On March 18, 2019, at the "Boundaryless Retail Industry Summit" co-hosted by JD New Channel and New Distribution, Mr. Zheng Hongyan, Vice President of JD Group and President of the New Channel Business Unit of JD Retail Group, officially announced that JD New Channel would fully transition from its 2018 trial phase to the 2019 practice phase, and move towards a more open and intelligent direction, building a full-chain B2B2C platform. This also indirectly confirms that FMCG B2B, from its birth in 2013 to 2018, after five years of land grabbing, model iteration, and strategy exploration, has officially entered a stage of deep, refined operations. Because there was no B2B in the past, it has been in trial. When the trial ends and the platform understands the pain points of all links from brand owners to channel distributors to retailers, what follows is the introduction of concrete, implementable methods and strategic paths. At the meeting, Zheng Hongyan stated that in 2019, JD New Channel will focus on the three aspects of boundaryless retail: cost, efficiency, and experience, providing a complete set of channel solutions for the entire FMCG chain. During the break, New Distribution conducted an exclusive interview with Mr. Zheng Hongyan to see how he will lead JD New Channel towards an open, intelligent, and win-win B2B2C platform. 1 Openness: Lower Costs and Improve Efficiency "On the basis of not adding new pain points for brand owners, help them solve old pain points" — this is the tenet of JD New Channel's upgrade and reconstruction of the FMCG supply chain. In the view of New Channel, due to different categories, brands, development stages, and regional market conditions in the FMCG industry, each company requires different distribution and sales promotion strategies. It is impossible to solve all problems with one method or one path. The basis for not adding new pain points is to fully understand the needs of each brand owner; solving old pain points is to help each brand manufacturer solve distribution and sales promotion. Based on this, Zheng Hongyan told New Distribution, After the joint warehouse and distribution system launched in 2018, JD New Channel has extended outward and launched 7 modular channel solutions. Each type of brand owner can find a suitable position among these 7 modular solutions. For example, a small or medium brand that has not completed basic market coverage can have New Channel help solve its distribution coverage problem; a mature brand with a sound network can have New Channel help it, together with its distributors, put products online and obtain omni-channel data, enabling precise investment of expenses; additionally, even a mature brand may have poor sales in a certain region. At this point, New Channel can not only help it complete distribution coverage at low cost but also use data monitoring to conduct sales diagnosis. JD New Channel's openness is for the entire FMCG industry, but for a specific brand owner, New Channel is actually helping the brand owner reduce costs and improve efficiency. Currently, New Channel has covered millions of small stores. Brand owners no longer need to build large, independent distribution teams as they did in the past to distribute products to more places. By handing this over to New Channel, costs can be directly reduced. Distribution is just the prelude; sales promotion is the key. In the past, brand owners invested a lot of expenses in sales promotion, but due to lack of data, the investment was not transparent. After expenses were issued, whether the channel was used was completely unknown, which is the reason for low efficiency. By placing goods on New Channel, the chain is online in real time, and the effect of expense investment is immediately fed back. If the expense output is high, continue investing and replicate; if the expense output is low, adjust, diagnose, and re-evaluate. Through openness, JD New Channel brings brand owners, channel distributors, and retailers together. As an enabler, the market still belongs to brand owners, channel distributors, and retailers. The platform only provides targeted tools to make the distribution chain smooth, jointly facing ever-changing consumer demands. In the industry chain, the entities in each link are never a zero-sum game but cooperate with each other. In this process, the foothold of JD New Channel's "openness" is the joint warehouse. In March 2018, JD New Channel announced the launch of a joint warehouse and distribution system. To date, the joint warehouse has covered 30 provinces and nearly 300 cities, serving 70% of Zhanggui Bao stores. The open joint warehouse has also attracted more brand owners to join. Currently, New Channel has over 5,000 cooperative brands. "With a clearer open strategy, JD New Channel will combine the complete supply chain with brand owners and channel distributors to form a huge supply network. Let every brand owner find a suitable product circulation path on this network," said Zheng Hongyan. 2 Intelligence: Place the Right Products in the Right Stores and Sell Them at the Right Price to the Corresponding Target Consumers Openness is just the foundation. For the platform, helping brand owners reduce distribution costs and improve distribution efficiency is far from enough. Especially for brands that have already formed deep distribution, the era of big single products has passed. The stratification and fragmentation of consumer demand inevitably require enterprises to have a more precisely matched supply chain and a more intelligent supply chain. In the view of New Distribution, through openness, JD New Channel can connect all manufacturers' products. Whether the products are in the hands of distributors or New Channel is not important. What is important is that after products are online, let products be moved less and data run more. Only when data runs can intelligence be truly realized. Why say this? A person in charge of a brand owner's B2B department once told the author, Any precise distribution requires scale as a prerequisite. Especially in the early stage, without scale effect, precise distribution is impossible. Behind the scale effect is data accumulation. Without data accumulation, no matter how much precise distribution is discussed, it is just talk. JD New Channel's accumulation over the past nearly three years, coupled with the current open strategy, will bring more goods online and obtain data. Only when data is large and abundant can precise matching be achieved based on past path experience. This is also the foundation of the "data mining productivity" that Mr. Zheng Hongyan mentioned earlier. What is precise matching? Simply put, it means New Channel will help brand owners place the right products in the right stores and sell them at the right price to the corresponding target consumers. In the past, JD New Channel might only meet brand owners' demand for "data," but now New Channel not only provides data but also helps you analyze and provide the correct sales path. It is understood that currently, JD New Channel's Huiyan big data system has been iterated to version 2.0. At the meeting site, for channel distributors and retailers, JD New Channel launched different intelligent tools: Fenxiao Bao and Sheng Yi Jing. JD New Channel can provide brand owners with multi-dimensional, multi-angle analysis "reports," including transactions, products, consumers, supply chain, and even industry. Through intelligent tools in different sections, brand owners can make clear sales diagnoses: where the problem lies in the product—whether it is a channel problem, store problem, promotion problem, or the product itself. 3 Win-Win: Integrated Operation of Factory, Store, and Store to Serve Consumers Well In the past, manufacturers and distributors joined hands to extend their operational reach to small stores. New Distribution believes that in the future, with changes in consumers, it will definitely be the joint efforts of factories, stores, and stores to serve consumers together, shifting from supply chain to consumer-centric services. In this process, the platform will play a connecting role. The platform will collaborate with brand owners, channel distributors, and retailers to build an integrated relationship and better respond to future changes in consumer demand. In the future, brand owners must possess four capabilities to meet changing consumer demands:

First, R&D capability: continuously launch products that meet consumers' various special needs;

Second, response capability: accelerate the response speed of the entire supply chain and the delivery efficiency within the channel;

Third, turnover capability: reduce batch sizes, and by reducing inventory in the channel and at terminals, enable partners to achieve more efficient turnover;

Fourth, cooperation capability: build strategic cooperative relationships with supply chain platforms to jointly provide consumers with rich products. In the view of New Distribution, FMCG B2B platforms represented by JD New Channel will act as a "central nervous system," organizing all parties to collaborate within the network, helping brand owners build these four capabilities to respond to changes in consumer demand. Through openness, JD New Channel can customize distribution chains for different brand owners on demand; through intelligence, JD New Channel can help brand owners not only solve "selling in" but also "selling out"; through win-win, JD New Channel can find its own value in the FMCG industry chain while providing value to all parties. 2019 is the year of practice. We look forward to JD New Channel helping more brand manufacturers achieve new channels! -END-