As a model of B2B, HuiCong is a pioneer, but from the current situation, its development is awkward; Alibaba's 1688, though not successful, is not dead either, having cooked half-cooked rice; and JD.com's "New Channel Business Unit" that emerged this year is inevitably seen as a speculative move to try elsewhere when at a disadvantage in the B2C market. Any innovation, including business model and channel model innovation, must bring value to society, otherwise it will die halfway. This value includes value addition, cost reduction, and good consumer experience. B2B as a channel innovation cannot violate this fundamental principle. What keeps many distributors, especially channel dealers, awake at night is that the intervention of big B, with capital as backing, traffic as platform, occupying geographical advantages, looking down from a high position, and sweeping all before them, makes their painstakingly cultivated small territory seem like someone else's bag, taken without effort. My view is exactly the opposite: the time for the B2B era has not fully matured, and even if it matures, the process will inevitably be difficult and its fate will be full of twists and turns. Will the entry of big B into the B2B field affect China's business landscape, especially the supply and marketing pattern? My view is that it certainly will, but whether the impact is good or bad, big or small, needs to be considered case by case. From the perspective of social value: If JD.com and Alibaba invest B2B resources in improving China's rural logistics system and product system, going to the countryside to chew bones rather than grabbing meat in the city, that would be a blessing for China and the industry, although it goes against the nature of business to pursue profit. Therefore, I have always welcomed Taobao going to the countryside and JD.com going to townships, to accelerate category enrichment and goods circulation, and to improve the quality of life for consumers in fifth- and sixth-tier, even seventh- and eighth-tier mountainous areas. However, if JD.com and others just want to take over the work of distributors by leveraging their platform advantages, except for value in payment methods, credit systems, and data marketing (which is only marketing value), B2B's improvement to the business environment is quite limited. Because, given China's current economic situation, there is no shortage of products in cities above the prefecture level, and high quality at low prices is not the main issue. Internet companies doing channel optimization in cities is a typical case of picking the soft persimmon. What cities above the prefecture level lack are truly innovative products and services, as well as high-quality products, which is why a bunch of Chinese people go to Japan to buy toilet seats. The "乾坤大挪移" (a martial arts move) style of B2B is just recreating an e-commerce platform and a monopoly platform, which goes against the "decentralization" spirit of the Internet and has little social value. From the perspective of industry operations: Distributors are a typical circle of acquaintances, and distributors themselves are very "small and micro" companies. There is a lot of mutual help and support between upstream and downstream. Given the vastness of China's geography, many operations are verbal agreements and not standardized, which is something standardized companies cannot do; with full internetization, there is "cloud accounting" for both incoming and outgoing. If you issue invoices to distributors, they have input tax but don't know how to handle output tax. Current B2B startups are all aiming for IPOs; how can they do it without standardization? Perhaps turning a blind eye and forcing national policy is one option, but it takes time and process. So currently, the difficulty of intercepting is relatively high, and the cost will also be high. So, will it affect the supply and marketing pattern? Certainly, but the progress will be more difficult than in the C market. In terms of direction, if it focuses on cities, it has little social value; in terms of method, if it just takes over, it has little value for retailers. As a side note, recently people have been asking whether the advent of the big B era will impact vertical B2B websites, and how small Bs can survive. My view is that big B harvesting small B is an inevitable result in the early stages of Internet and e-commerce development. The Matthew effect of the big getting bigger will make the survival space for vertical B2B websites smaller and smaller. This is a sign of immaturity in Chinese business behavior and also in the Internet. However, this does not represent the future trend of the Internet. Future Internet commerce will definitely be diversified and decentralized, giving everyone more choices, including distributors. This is the value of the Internet. But this will take a long time, and many vertical B2B companies will not survive until that day. Returning to the topic of distributors, if even a group of "small Bs" cannot escape the fate of being harvested, can distributors, especially channel dealers, have good days in the B2B era? From the past profiteers to self-employed individuals, from retailers to channel dealers, as the most active individual cells in China's economy, they were once a group of the most unrestrained and imaginative people, a group said to have caught up with good times. When the Internet came, first their information discourse power was weakened; then e-commerce and logistics came, reducing their originally generous profits again and again; soon B2B will stir things up, platforms will supply directly, manufacturers will sell directly, and distributors have become the group with the weakest ability to resist risks in the Internet era, becoming the softest persimmons to squeeze. There is no love without reason, and no hate without reason. Channel dealers must learn to find a way out in the "turbulence" to survive the cruel elimination game. I offer three ways out for distributors to try: either channel dealers unite themselves, or strengthen irreplaceable value, or embrace change and trends. Way out one: Channel dealers unite themselves. Since channels are the advantage of channel dealers, why can't local lords unite, turn fragments into a whole, and organize products and connect with terminals? I had a distributor from Hebei who founded a corporate brand in Foshan. Using his years of connections in the industry, he gathered major players from various provinces in the water, electricity, and lighting products (pipes, wires, lamps, etc.) under this company through shareholding cooperation. Everyone became a shareholder based on sales volume and investment amount. The brand collectively purchases from manufacturers, forming a price advantage, and also uses OEM advantages to promote its own brand products, finally using the networks of major players in each province to quickly reach terminals. This has three benefits: first, professionals do professional work; everyone is familiar with the water, electricity, and lighting industry and understands trends and products; second, joint shares and joint hearts, divided power and divided profits; everyone uses their own network to promote their own products, so they cannot be careless; third, they are all old brothers and friends, so things that cannot be put on the table can be privately negotiated. Way out two: Enhance your irreplaceable value. Channel dealers should try to list what enterprises cannot do but they can, and strengthen and form core advantages: for example, using geographical location to integrate the advantages of small-quantity, high-frequency delivery. Of course, this will increase costs, but most of our distributors lack optimization of delivery routes and rely absolutely on feeling. There is great room for optimization in delivery frequency, routes, and tools; another example is localized service. In the past, some channel dealers thought to push away or avoid problems, waiting for the enterprise's feedback. But some after-sales issues are dragged out by enterprises, and many channel dealers end up taking the blame. There are many such examples, so I won't list them. Now that B2B is coming, channel dealers should have the courage and ability to take on these issues, use regional platform strength to negotiate with enterprises, help retailers solve problems, and also help themselves improve value. These days, even as a porter, you should be a porter with technical content. Way out three: Embrace trends and changes. If distributors evaluate themselves and find that they have neither the ability to integrate resources nor the value to improve, then you can only embrace trends and changes and become a part of the B2B business. Learn new business models, go deep into them, see what value they can bring you, what abilities they can enhance, and in the process, distributors will naturally learn a lot. In short, when you can't see the direction clearly, you can follow the general trend, which is better than standing still. This platform will soon organize distributor friends who are interested in building B2B platforms to visit and learn from some B2B platforms. Friends who are willing to learn with the editor can add the editor's WeChat to understand together. 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Dealer Operations · Supply Chain & B2B
In the B2B Era, How Should Distributors Upgrade Their Core Value?
As a model of B2B, HuiCong is a pioneer, but its current development is awkward; Alibaba's 1688 has not succeeded but is not dead, having cooked half-cooked rice; JD.com's new "New Channel Business Unit" this year is inevitably seen as a speculative move to try elsewhere when at a disadvantage in the B2C market. Any innovation, including business model and channel model innovation, must bring value to society, otherwise it will die halfway. This value includes value addition, cost reduction, and good consumer experience. B2B as a channel innovation cannot violate this fundamental principle.
