Formerly "FMCG Distributor Professional Management Consulting" renamed to New Distribution Long press the QR code or click "Read Original" to register. 30+ industry experts, 100+ B2B platform founders, 800+ manufacturer and distributor friends, gather in Fuzhou to discuss the internet transformation path of the FMCG industry. With the application of various new technologies and the shift in consumer groups, today's channels and markets are undergoing unprecedented changes. Traditional thinking and models can no longer keep pace with the times, so both food companies and retail giants are adjusting to cope with the changes. Today, the editor has compiled the channel hot events that have attracted much attention from food industry professionals this year, with manufacturer-distributor relations, retail winter, and channel compression once again becoming focal topics. JD New通路 Debuts, Aiming to Reshape Offline Business Forms Following Alibaba's "City Partner" plan, on January 16, at JD's annual meeting, Liu Qiangdong highlighted the group's top priority project—the New通路 Business Unit, which he called "a major event that can subvert and reconstruct traditional retail channels." The so-called New通路 Business Unit, as the name suggests, aims to build a new channel, targeting nearly ten million small and medium-sized stores in third- to sixth-tier cities, becoming their supplier, with a focus on expanding FMCG business. Currently, JD New通路 has reached strategic cooperation with food giants like Mondelez and Fonterra. Eternal Asia Raises 6 Billion Yuan to Accelerate Expansion On April 9, Shenzhen Eternal Asia Supply Chain Management Co., Ltd. announced a private placement plan to raise 6 billion yuan, intending to continue acquiring FMCG distributors in the next three years, integrating and establishing 266 holding companies to complete national layout, ultimately building a deep supply chain distribution platform in over 380 prefecture-level cities and economically developed county-level cities across the country, selling all products through the platform to terminal stores. Eternal Asia stated that after the ecosystem strategy and platform construction are completed, business scale will achieve explosive growth, with revenue expected to exceed 100 billion yuan by 2018. "Donggu Throat-Cutting" Incident On May 3, Zhengzhou Yanling Yixiang Condiment Company issued a WeChat post claiming it had been "throat-cut." The distributor had represented Donggu soy sauce for many years, with annual sales of over 30 million yuan, but in 2016, its agency rights were suddenly revoked, plunging its operations and life into difficulty. Yanling Yixiang's WeChat mentioned that Donggu's boss had once promised: "Regional agency rights can be transferred and inherited; Donggu is a corporate brand, and in Henan, it is also your brand." The former promise starkly contrasted with the actual outcome. This incident once again made manufacturer-distributor relations and distributor value a focus of discussion. Nongfu Spring Promotes Large Distributor System This year, beverage giant Nongfu Spring joined the channel reform, starting to promote a large distributor system. It is reported that Nongfu Spring will significantly reduce the number of distributors and instead cultivate large clients. After the adjustment, distributors will enjoy the latest policy of products leaving the factory at bare price, while the manufacturer will be responsible for all operating costs, but tasks will double, requiring annual performance of no less than 5 million yuan. Currently, Nongfu Spring's large distributor system has been gradually promoted nationwide. Jiutouya, Xinlianxin Local Commercial Giants Suspend Operations On July 18, Henan Jiutouya Group Pingdingshan Commercial Chain Co., Ltd. issued a suspension notice. The local food and department store, which had been established for 23 years, started from a small shop, and expanded into mooncakes, beer, supermarkets, beverages, meat products, and other fields, with annual output value of hundreds of millions of yuan, looked somewhat bleak. Not only Jiutouya, but earlier, Xinlianxin stores in Pingxiang, Hunan, and other regions closed one after another, and issues of unpaid employee wages and supplier payments attracted attention online. Recently, empty shelves appeared in multiple Xinyijia supermarkets in Shenzhen. Walmart Sells Yihaodian for 20 Billion Yuan Due to unsatisfactory integration results, Walmart sold Yihaodian, which it had acquired less than three years ago, to JD. On June 22, JD and Walmart jointly announced that Walmart would strategically invest in JD, receiving approximately 144,952,250 newly issued Class A common shares of JD, about 5% of JD's total issued shares, worth approximately $3.116 billion (about 20.6 billion yuan). JD would acquire the main assets of Yihaodian. This came less than a year after Walmart fully acquired Yihaodian. Wahaha Invests 2 Billion Yuan in Vending Machines Following Coca-Cola, Pepsi, and Nongfu, beverage giant Wahaha also announced its entry into the vending machine field. Recently, Wahaha confirmed that it has established Zongsheng Intelligent Technology Co., Ltd. specifically for vending machine layout, with high channel profits, planning to invest 2 billion yuan in three years to deploy 100,000 vending machines, and within ten years build a million-level, nationwide intelligent retail terminal network. Wahaha's entry has drawn more industry attention to vending machine development. Mondelez, Nestlé and Other Giants Partner with Alibaba and JD for Channel Sinking If JD New通路 and Alibaba 1688 plan were just their own ideas, then the cooperation of giants like Mondelez and Nestlé with them shows food companies' expectations for this model. In April, Mondelez China signed a strategic cooperation agreement with Alibaba; in July, Mondelez China partnered with JD New通路; also in July, Nestlé reached strategic cooperation with Alibaba... The purpose of these cooperations is to promote product sales on e-commerce platforms, launch customized services, and sink channels to reach more consumers. Three Squirrels Expands Offline Physical Stores While some are expanding online channels, others are increasing offline layout. Just a few days ago, e-commerce food company Three Squirrels' offline store "Three Squirrels Feeding Store" officially opened, with a business area of over 300 square meters. The nuts and snacks in the store will be the same products and prices as the online store. Additionally, it sells squirrel dolls, cushions, and other store-exclusive limited merchandise. Zhang Liaoyuan stated that the purpose of opening physical stores is to enhance consumers' brand experience. What Signals Do the Major Adjustments in Channels and Retail Release? Whether it's JD New通路 or Nongfu Spring's large distributor system, or food companies building their own terminals, these are all manifestations of profound changes in channels and retail. Under this background, how should distributors act? Where will channels go? 1. The Era of Distributor 4.0 Arrives, Becoming Life Service Providers. With the advent of the consumer sovereignty era, channel fragmentation, the popularity of mobile internet technology, and cross-border competition and integration, distributors are ushering in the fourth development stage, temporarily defined as "life service providers." In the 4.0 era, distributors are no longer "water sellers or milk sellers," but service platforms that discover consumer and terminal needs and meet them through product and service combinations. Through comprehensive means such as WeChat business, local e-commerce, community marketing, and vending machines, they provide users with demand solutions. 2. Channels Develop Toward Flattening. With the rapid development of e-commerce and logistics, the traditional distribution chain will find it difficult to provide profits for many levels, and channels will develop toward flattening. Either upgrade the original secondary distributors and wholesalers to distributors, dividing the market into smaller areas; or let fewer large distributors control the market, with large distributors managing lower-level markets through branches. Nongfu Spring adopted the latter method, while Wahaha's construction of vending machine systems and Mondelez and Nestlé partnering with Alibaba and JD all aim to further compress channels, even directly controlling terminals. 3. Physical Stores Need to Provide Better Shopping Experiences. Although Walmart, Carrefour, and other hypermarkets have experienced store closures, Three Squirrels, which grew from the internet, is increasing physical stores. In fact, research institutions like Nielsen and Kantar Worldpanel have also stated that the winter faced by physical stores is not a decline of physical stores, but that the traditional shopping model provided by physical stores no longer adapts to current consumer needs; physical stores need to provide customers with more diverse and thoughtful shopping experiences that the internet cannot offer. Only then can physical stores enter spring again.

FMCG Impacted by the Internet, Where Should Distributors Transform?

The traditional distribution business being transformed and reconstructed by the internet is an inevitable trend. In this field, countless smart people, armed with VC funds, use the most advanced technology to transform the industry. There are industry giants like Alibaba and JD, rising stars like Huimin.com, Zhanghe Tianxia, and Yijiupi, and countless B2B platforms like Xingaoqiao, 51 Ordering, Yunbao Shangmeng, Jinhuobao, and 91 Ordering that have entered successively. Currently, different types of B2B platforms have covered markets from T1 to T6 in China. From last year to this year, through continuous trial and error, they have basically completed the initial education of the market. The habit of small stores ordering online has begun to be cultivated, and store owners are gradually adapting to this new ordering method. From another perspective, whether B2B is segmented or vertical, matching or self-operated, there is no small business. In dealing with traditional stock, platforms will reconstruct the existing stock of distributors, reallocate resources, and redivide functions. Some may see it as a revolution, but from another angle, it is more like a window of opportunity. So, how should distributors transform and seize the opportunity of this window? Five Transformation Directions for Distributors Under the Impact of Internet B2B on Traditional Agency Business. First, transformation is based on the premise that future B2B platforms will reconstruct traditional businesses. Under this reconstruction, the original interest pattern in the local market will be broken, and distributors' original business models will be transformed and given new roles. If distributors stick to the status quo, they will certainly be revolutionized by more efficient division of labor. Functions That May Be Redivided First, Platform Operators, City Service Stations

  1. Some distributors spontaneously unite, jointly contribute capital and resources to establish B2B online platforms, and reconstruct their business structures around the trading platform. By transforming order forms, building unified warehousing and distribution logistics, and using trading platform data, they provide supply chain finance for partners. This is the most difficult and most valuable of all transformations. Currently, some regional distributors in China have begun to spontaneously organize such platforms. For example: Hubei Qianjiang Nianjia Company
  2. Join a platform as a local market service station, responsible for the platform's local operations. For example: Zhanghe Tianxia Service Stations Second, Logistics Providers, Unified Warehousing and Distribution Logistics is the infrastructure of B2B and the core supporting offline goods flow for all B2B platforms. This is also one of the easiest transformation directions for distributors. Several distributors cooperate to build large warehouses and distribution centers, providing terminal logistics distribution services for local distributors and national B-end e-commerce platforms, obtaining orders through price advantages and earning revenue through value-added services. For example: Yishang Logistics, Weijie City Distribution Third, Professional Brand Service Providers
  3. Some distributors have limited capital but strong team management capabilities. Such distributors can give up agency rights for the brand in the regional market and rely on their strong team management capabilities to help B2B platforms or small and medium-sized brands do ground services in a certain region or nationwide, earning commissions through ground value-added services. For example: Xiaobao Zhaoshang
  4. Keep the original agency model unchanged, but hand over warehousing and distribution to professional city distribution logistics providers, while distributors focus on promoting products, obtaining orders, and serving stores. Fourth, OEM, Private Label, Using the Internet for Rapid Dissemination B2B networks have nationwide coverage. Distributors with strength can consider extending upstream to do OEM private label, leaving distribution to professional ground promotion teams in various places, while focusing on online operations and consumer pull. Fifth, Chain Retailers, Transforming Downstream Convenience stores are currently blooming across China. Retail is evolving toward service standardization, internetization, and chain operation, which has become a trend. Retail stores in township markets are developing toward supermarkets and KA, while cities are evolving toward small convenience stores. These are all business opportunities. If you have professional experience in this field, consider transitioning to the retail industry; it's a good opportunity. This year, distributors' businesses have not been easy. Many believe the industry has peaked and reached its limit, but the author believes the consumer goods market is never saturated, only redistributed. If distributors only focus on their immediate business, they will surely have their rice bowl taken away. Whether to change or not depends on how distributors judge for themselves. New Food Era · New Distribution —— 2016 China "FMCG + Internet" Summit Forum —— This is a grand event focused on how FMCG industry channels should transform under the general trend of Internet+ transformation Conference Agenda 08:00-09:00 Registration 09:00-09:05 Host opening 09:05-09:35 2016 China FMCG Industry Trend Analysis Report - Zhao Bo 09:35-10:05 FMCG Enterprise Transformation Strategy and Path - Liu Chunxiong 10:05-10:35 Opportunities and Challenges Brought by FMCG Channel Transformation - Liu Zhao, CEO of Waiqin365 10:35-11:05 Reconstructing Distribution Channel System, Promoting Urban Retail Upgrade - Tian Yuan, General Manager of Alibaba Retail Link Backend 11:05-11:25 Channel Efficiency in the Internet Era - Fu Xiaoyun, Vice President of Benlai Holding 11:25-12:00 Roundtable Forum - Brand Enterprise Transformation: Improvement vs. Reconstruction? Guests: Liu Zhao, Liu Chunxiong, Fang Gang, Chen Feng, Shi Zhengchuan, Deng Xia 12:00-13:30 Lunch 13:30-13:50 Distributor Transformation: City Distribution Trend Development - Wang Qi, CEO of Weijie City Distribution 13:50-14:20 Roundtable Forum - Why Should Distributors Do Logistics in Transformation? Guests: Zhao Bo, Wang Qi, Liu Zhongmin, Tang Guangliang, Wang Cheng, Sheng Yan 14:20-14:40 How FMCG Enterprises Leverage the Internet to Take Off - Wang Hui, E-commerce Operations Director of Xijiu 14:40-15:00 Detailed Explanation of Zhongshang Huimin's "One Machine, Two Wings" Strategy - Su Xiaoxin, Vice President of Zhongshang Huimin 15:00-15:20 Category Value and B2B E-commerce Development Strategy - Wang Chaocheng, CEO of Yijiupi 15:20-15:40 Supply Chain Finance: Lubricant for B2B Driving Traditional Business - Chen Xian, CEO of 51 Ordering 15:40-16:00 Zhanghe Cloud Factory Helps Upgrade FMCG Supply Chain - Yang Lixiang, CEO of Zhanghe Tianxia 16:00-16:30 Integrating Small and Micro Retail, Reconstructing Business Ecosystem - Miao Dong, Vice President of Quanshi 16:30-16:50 B2B Investment Principles and Ideas - Zhao Mingwei, Vice President of Junlian Capital 17:00-17:30 Roundtable Forum - Who Is the King of FMCG B2B Models? Guests: Fu Xiaoyun, Zhuang Jianzhong, Jiang Tao, Zeng Weiqin 17:30-19:30 Dinner For manufacturer and distributor friends who want to transform, this grand event is not to be missed. Interested friends can long press the QR code below or click "Read Original" to register. Registration Method: Long press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]