---
title: "Ge Kun, Deputy General Manager of Baowan Logistics Holdings: Reliable, Flexible, Efficient — Baowan Logistics' Supply Chain Service Model"
description: "The following is the speech delivered by Mr. Ge Kun, Deputy General Manager of Baowan Logistics Holdings Co., Ltd., at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers. He introduced Baowan Logistics and discussed the challenges and solutions in supply chain services for the new retail era."
author: "葛昆"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2019-04-17"
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# Ge Kun, Deputy General Manager of Baowan Logistics Holdings: Reliable, Flexible, Efficient — Baowan Logistics' Supply Chain Service Model

> The following is the speech delivered by Mr. Ge Kun, Deputy General Manager of Baowan Logistics Holdings Co., Ltd., at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers. He introduced Baowan Logistics and discussed the challenges and solutions in supply chain services for the new retail era.

The following is the speech delivered by Mr. Ge Kun, Deputy General Manager of Baowan Logistics Holdings Co., Ltd., at the 5th FMCG + Internet Conference hosted by New Distribution, organized and published for readers.

First, let me give a brief introduction to Baowan Logistics. To introduce Baowan, we must mention China Nanshan Development (Group) Co., Ltd., established in 1982, mainly engaged in port logistics, container trunk transportation, oil base development, oil base logistics services, and industrial park development.

We have been in logistics and supply chain for thirty years. In 2003, we created a brand called Baowan Logistics, mainly engaged in the development, construction, and operation of modern logistics parks. It was one of the earliest enterprises in China to develop modern logistics parks. Currently, we have 58 logistics parks in 35 hot cities across the country, with a total warehousing area of 5 million square meters.

Today's conference theme is Retail + Internet. Although we do not actually operate in the retail industry, we have been accompanying the industry's growth as a logistics supply chain service provider. Therefore, we can deeply feel the changes in this industry over the past decade or so, especially in recent years. These technologies have brought about earth-shaking changes in consumption scenarios, channels, and habits, but at the same time, they have also made current supply chain services unable to adapt to such changes. In 2016, Cainiao first proposed the concept of New Retail, and then JD.com proposed the concept of Unbounded Retail. Although there is still no precise definition of New Retail within the industry, recognition of this term is increasing. The reason is simple: the original retail model can no longer adapt to the ever-changing consumption patterns, and everyone is seeking the way forward and the direction.

In fact, from our perspective as a supply chain service provider, whether it is traditional retail or new retail, it is only a change in model; the core content has not changed essentially. What is pursued is still how to provide consumers with efficiency, low cost, and better customer experience. This is also where the future supply chain should focus its efforts. How to achieve the best? Currently, there is no standard answer in the market environment, but the trend is clear: through the integration of social resources, channel management, and online-offline integration, to precisely reach users. Empower omnichannel marketing data. Through data mining, place the products users need in the nearest location they can reach. And through online-offline full-scenario models, maximize adaptation to different types of users' consumption habits. These are the core connotations of New Retail.

We fully agree with this overall development trend. However, based on our more than 20 years of supply chain service experience, we believe that with the current industry level, achieving these goals ultimately still has certain difficulties, and they are not small.

We have roughly summarized three difficulties:

**1. Resource integration.** Imagine a retailer that does both B2B and B2C, selling on both Alibaba and JD platforms. This resource integration includes all operational integration and also increases costs, with the biggest increase being communication costs. So this difficulty is very significant.

**2. Channel management.** I believe everyone present deeply feels that channel management and online-offline integration are easier said than done. Suppose you list products on all platforms, also involving B2B and B2C ends; this will occupy a large amount of channel capital costs. At the same time, more importantly, there are very few suppliers that can provide omnichannel logistics services.

**3. Online-offline integration.** Many retailers entrust the 2C channel of supply chain logistics services to service providers focused on 2C, and the 2B channel to those focused on 2B. The entire tree-like structure is very complex. The challenge before everyone is still how to integrate and unify.

So based on these three common problems in the figure, we believe that the core issue for both FMCG and retail models is found: **the root cause is basically supply chain issues**. If the supply chain is not solved, all your ideas are just fantasies and cannot be implemented. How to implement, or what effect can ultimately be achieved, depends on the service capability and quality of the supply chain.

Through communication with a large number of customers and practical experience in the industry and market, we have found that the industry or market needs a public socialized logistics service platform that can provide all distributors with non-discriminatory quality services. And this must be an open, inclusive, and highly integrated platform.

Many things must first be implemented and actually participated in to solve problems at each link. As mentioned earlier, we have been doing this for over a decade, and we have done all nodes of supply chain services. But based on the current industry development trend, we have proactively adjusted our business and established four business segments.

**1. Smart Cloud Warehouse.** The Smart Cloud Warehouse business is based on our national 5 million square meters of warehousing resources and mature 2B and 2C operation teams. What is the purpose of this business? It allows our distributors to share both 2C and 2B goods in one warehouse, greatly reducing inventory pressure. The entire cloud warehouse charging model is very simple, charging by traffic, which reduces the cost of warehousing for distributors. Warehousing is our core resource advantage. Some distributors who choose Baowan say, "I have a huge increase during Double 11, and if I hand it to you, I don't need to look for warehouses everywhere." Each of our warehouses is a high-standard warehouse with relatively large single-warehouse area. With a high-density warehouse network nationwide, combined with our own data analysis, we can achieve real-time nationwide warehouse allocation.

**2. Supply Chain Finance.** The supply chain finance business is also based on our own qualified financial company to provide in-depth services. The specific model can be customized according to different customer needs.

**3. Supply Chain Mall.** Baowan Cloud Commerce is a major innovation because we found that customers have a lot of surplus goods that incur high costs to handle. So we held some clearance sales in the parks, which were very effective. Merchants reported that sales were better than in shopping malls. Not only that, we also do system integration for merchants online. Their normal operations are also handled by us. What is the biggest benefit of system integration? Direct transfer on the system, goods do not need to leave the warehouse, and all platform goods are converted. This greatly improves efficiency and reduces goods costs. Therefore, both suppliers and platform merchants like it, and everyone benefits.

**4. Baowan Cloud Distribution.** To meet the needs of brand owners and distributors for 2B/2C omnichannel inventory sharing and co-distribution within warehouses, we established this operation team based on business needs. Currently, we have two warehouses in Chengdu for 2B/2C unified warehousing and distribution, with parks in Longquan and Xindu. We hope to build a one-stop public logistics service platform, the Foxconn of the logistics industry. No matter what type of business or needs, hand it to us, and we can provide high-quality solutions and optimization plans.

Let me share a case. One of our customers is in the pet food industry. They are a pure import product company with more than 20 warehouses nationwide. Previously, they used more than ten suppliers. Sales volume is very large, and the operation difficulty in pet warehouses is also very high. In addition, their business characteristics are 2C and 2B together. We have now designed four national sub-warehouses for them, all capable of one-piece drop shipping and store co-distribution. In addition, all their goods are also procured on their behalf through our logistics financial services, and store distribution is also done by our own team. This reduced overall inventory by 20%. For surplus goods, because of dents during handling, they cannot be sold in stores, so we transferred them to another team that specializes in online inventory disposal, achieving complete in-warehouse transfer between two platforms without leaving the warehouse. This allows products to be sold quickly, creating a win-win situation for all parties, truly improving efficiency and reducing costs.

In fact, we cultivate and establish our core values from these four aspects, namely **reliable, flexible, efficient, and comprehensive**. So far, we believe we have all the conditions to do well in these four aspects. In the future, we will also improve our comprehensive service quality through in-depth refined management. In summary, Baowan is a one-stop logistics service platform with a mature, comprehensive frontline operation team and various resources. In addition to logistics financial services, it can also bring customers more additional value-added services.

As can be seen from the figure, we not only connect merchants and platforms but also include suppliers and consumers. In this sense, we have virtually broken the original model, achieving a high degree of integration of people, goods, and scenes, truly combining new logistics with new marketing.

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