- From an overseas engineer to a B2B platform entrepreneur, what drove this identity shift?
- Why has this B2B platform focused on the snack food category since its founding over two years ago?
- What is the purpose of this B2B platform expanding its channel structure beyond serving small shops?
In 2017, New Distribution conducted a systematic survey of 22 major cities across China, comprehensively investigating the penetration and coverage rates of various B2B platforms in different regions. In the Dalian market, in addition to national platforms such as JD New通路 and Yijiupi, local FMCG B2B platforms also performed notably, with Lianpin being one representative.
Public information shows that Lianpin was founded in 2016 as an FMCG B2B platform focusing on snack foods, and it currently covers over 5,000 outlets in Dalian. Recently, New Distribution exclusively interviewed Lianpin's founder, Xu Weili, hoping that Lianpin's business model and development path can offer some insights.
1 From Overseas Engineer to Returning to China to Start a Distribution Business
Xu Weili studied abroad starting from high school, and before returning to China, he worked in engineering automation, focusing on BI (Business Intelligence) and sustainability optimization. His years of overseas study and work experience gave him a deep understanding of informatization and intelligent, refined operations.
"Life abroad is relatively leisurely, with more free time," Xu Weili told New Distribution. During his spare time, he would engage in small businesses, such as importing domestic products like bags and toys from China to sell on overseas e-commerce platforms. As online orders increased, Xu Weili conceived the idea of returning to China to start a business, and he eventually decided to move his family back in 2013. At the start of his entrepreneurial journey in China, he leveraged his years of accumulated connections abroad to engage in food and beverage import-export business, distributing several foreign beverages and foods through traditional channels. This marked his formal entry into the FMCG industry.
As business volume grew, Xu Weili built an e-commerce team and gradually expanded distribution channels online, supplying to e-commerce platforms such as JD.com, Yihaodian, and Lashou. However, by then, online brands like Three Squirrels and Beicaowei had fully risen, the online landscape for brand owners was taking shape, and online traffic costs were rising. At this point, Xu Weili saw an opportunity in the offline market.
"There is no wholesale market abroad," Xu Weili stated bluntly. "My family abroad had experience running chain stores. The business manager would start ordering around 4 p.m. at the computer, with all ordering processes done digitally. Fruits, cakes, and more could be ordered online and delivered to the store the next day. The whole shopping experience was excellent. In contrast, in China, regional distributors still operate their businesses in traditional ways with low informatization, and wholesalers, having fixed customers, operate separately from distributors, making the distribution chain complex. In this process, we found that our retail prices to consumers were even lower than the prices small shops paid at wholesale markets." This revealed to Xu Weili his advantage in the supply chain and further strengthened his determination to enter the offline retail market.
2 Why Focus on the Snack Food Category?
In November 2015, Lianpin began a three-month market research for its B2B project.
"The test was simple; we wanted to understand the needs of small shops." Without any domestic brand product sources, Xu Weili promised small shops that he could meet all their category supply needs, then sourced from wholesale markets and sold at cost to meet their procurement needs. Through this approach, Lianpin quickly secured 50 loyal store customers, with the highest monthly transaction volume per store reaching 20,000 yuan.
During the market research, Xu Weili also applied his early experience in lean production line management to the management and maintenance of retail stores. Xu Weili told New Distribution: "At that time, we focused on studying the arrival times of traditional distributors' personnel. We would visit and take orders the day before they arrived, creating the impression that the shelves were always full when they visited. Gradually, the store's entire supply came from us."
In March 2016, the Lianpin project was officially launched. In the early stages, the team focused the platform's business categories on the snack food sector, where they had expertise. On one hand, their long experience in importing food made team management and product sales smoother, effectively reducing losses and time costs. On the other hand, the food category has relatively low brand concentration, offering larger profit margins and easier profitability, which laid a material foundation for team expansion and entry into new market areas. Additionally, snack foods, unlike beverages and alcohol, are less dependent on strong brands, and the upstream is fragmented, making the procurement process for retail stores lengthy and complex—precisely why B2B needs to participate in the entire supply chain.
Furthermore, good relationships with manufacturers are a key reason for Lianpin's sustained refined operations. Currently, Lianpin represents leading domestic and international FMCG brands such as Master Kong, Nestlé, and Nongfu Spring. Xu Weili told New Distribution: "Our platform rarely experiences stockouts or shortages because, since last year, we have invested significant time and effort in maintaining brand owners' market pricing. In this process, we do not disrupt brand pricing systems, nor do we engage in cross-regional selling or dumping. Our daily operations are basically centered around meeting manufacturers' needs."
3 Not Just Serving Small Shops: Adjusting Channel Structure
In 2016, Alibaba and JD.com both proposed plans for millions of convenience stores, turning previously overlooked traditional retail stores into hot commodities for capital competition. In this context, various B2B platforms launched their own convenience store brands, making convenience stores seem like an unavoidable hurdle in FMCG B2B. However, the Lianpin team believed that running convenience stores was not a very reliable business.
"We did try convenience stores at the time, but later discontinued them," Xu Weili said. "We operated light-franchise convenience stores, helping traditional shops update their storefronts, equipping them with informatized POS systems, and providing quality products. Although the supply chain could indeed help optimize product costs to some extent, the improvement in daily business performance was not significant. Moreover, small shops have different needs, which places higher demands on the supply chain and service personnel. In such a situation, to genuinely help small shops increase sales, we would need to establish professional renovation and service teams for continuous support, making investment a bottomless pit—clearly unrealistic for a startup.
From another perspective, does helping small shops optimize product costs necessarily require rebranding them? Not necessarily. So Lianpin later conducted an experiment: by charging retail stores a service fee, they offered a member price lower than the normal price, saving small shops the time cost of price comparison. In this model, the more orders a store owner places, the greater the value of the paid membership. Ultimately, this membership model proved very popular with small shops." Consequently, Lianpin repositioned itself from a "one-stop wholesale platform for FMCG" to a "new retail supply chain service platform".
Currently, most FMCG B2B platforms serve only traditional retail shops, tobacco and liquor stores, and restaurants. However, in Xu Weili's view, the service targets of FMCG B2B are not limited to these. To this end, Lianpin has taken the following measures this year:
Open warehousing to attract more distributors of various categories to store goods, continuously optimizing warehousing and distribution costs. By opening and sharing warehousing capabilities, they continuously empower traditional distributors, thereby positioning themselves as the router for regional FMCG supply chain enterprises.
Adjust channel structure to improve gross profit margins. Not only serving small shops, but also serving special channels such as hotels, chain pharmacies, tourist attractions, and key accounts, improving the profit structure.
Attracting more distributors to store goods also facilitates providing flexible supply chain services to downstream end users. Not only selling goods to end users, but also helping them find needed products to meet diverse personalized needs, thereby achieving two-way empowerment for both upstream distributors and downstream end users.
Additionally, Xu Weili directly applied his early experience in refined operations in the overseas industrial goods sector and Six Sigma theory to Lianpin's daily operations, including procurement, warehousing, and logistics. This directly helped Lianpin reduce the product error rate to 0.4%, and achieve a monthly inventory turnover rate of 5 times, thereby boosting overall operational efficiency and reducing operating costs.
After rapid development in recent years, FMCG B2B has entered the deep waters of transformation. Most industry participants have shifted from pursuing market scale to refined internal management. Brand owners have also moved from initial rejection and resistance to B2B toward a more open and accepting attitude. The entire FMCG distribution channel is evolving toward greater efficiency and transparency, a process that requires communication and collaboration among all participants in the supply chain.
For traditional distributors, the mobile internet brings irreversible trends of channel informatization, efficient circulation, and data transparency. The case of Lianpin further demonstrates the immense value of solid foundations and regional deep cultivation. Channel transformation is both a challenge and an opportunity. Only by seizing the opportunities of the era and embracing change can distributors avoid being eliminated in the wave of digitalization.
From August 22 to 24, the "2018 China Digital Innovation Conference (2018FDIC)" with the theme "Finding New Engines for Growth" will be held in Shanghai, hosted by the China FMCG Industry Association and organized by New Distribution!
This three-day conference will focus on two main themes: marketing and supply chain, with six parallel forums on brands, channels, communication, B2B, same-city logistics, and innovative retail. We will invite industry leaders, CEOs, and brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry.
We will invite over 500 FMCG enterprise executives, 200+ B2B industry CEOs, and 1000+ major FMCG distributors to gather and discuss how the FMCG industry can leverage digital tools to achieve renewed high growth in the digital era. This conference will build a bridge for brand owners, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers access the latest information, understand best practices, and master more practical transformation skills.
Planned Invited Companies
Conference Time August 22-24, 2018
Conference Venue Shanghai Baohua Marriott Hotel
Conference Agenda August 22: Full-day check-in Afternoon 14:00–17:30: Parallel forum on distributor same-city logistics Evening 18:30–21:00: New Distribution Night Gala Dinner August 23: Theme: Marketing Digital Innovation Morning 9:00–12:00: Main forum on marketing digital innovation Afternoon 14:00–17:30: Parallel forums on brands, channels, and communication August 24: Theme: FMCG Supply Chain Digital Upgrade Full day: FMCG Supply Chain Conference
Registration Method Registration is now open. Long-press the QR code below or click "Read Original" to register. Early-bird tickets are on sale for only 2 more days, offering a 50% discount; prices return to normal on July 1st!
Registration Consultation Ticket inquiries: Media cooperation inquiries:
Highlights of Previous New Distribution Conferences Click the links below to review the highlights of the 1st, 2nd, 3rd, and 4th FMCG + Internet Conferences:
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