Text | Yunjiu Team In 2016, China's liquor distribution industry was in the midst of a wave of consolidation. Companies such as Jiuxian.com, 1919 Liquor Direct Supply, and E.A. were wielding internet+, chain operations, and capital as sharp tools, becoming leaders on the distribution track. Baichuan Famous Products Supply Chain Co., Ltd. (hereinafter referred to as "Baichuan Commercial"), which achieved revenue of 3.7 billion yuan in 2015, seemed relatively low-key. As a "model student" of brand operators under the traditional liquor distribution system, in an era when liquor brand operations were declining and capital and the internet became shortcuts to becoming new liquor industry upstarts, what was Baichuan doing, and could its transformation succeed? 2015-2016: Baichuan Changes Lanes Anhui Baichuan Commercial's rise to fame was inseparable from famous liquor companies like Wuliangye and Jiannanchun, and even more so from the once-thriving "brand operation" model in the industry. Even during the deep adjustment of the liquor industry from 2013 to 2015, relying on its brand advantages with Wuliangye and Jiannanchun and its intensive cultivation of the Anhui and East China markets, Baichuan's performance continued to soar, reaching 3.7 billion yuan in revenue in 2015. As the East China platform operator for Wuliangye's core brand "Wuliangchun" under the 1+5+N strategy, it delivered a satisfactory performance. It is reported that East China accounts for about 40% of Wuliangchun's national sales. Despite this seemingly good news, starting in 2015, Baichuan quietly accelerated its pace of "lane-changing transformation." From May to September 2015, Baichuan Commercial made five acquisitions in Shanghai, establishing "Shanghai Bairong Commercial Co., Ltd.," "Kunshan Baite Liquor Co., Ltd.," Pudong's "Baichuan Taifeng" company, Nanhui's "Baichuan Huixin" company, and Qingpu's "Baichuan Gupin Commercial Development Co., Ltd." It further integrated markets in their respective surrounding areas, promoting the formation of a unified market in Shanghai. In November 2015, Anhui Baichuan completed the controlling acquisition of Anqing Classic Commercial Company and Anqing Zhaoping Commercial Co., Ltd., marking the first case of liquor industry integration in Anhui Province. Entering 2016, Baichuan accelerated its pace toward supply chain transformation and chain layout. In March 2016, Baichuan entered Shucheng, Anhui, establishing Baichuan Zhonghe Commercial. At the same time, Baichuan Commercial was renamed Baichuan Famous Products Supply Chain Co., Ltd. On April 28, 2016, Baichuan Famous Products Supply Chain Co., Ltd. held an Anhui regional strategy conference in Hefei, launching province-wide acquisitions and initiating its transformation into a regional omni-channel supply chain platform. Deep Supply Chain vs. Scale Supply Chain At Baichuan Commercial's Anhui regional strategy conference, Baichuan released its new "1234" strategy, revealing its ambition to build a regional omni-channel terminal supply chain platform. The specifics are as follows: One main business: Continue to focus on the FMCG distribution industry, improve industry efficiency, and tap into industry potential. Two core competitiveness: In the coming period, Baichuan Famous Products will treat brand operation capability and supply chain platform service capability as its core competitiveness. Three collaborations: Promote shareholding cooperation with high-quality terminal service providers, promote chain operation cooperation with physical stores, and promote branded product operation cooperation with distributors. Four transformations: First, strengthen close cooperation with upstream FMCG manufacturers, increase the development and agency of new products, build a multi-category, comprehensive product supply platform, and enhance the brand operation capability of the Baichuan Famous Products platform; Second, carry out shareholding cooperation with regional high-quality terminal operators, build a regional omni-channel terminal operation platform, integrate the management, financing, supply, information, and technology advantages of the headquarters platform with the terminal maintenance, service, promotion, distribution, and delivery advantages of regional platforms, forming supply chain integration advantages; Third, renovate and upgrade existing Baichuan Famous Products chain stores, and select high-quality famous tobacco and liquor stores across the province for in-depth cooperation, creating branded, online-offline three-dimensional same-city delivery, experience, service, and group-buying window demonstration stores; Fourth, fully integrate offline resources, creating an online-offline integrated B-end online platform "Baichuan Distribution" APP and a C-end online platform tool "Baichuan Famous Products" APP. Analyzing Baichuan's "1234" strategy, its fulcrum lies in "mergers and acquisitions" and "chain operations." M&A is the path to opening up the supply chain, while offline expansion of Baichuan Famous Products chain stores becomes the foundation and support for supply chain implementation. Baichuan believes it is building a "deep" supply chain, which is unique among current supply chain models that pursue scale and transaction volume. It is reported that the deep supply chain Baichuan Commercial aims to build differs from the current scale-and-traffic-driven supply chain model in the following main ways: First, it does not seek breadth but depth. Most supply chain companies prioritize scale and sales volume to gain bargaining power with upstream suppliers and so-called growth, making national expansion inevitable. Baichuan Commercial is building a regional supply chain, which may only have a few hundred members, but emphasizes efficiency and synergy advantages. According to sources close to Baichuan, Baichuan's supply chain is mainly rooted in Anhui, covering four provinces and one city in East China (Anhui, Jiangsu, Zhejiang, etc.), with plans to integrate 100 regional distributor companies within three years to achieve intensive cultivation in the region. Second, it is highly focused on liquor products. Baichuan has been deeply involved in the liquor industry for over 20 years, maintaining good business relationships with Wuliangye, Jiannanchun, Luzhou Laojiao, COFCO Wine, etc., and has 100,000 terminal network resources. Its supply chain will also be highly focused on liquor products. "In integrating supply chain products, unlike other companies that widely operate daily chemicals, dairy, etc., Baichuan will not easily enter non-liquor FMCG products. Currently, over 95% of the company's products are liquor. There is a raw juice beverage launched, mainly to support liquor promotion in the market," said a source close to Baichuan. Third, it emphasizes the platform service capability of the supply chain and the cluster advantages formed through collaboration. Services include online-offline mutual traffic generation, same-city delivery, experience, service, group buying, etc.; cluster advantages are mainly reflected in the management, financing, supply, information, and technology advantages generated by integrating the headquarters platform and terminal platforms. Fourth, Baichuan Famous Products chain stores are key to connecting online and offline. In Baichuan's plan, the ultimate competition for liquor distribution companies is for consumers. Whether installing "APPs" or other software, the internet can only serve to "disintermediate" information; it cannot guarantee that consumers will like and purchase products. Therefore, how to integrate liquor products into consumers' lives and truly become a part of the ecosystem is the focus of future competition. Baichuan Famous Products chain stores are not only traffic generation centers and distribution centers but also should become the traffic entry point for Baichuan to build an ecosystem. This positioning distinguishes Baichuan Famous Products chain stores from traditional liquor terminal chains and makes them more innovative in terms of business format and functional positioning. Can the Model Student Transform and Overtake on a New Track? In recent years, the transformation of liquor distribution companies into supply chain and platform models seems to have become a trend. Looking at the current leaders in supply chain and platform operations, such as E.A. and 1919 Liquor Direct Supply, none of them transformed from traditional liquor merchants. As a typical liquor brand operator and a "model student" under the traditional distribution model, Baichuan holds advantageous brands such as Wuliangye, Wuliangchun, Wuliangchun, and Jiannanchun, covers first- and second-tier markets in East China, and has an excellent team. Can such a high-quality liquor distribution company, focused on the liquor distribution industry for over 20 years with annual revenue exceeding 3 billion yuan, successfully transform from a traditional agency model and brand operator? "I am very optimistic about Baichuan's transformation. It is an inevitable trend for liquor distribution companies to embrace the internet. As a leading liquor distribution enterprise in East China, Baichuan has advantages in product brands, network construction, human resources, and market operations. With this foundation, Baichuan's transformation into a supply chain enterprise should be 'internet+', that is, using internet thinking, technology, and tools to reform traditional liquor distribution, reduce costs, and improve efficiency. It should not be simply creating an APP and selling some liquor online. Companies like Baichuan with market foundations have a much higher probability of successful transformation than platforms that rely on financing and burning money," said Meng Yue, Chairman of Anhui Mengyue Marketing Management Consulting Co., Ltd. In fact, when Baichuan Commercial transforms into Baichuan Famous Products Supply Chain Co., Ltd., the entire organizational structure, business processes, and business model will undergo tremendous changes. Taking the integration and acquisition of regional distributors as an example, Baichuan's goal is to build a regional omni-channel terminal operation platform through shareholding cooperation with high-quality terminal operators, integrating the management, financing, supply, information, and technology advantages of the headquarters platform with the terminal maintenance, service, promotion, distribution, and delivery advantages of regional platforms, forming supply chain integration advantages. In other words, it is not "buying for the sake of buying," nor does it hope to quickly expand the company's scale through consolidated statements to gain greater bargaining power with upstream enterprises or even capital realization. Instead, it aims to form supply chain integration advantages and improve efficiency, which is the core competitiveness of the enterprise. Baichuan's leader Jia Guangqing believes that current e-commerce O2O or other forms of e-commerce have no profit model. The core of Baichuan's B-end and C-end APP development and offline channels is to improve channel efficiency, and for now, it is not treated as a profit model. Thus, facing the multiple choices of speed, scale, efficiency, and stability, Baichuan is most likely to maintain stability while carrying out systematic company reform and upgrading. Through the creation of an online-offline interactive system, it will leverage the advantages of traditional liquor merchants in offline and terminal channels, follow a path of quality-efficiency-scale, and ultimately transform into a liquor distribution supply chain company with internet thinking and genes, achieving a lane change and overtaking. -END- The best FMCG distributor learning platform in China Dedicated to providing professional, practical, and actionable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]