Currently, FMCG B2B models can be categorized by developer into manufacturer-led and distributor-led, and by operation mode into closed self-operated and open matchmaking.

Analyzing the rationality of a business model cannot be done from a single business segment. It must be analyzed from the perspective of the entire industry chain, from the perspective of grasping industry development trends, and from the perspectives of manufacturers, distributors, logistics providers, and terminal retailers. 1

Analysis of FMCG Development and Changes 1) Analysis of Changes in the Commodity Market: Due to the influence of changes in the consumer market, the FMCG commodity market is bound to undergo some new changes. Analyzing the current consumer market reveals a very obvious three-phase iterative demand characteristic, integrating the satisfaction of basic needs, emphasis on consumption quality, and attention to consumption experience. Not only do consumer groups exhibit three-phase iteration, but individual consumers also simultaneously experience three-phase iteration. In the era of three-phase iterative consumer demand, consumer needs are more complex, consumption demands are broader, and consumption methods are more diverse. Specifically, consumers are not only satisfied with buying goods, nor are they limited to products with good quality assurance, but they also pay more attention to the personal experience during the consumption process. Experiential consumption is a consumption process with broad connotations. There are huge differences among individuals, and the experience gaps between different individuals are significant. Products can be standardized, quality can be standardized, but experience is difficult to standardize, and it mostly exists in personalized forms. This is also the reason why the current consumer market is complex. Currently, most FMCG products are in the stage of meeting basic needs and quality assurance, which is still far from the current three-phase iterative consumer demand characteristics. This has led to a large number of quality, standardized products that are difficult to arouse consumers' purchase interest and difficult to meet consumers' experiential needs. Analyzing this consumption trend, it will be further strengthened in an environment where the commodity market is extremely abundant and the economy and society further develop. Based on the above analysis, in the future market, the market share of explosive products and unified products will decrease, while the share of personalized and differentiated products will increase. Ma Yun predicted that 8020 will replace the 2080 rule. Currently, from the perspective of the FMCG commodity market development, this trend is emerging. The sales methods of commodities will also gradually shift towards experience and service. This change brings about a transformation of decades-old FMCG business concepts and methods. Whether manufacturers, distributors, or terminal retailers, all must undergo transformation. This transformation is not a simple adjustment but a revolutionary change, a complete rebuilding of the entire business model. Currently, some enterprises are already undergoing such transformations, such as the C2F model transformation of Hongling Clothing Group; Procter & Gamble is also undergoing transformation, based on the original brand positioning of anti-dandruff (Head & Shoulders), nutrition (Pantene), and smoothness (Rejoice), vertically developing shampoos suitable for perming and oil treatment, developing Pantene for curly hair and Pantene for medium-thickness hair, placing more emphasis on the direction of product personalization. Some categories have clearly reflected this change towards better satisfying personalized consumption, such as kitchen cleaning products, which have evolved from a single dishwashing liquid to multi-functional cleaning products for fruits, glass, stainless steel, ceramics, microwave ovens, ovens, range hoods, etc. 2) Analysis of Changes in Terminal Product Presentation: Whether physical stores or C-end stores, the terminal's contribution to FMCG sales is very important. No matter how good a product is, if it cannot reach the terminal, or if it does not have a good display performance, reasonable sales method, or cannot influence consumer purchases, it will not generate good market value. According to the development trend of the commodity market, the number of SKUs in FMCG will multiply in the future. Such dense product function segmentation and increased product variety pose severe challenges to terminal product assortment, category management, product display, and shelf performance. If no changes are made, the added functionally segmented products will not only fail to increase sales but may have the opposite effect. Therefore, some previous concepts and principles of category management and product display are no longer applicable. Combining the current consumer demand characteristics and market product development trends, the best current presentation method is: life-oriented zoning and scenario-based display. That is, from the customer's perspective, according to customer consumption demands, the store's products are divided into life-oriented zones, and within each zone, products are displayed according to consumption scenarios. This makes the store's product presentation as close as possible to consumers' actual life experiences, maximizing the display of product functional value and maximizing the touch of consumers' purchase feelings. 3) Analysis of Changes in Distribution Channels: To achieve such good product assortment and display effects, better cooperation between manufacturers and terminal stores is needed to achieve a basic consistency in product understanding. Based on this requirement, a flattened distribution channel will be an important choice. Only cooperation based on closer cooperation and more effective communication between manufacturers and terminals can ensure this result. That is to say, in the future, the FMCG distribution industry chain requires closer union and cooperation among manufacturers, distributors, and terminals. 4) Analysis of Changes in Logistics: Borrowing the viewpoint of Sun Wuhu, President of Jinan Circulation Industry Supplier Association: The logistics industry must be an intensive and large-scale industry. Only through intensive operation and large-scale development can efficiency be higher and costs be lower. 2

****Defects in the B-end Model 1) Unclear Business Target Positioning: Analyzing current B2B operators, most have the following prominent problems: Unclear target positioning: whether to do full-category or develop vertical categories, whether to serve customers in the whole region or serve customers in a certain field; Unclear business strategy: lack of backbone category support; or categories too narrow, lack of correlation between categories, etc. Such vague business strategies make it difficult to effectively attract target customers. 2) Not Controlling the Two B-ends: Most operating enterprises have followed the old path of current distributors. The current distributor class is a very awkward link. Neither the manufacturer nor the terminal B-end, nor the resources at both ends, are under their control. They only bear responsibility and do the work. The manufacturer's sales pressure is transferred to the distributor, and the terminal enterprise's performance pressure is also transferred to the distributor. On the manufacturer side: Currently, most manufacturers have not paid enough attention to B-end business, and even restrict it in various ways. The platform lacks comprehensive and closer cooperation with manufacturers, especially large brand manufacturers; on the terminal side: they only establish simple sales relationships and lack effective control. Without an effective control model for the two core ends, there is no future, and the result is the current distributor situation. 3) Functional Defects: Most current B-end operating enterprises only have simple commodity purchase and sales functions. They cannot undertake further market deep development, shipment rate, display, and other related requirements from brand manufacturers; they have even less influence on terminal KA systems; for small B enterprises, they only establish simple sales relationships and cannot meet their urgent needs to improve store operation capabilities and sales capabilities. The improvement of small store capabilities is the key foundation for establishing an effective sales network. A market network without sales capability, extremely unstable relationships, and fragile relationships is worthless. Therefore, the operation model with a single sales function has serious defects. 4) Unified Warehousing and Distribution is a Stopgap Measure: Based on the above analysis of the logistics industry development trend, the current practice of unified warehousing and distribution adopted by some distributors can only be analyzed as a stopgap measure. 3 Development Direction of the B2B Model To build a reasonable business model, there are three key points: clear business strategy, effective control of core resources, and an efficient operating system. Any business model's core lies in operation. Therefore, determining a scientific and reasonable business strategy and business tactics is the most important. If the strategy and tactics are not scientific and reasonable, no matter how good the operating platform is, it will inevitably fail. To build a scientific business model, in a highly competitive market environment, controlling core resources is the key to success. If this model has no resource advantages, or cannot form effective control over core resources, it has no commercial value. A B-end platform that undertakes commodity circulation functions is itself an intermediate link, responsible for connecting and serving manufacturers and terminal stores. Its operational efficiency is particularly critical, not only for itself but also the most important consideration for manufacturers and terminal customers when choosing you. The B-end model was born in the context of rapid internet application development. Its mission is to innovate the traditional FMCG circulation model through efficiency improvement. Its key point is: taking commodity circulation as the core of operation and using the high efficiency of the internet as the operational means. Therefore, when building its business model, the first factor to evaluate is whether the business strategy and tactics are reasonable, and only then can the efficiency model of the platform itself be considered. At the same time, it is necessary to deeply analyze the problems existing in the current distributor link in the current stage, and the model must be built on the basis of eliminating the existing distributor problems. According to general marketing principles, combined with the characteristics of FMCG market changes, the development trends of commodities, production, circulation, and terminal links, combined with the advantages of the B-end model itself and market competition trends, the following suggestions are proposed for building the B-end model: In general, it is necessary to establish: more precise market positioning, close cooperation with brand manufacturers, effective control of terminal resources, reasonable and effective product assortment, provision of efficient logistics services, multi-functional support for manufacturers and terminals, and an efficient and low-cost operating system. The following seven aspects should be comprehensively analyzed and evaluated. 1) More Precise Market Positioning: According to general marketing rules, establishing any business model must be based on precise market positioning. Analyzing the competitive development trend of the B-end model, it is inevitable to form more precise market positioning and clear market segmentation. From the current development trend, there are mainly the following directions: by product segmentation: comprehensive, vertical; by customer segmentation: which type and level of customers to serve; by regional segmentation: serve the national market or serve the regional market. Market segmentation is a positioning choice made on the basis of evaluating category characteristics, competitive environment, and self-advantages. 2) Close Cooperation with Brand Manufacturers: The B-end model is centered on operating commodities. Therefore, when establishing its business strategy, it must first consider close cooperation with brand manufacturers. Commodities are the first element for operation. Without strong product support and strong brand product support, there is no foundation for operation. It is necessary to first consider close cooperation with big brands. Big brands have very strong market value and have a very strong market pull for developing markets and attracting customers. It is necessary to seriously consider cooperation with first-line brands in each category, especially the number one brand. For example, Coca-Cola, Yili, Wahaha, Hengan, P&G, Haitian, Dali, etc. In the current environment where most manufacturers lack sufficient understanding of the online incremental market and are still struggling with how to balance offline distributors and online B-end customer relationships, it is even more necessary for B-end platforms to attract brand cooperation with a more proactive attitude and more favorable policies. Only by forming close cooperation with brand manufacturers can the foundation for healthy development be established. 3) Effective Control of Terminal Resources: For manufacturers, one of the most important values of distributors is having market network resources. The same is true for B-end platforms. In the current environment where offline distributors and online B-end platforms are both competing for offline small Bs, the most critical point is who can form effective control over offline small Bs and whether they can establish a stable, closely related, healthy developing, and vibrant terminal market network. Only the B-end that can truly control the terminal will be the truly competitive platform in the end. How to control the B-end? The key is to grasp the core problems of small Bs, grasp their real needs, and cut in very specifically, thereby establishing a solid cooperative relationship. In a certain sense, what small Bs lack most is not commodities, but reasonable product assortments, store operation capabilities, marketing capabilities, and management capabilities. Only by grasping these key points and forming effective entry points can valuable cooperation be formed, and the cooperative relationships and network systems established thereby will be valuable. How to cut in? Use internet thinking: give first, take later; first help them improve; establish trust; reflect platform value; through the platform's backend information management, replace the small B's core business functions, reduce their operational pressure; and finally form a dependency relationship on the platform. Specifically:

  1. Appropriate investment: Small Bs are very practical. To first gain their trust, you must give them some sweeteners. Appropriate investment is necessary. For example: store signs, cash registers, backend systems, etc. In fact, these can also be integrated.
  2. Introduce business technology to quickly improve store operation capabilities. Let stores feel the contribution of technology to sales growth as soon as possible.
  3. Integrate product resources and introduce more reasonable categories and suitable products into stores.
  4. Entrust some backend functions, such as category management, replenishment, etc., to simplify store work and make stores dependent, forming a stable cooperative relationship.
  5. Establish corresponding training, assessment, guidance, and control mechanisms to maintain close contact with stores and help them continuously improve business management. The network system established on this basis is completely under your control, and for any product development, the manufacturer's pull will play a very important role. It will be more efficient to adapt to product changes, consumer changes, and better terminal product presentation. 4) Reasonable and Effective Product Assortment and Strategy Combination: Any operation must pay attention to scientific business strategies. The so-called strategy is a scientific combination. In the context of commodity business activities, it is the combination of products, categories, brands, gross profit policies, etc. Only by forming effective and scientific combinations can the power of business strategy be exerted. Products should have different positioning: offensive, defensive, and profitable. Scientific business strategy is very important for the operation of B-end platforms. 5) Provide Efficient Logistics Services: For terminals, an efficient replenishment system is crucial to business operations, related to preventing out-of-stock and maintaining reasonable inventory. Therefore, logistics service capability is very important for the business development of B-end platforms. It is not just about "arrival," but the key is replenishment efficiency, with the core being short replenishment cycles, high efficiency, and low out-of-stock rates. 6) Provide Multi-functional Support for Manufacturers and Terminals: A single sales function model has no advantage. A model that only provides sales process matching, logistics, and financing also lacks core competitiveness. It is necessary to combine more needs of manufacturers and terminals and establish stronger support functions to form a stronger competitive advantage. In a certain sense, the future business model cannot be just sales-oriented; it must be service-oriented. In the previous section, some terminal needs were analyzed. At the same time, it is also necessary to have the ability to meet manufacturer needs, such as deep distribution, display, promotion, experience, etc. Only with stronger functions will advantages be more prominent. 7) Have an Efficient and Low-cost Operating System: As mentioned earlier, the B-end model is an innovation with the mission of reforming the traditional distributor model's chronic problems of low efficiency and high cost. Therefore, it must be more efficient in its own operation. It must fully reflect the advanced nature of internet enterprises in process design, standardization, and other aspects. At the same time, it must be clear that the business of acting as an intermediary is not a high-margin, high-output industry. In a certain sense, its profitability is limited. Therefore, it must rely on the advantages of the internet to make its own operation more efficient and lower cost. -END- The best FMCG distributor learning platform in China Dedicated to 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 Operation | 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 Salespeople | 015 Internet, Brands | 016 Distributor B2B Transformation | [Long press QR code to follow]