Situation: Internet Giants Enter the FMCG B2B Field In 2016, JD.com will launch the "Locomotive No. 1" project, namely the New Channel Business Unit. JD.com will act as a large wholesaler, supplying goods to physical merchants, which will directly snatch business from many traditional middlemen. Alibaba, similar to JD.com's Locomotive No. 1 project, has "Traceability Wholesale," launching the City Partner Plan to provide a series of services such as supply, distribution, and finance to urban retail stores. FMCG B2B platforms like Zhanghe Tianxia, Yi Shenghuo, Wanwu APP, Wanshangou, and Xingaoqiao are also growing wildly. Will traditional FMCG distributors be eliminated? Where is the way out for FMCG distributors?

Original Intention: Eliminate Information Asymmetry and Improve Operational Efficiency Zhang Xuebing, General Manager of Jiumaotong, said, "The company started using the Laojiaoke system in 2013. The initial operation of the Jiumaotong platform was simply to eliminate information asymmetry between the company and retail terminals, allowing terminal customers to establish the most direct contact with the company, place orders independently, minimize employee workload, thereby reducing operating costs and enhancing the company's market competitiveness. Bypassing second-tier distributors and reaching retail terminals directly as a logistics distributor was our original idea." Two years later, Jiumaotong has effectively covered 5,500 retail terminals in Chengdu, operating over 120 SKUs, becoming the leading wine B2B platform in the Chengdu area. Regarding Jiumaotong's market influence in Chengdu, Zhang Xuebing proudly said, "The Jiumaotong ordering system has become the price benchmark in Chengdu. Wine merchants in major wholesale markets in Chengdu start their business every day by checking Jiumaotong's prices. Our business team's service efficiency is also unimaginable for traditional wine merchants: on average, each salesperson serves more than 500 customers, which is difficult for traditional wine merchants to achieve." Undoubtedly, Jiumaotong's business team has reached a new efficiency height in the industry, significantly reducing the service cost per customer and solving the headache of rapidly rising labor costs that plague traditional wine merchants, thanks to the technical support provided by the Laojiaoke system.

Bottleneck: Last-Mile Logistics Distribution Jiumaotong has three delivery vehicles for customer deliveries. As the number of customers and orders rises sharply, logistics distribution efficiency has become a major problem. One vehicle can serve at most 50 retail terminals per day, delivery drivers are very tired, and logistics costs are high. Zhang Xuebing said, "Chengdu is located on a plain, the city is large, and traffic congestion is common. With the increase in customers, last-mile logistics distribution has become a headache." FMCG differs from online shopping, emphasizing convenience. Jiang Xiaobing, a logistics and supply chain management expert, said that FMCG transaction volume will surpass any other field in the future. Although individual transactions are small, the market scale is large enough—not just large, but the largest. FMCG B2B restructuring of intermediate links is the next trend. Last-mile logistics distribution for FMCG is a nationwide industry-level problem. Most B2B platforms solve it by adding warehouses, vehicles, and personnel, inevitably forming an asset-heavy model. Distributors running their own logistics incur huge direct investments in warehousing, transportation, labor, and equipment, and the operating and maintenance costs of venues and equipment, as well as capital occupied by goods turnover, directly increase operating costs. Because FMCG companies focus mainly on marketing and have limited knowledge of storage and transportation, coupled with market volatility, the scattered storage and transportation resources of various enterprises are not efficiently utilized, resulting in low overall logistics efficiency and further high logistics costs." When asked how Jiumaotong solves the last-mile logistics distribution problem, Zhang Xuebing said, "The Laojiaoke system provides a distributor function that can bind each retail terminal to a logistics distributor. After system setup, orders generated by each retail terminal are automatically transmitted to the designated logistics distributor. Jiumaotong recruited 15 second-tier distributors in Chengdu as logistics distributors. They have warehouses, vehicles, and delivery personnel. After the distributor system is established, Jiumaotong can handle local orders quickly, solving the last-mile logistics distribution problem."

Practice: The Status of Second-Tier Distributors Remains Important Regarding the market position of second-tier distributors, most views are that they will be gradually replaced and then disappear. Yu Chaowei, founder of the Laojiaoke system, said, "Second-tier distributors in the FMCG field will not completely disappear; their market position is important and irreplaceable for a long time. Second-tier distributors have warehouses, vehicles, personnel, and capital, and their market position naturally formed in the development of the FMCG circulation field. FMCG B2B platforms must achieve the integration of business flow, logistics, information flow, and capital flow. The addition of second-tier distributors as logistics distributors not only solves Jiumaotong's last-mile logistics distribution problem but also provides capital flow. If all four flows are independently solved by B2B platform companies, they would need to increase investment significantly and become asset-heavy enterprises. Hunan Xingaoqiao and Yantai Wanshangou need large-scale financing for this reason. The Laojiaoke solution enables Jiumaotong to develop toward an asset-light company, reducing operational risks and increasing expansion speed." Regarding the order formed by B2B platforms and traditional circulation channels over a long period, Yu Chaowei said, "The idea that B2B platforms will overturn traditional FMCG circulation channels is common, but it is very difficult to achieve. It is necessary to respect the market order formed over many years, making the original ecosystem more harmonious. Destroying the original order will inevitably encounter various confrontations and counterattacks."

New Positioning: Win-Win with Second-Tier Distributors, Becoming Regional Brand Operators Jiumaotong has formed a win-win alliance with second-tier distributors who become distributors. Zhang Xuebing said, "The ordering platform not only has products operated by Jiumaotong itself but also products operated by distributors. When retail terminals enter the Jiumaotong system, the products and prices they see are fully corresponding to those of the distributors, without price confusion. This is the information service Jiumaotong provides to second-tier distributors. It should be noted that it is extremely difficult for second-tier distributors to build their own B2B platforms. Jiumaotong assigns dedicated salespeople to franchised second-tier distributors to help them develop customers and take orders. This is the same as Coca-Cola's '101 System.' Second-tier distributors pay Jiumaotong for goods. Second-tier distributors and Jiumaotong have formed a de facto alliance with clear division of labor, capable of cultivating new brands, clear interests, and truly achieving win-win." When discussing Jiumaotong's market positioning, Zhang Xuebing said, "Jiumaotong's initial goal was to be a logistics distributor; now the goal is to become a regional brand operator, replacing manufacturers' direct sales teams, helping manufacturers develop and maintain markets, thereby reducing operating costs. Jiumaotong and second-tier distributors have formed a solid interest alliance, while also establishing efficient information channels with a large number of retail terminals. This is a strong guarantee of Jiumaotong's market role positioning. Platforms like Zhanghe Tianxia, Yi Shenghuo, and Wanwu APP do not provide brand cultivation services for manufacturers."

After 30 years of development, the Chinese FMCG market has formed a huge number of general distributors and second-tier distributors. In the context of rapid e-commerce development, it is widely believed that channels will flatten and general distributors and second-tier distributors will largely disappear. In this regard, Weng Guangneng, Sales Management Director of Chongqing Region for Evergrande Spring Water, analyzed, "Regarding channel flattening, the facts may differ from common judgment. Evergrande Spring Water lost more than 5 billion RMB in two years of market operation. Because second-tier distributors lack the awareness and ability to actively cultivate brands, a large portion of the company's budget is spent on labor costs. The company is unwilling to do this; it is very willing to cooperate with B2B platform operators like Jiumaotong. Only in this way can the company ensure its products are well cultivated in the market while reducing operating costs. Platforms like Zhanghe Tianxia, Yi Shenghuo, and Wanwu APP often mess up product prices, which is not what we want."

Of course, we don't yet know whether B2B businesses like JD.com's New Channel Business Unit will succeed, but they have sounded the alarm for this round of B2B. Besides warning distributors who wait for customers in their stores, what changes will it bring to sales positions derived from channels?

Change 1: The need for horizontal expansion of sales skills increases. After B2B implementation, a hypothetical possibility is that manufacturers only hire a small number of platform salespeople. Various professional sales companies will emerge in the channel, undertaking store development and maintenance business through platforms. These professional sales companies will hire some salespeople as their employees. These salespeople will not only sell brand A but also brand B; not only sell toilets but also floors. Brand generalization and category generalization impose width requirements on salespeople's knowledge systems and sales skills. For example, can salespeople reasonably classify the skills they have mastered into universal skills and industry-specific sales skills? The ability to extract and apply universal sales skills will determine the ability and speed of salespeople to adapt to new business models.

Change 2: Information asymmetry will be completely broken. In the past, as manufacturer representatives, we had some resources and power. We could bluff about product price increases to trick sales; we could fool distributors into thinking best-selling products were in short supply to pressure them into stocking up. If the big B-end (platforms like JD.com) and the small B-end (terminal stores) are fully networked, the system will inevitably have an open information platform. Information about promotions and inventory will definitely be open to retailers (this is also the driving force to attract retailers into the system). In the future, salespeople who do not seriously interpret platform policies may be less sensitive to information than retailers. Salespeople who rely on information for a living will have no food to eat. Those who can provide consultative sales to stores, those with tools, methods, and routines, are the ones truly welcomed by retailers.

Change 3: Dancing in chains is an inevitable transformation. The special nature of sales positions determines that this is a position that requires personal self-discipline to grow. In the past, many companies' laissez-faire management cultivated lazy habits among many salespeople. Many people have fabricated itineraries and written false reports. But with the intervention of B2B, the competitive pressure on salespeople has suddenly increased. In addition to the ability to extract store performance at any time, the development and maturity of sales field service software have basically left salespeople with little privacy. Although we can still see some salespeople using tricks to counter field monitoring, technology improvement is endless. As long as there is demand, technology will surely meet it. In the B2B era, this trend will become more obvious.

-END-

Excellent Product Promotion Recommendation Reasons:

  1. Category Innovation: The first DHA brain gold drink in China, which helps adolescent brain development, opening a new blue ocean in the beverage market.
  2. Unique and Eye-Catching Packaging: Patented dragon claw bottle design, the first sci-fi and fashionable beverage bottle internationally, extremely outstanding in terminal display. Advanced imported sports cap, first introduced in China, fashionable and cool, with high technical threshold.
  3. Distinct Selling Points: China's first brain gold drink, a brain-healthy beverage, with fun and fashionable bottle design, ensuring product popularity.
  4. Weak Competition: Shanlong is a completely original category and appearance, with few competitors.
  5. Huge Consumer Group: Targeting students and teenagers, channels concentrated with young people such as schools and internet cafes can see rapid sales growth.
  6. Small Investment, Big Profits: Can trial sell in small quantities, retail price 5 yuan, huge profits. Please do not disturb if you are an advertiser or without experience and channels.

Nationwide blank market hot recruitment, miss it and it's gone. Long press the QR code below to directly add Manager Lin's WeChat: Guangdong Heyuan Fengsheng Food & Beverage Co., Ltd. Website: WWW.FOODSUN.CN

Domestic best FMCG distributor learning platform Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly FMCG industry's most professional and practical knowledge base Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operation | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Eighteen Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brands | [Long press QR code to follow] **Join QQ/WeChat groups: Click: Read Original