With the acceleration of digital technology tools and their increasing penetration, e-commerce has become an indispensable part of people's lives. As a new procurement method for traditional retail stores, B2B platform ordering is increasingly accepted by small store owners. Especially after the successive entry of two internet giants, Alibaba Retail Link and JD New Path, the FMCG B2B industry has begun to receive unprecedented attention from brand owners. To help FMCG professionals gain a clearer understanding of the current development of the B2B industry, the proportion of purchases from different channels by traditional retail stores, and the comprehensive competitiveness of platforms in various regions, the New Distribution research and consulting team has compiled the "2019-2020 FMCG Retail Store B2B Competitiveness Report" (hereinafter referred to as the Report). The Report, through surveys and research on FMCG retail stores across different city tiers nationwide, statistically analyzes the key behaviors and factors of retail stores engaging in B2B business, revealing the competitiveness of FMCG B2B platforms in retail stores. At the same time, through year-on-year data comparisons, the Report will present the evolution of channel and distribution patterns, thereby helping brand owners and channel partners deepen their understanding of retail stores and FMCG B2B, gain insights into distribution trends, and provide strong support for key decisions to win in the channel. The following are excerpts from the report: 1. FMCG B2B platforms have become the third largest procurement channel for retail stores After years of development, FMCG B2B has gradually become the third largest procurement channel after brand owner (distributor) procurement and wholesaler procurement, with 43.5% of stores purchasing from B2B platforms, while brand owner (distributor) and wholesaler procurement account for 73.3% and 53.8%, respectively. There are also significant differences in procurement channels among stores of different sizes. Stores under 50 square meters prefer purchasing from wholesalers, while stores between 50 and 200 square meters relatively prefer B2B platforms. The larger the store, the more likely it is to receive financial support from brand owners (distributors), and the more dependent it becomes on purchasing from brand owner and distributor sales representatives. When choosing procurement channels, price remains the primary concern for store owners, but its importance has significantly decreased compared to previous years, while attention to service has greatly increased. The lower the market tier, the more stores value products and services. Through comparative analysis of purchasing behaviors across different store tiers, we found that store owners in higher-tier markets have a much higher acceptance of B2B purchasing than those in third-tier and below markets. In second-tier and above cities, B2B penetration is often above 40%, while in third-tier and fourth-tier and below markets, acceptance rates are 36% and 36.6%, respectively. In terms of regional distribution, in eastern coastal provinces, due to relatively developed economies, store owners' acceptance and usage of B2B are generally higher than in northwest and northeast regions. Specifically, Beijing, Shanghai, and Jiangsu have the highest B2B usage, while Xinjiang, Liaoning, and Jilin have the lowest. In terms of product categories, store owners primarily purchase beverages, leisure snacks, and convenience foods through B2B platforms, but there are significant differences in the main categories purchased by store owners in different city tiers. Store owners in first-tier markets mainly purchase beverages, leisure snacks, and mineral water through B2B, while those in fourth-tier and below cities mainly purchase leisure snacks, beverages, and convenience foods. 2. B2B is more mature in higher-tier markets, with significant room for growth in lower-tier markets The higher the city tier, the higher the acceptance of B2B among store owners, while in lower-tier markets, B2B still has significant room for improvement. In higher-tier markets, store owners' order weight is 5.7%, order frequency is 6.6 times per month, and average order value is 1,151 yuan, while in lower-tier markets, these three core figures are 3.9%, 4.0 times per month, and 815 yuan, respectively. According to a sample survey of retail stores nationwide: stores in first-tier cities have an order weight of 7.1% on B2B platforms, higher than the national average of 5.1%, while stores in new first-tier cities have an order weight of 5.9%, second-tier cities 5.1%, third-tier cities 3.9%, and fourth-tier and below cities only 2.8%. There are also significant differences in average order value on B2B platforms across different city tiers. The national average order value on B2B platforms is 912 yuan, with first-tier cities at 1,336 yuan, new first-tier cities at 1,183 yuan, second-tier cities at 1,049 yuan, and third-tier and fourth-tier and below cities at 859 yuan and 802 yuan, respectively. In terms of order frequency, stores increased their B2B platform orders by one time in 2019 compared to 2018, reaching an average of 6 orders per month. Specifically, stores in first-tier cities order an average of 7.7 times per month on B2B platforms, new first-tier cities 6.7 times, second-tier cities 6.1 times, third-tier cities 5.5 times, and fourth-tier and below cities 3.6 times. 3. Delivery timeliness and service of B2B platforms In terms of delivery timeliness, 47.3% of B2B platform orders can be delivered within 24 hours, and 91.6% within 48 hours. The higher the city tier, the faster the delivery. Complex platform operations, concerns about product quality without guarantees, and inability to return or exchange goods are the main reasons stores are unwilling to use FMCG B2B platforms. Stores in higher-tier markets pay more attention to product prices, while those in lower-tier markets focus more on return and exchange services. 4. Current status and comprehensive competitiveness of B2B After several years of development, the Matthew effect in the B2B industry has begun to emerge. Especially with the cooling of B2B in the capital market, a large number of platforms have begun to close down. Affected by this, the New Distribution research and consulting team counted a total of 90 platforms in this report, a decrease of 33 compared to 2018. The higher the city tier, the more B2B platforms there are, and the more intense the competition. The number of B2B platforms in higher-tier cities has decreased by more than half compared to last year. Among the 90 B2B platforms counted, 68% are single-city platforms; only 5 platforms cover more than 30 cities, and 4 platforms cover 10 to 30 cities. 5. How to win in B2B? Based on this survey and analysis, the New Distribution research and consulting team has made the following judgments and recommendations for the future development strategies of the B2B industry, brand owners, and B2B platforms from different dimensions: B2B industry:
FMCG B2B platforms have become the third largest procurement channel for stores, with stores ordering more frequently and average order values significantly increasing.
The order weight of stores on B2B is currently limited, and usage rates in lower-tier markets and suburban counties are relatively low.
Stores' demands for after-sales service are becoming increasingly important, and the lower the market tier, the more stores focus on quality products and services.
Complex platform operations, concerns about product quality without guarantees, and inability to return or exchange goods are the main reasons stores are unwilling to use FMCG B2B platforms.
Stores in higher-tier and lower-tier cities have different category preferences on B2B platforms.
Some brand owners have begun to promote self-built ordering apps and other software in stores, and brand owner self-built B2B will become a major trend in the industry's future development. Brand owners:
Cooperate more actively with FMCG B2B platforms, layout more scientifically, and improve the convenience of store replenishment.
In weak markets where sales representative coverage is insufficient, cooperate with competitive local FMCG B2B platforms to improve store coverage and service.
Collaborate with B2B platforms to develop simple, easy-to-understand, and easy-to-operate marketing activities to boost store sales.
Use B2B platform big data analysis to formulate distribution and product selection strategies and marketing plans for different markets, improving product distribution efficiency.
Learn from B2B platforms' digital operation tactics, or engage in strategic cooperation in warehousing and logistics with B2B platforms to achieve win-win outcomes. B2B platforms:
- The pace of consolidation in the FMCG B2B industry is accelerating; opportunities in higher-tier markets lie in intensive cultivation, while opportunities in lower-tier markets lie in expanding distribution coverage. 2) Strengthening after-sales service guarantees for stores is an important opportunity for B2B to increase store usage, especially in lower-tier markets. 3) Continuously simplify ordering operations and promotion mechanisms to reduce usage barriers for stores. 4) Enhance data analysis and usage capabilities, with product selection tailored to each store and precise promotion targeting, empowering both brand owners and stores. 5) Engage in differentiated and complementary strategic cooperation with brand owners to achieve win-win outcomes. Image quick read of the "2019-2020 FMCG Retail Store B2B Competitiveness Report" For purchasing the full report, please contact: Yang Hongyu Oscar Yang +86185-2033-2627 oscar.yang@fmcgdealers.com The following is the "2019-2020 FMCG Retail Store B2B Competitiveness Report (Circulation Edition)". Reply with the keyword "Report" in the New Distribution official account backend to obtain it.