In 2016, with JD.com formally establishing its New Channel Division and Taobao launching its Rural Taobao project, various FMCG B2B platforms emerged like mushrooms after rain. So, are traditional FMCG distributors facing 'disintermediation'? Where is our way out? Most e-commerce companies entering the FMCG distribution market view distributors as sponges to be squeezed for profit, while we are filled with bitterness. Business is getting harder, and under the fourfold pressure from manufacturers, supermarkets, retail terminals, and B2B platforms, the space for us to operate is shrinking. Is it the B2B platforms that have taken away our livelihood? Is that really the case? Let's first look at the current state of the FMCG B2B platform battle. The existing debate over the models of FMCG B2B platforms mainly focuses on two aspects: First: The JD-style 'disintermediation'. This completely eliminates the intermediate process in the FMCG circulation chain, namely the so-called distributors. It bypasses distributors, cooperates directly with brand manufacturers, and relies on its own service team and logistics to directly control terminals. Through thorough 'disintermediation', it replaces all functions of distributors in the traditional circulation channels. Second: Distributed e-commerce. Distributed e-commerce aims to convert existing stock into traffic, using a matching model to package distributors wholesale, achieving the so-called effect of channel integration plus the internet. However, the commercial essence of distributors has not changed. Due to the transparency of platform information, internal competition becomes more intense, and the survival situation becomes worse. This is a meat grinder for distributors. The market rules formed over the years in the Chinese market do have issues such as information asymmetry, logistics and transportation, regional preferences, and product differences, but it is actually very difficult to destroy the original order and rebuild an ecological chain under a new economic and new business model. Theoretically, any industry or field transformation will face choices: rebirth or destruction, radical or moderate. History has no conclusion, but the logic is always surprisingly similar. Whether it is thorough disintermediation or distributed e-commerce, the operators only consider their own interests and never stand from the perspective of us distributors to think about the future of the entire industry. What we truly need is a way out, an iterative upgrade. The new mobile internet B2B procurement platform Jinhuobao has proposed an 'aggregated e-commerce' model, providing us with a direction for a solution. The core is to help distributors upgrade and enhance their survival space and capabilities. First: Select partners for leapfrog promotion. Jinhuobao selects distributors nationwide who have strength and ideas and are seeking a way out for the industry, provides them with training on internet business models, and dispatches outstanding management talents in the FMCG circulation field who have graduated from Jinhuobao's Hermes Business School for regional guidance. Second: Capital transfer, exchanging shares for market. By transferring shares of Jinhuobao's parent company, it establishes a stable relationship with regional market partners, achieving a positive feedback mechanism of shared benefits. Jinhuobao designs its partner plan based on equity investment logic: partners invest principal, team, and business capabilities. Within two years, they can not only receive cash returns of more than double but also become shareholders of Jinhuobao's parent company, obtaining excess returns from the platform in the capital market. Third: Break through boundaries and achieve economies of scale. For mobile internet B2B platforms, the core is technology, and the biggest benefit of technology is the rapid expansion of scale. Through the aggregation of talent, capital, information, supply chain, logistics, and scale, this new 'aggregated e-commerce' model will help us in difficulty to meet market changes and challenges. Within five months of its launch, Jinhuobao completed its layout in the Beijing area, covering 80% of merchants in the Beijing region, established four warehouses, and achieved a monthly transaction volume exceeding 30 million yuan. At the same time, Jinhuobao selected Beijing-Tianjin-Hebei as the main direct-operated market, and the Tianjin market has also opened. The 'China Partner' plan started in March has already signed regional markets in 10 cities. The speed of such undifferentiated horizontal expansion is very alarming. By improving distributors' service capabilities and internet operation capabilities, integrating upstream and downstream supply chains, optimizing channel structures, and sharing advantages, Jinhuobao uses the platform's data capabilities to establish a meso-economic database of retail terminals. Coupled with efficient warehouse and logistics coordination, it has won the favor of merchants, aggregated a large number of retail terminals, and enhanced its attractiveness and bargaining power with manufacturers. In 2016, Jinhuobao will enter 15 provinces nationwide and start developing regional markets in 30 cities. All regional markets will uniformly begin generating sales on May 1. By the end of 2016, the total registered users of the Jinhuobao platform will reach 450,000, and the total platform transaction volume will reach 3.5 billion yuan. By 2020, the total transaction volume of the Jinhuobao platform is expected to exceed 15 billion yuan. By upgrading and transforming the original channels of FMCG distributors and connecting to the mobile internet B2B platform Jinhuobao, major distributors can truly embrace the internet and achieve cross-border upgrades for participants in the traditional FMCG circulation field. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and actionable 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 salespeople | 015 Internet, brands | [Long press QR code to follow] To join QQ/WeChat groups, please click: Read the original text
Dealer Operations · Supply Chain & B2B
How Should Distributors View B2B: Friend or Foe?
In 2016, with JD.com formally establishing its New Channel Division and Taobao launching its Rural Taobao project, various FMCG B2B platforms emerged like mushrooms after rain. So, are traditional FMCG distributors facing 'disintermediation'? Where is our way out? Most e-commerce companies entering the FMCG distribution market view distributors as sponges to be squeezed for profit, while we are filled with bitterness. Business is getting harder, and under the fourfold pressure from manufacturers, supermarkets, retail terminals, and B2B platforms, the space for us to operate is shrinking. Is it the B2B platforms that have taken away our livelihood? Is that really the case?
