“At first, when we started doing business through the B2B platform, we faced concerns and opposition from many manufacturers' salespeople. They cursed at us daily, saying we were poaching offline outlets and ignoring the offline wholesale business. But after a year of operation, Chunxia Mingpin's B2B platform business has grown 10-fold, and the original wholesale business has also grown by 50%.” — Zhang Wei, founder of Nanjing Chunxia Mingpin
China's reform and opening-up over the past 30 years has also been a period of rapid economic development. The early batch of distributors who ventured into business have accumulated considerable wealth, but most are now in their sixties. Many distributors face the issue of their children taking over the business.
However, most second-generation merchants are resistant to this business. They have grown up watching their parents work hard, rising early and staying up late, earning money through hard work. It is not easy, and compared to other industries, it seems low-end and not respectable. So when most distributors ask their children if they are interested in “taking over,” the answer is often a resolute NO!
Recently, New Distribution interviewed one such second-generation merchant. He is a returnee from Australia, holds a master's degree in translation, and was an executive in the legal department of a multinational corporation. Initially, he refused to take over his parents' business, but due to his parents' expectations and his own careful consideration, he eventually gave up his comfortable life and entered the distribution industry.
However, he did not stick to convention. Instead, he used new technology and methods to successfully transform his parents' business in less than a year, making it a representative B2B platform in Nanjing's frozen food industry.
How did he do it? After in-depth communication with this second-generation merchant, New Distribution gained some different insights.
01 Resigning from a Multinational Corporation, Leveraging Parental Resources for E-commerce
Zhang Wei holds a bachelor's degree in law from Nanjing University and later pursued a master's degree in translation at Macquarie University in Australia. After graduation, he worked in the legal department of a multinational corporation, with an 8-hour workday, weekends off, annual leave, and an annual salary of hundreds of thousands. His achievements surpassed most of his peers.
His parents have been agents for frozen food in Nanjing for many years, with an annual business scale exceeding 200 million yuan. They are well-known major frozen food distributors in Nanjing. Compared to food and beverages, the frozen food industry is still relatively primitive, mostly wholesale-based, and relatively easy to manage. Especially for veteran distributors with years of experience, they have abundant local market resources, selling goods through wholesale markets to government agencies, hospitals, and corporate canteens, with considerable profits.
As Zhang Wei's parents aged, the issue of succession began to be discussed at family gatherings. For Zhang Wei, on one hand, there was a comfortable and glamorous job at a foreign company, relatively easy; on the other hand, there was his parents' decades-old distribution business, requiring hard work from dawn to dusk. This put Zhang Wei in a dilemma. His parents kept urging him, while he had his own interests and a comfortable job. After much consideration, Zhang Wei finally decided to return! But before returning, he made a condition with his parents: I'll come back, but the business must be run my way!
In early 2014, Zhang Wei opened an online wholesale store named “Chunxia Frozen Food Store” on Alibaba's B2B platform 1688.
Because of his background, Zhang Wei was forward-thinking in planning from the start. He hired people to retouch product images, had dedicated customer service, used ice packs for packaging... The store quickly gained traction, and within a short time, monthly sales reached 30,000 to 40,000 yuan, giving Zhang Wei strong confidence. But these volumes were still small. How could he expand sales?
Zhang Wei tried various methods, such as printing flyers and distributing them to local small shop owners. To understand the market, he personally visited shops. For the first three consecutive days, these shop owners placed no orders. But Zhang Wei noticed in the backend that the store's page views were unusually high during those three days.
Zhang Wei realized that although these people didn't place orders, they were very interested in the online platform. Seeing potential, Zhang Wei brought in a few friends to develop their own online B2B ordering platform.
In March 2016, Zhang Wei and his partners spent nearly one million yuan to independently develop an ordering platform. They thought they could do great things, but the process was full of obstacles.
After several months of development, the system was launched. Although it could operate normally, it encountered various strange problems. For example, out of 100 orders, only 80 were fulfilled; some phones could log in, others couldn't. The self-developed system had various bugs that severely affected operations. At the peak of problems, Zhang Wei arranged for six accountants to reconcile accounts.
After a year of stumbling operations, system issues kept arising, requiring constant fixes, and market sales growth hit a bottleneck. In March 2017, the founders' investment ran out, and the venture ultimately failed.
02 Getting on Track: Order Volume Doubles in 90 Days
Zhang Wei recalled that although it failed, it at least proved that this was a viable path. He told New Distribution that the pitfalls and losses he encountered in the past could at least help him avoid detours in the future. By chance, Zhang Wei came into contact with some third-party software. After comparing several technologies and functions, he chose a seemingly reliable software company to cooperate with and started again.
In August 2017, “Chunxia Mingpin” was officially launched. Leveraging the existing base traffic, it achieved an average of 80 orders per day upon launch.
After operating for a period, the business gradually got on track. But what really made him famous was a “price increase incident.” In March 2018, the frozen food industry experienced a wave of price increases, causing severe supply shortages in the market.
Zhang Wei told New Distribution that because Chunxia Food Company represented well-known brands such as Jinluo, Anjoy, and Xinmeitai, Chunxia Mingpin had a relatively stable supply, and customer orders were not significantly affected. Word of mouth spread, and the stable supply quickly brought Chunxia Mingpin recognition and gradually gained customer trust. That month, the platform's daily transaction volume reached 150,000 yuan.
In June 2018, with the surge of food delivery platforms and the cumulative effect of trust, Chunxia Mingpin reached another level, with daily transaction volume reaching 400,000 yuan. Zhang Wei told New Distribution that after September, with the peak season for frozen food, daily transaction volume would soon reach 500,000 yuan.
03 Enhancing Customer Experience with Data and Innovating in Details
The external environment is just a booster for Chunxia Mingpin's sales growth. Internal lean operations are the core competitiveness of Chunxia Mingpin. After nearly two years of refinement, Zhang Wei has developed an “innovative” approach to internal management compared to the older generation of distributors.
Zhang Wei told New Distribution that in the past, distributors compensated salespeople with a single-dimensional commission based on sales volume, regardless of which brand's products were sold, giving a corresponding commission rate based on sales. Obviously, this could easily lead to salespeople only selling best-selling products and ignoring others. But Chunxia Mingpin's commission is detailed down to each product, setting different commission rates based on product structure and gross profit levels. On one hand, salespeople will promote products the platform wants to push; on the other hand, different commission rates also increase salespeople's income, rather than a simple one-size-fits-all approach based on sales.
With data tools, Zhang Wei also analyzes customer activity and formulates corresponding solutions. For example, if a certain outlet hasn't ordered for 15 days, Zhang Wei will give the corresponding salesperson a “yellow light”; if no order for 40 days, a “red light.”
Not only that, Zhang Wei has also implemented “innovative” standard steps in business visits:
- Add the outlet owner on WeChat;
- Have the owner follow the “Chunxia Mingpin” WeChat official account;
- By browsing the menu, identify the Chunxia products the outlet uses and help the owner add them to favorites. Additionally, salespeople also add unused products that Chunxia Mingpin can provide as similar alternatives.
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Furthermore, to help customers quickly find products, Chunxia has set up product procurement areas for different outlet types, such as fried burger area, hot pot and spicy area, porridge shop area, and Japanese and Korean cuisine area.
Zhang Wei told New Distribution that in the product distribution business, although the goal is to buy and sell goods for profit, this business is a systematic project. Most traditional distributors only focus on the sales segment, paying little attention to other departments, or even ignoring them. In fact, from sales to finance, procurement, warehousing, and delivery, it is an organic whole. Sales is not isolated. Although it is the department that directly generates profit, without the cooperation of other departments and the smooth flow of business processes, it is easy to cause mutual complaints and blame-shifting between departments, which in turn affects external business efficiency.
The B2B market in Nanjing is highly competitive. Besides nationally known platforms, there are no fewer than 10 local ones. The reason Chunxia Mingpin runs a bit faster than others is not only upstream manufacturer resources, but more importantly, Chunxia Mingpin pays attention to every detail of the business. For example, product refunds are processed within 2 hours at the fastest; a price committee is established to monitor market prices at any time; a data analysis department is set up; salespeople are given a certain monthly bargaining quota to facilitate building good customer relationships with outlets, etc.
Zhang Wei told New Distribution that besides Meicai being rooted in Nanjing, Meituan's Kuaillu delivery is also expanding across the city. In the past, we were very worried about whether Chunxia Mingpin could survive the competition under giant platforms. But after a year of actual operation, we have not been defeated; instead, we are doing better. This made Zhang Wei realize that giants are not scary. As long as we provide solid service, even if giants come, they are helping us educate the market.
Final Thoughts
Zhang Wei told New Distribution that in the past, the older generation did business relying on hard work, flexible thinking, and rich experience. But now the market is highly mature, and the competitive environment is complex and fierce. If the second generation takes over their parents' business and still follows the old methods and thinking, it will definitely not work.
The impact of the internet on this era is undeniable. As second-generation distributors inheriting their parents' business, they must not only carry on but also keep pace with the times. They must embrace the internet, learn to use internet technology and tools to arm themselves, and become more advanced and powerful.
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