Matchmaking vs. Self-operated: Which B2B Model Is More Efficient?

The essence of B2B is to improve supply chain efficiency through internet transformation. However, many B2B platforms have not improved efficiency through technological transformation or compressing levels; instead, their operating costs remain high. This involves many operational issues and also underlying model bugs. Today, I will sort out the relationship between different products and models, and which operational model is most efficient.

When discussing supply chain efficiency, we must mention the underlying logic of three points: products, warehousing and logistics, and models.

1. Products: From the perspective of consumer purchase cycles, products can generally be divided into two types: high-frequency and low-frequency products.

High-frequency products: These are products that consumers purchase and consume frequently within a certain period, such as milk, ham sausages, beer, beverages, instant noodles, and liquor. High-frequency product industries have relatively high brand concentration; a few major brands in a category monopolize most market share, such as carbonated drinks: Coca-Cola and Pepsi; milk: Yili and Mengniu; high-temperature meat products: Shuanghui, Jinluo, Yurun; instant noodles: Master Kong, Uni-President, Jinmailang, Baixiang; beer: Tsingtao, Snow, Budweiser, Yanjing, etc. For high-frequency products, the chain owner (manufacturer) is relatively strong, has strong control over channels, and the channel flattening degree is relatively high.

Low-frequency products: These are products that consumers purchase less frequently, such as snacks, daily chemicals, daily necessities, stationery, and condiments. Because these products are consumed less frequently, users have relatively poor brand awareness, and brand concentration is relatively low. From a single category perspective, the market capacity may be small, such as the stationery industry with only 150 billion yuan market capacity nationwide. However, these products have extremely many SKUs, infinite long tail, more distribution levels, and relatively low turnover rates.

2. Warehousing and Logistics: B2B warehousing models generally fall into two types. The first is the central warehouse model, commonly used by B2C e-commerce like JD.com and Suning, where one or two warehouses are set up per province, with a radiation radius exceeding 300 kilometers. Among B2B platforms, JD's New Path, Alibaba's Retail Link, and 51 Ordering adopt the central warehouse model. The advantage is rich SKUs, high throughput, and relatively low warehousing costs, but the disadvantage is large logistics radius and high logistics costs. It is suitable for low-frequency products that are not sensitive to logistics costs.

The second is the front warehouse model, also called distributed warehouse, used by platforms like Huimin Network, E-commerce Interconnect, Dianda, and Xingaoqiao. The delivery radius does not exceed 100 kilometers, serving only the local market. Distributors are typical front warehouses. The advantage is short delivery radius and lower logistics costs, but the disadvantage is that it can only serve the local market, and warehousing costs are relatively high. It is suitable for high-frequency products that are sensitive to logistics costs.

3. Models: From the transaction perspective: Currently, domestic B2B models can be divided into two types: matchmaking and self-operated. They can be distinguished by the invoicing entity: in matchmaking, the goods owner issues the invoice; in self-operated, the platform issues the invoice. The advantage of matchmaking is not touching goods, lighter model, and easy to scale. Zhanghe Tiandi, Tongying Tianxia, and Retail Link are typical matchmaking models. The disadvantage is that it is difficult to bring online brand owners who have strong channel control and relatively flat channels. The advantage of self-operated is self-built warehousing and logistics, self-purchasing, ensuring product and delivery efficiency. The disadvantage is heavier model and difficult to replicate quickly.

From the supply chain perspective: From the supply chain, models can also be divided into agency, second-tier wholesale, and store-opening models.

Agency: This refers to platforms like Alibaba's Retail Link, JD's New Path, and Zhanghe's Cloud Factory, which cooperate directly with factories to obtain exclusive or dedicated products, bypassing distributors, and directly transacting with small stores on their platforms.

Second-tier wholesale model: This is a pure intermediate trader model, purchasing goods from agents and delivering directly to small stores through unified warehousing and distribution, such as E-commerce Interconnect, Dianda, Jinhuobao, and Zhongshang Huimin.

Store-opening: This involves rebranding stores to force supply chain warehousing, achieving end-to-end supply chain integration, such as Xingaoqiao, Beiquan, Furongxingsheng, and Meiyijia.

From the perspective of third-party technology and service support: Currently, SaaS is the mainstream in China, with many platforms providing SaaS, such as Dinghuobao, Qianmi Network, Zhongke Shangruan, and Dianxiaohuo. These platforms purely provide technology to help distributors complete their own B2B transformation. There are also third-party logistics platforms like Yijia Logistics, Weijie City Distribution, and Yunniao Logistics, which help distributors transform into logistics providers through warehousing and logistics services or franchising.

After analyzing the supply chain, let's see which FMCG B2B model can truly improve supply chain efficiency.

Currently, most domestic platforms have not fundamentally solved the one-stop procurement problem for stores. Matchmaking platforms have not solved the issue of high-frequency products being traded online, and self-operated platforms have not well solved the demand for long-tail products.

FMCG has never been a single industry; different categories have different demands for platform services. The attributes between categories are too distinct. For example, mineral water and beer, although both are beverages, have completely different channel focuses and distribution models. Similarly, condiments in the catering channel and distribution channel have completely different customer decision-making models. High-frequency products with high industry concentration and low-frequency products with low concentration have different difficulties in supply chain organization due to the strength of the chain owner. Both procurement and distribution require different operational and service models.

The difference between matchmaking and self-operated lies in the frequency of product procurement. The higher the frequency and industry concentration, the more self-operated is needed; the lower the frequency, the more long-tail, and thus matchmaking is needed.

However, whether matchmaking or self-operated, the platform must achieve one-stop shopping to control store goods, otherwise competitor platforms will use high-frequency products to eat into low-frequency product platforms. For example, Wang Chaocheng of Yijiupi has said at many speaking events that selling beverages is not profitable, but why does he still do it? Because he fears that if he cannot meet the one-stop procurement needs of users, Zhongshang Huimin will enter his tobacco and liquor store channel. Mineral water is too high-frequency; it can easily eat into his tobacco and liquor stores. So, even if selling beverages is not profitable, he must do it.

In warehousing and distribution, the higher the brand concentration, the higher the sensitivity to logistics costs and the higher the demand for public transportation logistics. Industries with lower brand concentration are less sensitive to logistics costs but more sensitive to warehousing costs.

The game between brand owners and channel distributors will always exist, but channel transparency is definitely the mainstream trend. Traditional distributors will never fully open and transparently share transaction data with brand owners. This is a structural problem. In the future, the high fragmentation of products brought by consumption upgrades will require a more precise and transparent distribution channel system, which is a byproduct of efficient B2B.

B2B efficiency is never a single dimension; it is based on user needs, fully balancing the efficiency and interests of the entire supply chain. Only through efficient operational methods can B2B achieve overall efficiency exceeding traditional supply chain systems. This must be based on industry, category, and the needs of both ends. Therefore, discussing efficiency without considering category is irresponsible.

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