Recently, media reports have revealed that some brand companies are continuously engaging with the internet to try new channels: Moutai cooperating with Alibaba, Wuliangye cooperating with JD.com, Niulanshan and Nongfu Spring streamlining distribution, and beverage companies deploying vending machines on a large scale. Linking these events together, the author cannot help but think: With the proliferation of internet technology, it has become possible for companies to directly control and manage millions of terminals. F2C (Factory to Consumer), F2R (Factory to Retail), or B2B (B-end e-commerce to Retail) — whether brand owners are driven by cost pressures or seeking new growth points, shortening channel levels and flattening channels has become one of the issues that most brand owners must consider in the current market environment. The emergence of B2B has broken the original combination of the five elements of distributor functions: capital, sales, service, public relations, and warehousing and distribution. The traditional functions of distributors are being rapidly differentiated, and many new roles will emerge with the rise of the B2B model. The most typical is the rise of professional urban distribution models that reduce costs through unified warehousing and distribution, which handles the end-of-chain logistics of production companies' products at the terminal. Representative examples include Yantai Yishang Logistics and Xiamen Weijie City Distribution. Of course, there are also platforms such as JD.com, Huimin, Wanshang Yizhan, Wdian Yigou, and 51 Ordering that have self-built urban distribution logistics, allowing companies to deliver products directly from factories to terminal stores at extremely low logistics costs and high distribution efficiency. Another change is in corporate financing and transaction methods. Online transactions bring high precision of data, increasing the value of data. Companies can accurately control product sell-through at terminals through transaction data, thereby deploying market expenses in a targeted manner. When considering going online, companies should not only view the online channel as an addition but also reconstruct products and channels from multiple dimensions such as design, production, brand, and marketing. Before taking action, companies need to clarify several things: First, do not rush to shorten levels. In fact, levels have value and significance; they not only bear the functions of warehousing, distribution, and capital advance but also include product sales, promotion, service, and public relations. What companies need to do is more about reconstruction, not revolution. Second, different products have different characteristics. Combining multiple characteristics, there will be possibilities for multiple channel combinations in the future. Several channel models under the B2B model: F2R: Factories do not use agents but supply products directly from factories to retail stores through B2B platforms, while operations, transactions, and settlements are controlled by themselves. Examples: Zhanghe Cloud Factory, Alibaba Retail Link; **F2B:**Factory to B-end self-operated e-commerce — factories do not handle sales; they delegate all distribution functions to the platform, which is responsible for all work from product to terminal. Examples: JD New Path, Huimin Network, Jinhuobao; **F2C:**Factory to Consumer — factories sell their own products directly to consumers on platforms. Examples: Tmall Supermarket, JD Supermarket, Yihaodian; During exchanges with executives of some brand companies, the author summarized the issues that brand companies consider when choosing to try B2B business models, and provided some personal views, hoping to help companies that want to transform to the internet: 1. The internet is a major trend, but how should products be moved online? Non-planned FMCG products (beverages, alcohol, convenience foods) have limited incremental space under the B2C model. Consumer purchasing characteristics determine that mainstream purchasing channels will remain offline. In the short term, the importance of retail stores will not change, but the difficulties of recruiting channels and high costs have become barriers for many small and medium-sized production enterprises to expand nationwide. The B2B business model essentially reconstructs the logic of the original product supply chain. Warehousing, distribution, and transactions are handed over to the platform, allowing distributors or companies' own sales personnel to focus on order promotion and terminal services, improving efficiency and reducing costs through division of labor. Leading brands, because of their huge existing offline volume, may not be suitable to move their main products online in the short term: first, going online will cause channel conflicts with offline; second, the current infrastructure of the B2B industry is still not perfect and cannot bear such large sales volumes. Rashly going online will bring many uncertain consequences. As for some distributors privately going online, companies can turn a blind eye and observe their actual development. If the new business model's sales grow rapidly, adjustments can be made later. For large brands, is it feasible to produce exclusive products separately? As long as production and channel conditions allow, it is recommended to try. For small and medium-sized brand companies, B2B is an opportunity for rapid growth. Look at the growth path of Taobao and Tmall: leading brands initially refused, then channel distributors privately moved to Taobao, and eventually all opened Tmall direct stores. During this process, a large number of Taobao brands with sales exceeding 10 billion emerged, including Three Squirrels, Handu Yishe, and Puppy Electric Appliances, all excellent companies that grew before major brands went online. 2. How should the offline price system face issues of online special offers and subsidies, and cross-regional product diversion? Some self-operated platforms, in order to quickly gain GMV and cultivate the habit of small stores ordering online, adopt price subsidy strategies for quality products, leading to unstable regional market price systems, affecting distributor sales and profits, and thus complaints to manufacturers. Since FMCG products are heavy, the source of such goods is generally not too far, and industry characteristics determine that B2B platforms cannot subsidize a single product for a long time. Companies can have distributors buy back products in bulk, severely punish distributors who divert goods, and communicate with platforms to avoid such incidents. Of course, companies can also, in areas without agents or with incomplete agent coverage, give some platform operators limited regional rights and offer them second-tier or agency prices to try distribution in regional markets. 3. As a small or medium-sized enterprise, how can you achieve rapid nationwide expansion by going online on B2B platforms? Before going online, companies must first consider clearly: if your product is not good, it will not sell well anywhere. Going online is like raising a son, not selling pork. As a company, there is still much work to do. First, products need to be redesigned to fit the product and channel characteristics of the internet era. Product strength must be strong enough; segmentation and niche markets are potential opportunities. Second, having an ultimate product is not enough; you also need to do consumer pull. Low-cost internet marketing methods can be tried. Third, products with low temperature and short shelf life are not recommended for trial, as most B2B platforms currently lack cold chain logistics infrastructure. Fourth, companies should not fantasize that going online will immediately bring huge sales. B2B and B2C models are fundamentally different. Platform traffic has little to do with products. Products distributed online to stores only improve channel efficiency, but the essence of offline retail has not changed. Although platforms can help companies solve warehousing, transactions, distribution, payment collection, data, and finance functions, the work that originally required dedicated personnel, such as in-store promotion, terminal merchandising, and returns and exchanges, cannot be omitted. Companies need to assist platforms in getting products into stores, doing terminal merchandising well, and resolving small stores' concerns about returns. Of course, many B2B platforms have user-friendly crowdsourced ground promotion teams, such as Alibaba's City Partners, JD's ground service staff, Jinhuobao's Jinhuo Group, and Xiaobao Recruitment. These can help companies do some ground work. Of course, some companies may feel that raising their son (product) requires personal attention, so they can also build their own ground promotion teams or find provincial agents to handle product distribution and some ground market services on the internet. 4. Will companies be strangled by platforms? B2B platforms are divided into two models: self-operated and matching. Simply put, the self-operated model is like a large distributor covering the whole country, while the matching model is more like a large wholesale market across the country. Companies open stalls on the platform for wholesale. Both have advantages. The B2B market will not be as highly concentrated as the B2C market. Different industries may have multiple vertical B2B e-commerce platforms. This is a two-way selection process. Production enterprises, as resource exporters, have enough choice to decide which platform to cooperate with, and can also cooperate with multiple platforms simultaneously. Worrying about being strangled by traffic is completely overthinking. 5. My products are numerous and my brand is strong enough. Is it feasible to build my own B2B? The answer is definitely not feasible. Many companies' self-built ordering systems are just extensions of ordering management software for distributors, allowing terminal stores to use them. The B-end is different from the C-end. FMCG is not like 3C products. The importance of offline supply chain organization is far greater than online brand operations. Unless the brand is as monopolistic as China Tobacco, do not consider building your own B2B platform. Summary When facing internet B2B platforms, production enterprises must clarify the matching between their product characteristics and new channels; otherwise, strategic misjudgment may occur, leading to jokes like SF Hi Guest, wasting a lot of funds and opportunities. If you want to go online, channels must be reconstructed around B2B, re-dividing the functions of roles in the supply chain: companies do ground services (order promotion, returns, and consumer pull), high-density online contact with terminals, not intensive cultivation in the region, but using B2B platforms to flood all channels. In the new model, product strength is the foundation, price is the killer, and differentiated products around personalized needs, segmentation markets, and niche markets can also bring considerable sales. 2016 is the first year of FMCG B2B. A large number of B2B platform companies have emerged across the country, indicating that the reconstruction of the FMCG industry is an inevitable trend. Under the B2B model, F2R is the most efficient and direct effective operation model. It depends on who can act first in this transformation. At the request of many distributor friends, the fourth B-end e-commerce inspection class of this public platform will go to Nanjing and Hangzhou from August 15-18 to inspect Qianmi Network and Alibaba Retail Link. Distributor friends interested in transformation can come with us for on-site inspection: Activity process: Time: August 15-18

Nanjing·Hangzhou 15th: Check in at designated hotel in Nanjing; 16th: On-site inspection of Qianmi Network, afternoon high-speed rail to Hangzhou; 17th: Participate in the "FMCG Distributor B2B Transformation Exchange Summit"; 18th: On-site inspection of Alibaba Retail Link in Hangzhou; Distributor friends interested in transformation are welcome to come with us to learn and inspect on-site: Organization Form ************1. Company visit

  1. Actual market case visit
  2. On-site explanation
  3. One-on-one communication************ Participating distributor friends only need to pay a registration fee of 200 yuan Other expenses are self-paid Note: This inspection is limited to distributors only Distributor friends interested can long-press the QR code below to register. When adding, please note: "Fourth Phase Registration". Non-participants please do not disturb Group photos of previous inspections: Group photo of the 3rd B-end e-commerce inspection, from top to bottom: Yunbao Shangmeng, Weijie City Distribution, Wanshang Yizhan. Group photo of the 2nd B-end e-commerce inspection, from top to bottom: Jinhuobao, Caiba, Yishang. Group photo of the 1st B-end e-commerce inspection, from top to bottom: Piduoduo, Beiquan, Yishang. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 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 sales | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]