No matter how large the scale, inefficiency is doomed to elimination! Since rapid development began in 2013, the industry once had over 200 FMCG B2B platforms at its peak. According to the latest data from New Distribution, after years of rapid development and survival of the fittest, only over 100 B2B platforms remain. From the current industry development status, even the surviving B2B platforms are not doing well. Alibaba Retail Link stopped market expansion after covering 17 provinces, shifting to deep cultivation of existing coverage areas; JD New Route has been transferring warehousing and distribution cost pressure by vigorously promoting joint warehouse distribution. At the same time, regional B2B platforms have also been exposed to operational crises one after another... This article does not aim to discuss whether the business logic of FMCG B2B is correct, nor does it analyze the strategic changes of JD New Route and Alibaba Retail Link. Instead, it hopes to help brand owners and individual entrepreneurs think through analysis and interpretation of national and regional B2B platforms. Advantages of National B2B Platforms At the Fifth FMCG + Internet Conference held by New Distribution, the founder of a national B2B platform expressed two viewpoints: national B2B will definitely defeat regional B2B because national B2B has capital support, and under current market conditions, regional platforms have difficulty obtaining financing. Another viewpoint was that this B2B platform does not fear competition with Retail Link in national market development because Alibaba only has money. The same capital, however, produces completely different effects and functions in the founder's words. Setting aside corporate PR factors, let's objectively analyze: what exactly makes national B2B platforms stronger than regional ones? 1. Scale Effect Although the regional agency system for FMCG restricts cross-regional circulation of most brands, it is undeniable that due to market policies and other reasons, there are still significant price differences between different regions. Huge price differentials will promote the flow of goods from low-price markets to high-price markets. This phenomenon exists objectively even without B2B. After the emergence of B2B, some B2B platforms amplified this phenomenon through technology, using the inconsistency of national market prices to sell goods on a large scale across regions, thereby bringing scale effects and maximizing revenue. 2. Upstream Bargaining Power Compared with regional platforms, the most typical advantage of national B2B platforms is that they cover a much larger market area. For brand owners, especially non-deep-distribution and mid-to-long-tail brand owners, national B2B platforms undoubtedly have great say. In this case, to pursue broader market coverage, some brand owners mostly turn a blind eye to cross-regional sales of goods on B2B platforms. Even with supply chain finance support, national B2B platforms can buy out national agency rights for certain brands, thereby mastering commodity pricing power and further expanding gross profit margins. This capability is something regional B2B platforms cannot possess in the short term. 3. Industry Development Trend: Distribution Channels from Fragmentation to Concentration Are Regional B2B Platforms Destined to Be Defeated by National Platforms? Although national B2B platforms have advantages over regional platforms in development, this does not mean that regional platforms will necessarily be defeated by national platforms. Based on differences in team genes and backgrounds, New Distribution divides B2B platforms into three categories: native B2B platforms, retail-type B2B platforms, and distributor-type B2B platforms. From the current industry development status, retail-type and distributor-type B2B platforms are developing much better than native B2B platforms. At the same time, internet giants such as JD New Route and Alibaba Retail Link have entered the market one after another, but this does not prevent a large number of regional B2B platforms with different backgrounds from emerging and developing like mushrooms after rain, such as Fujian's Wanquan Speed Distribution, Chengdu's Rongcheng Yigou, and Shanghai's Kuaile Zhanggui. Taking Kuaile Zhanggui as an example, since its establishment more than three years ago, it has been based in Shanghai, radiating to Suzhou and Taizhou, achieving coverage of 31,000 stores with cumulative online revenue exceeding 1 billion yuan, far surpassing internet giants like JD New Route and Alibaba Retail Link. It has now developed into the largest B2B platform in Shanghai. "In terms of transaction volume, in Shanghai and even in East China, our Kuaile Zhanggui's industry leadership is not challenging," Kuaile Zhanggui CEO Yang Qiming told New Distribution. The core of Yang Qiming's confidence lies in Kuaile's grasp of platform operational efficiency. 1. All Orders Paid Online "All our orders are paid online, i.e., prepayment. Prepayment in the B2B industry means cash flow. The efficiency of capital use is our most important bargaining chip to compete with opponents. The FMCG industry is very large; annual sales of 10 billion or 20 billion are small numbers. If your capital efficiency is not among the best in the industry, your competitiveness will be dragged down in the long marathon. Only by achieving the highest capital efficiency can you win the core competitiveness of the platform," Yang Qiming told New Distribution. Yang Qiming gave New Distribution an example: "On Friday, we purchase 10,000 cases of Red Bull, requiring payment to suppliers within 3 working days. We sell them out on Saturday through promotions. If any opponent, using cash collection, sells out Red Bull on Friday and Saturday, the cash becomes online payment for goods, usually by next Wednesday. First, goods leave the warehouse, cash comes in, handed to the warehouse cashier, then to the company finance department, which deposits it as online currency and pays suppliers. In between, 3-4 days means one round of lower turnover, meaning more than ten percentage points lower than others. No matter how high your profit, compared with this capital efficiency, the conversion rate is still not strong enough. This is why Kuaile Zhanggui can compete with all competitors in Shanghai for three or four years and still grow stronger." 2. Efficient Information System Efficient Intelligent Dispatch System: The efficient dispatch system helps Kuaile Zhanggui dispatch 2,000 orders within 2 hours, with a full-load rate of over 95%, while ensuring the cost per ton of goods is within 3.5%, far better than most B2B platforms; Online Sales System: Currently, the KPIs of ground promotion personnel on most FMCG B2B platforms are still linked to GMV. Although this can bring overall GMV growth, it is common for business personnel to visit large stores rather than small ones, or only sell goods to secondary wholesalers. In contrast, the KPI of Kuaile Zhanggui's ground promotion personnel is only linked to the number of newly opened stores. This is why Kuaile Zhanggui can maintain coverage of 30,000 stores in Shanghai and a daily order volume of 2,000 with only 29 ground promotion personnel, while Mizone requires 168 salespeople to cover 5,000 stores in Shanghai. In addition, Kuaile Zhanggui has incubated the community group buying platform Kuaile Youpin, adding more service attributes to small stores while helping them improve store efficiency. These have also become important reasons why Kuaile Zhanggui can dominate the East China market. The case of Kuaile Zhanggui is just a microcosm of the development of regional platforms. In New Distribution's 2018 national B2B platform competitiveness survey, excellent regional B2B platforms are too numerous to mention. Returning to the essence of the industry, the fierce giants are not actually scary. Based on the region, with the fundamental goal of improving industry circulation efficiency, and solidly polishing soft strengths such as warehousing and distribution, software, and store service capabilities, it is possible to gain more bargaining chips with giants in future development. Conversely, blindly following trends and ignoring industry development laws will inevitably lead to elimination. 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