---
title: "FMCG B2B Platforms: Three Reasons Logistics Must Come First"
description: "2015 was dubbed the inaugural year for vertical B2B e-commerce. In the FMCG sector, platforms like Zhanghe Tianxia, Huimin Wang, and Jinhuobao rapidly rose with successive funding rounds, stirring the waters. By 2016, with giants like Alibaba and JD.com entering the fray, the nascent FMCG B2B e-commerce platforms were instantly engulfed in fierce competition, with major players and dark horses carving out territories—some splurging millions, others exiting quietly, as the tides turned. The internet will inevitably transform every industry, including FMCG distribution, without a doubt. But the only question now is when, where, and how?"
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-06-16"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/fmcg-b2b-platforms-three-reasons-logistics-must-come-first-8fb91b96.md"
original_source: "https://mp.weixin.qq.com/s/_Bpr1Y7-1OIL5e-1f1Xfvw"
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# FMCG B2B Platforms: Three Reasons Logistics Must Come First

> 2015 was dubbed the inaugural year for vertical B2B e-commerce. In the FMCG sector, platforms like Zhanghe Tianxia, Huimin Wang, and Jinhuobao rapidly rose with successive funding rounds, stirring the waters. By 2016, with giants like Alibaba and JD.com entering the fray, the nascent FMCG B2B e-commerce platforms were instantly engulfed in fierce competition, with major players and dark horses carving out territories—some splurging millions, others exiting quietly, as the tides turned. The internet will inevitably transform every industry, including FMCG distribution, without a doubt. But the only question now is when, where, and how?

2015 was dubbed the inaugural year for vertical B2B e-commerce. In the FMCG sector, platforms like Zhanghe Tianxia, Huimin Wang, and Jinhuobao rapidly rose with successive funding rounds, stirring the waters. By 2016, with giants like Alibaba and JD.com entering the fray, the nascent FMCG B2B e-commerce platforms were instantly engulfed in fierce competition, with major players and dark horses carving out territories—some splurging millions, others exiting quietly, as the tides turned.

The internet will inevitably transform every industry, including FMCG distribution, without a doubt. But the only question now is when, where, and how?

From the current market landscape, there are two breakthrough points: **the terminal, and the distribution link.**

One approach is to capture the terminal by operating self-owned supermarkets and convenience stores, leveraging the orders in hand to pressure suppliers.

Another approach is to transform the distribution sector through logistics and delivery, genuinely reducing supply costs for suppliers, enhancing ordering experiences for terminals, thereby strengthening the stickiness of suppliers and supermarkets to the platform, and ultimately integrating into the entire supply chain.

The logistics pain points for FMCG distributors need no elaboration: small supermarkets place scattered orders, average order values remain low, a single truck might carry half a load and still have to dash across town and villages, and after calculating profits, after deducting fuel, wear and tear, and labor, little remains—not to mention the high costs of warehousing and vehicles.

Small supermarkets also suffer: deliveries every two or three days, stockouts leave them waiting helplessly, different goods come from different suppliers, and each delivery offers inconsistent service experiences. Although small supermarkets have little say, their silence does not mean they are not in pain.

Why the pain? The root cause is the "many-to-many" dynamic: multiple supermarkets dealing with multiple suppliers. When relationships are fragmented, costs rise and experiences decline.

This is where the platform's integration advantage comes into play. By consolidating suppliers' goods and orders, and centralizing warehousing and distribution, what previously required ten suppliers using 10,000 square meters of warehouse and 20 vehicles can now be handled by the platform with 8,000 square meters and 5 vehicles—a win-win for all.

Every link in the FMCG industry chain has its own pain points, but **logistics pain points best leverage the platform's integration advantages. Starting FMCG B2B from logistics offers clear benefits.**

**First, it's "basically harmless."** Many distributors attempt resource integration, but they cannot do it themselves because they fear being swallowed by others. However, when a platform steps in, it's different because it's a third party, providing only logistics services. Channels remain with their original owners; no one's pie is touched.

**Second, it's "timely."** For distributors, logistics is an awkward investment: indispensable as a support department, yet a massive cost center. Especially for the first generation of businessmen after reform and opening-up, now in their fifties, they lack the drive they once had, and with the fierce impact of e-commerce in recent years, they may be considering retirement. How to exit? By stripping away cost items one by one, starting with logistics. So, handing logistics over to the platform—isn't that a win-win?

**Third, it's "link reset,"** which is also the entry point for the platform's further development, and worth discussing in detail.

Traditionally, suppliers and supermarkets have a strong link, covering everything from sales to delivery and receipt, leaving no room for platforms. Unless the platform also engages in self-purchasing and self-selling to monopolize supply channels (which would no longer make it a platform), it holds no advantage in service quality or closeness. This leads to a major pain point for most FMCG B2B platforms: weak user stickiness—users come for subsidies and leave when they're gone.

In fact, this strong link is a many-to-many relationship (supermarkets to suppliers), inherently inefficient. Due to idle and wasted logistics resources, supply costs are invisibly inflated.

When the platform steps into logistics, it breaks the original "sales-delivery" link between supermarkets and suppliers, transforming it into a "(supplier) sales - (platform) delivery - (supermarket) receipt" relationship, while converting the original "many-to-many" delivery into an orderly "many-to-one-to-many" link. This is a model that benefits supermarkets, suppliers, and the platform alike.

As a result, suppliers reduce costs, supermarkets enjoy efficient services of two or even three deliveries a day, and the platform successfully enters the game, providing genuinely valuable and irreplaceable services, thereby aggregating a large number of highly sticky supermarket terminal users and platform suppliers—a true "win-win."

-END-

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