All B2B entrepreneurs must be clear that in the internet era, they must rapidly expand their territory; without the ability to do so, they are likely to slowly die out. — Wang Chaocheng
Yijiupi, under the "three no's" background of no capital, no resources, and no foundation, has carved out a path in the FMCG B2B track. Undoubtedly, when it comes to the battlefield of FMCG channel transformation, Yijiupi has become an unavoidable player.
As the helmsman of Yijiupi, Wang Chaocheng is also a "godfather" figure in the Baijiu consulting world. His remarks often "hit the nail on the head," but also inadvertently invite "questioning and rebuttal" from industry insiders.
01 Will B2B platforms be national or regional in the future?
Wang Chaocheng says that internet companies are not regional; only traditional industries have regional companies.
Since the birth of the internet, there has not been a single regional internet company. The business law of all internet and high-tech companies worldwide is that global "kills" national, and national "kills" regional. For example, in the media industry, there used to be countless regional media, but in the internet era, Sina is just Sina, there is no Beijing Sina, but Sina has Beijing channel and Hebei channel. Toutiao, users get local news wherever they are.
Some in the industry argue that the B-end is different from the C-end; on the B-end, distributors are local distributors, supermarkets are local supermarkets, so B2B should be local. Wang Chaocheng believes that if the internet (B2B platform) were the same as traditional commerce, it wouldn't be called the internet. The internet has no boundaries. Why do traditional industries have geographical boundaries? Because the path of expansion is different.
Traditional hypermarkets have very limited products, while Tmall and JD.com can expand their products infinitely. Traditional stores have physical display space; placing 1,000 SKUs requires corresponding area, while placing 10,000 SKUs requires a very large area. The store itself has a fixed area, but Tmall and JD.com do not; the shelf space of e-commerce platforms is relatively unlimited.
In the past, real estate bosses said that the real estate industry is always regional because consumers are in this city, land belongs to the local government, and consumers are always local. There cannot be a national real estate company; they should all be regional. But today, the "leader" in national residential is Vanke, the "leader" in national commercial was Wanda last year, now Sunac, and the "leader" in national villas is Country Garden. Why does this phenomenon occur? Although land and users are localized, as a national company, they have absolute advantages in residential design, R&D, and sales. In "land acquisition," "national" companies know which city's land is safer and which is not. Whether it's land acquisition capability, capital, experience, or sales, they are much stronger and more professional than local ones. National companies will use all their experience to "defeat" you in a new region.
Yijiupi originally started from a region, but it must become national. We cannot say that B2B platforms are only suitable for regions just because we are currently operating in a region. We need to know the essence of the industry! The internet industry only has big, not small.
02 Can B2B platforms disintermediate?
Recently, Mr. Liu Chunxiong expressed his view: "Unless brand owners are willing to give up channel control, first-line brands will never hand over all channels to B2B platforms." Mr. Liu believes that except for the second-tier distribution to C-class and D-class stores, there is basically no room for compression, and B2B cannot truly achieve disintermediation. Regarding this, Wang Chaocheng told New Distribution that there is no doubt that B2B platforms will be able to disintermediate in the future, but in the short term, it is not yet fully achievable.
This year, Yijiupi has first-line brands in more than 100 cities, such as Coca-Cola, Pepsi, Master Kong, JDB, Panpan, Daliyuan, Moutai Platinum, Xifeng, Fenjiu, etc., all achieving disintermediated (removing distributors) operations, shipping directly from the factory through Yijiupi to the terminal. In the coming years, there will be more "disintermediation." Some in the industry say that big brands control their own orders and cannot be disintermediated, but Wang Chaocheng believes that big brands' deep distribution, control of core terminal promotion, and disintermediation are two different things. The manufacturer controls the display, brand presentation, and promotion at core terminals, but the intermediary fulfills order delivery; the two functions are different.
In cities where Yijiupi has disintermediated, the manufacturer's business continues to maintain the brand. Facts prove that so-called disintermediation of big brands and manufacturer maintenance of terminals are not contradictory; they are completely complementary. "Now some brands are also talking to us about outsourcing brand maintenance functions, because it is too expensive for a brand to maintain a team. A 'shared team' is more economical, and we are discussing this," Wang Chaocheng told New Distribution.
If brand owners give best-selling products to B2B, they cannot explain to offline distributors. It is suggested that either the brand, category, or specification should be different, so there must be differentiation. Upstream brand owners should create a "new product" for B2B, but the premise must be scale.
Wang Chaocheng believes: "At the current stage, upstream brand owners can develop a new product for B2B, but in the future, you will still have to choose between B2B and traditional distributors. Who will get the 'best-sellers'? I think this will happen within five years, and it is very likely to happen within three years. The lower the unit price of a product, the easier it is to be conquered offline. In terms of logistics efficiency and warehousing efficiency, traditional distributors simply cannot compare. Warehouses lack informatization, product inventory expiration is unknown, and logistics is all single-variety, while B2B sends full trucks every trip. B2B does not sell to wholesale departments; it sells directly to terminals."
Brand owners must face the future with a positive mindset. Zeng Ming (former chief of staff at Alibaba) once said: All e-commerce selling goes from the edge to the mainstream; this is the natural law of new things. Taobao was originally a place for fakes, so Tmall was created, and then products became branded.
03 Can B2B be more efficient than local distributors in local markets?
Mr. Liu Chunxiong believes that the efficiency of urban distribution depends on traffic density. 1 billion in traffic concentrated nationally versus concentrated in one city are completely different concepts. But Wang Chaocheng believes that if 1 billion in one city is all beverages, it will still lose money and be inefficient, but 1 billion across 10 cities nationally, if it is all liquor (Baijiu), it will be efficient and profitable.
Even in a single specific regional market, Wang Chaocheng told New Distribution that B2B platforms are also more efficient than local distributors. He believes that the order density of B2B platforms must and will inevitably be greater than that of distributors, because distributors represent a few brands in a certain category, while B2B platforms are multi-product and multi-brand. Although distributors have higher penetration in a category and brand than B2B platforms, because they only have segmented products, there is a huge gap in purchase frequency and purchase diversity of customer needs. For example, Yijiupi now, in any city or local small area, our full-truck delivery frequency is much higher than that of distributors. In terms of distribution costs, the liquor category is only about 1/2 of traditional distributors, and non-liquor is only 2/3 of traditional distributors.
Currently, Yijiupi has opened self-operated products in more than 80 cities, all developed by upstream, starting from 10 million. Imagine if a distributor, even a regional B2B, even if the brand owner gives an independent SKU code, might not dare to take 10 million worth of goods. If only 3 million, the costs of bottle mold opening, barcode application, packaging sampling, etc., the brand owner would not agree. Wang Chaocheng believes that relying solely on wholesale to make money will make your financial situation worse and worse, while national B2B will have better and better financial conditions, and ultimately distributors will be defeated by B2B.
Wang Chaocheng suggests that brand owners should proactively let B2B help sell goods. The simple method is to change specifications, and also to change their mindset. It is understandable that existing inventory cannot do without distributors in the short term, but do not fight against the times.
04 Is there value in B2B platforms rebranding small stores?
Before B2B appeared, there were already a large number of franchise chain companies nationwide, such as Meiyijia in Guangdong, Furongxingsheng in Hunan, and Hualian Supermarket. This kind of rebranding (franchising) itself does not have much strategic value. If it is just changing the sign, the value is not that great. But 7-11's rebranding has strategic value. The core is the depth of franchise management, and the key is whether the business model behind the sign has real value. Rebranding is not as impressive as B2B platforms imagine. For example, Yatang Xiaochao, a Chengdu enterprise, rebranded many stores, but what is the result now? The matter is clear.
Wang Chaocheng believes that only by using a powerful supply chain to gain terminal user stickiness is the most real; otherwise, rebranding is meaningless.
Summary of Yijiupi founder Wang Chaocheng's core views:
- In the future, FMCG B2B platforms will only be national, not regional;
- B2B platforms cannot truly achieve "disintermediation" in the short term, but they will definitely do so in the future;
- Even in a specific market, B2B platforms can achieve higher operational efficiency than local distributors;
- Currently, B2B platforms rebranding small stores has no value; what is truly valuable is gaining terminal customer stickiness through a powerful supply chain.
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