier brand forever, because many new brands are growing. The emergence of new channels will bring new growth opportunities for these new brands. So, Ms. Li's product is very promising.

Liu Chunxiong: If she entrusts it to you, how does your platform undertake her channel function? Does she still need to do another channel function with the platform?

Wu Shuangxi: This is something every B2B practitioner should think about. In the past year or more, besides first-tier brands, we have done many brands you may not know, but these brands sell very well in our terminal stores. Because these brands may have the ability to build production capacity and do brand marketing, but compared to traditional first-tier FMCG brands, their channels are relatively weaker, and supply chains are weaker. This is JD's core competitiveness, built over more than a decade.

Liu Chunxiong: As a moderator, I shouldn't express opinions, but I feel I should. I think the best B2B platforms do the long tail. This product belongs to the long tail. Snack foods are actually the most differentiated. If you do convenience stores, you are also in the long tail. Second question: For a brand like Yili, how do you establish a symbiotic and co-prosperous channel system with it, rather than a potentially harmful one?

Wu Shuangxi: Yili is a very representative brand. Its original channels are relatively mature, with many offline personnel and years of deep channel cultivation. Of course, there are also product characteristics: fast turnover, very fast-moving consumer goods. So in our cooperation, we have communicated several rounds about what value we can provide. Yili is not the only one. Many traditional FMCG companies have a common pain point: many old-generation distributors are at the stage of generational transition. Many distributors' children have returned from studying abroad. Our distributor system, frankly, needs many B2B platforms to enter like catfish to activate the system. Many first-tier manufacturers say they have over a thousand brands, but fewer than ten are visible in the market. So when new products come out, many distributors are unwilling to promote them. Thus, supply-demand conflicts exist. For JD in the future, we always emphasize that we will tend to cover 4-6 tier cities, including meeting the timely needs of small stores. So for Yili, we have many complementary aspects in the supply chain.

Liu Chunxiong: In this process, you undertake many transaction and promotion functions. In the future cooperation system, what role do you think distributors will play?

Wu Shuangxi: The role of distributors is not just my opinion. The entire B2B industry, as various guests mentioned, future distributors must transform. What will they transform into? Professor Liu, your own speech just answered this question. In the future, trading platforms, distribution platforms, and promotion platforms will definitely have a division of labor. Traditional distributors have their advantages and pain points. In the future reconstruction of the supply chain, distributor value will definitely exist.

Liu Chunxiong: Mr. Jiang from Dinghuobao, same two questions: How do you do it?

Jiang Tao: National platforms like JD and Alibaba have their advantages. Of course, regarding rule-making, whether everyone should abide by these rules, I think if everyone followed the rules, there wouldn't be so many platforms. Platforms sometimes appear to break rules. When a platform reaches a certain scale, the rule-maker is no longer the original strong party. So cooperation with brand owners depends on the platform's strength. I prefer regional platforms. Of course, our Dinghuobao has supported and helped many regional platforms grow through our capabilities, including coverage from 1,000 stores to 10,000 stores. They have strong control over terminals and local markets. So for brand owners, through such rapid development, many brand owners are cooperating with us and with our clients. For large brands, they are tentative and half-hearted, but truly long-tail small brands are very actively embracing the platform. So whether national or regional, platforms play a positive role in channel support and distribution for brand owners. As a platform, value lies in changing industry rules. The real beneficiaries are actually brand owners, because the future core value of platforms includes not only efficiency and promotion value but also data value. In traditional wholesale markets and models, data is hard to format, analyze, and analyze. Just now, the JD leader mentioned opening the platform to brand owners. As a B2B platform, opening data to brand owners to optimize products and deeply analyze markets is of great value. So adopting the B2B platform model is a generational difference compared to pure offline models. The emergence of such platforms in large numbers can help brand owners better understand the market and is of great value. Of course, for the existing market of large brands, it will create a big catfish effect, but for small brands, it helps greatly.

Liu Chunxiong: Honestly, I'm not satisfied. I don't want you to always say that because it's a trend, you have to participate even if it's unfavorable. I think this attitude is not one of jointly rebuilding the ecosystem between brand owners and platforms. Actually, today is a good advertisement. We have two brands, one strong and one weak, and two platforms, one strong and one weak. From this, we feel we need to rethink.

Alright, thank you all!

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