Click to read the original article for details In recent years, with the acceleration of e-commerce penetration into various industries, channel digitalization has become an unavoidable topic in the FMCG industry. Whether it was the earlier B2B, the later unmanned retail, convenience stores, video live-streaming e-commerce, or the recent community group buying, all reveal the desire of 'outsiders' from various industries to digitally 'transform' the traditional FMCG industry. But after rounds of entrepreneur turnover, we suddenly find that the changes in the traditional FMCG industry do not seem as dramatic as the outside world claims. No matter how digitalization accelerates, expense management, product distribution, and terminal merchandising remain the magic weapons for FMCG companies to win the market, and the impact of digitalization on FMCG companies does not seem that significant. But is this really the case? What changes has digitalization brought to FMCG companies? And how has digitalization started to change the business models of traditional FMCG companies from the perspective of business thinking? All of this starts with FMCG B2B. The Rise of FMCG B2B On November 11, 2009, Taobao Mall (now Tmall) launched the first Double 11 event with 27 merchants, and the single-day transaction volume exceeded 52 million yuan, 10 times the daily transaction volume. The next year, the transaction amount per second exceeded 20,000 yuan during Double 11, and the total transaction volume exceeded 936 million yuan, which reached 3.36 billion and 19.1 billion in 2011 and 2012, respectively. As a microcosm of the rapid development of e-commerce, Double 11 attracted global attention within just a few years, and also drew attention to the enormous capabilities unleashed by e-commerce and digitalization. If e-commerce can change traditional transaction methods and consumer habits, why wouldn't this change happen in the B2B consumer goods sector? The 6 million traditional grocery stores across the country still need to visit numerous wholesale markets for procurement, and hundreds of thousands of FMCG market salespeople travel to vast 1-6 tier markets every day. The complexity and backwardness of the traditional FMCG distribution chain made countless entrepreneurs smell the opportunity behind FMCG products. In 2013, FMCG B2B platforms represented by Zhongshang Huimin and Zhanghe Tianxia emerged and quickly attracted capital attention. According to incomplete statistics from New Distribution, from 2016 to 2018 alone, the total financing in the FMCG industry exceeded 5 billion yuan, with Zhongshang Huimin's Series C financing of 1.6 billion yuan in 2019 setting a record for financing scale in the FMCG B2B e-commerce field. The number of national B2B platforms also surged from 29 in 2013 to 254 in 2018. The rapid development of FMCG B2B also attracted internet giants like Alibaba and JD.com to enter the field. In April 2017, JD.com founder Liu Qiangdong announced on social media that JD.com would open more than 1 million JD convenience stores in China within five years, and the project was undertaken by JD New Channel. Similarly, Alibaba also launched its FMCG B2B platform—Ling Shou Tong—around the same time. These two events marked the official entry of FMCG B2B into the fast lane of development. The Decline of FMCG B2B After the giants entered, they adopted a high-profile approach and basically completed coverage of the national market within just two to three years. No grass grows under a big tree. Behind the rapid development of giants, on the one hand, we see that with strong brand appeal, financial strength, technical strength, and marketing power, B2B has become a widely accepted procurement method for traditional grocery stores, with 74% of small stores placing orders on B2B platforms to some extent. But on the other hand, the entry of giants further squeezed the development of other regional B2B platforms. Among them are platforms that are well-known and were once darlings of the capital market, such as Dianshang Hulian, Zhanghe Tianxia, Yatang Xiaochao, Zhangshang Kuaixiao, and Best Dianjia. Taking Dianshang Hulian as an example, it was established in January 2014, and at its peak, its business covered 40 cities nationwide, serving over 420,000 grocery terminals. It received substantial investments from well-known investment companies such as Xianfeng Changqing, Matrix Partners China, DT Capital, Everbright Ruihua, and Zhenru Investment, with a total investment exceeding 1.3 billion yuan. Despite this, it ultimately could not escape the fate of capital chain rupture, closure, and shutdown. Another example is Best Dianjia, a B2B platform born from Best Group, which enjoyed Best Group's strong logistics and supply chain system, so the business was given high expectations from the start. At its peak, Best Dianjia had completed coverage of more than 50 cities in 24 provinces and municipalities across the country, with over 340 cloud warehouses nationwide and a management area exceeding 2.6 million square meters, but its long-term losses eventually led to its closure. On November 16, 2020, Best Group announced that it would gradually shut down Best Dianjia's business, marking the failure of Best's attempt to enter the B2B business. Moreover, even Alibaba, despite its strength, began to see that its long-term losses indicated an investment with seemingly no bottom, and the prospect of profitability was so distant that it had to undergo business transformation. Earlier this year, Alibaba's Ling Shou Tong officially merged with Hema Market, becoming the new MMC business group, shifting its business from B2B to community group buying, which was widely interpreted as a sign of Alibaba's FMCG B2B failure. Is B2B Really Not Working? Whether it is national B2B giants or regional B2B platforms, their development in recent years has been poor, with news of closures, shutdowns, and transformations frequently appearing in the media. But does this mean that B2B is really not working? The answer is clearly no. In March this year, the B2B platform Pidao officially completed a tens of millions of yuan angel round financing after four years of development. On June 21, the B2B platform Pinpianyi officially announced a C+ round financing of hundreds of millions of yuan, exclusively invested by Yingke Capital. Pinpianyi had previously received favor and investment from several first-tier investment institutions such as Jiashi Investment, Qingsong Fund, and Mingyu Venture Capital. Pinduoduo officially launched Pinduoduo Wholesale, starting to test 'wholesale supply' and 'one-piece drop shipping' services... On the other hand, regional platforms seem to be ushering in a new spring of development after rounds of market education by internet giants and capital. Rongcheng Yigou, after becoming the number one B2B platform in Chengdu, began to gradually expand to regions such as Tibet and Shanxi. The East China B2B platform Wanquan Mall also began to gradually expand from Fujian to Jiangxi. The matching-type B2B platform Youdehuo, after several years of steady development, saw its GMV officially exceed 300 million yuan in 2020... At the same time, we also see that Caihua Commercial, RT-Mart e-Lufa, Kuailai Zhanggui, and Xingaoqiao have gradually achieved profitability while steadily developing in regional markets. Especially with the penetration of digitalization into various industries in recent years, more and more traditional distributors have begun to transform into B2B platforms. With the diversification of future retail scenarios, FMCG B2B, or what might be called industrial internet, is bound to become a consensus among more and more people. What will the competitive landscape of FMCG B2B look like in the future? How can B2B platforms achieve profitability? From September 23 to 25, at the 2021 (4th) China FMCG Conference, we have invited Chang Junjie, founder of Pidao; Xu Weili, CEO of Mendoorn Supply Chain; Qin Xian, founder of Rongcheng Yigou; and Fan Qi, founder of Jiapin Yunshi, to discuss these topics. This feast of ideas for the FMCG industry—you must be there! Are you 'watching' me?