---
title: "Proposal for the Launch of the China FMCG Digital Distribution Alliance"
description: "Distributors transitioning to B2B need to unite and join the alliance to engage in dialogue, exchange, growth, and development together."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-01-04"
language: "en"
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# Proposal for the Launch of the China FMCG Digital Distribution Alliance

> Distributors transitioning to B2B need to unite and join the alliance to engage in dialogue, exchange, growth, and development together.

**Introduction**: Distributors transitioning to B2B need to unite and join the alliance to engage in dialogue, exchange, growth, and development together.
**Distributor Digitalization**
**A Decade of Turbulence and Ups and Downs** China's FMCG B2B, which began in 2012, has gone through a tumultuous decade. In 2015, B2B entered an era of chaotic competition and capital boom. JD New Route and Alibaba Retail Link both entered the market; national and regional B2b platforms founded by brand owners, distributors, and industry entrepreneurs also flourished. Direct operation models, matching models, mixed models, business flow entry, logistics entry, and trading tool entry—countless manufacturers and entrepreneurs leveraged their industry insights to enter the FMCG B2b track from various dimensions. Within just a few years, nearly 100 billion yuan was invested in the FMCG B2B market. Everyone knew this was a super-large market worth trillions, but most underestimated the difficulty of digitally transforming the offline FMCG market. It has been a process full of hardship and struggle, hope and despair. Many B2B platforms' heavy subsidies to small stores yielded no returns, leading to sustained losses, and many top-tier brands strictly banned B2B channels. In 2020, after a massive capital retreat, China's FMCG B2B entered a dark age. Many B2B platforms suffered continuous huge losses, cash flow breaks, and closures. But the remaining entrepreneurs persevered and are finally seeing the dawn today. The development of China's FMCG B2B is a Gartner curve (see below). In 2022, a large number of B2B platforms began to achieve real operational profitability, and China's FMCG B2B emerged from its darkest hour, entering a mature growth phase.
In the past three months, New Distribution has conducted frequent in-depth research and visits to numerous B2B platforms across the country, finding that: **the vast majority of FMCG B2B platforms have seen rapid GMV growth in the past two years and have begun to achieve widespread profitability.** According to incomplete surveys, the 2022 transaction scales of various platforms are as follows: Yijiupi's direct-operated GMV was 6 billion yuan, Retail Link 4 billion, Zhongshang Huimin 4 billion, Wanquan Speed Distribution 4 billion, Caihua Commerce 2.2 billion, Kuailai Manager 1.2 billion, Xingaoqiao 1 billion, Jiaping Yunshi 1 billion, and Rongcheng Yigou 700 million. Among these, except for Yijiupi, which is expected to be profitable in 2023, almost all other B2B platforms achieved profitability in 2022.
**Digital Transformation**
**Is the Foundation for Distributors to Control Their Destiny** Not only are GMV figures growing impressively, but the market influence of various B2B platforms is also increasing day by day. Kuailai Manager is currently the most extensive digital supply chain service provider in Shanghai, directly supplying nearly 50,000+ terminal outlets, and is the largest distributor in Shanghai for many beverage brands such as Uni-President, Master Kong, Coca-Cola, Budweiser, and Red Bull. Chengdu's Rongcheng Yigou was a traditional distributor with annual sales of less than 20 million yuan in 2014. After transitioning to a regional B2B platform in 2014, it maintained over 30% growth annually for six consecutive years (2016-2022), with annual sales of 700 million yuan, and is now the largest supply chain service provider in Chengdu. Xi'an's Jiaping Yunshi, founded in 2017, covered nearly 20,000+ terminal outlets in Xi'an within just five years, also becoming the largest digital supply chain service provider in Xi'an. The founder said about the difference between Jiaping Yunshi and traditional trading companies: "We position ourselves as supply chain service providers for small stores, while traditional trading companies first serve brands, selling whatever they have; we sell whatever the stores need. On one hand, we focus on A-category products for rapid turnover; on the other, we handle B and C category products with high margins and deep service." In addition to the above platforms, there are also Luoyang Hecai Trading, Tangshan Yihe Trading, Anshan Hongye Hengda, Shijiazhuang Zhongshan Daily Chemicals, Nanjing Aiyou Trading, Nanjing Chunxia Famous Products, Wuhan Guoran Shifen, Guizhou Suichujian Supply Chain, Hebei Dunjie Supply Chain, Chongqing Jiecang Wangou, Yantai Yingfa Trading, etc. These are all digital supply chain platforms transformed from traditional distributors, and they have basically become the largest local supply chain service providers. **In the next decade, the digital transformation of Chinese distributors will primarily take the form of B2B, and it will be the only way.** Looking at distribution trends, the high costs make deep distribution unsustainable, and new partner distribution systems based on B2B platforms are rapidly emerging. New Distribution believes that B2B will become one of the most important distribution models in the FMCG industry in the future. Every three to five years, there will be a wave of digital transformation and upgrading among large distributors. On one hand, digitalization brings huge competitive advantages, as demonstrated by the distributor transformation cases mentioned earlier; on the other hand, market resources and opportunities are limited, and whoever transforms successfully first will have the future. Generally speaking, a provincial capital market can accommodate at most two to three B2B platforms; in prefecture-level cities, at most one to two digital supply chain service providers. Therefore, in the coming years, among distributors transitioning to B2B, whoever takes the initiative will seize the opportunity. At the same time, some brands are also encouraging and promoting distributors' digital transformation, and a large number of successful transformed distributors have emerged in the industry.
**Initiative:**
**Distributors Transitioning to B2B Need to Unite** Since its founding eight years ago, New Distribution has been deeply researching and observing the development and growth of the FMCG B2B industry, publishing numerous articles and industry research reports, making certain contributions to the industry's development. Based on the rapid development trend of B2B, New Distribution believes it is necessary to establish an alliance organization to bring together all domestic B2B platforms to jointly promote the growth and development of the FMCG B2B industry. At the same time, it aims to provide transformation guidance for traditional distributors wishing to transition to B2B, establish industry dialogue mechanisms, form industry standards, and create opportunities for in-depth exchange, learning, and cooperation. After multiple discussions with dozens of excellent domestic FMCG B2B platforms, and after a year of in-depth thinking and preparation, New Distribution today officially launches the initiative: **In 2023, the 'FMCG Digital Distribution Alliance' will be formally established to unite forces, accelerate the digital transformation of the FMCG distribution industry, and provide an efficient, high-quality, and fast supply chain system for modern retail.** The significance of establishing the 'FMCG Digital Distribution Alliance' is to: **1. Establish industry standards** Construct and standardize some unified industry standards for B2B, accelerating the digital transformation process of the distribution industry. **2. Create opportunities for dialogue and exchange within the industry** Through the alliance's organizational connections, create dialogue mechanisms between platforms, while avoiding vicious competition caused by poor information flow within the industry. **3. Create opportunities for cross-industry connections for industry development** Through the alliance, establish regular dialogue mechanisms with brand owners to meet retail supply chain needs. Through collective procurement by the alliance, improve product mix, and build uniquely competitive product portfolios. **4. Lead and promote industry development** Attract and absorb more distributor partners who are willing to transform or have already transformed to join the alliance. Through internal activities and a series of events, help member companies solve difficulties and confusions encountered in actual operations, inspire thinking, and broaden cognitive horizons. The 'FMCG Digital Distribution Alliance' will provide a platform for B2B platform partners across regions to fully exchange and discuss, engage in dialogue with upstream brands, and change the previous state of fighting alone; it will provide a platform for traditional distributor partners to learn advanced distribution concepts, accelerate digital transformation, engage in dialogue with advanced benchmarks, and avoid detours in transformation. Ultimately, it will become a connection and dialogue platform for digital supply chain industry services in the FMCG sector.
**'FMCG Digital Distribution Alliance'**
**Work Priorities for 2023** We see that although the FMCG B2B industry has entered a mature stage, for the tens of thousands of traditional distributors today, awareness of digital B2B is just beginning.
During the digital transformation process, distributors will encounter many problems: software system issues, category operation issues, supply chain management issues, frontline sales BD expansion issues, convenience store franchise issues, and so on. Limited by local resources and experience, many distributors cannot iterate quickly and repeatedly make mistakes at the basic level.
Therefore, in 2023, the 'FMCG Digital Distribution Alliance' will focus on the following key tasks:
  * **Resource Integration**
Through New Distribution's existing training capabilities and the resources of B2B platforms that are running fast and doing well, we will organize study tours, salons, private board meetings, and other forms to lead members to learn, observe, exchange, and discuss, providing professional training, guidance, and expert opinions for distributors who want to transform or are still in the process, avoiding unnecessary waste of resources and time from repeated mistakes.
  * **Business Guidance**
In terms of business planning, New Distribution plans to hold about six study tour forums in 2023, conducting in-depth research on a series of operational issues related to B2B. We will also invite platform leaders who have done well in relevant operations to provide operational guidance to members as expert teachers.
  * **Connecting Brand Resources**
Not only in learning and growth, but also based on the alliance's influence and the brand resources New Distribution has accumulated over the years, we will help members with procurement and business coordination related to first-tier brand resources. This will help regional B2B platforms solve problems such as not finding the right contact person, not accessing quality brand resources and budgets when communicating with first-tier brands.
After the initiative is released, New Distribution will officially enter the preparatory phase of the alliance organization. **We welcome distributor partners who are willing, interested, already doing B2B platforms, or have ideas to do B2B platforms to contact us and join the alliance to dialogue, exchange, grow, and develop with us.** We will officially announce the alliance matters in the form of a press conference in mid-February 2023. Stay tuned!**


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