E-commerce has become the infrastructure of social operations, forming a 10-trillion-yuan economy that has drawn significant attention from internet practitioners. However, offline industries worth tens of trillions remain largely untouched, all seeking various forms of 'Internet +'. Having just returned from investigating three typical models of 'Internet + distribution', and as someone who has been working in 'Internet + commerce' for three years (founder of Palm Hongcheng, a first-hand goods platform in Jiangxi Province), I can clearly state that the full picture of 'Internet + distribution' has already begun to emerge. In the next 3-5 years, the competition will be about teams, resources, and technology; those who possess all three will win the next 5-10 years.

1. How far is it from traditional distribution to modern distribution?

1: Redefining interests.

The source of interests for traditional distributors is essentially the 'commodity price difference', which has led to a very single-dimensional business model and operational level. The formula 'selling price - purchase price - expenses = profit' is the basis. During the inspection of Yantai Yishang model, shrewd distributors from all over the country, based on this operational perspective, were calculating various costs and numbers, using the single price difference formula to verify whether Yishang was profitable or not! This certainly reflects the traditional business capabilities of traditional distributors, but as I discussed with various distributors, the greatest shrewdness of traditional distributors is that they always only calculate visible interests, while ignoring those interests that cannot be quantified under the price difference formula! Consequently, they lose the opportunity for operational advancement.

Friends who have inspected Yishang also know well that its interests are definitely not just the calculated profit numbers; its value is reflected in its six years of deep cultivation in warehousing and distribution, proving the successful implementation of 'centralized warehousing, joint distribution' in the field of commercial distribution. It has genuinely provided more efficient, professional, and competitive service and value guarantees for Yantai's circulation, distributors, terminals, delivery personnel, and customers!

Because of this value foundation, Yishang will inevitably gain more premium space! For example, government support, capital support, talent joining, and driving more value exploration! In other words, Yantai Yishang's interests should not be measured by the visible and quantifiable interests of the past or a certain month of the current year! Or, do not use the traditional distribution price difference formula to define its profit or loss; it is just beginning!

2: Modern distribution is just beginning

The current distribution market can be described as chaotic.

Traditional distribution has developed for decades, while e-commerce distribution has developed for over a decade. From the current perspective, both traditional and e-commerce distribution can be classified as 'traditional distribution'. In a sense, Yishang Logistics can be said to have achieved the top level of traditional distributors, serving over 9,000 offline outlets in Yantai. E-commerce distribution represented by Alibaba 1688 also represents the top level of e-commerce distribution, serving nearly 10 million sellers on Taobao Marketplace.

Their common feature is that they represent the top level in their respective fields, but they are all just beginning.

The hottest and highest-growth modules currently are: B2C, cross-border e-commerce, and rural e-commerce.

These three areas are ones where traditional distributors with a foundation like Yishang have the conditions to advance boldly (possessing a large number of traditional FMCG brand sources and warehousing and distribution capabilities)! These three areas are also markets that e-commerce distributors like Alibaba are rapidly attacking! But the sad reality is that these three modules are where traditional distributors are powerless!

The biggest growth point for B2C lies in the onlineization of traditional FMCG brand products. This is precisely the weakest and most powerless area for e-commerce distributors.

The biggest growth point for cross-border lies in the pursuit of quality, safety, and health brought by the consumption upgrade of traditional FMCG products. The hardest part is the lengthy management challenge of connecting overseas supply chains to the domestic market.

Many people say that the current third and fourth-tier distributors are all doing township markets, so the rural market is not a problem. In fact, it is the opposite; the ones to be eliminated are those traditional distributors who represent third and fourth-tier brand products and seriously fail to meet the upgraded consumption demand. E-commerce distribution is the biggest competitor in rural e-commerce.

In my view, modern distributors are those who, based on warehousing and distribution capabilities, can possess any one of the above three modules. Top traditional distributors like Yishang should more vigorously attract young team cooperation! The most direct and effective method is to directly poach teams from e-commerce distribution! For e-commerce distributors, it is to master more sources of goods by providing lower-cost, higher-efficiency, and more modern warehousing and distribution services. Once e-commerce distributors master a larger quantity of traditional FMCG brand sources, traditional distributors will inevitably be eliminated in large numbers.

2. How far is it from traditional retail to modern retail?