As one of the representative foreign convenience store chains, FamilyMart has always been a benchmark for domestic convenience store brands to learn from and benchmark against. Now, FamilyMart has officially opened its B2B business to the public. Will this trigger a wave of domestic convenience store enterprises opening B2B businesses?
Core Guide:
Why is FamilyMart opening its supply chain to traditional mom-and-pop stores?
Why are chain retail enterprises so keen on B2B?
Will full industry chain penetration become the standard for FMCG distribution enterprises? Competition among B2B platforms is no longer just between national and regional platforms. Giants like JD, Alibaba, and Tencent have successively entered the fray, and with various chain retail enterprises penetrating the full industry chain, the entire FMCG B2B battlefield has become even more unpredictable. Now, the brand with the most stores among the three major foreign convenience store chains—FamilyMart—has also entered the game! 1 FamilyMart's Supplier Officially Opens B2B Business Millions of Mom-and-Pop Stores May Become FamilyMart's Sibling Stores Recently, New Distribution learned that Shanghai Dingshi Warehousing Co., Ltd. has fully opened its supply chain capabilities, starting to provide goods and logistics distribution services to traditional retail stores, i.e., B2B services. When mentioning Dingshi, one cannot avoid mentioning FamilyMart. As of now, FamilyMart has over 2,000 stores nationwide, far exceeding 7-Eleven and Lawson. Especially in Shanghai, the number of FamilyMart stores is even more than the combined total of 7-Eleven and Lawson stores. In the convenience store industry, which relies on franchising for expansion, FamilyMart's achievement is truly remarkable, and Dingshi has played an indispensable role in this. As FamilyMart's sole supply chain service provider, Dingshi's importance in FamilyMart's store expansion is self-evident. For a long time in the past, FamilyMart was also Dingshi's only client. Additionally, since both FamilyMart and Dingshi are currently operated under the leadership of Ting Hsin Group, this opening by Dingshi may also signify Ting Hsin Group's opening in its overall channel strategy. So, why is Dingshi, or the Ting Hsin Group behind it, opening its supply chain capabilities to the outside? "The headquarters has been exploring new profit points," a FamilyMart franchisee told New Distribution: "The opening has little impact on the several stores I operate. The products operated by retail stores and chain convenience stores are quite different, and market acceptance will require a long cultivation process. " However, for Dingshi, this is an important attempt. This opening not only means that Dingshi will open its warehousing and distribution capabilities to more traditional small stores, but also that it will export products, especially private label products and fresh food, to these stores. While increasing gross profit from product operations, this will also significantly reduce Dingshi's operational costs in warehousing and distribution. With FamilyMart's business as a foundation, covering more stores is tantamount to stringing FamilyMart's isolated stores into a line through traditional grocery stores, greatly reducing the marginal cost of warehousing and distribution. Furthermore, by supplying traditional grocery stores through B2B business, Dingshi can establish initial sales relationships with them. As the supply time grows and cooperation deepens, the relationship and stickiness between Dingshi and these stores will inevitably strengthen, which is also crucial for attracting store franchises. From a higher dimension, stores signify sales opportunities to a certain extent. The more stores covered, the more sales opportunities for products. In today's increasingly high labor and channel costs, covering more stores through Dingshi's B2B business may have even greater imagination space for Master Kong, which is also operated under Ting Hsin Group. If Dingshi's B2B business covers the market strongly enough, Master Kong may also gain strong control over channels. After all, in FamilyMart's history, there have been instances of blocking competitors like Uni-President from Master Kong. 2 B2B Platforms Not Profitable? NO! Chain Stores Show You the Right Posture Returning to the topic of B2B, although more and more chain retail enterprises are getting involved in B2B, the entire FMCG B2B industry, especially native B2B platforms, once lived in "deep water and scorching fire". More and more platforms such as Shop Shang Interconnection, Bang Xiaodian, and Yatang Xiaochao have successively experienced operational problems, even leading to bankruptcy and liquidation. Coupled with the cooling of the capital market, more and more people have begun to question the rationality of B2B business logic. Retail enterprises expanding B2B business (partial) In contrast, retail enterprises have shown a "promising" trend. Whether in the small-format convenience store sector like Caihua Commercial, Xingaoqiao, Furong Xingxing, Meiyijia, and Every Day, or in the supermarket sector like Wumart, RT-Mart, and Costco, they had already established comprehensive supply chain warehousing and distribution systems before entering B2B business, which has become the foundation for these retail-type B2B platforms to achieve profitability quickly. Taking RT-Mart's e-Lufa as an example, after one year of operation, with costs basically breaking even, it may have achieved full profitability this year. The reasons why a large number of native B2B platforms cannot achieve profitability for a long time are:
At the beginning of market expansion, they need to invest a lot of manpower and resources to build the supply chain, and the construction of such infrastructure itself takes a long time.
In the early stages of development, B2B platforms cannot get support from brand owners, so in order to quickly expand their territory, they have to purchase products at high prices and sell them at parity or even at a loss, which further delays profitability. It was only after internet giants like JD and Alibaba entered that brand owners' attitudes toward B2B slightly changed.
In addition, many entrepreneurs ignored the diversity of FMCG categories and the special nature of the industry itself, which also led them to take many detours in their entrepreneurial process. Coupled with the blind pursuit of capital, many entrepreneurs' rapid expansion left only a mess for the industry, while the success of retail-type B2B platforms undoubtedly showed the industry another possibility for B2B development. Analyzing why retail enterprises are so keen on B2B business, the main reasons are as follows:
Traditional grocery stores have undergone preliminary market education, and their acceptance of B2B has greatly increased;
Sharing warehousing and distribution logistics costs, especially against the backdrop of declining performance in supermarkets and hypermarkets year after year, B2B business can reduce product distribution pressure and form new profit growth points;
Obtaining incremental markets and expanding bargaining power with upstream brand owners or distributors;
For chain convenience store enterprises, through B2B business, they can establish initial contact with potential franchise store customers, laying the foundation for future franchise conversion. 3 Full Industry Chain Penetration Will Become the Standard for FMCG Distribution Industry in the Future Poverty gives rise to the desire for change. With retail-type B2B platforms being the first to become profitable, native B2B platforms lacking short-term造血能力 have begun to penetrate the full industry chain more and more. So we see that Zhongshang Huimin has opened the Haijia Convenience brand in local markets such as Beijing and Hangzhou; Best Store Plus, after acquiring Chengdu's WOWO convenience stores, has also launched the Best Neighborhood brand; JD New Channel and Alibaba Retail Link have also successively opened JD Xiaodian and Tmall Xiaodian... In addition to accelerating penetration into stores, participants in the supply chain have also begun to focus on creating consumption scenarios. Targeting the community, a natural acquaintance consumption scenario, major supply chain enterprises have launched community group buying platforms, such as Kaola Select under Xingaoqiao, Youjia Puzi under JD, and Meiri Yitao under Miss Fresh. This is bound to bring more variables to the already fiercely competitive retail market. In this regard, new retail industry expert Wang Jun used "besieged city" to describe the current industry situation: those inside the city want to go out, and those outside want to come in. B2B platforms are desperately opening stores, while retail enterprises are opening their supply chains to traditional channels. Both sides believe this is the future. From this perspective, channel and store control ultimately lead to the same destination. B2B platforms opening stores Among them, Best Store Plus has acted relatively early and decisively. On one hand, it has built its own chain brand "Best Neighborhood"; on the other hand, it acquired Chengdu's local chain WOWO, and recently acquired Xi'an's local convenience chain "Aidebao". It is taking a dual approach because in the process of B2B platforms opening stores, it is found that strong store control expands too slowly. Zhongshang Huimin and Yijiupi will both regard store opening as one of their core strategies in 2019. The road to millions of franchised stores for Retail Link and New Channel is still long. Chain store enterprises naturally possess B2B genes, especially light chains based on franchising, which inherently have limited control over a large number of franchised stores. Meiyijia and Furong Xingxing had already covered a large number of traditional channel stores before the emergence of FMCG B2B platforms. Traditional retail convenience chains Every Day and 36524 also accelerated the layout of their B2B platforms in 2018. The awkward part is that the supply cycle and purchase prices of B2B are difficult to integrate with the procurement system of their own chain stores, so they continue to explore the most suitable model for themselves. RT-Mart's e-Lufa, with its strong procurement capabilities and using its stores as forward warehouses, has been running fast and has become a new model with both development speed and profitability. Now, the news that Dingshi is opening its supply chain to traditional channel stores to build a B2B platform is quite explosive to me. FamilyMart China has the strongest comprehensive strength among the three major Japanese chain convenience stores. Its category system, through continuous reduction and optimization, has become highly competitive and differentiated from competitors. Imagine: a newly opened mom-and-pop store, from the very beginning, completely copies the full category of products from FamilyMart convenience stores. For a small store's starting point, this is not low. As for what the market thinks? What do competitors think? How will Dingshi balance the impact on FamilyMart convenience stores, especially on franchise owners? Let time tell us. What do you think about this? Welcome to leave a message in the comment section You can also scan the QR code below Add the editor's WeChat to join the group discussion Looking forward to sparking new ideas with you The 10th B-end E-commerce Inspection - "From Products to Scenes" Activity Time: December 10-13 Activity Location: Wuhu, Nanjing, Changsha Activity Process:
Morning of December 10: Visit Three Squirrels Headquarters + Investment Store
Afternoon of December 10: Visit Nanjing Squirrel Small Store
Evening of December 10: Visit Nanjing Master Gao Beer Workshop Store
All day December 11: Nanjing-Changsha, or free arrangement
Morning of December 12: Community Group Buying Exchange Salon
Afternoon of December 12: Kaola Select Hero League Launch Conference
Night of December 12 to early morning of December 13: On-site inspection of Kaola Select Logistics Center - This time period is the peak sorting period in the warehouse, allowing direct observation and learning of the backend operation process of community group buying e-commerce Welcome interested distributor friends to join us for understanding and on-site inspection: Organization Form
Big Shot Exchange Salon 2. Company Visit 3. On-site Explanation 4. One-on-one Communication 5. Actual Market Case Visit If you are interested in participating If you are interested in a specific day's content, you can register separately Long press this QR code or click "Read Original" to register in one click! When adding friends, please indicate the purpose -END-