As more people and businesses come online, the internet has become a medium for breaking spatial barriers and enabling real-time communication, prompting traditional industries to undergo digital transformation. FMCG, a traditional and vast sector, has drawn significant attention from internet giants, with digital upgrades to distribution chains making FMCG B2B a familiar and hot topic. Viewing B2B through the lens of consumer internet, every participant in the future chain will be part of the B2B network, collaborating through network synergy and data intelligence. But frankly, building this network is no easy task. Besides the business awareness of each participant, the key lies in the pace of the 'network weavers.' Among the many 'network weavers,' JD New Channel is an important player that cannot be ignored. December 16 marks the third anniversary of JD New Channel's establishment. Now a leading player in the B2B field, reviewing JD New Channel's growth journey is also reviewing the rise of B2B. 01 Three-Year-Old New Channel Has Grown into a Behemoth New Channel was officially established on December 16, 2015, marked by the creation of a business unit within JD Group. Subsequently, in January 2016, Liu Qiangdong, Chairman and CEO of JD Group, officially announced that the New Channel Business Unit would undertake the 'Locomotive No. 1' project, making New Channel the focus of industry attention. Three months later, the mobile ordering platform for traditional retail stores, JD Zhangguibao APP, was officially launched. With a mobile terminal connecting over 6 million small stores nationwide, New Channel entered the fast track of expansion. In July 2017, JD Zhangguibao's supply coverage basically reached the whole country; From July to August 2017, the first batch of JD convenience stores opened, with average sales increasing by 200%; In November 2017, JD convenience stores blossomed everywhere, with a maximum of 1,111 stores opening on the same day; In December 2017, on its second anniversary, Zhangguibao served over 500,000 small and medium stores; In March 2018, it released the 'Boundless Retail' strategy for New Channel, launching new businesses such as joint warehousing and distribution, and JD Catering; In May 2018, the first JD convenience store in the Tibet Autonomous Region opened; In June 2018, Zhangguibao's cumulative sales during 6.18 reached 1,300% of the same period in 2017; In November 2018, Zhangguibao's cumulative sales during 11.11 reached 1,100% of the same period in 2017. Although it is transforming traditional offline business, from the operational data, New Channel still maintains 'internet characteristics,' with market expansion and operating revenue growing exponentially. What can change in three years? Perhaps a new product has just completed national market distribution, and a distributor has grown from 30 million yuan in sales to 50-60 million yuan through hard work. But for enterprises carrying the advanced productivity of the internet, three years is not just a quantitative change, but a qualitative breakthrough. 02 Behind the Quantity Lies a Qualitative Leap China's market is unlike any other, with a large and widely distributed population. FMCG products are daily necessities, and because the market space is huge, every brand has established closed distribution channels to capture enough market share. In a relatively blank market stage, companies that set up channels naturally experience rapid growth, where cost and efficiency can be temporarily set aside, with growth > cost/efficiency. But when the market 'pie' has taken shape, companies enter the stage of competing for slices, leading to fierce hand-to-hand combat. At this point, the test is each company's operational capability, reflected in the market as 'distribution efficiency' and 'sell-through efficiency.' JD New Channel's transformation of the FMCG market channel is not only reflected in changes in numbers, but also in the upgrade and empowerment of every link in the FMCG supply chain, most notably sell-through and distribution.
1. Brand Owners: Precision Distribution, Boosting Sell-Through Zheng Hongyan, Vice President of JD Group and President of JD New Channel Business Unit, once said, 'For brand owners, JD New Channel, without disrupting the original model or adding new pain points, does a good job of distribution and sell-through, helping brands build a rapid supply chain system with small stores, expanding increments and refining stock.' The key to achieving 'expanding increments and refining stock' is the promotion of internet technology. New Channel leverages data intelligence, through massive product distribution, based on consumer preferences, to establish a label management pool for different stores. Brand owners can use the Huiyan big data platform in the New Channel backend to precisely distribute products targeting different groups to corresponding stores with surrounding consumer demand. Of course, reaching this step is not enough; brand owners can use New Channel's 'Xingzhe Sell-Through Platform' to effectively display and arrange products in stores and receive immediate feedback. Based on real-time feedback, they can make timely adjustments. The diversification, personalization, and stratification of consumer demand is an indisputable fact, requiring brand owners' distribution systems to no longer follow the old logic of being large and comprehensive, but instead be precise and accurate. For brand owners, this is the first time the FMCG distribution chain has achieved an accurate, real-time, and efficient distribution feedback loop. The returned data can guide not only current operations but also future operations, allowing companies to find a handle on distribution. 2. Distributors: Upgrading Operations, Gaining Business If before March 2018, New Channel was a B2B platform, after March it transformed into an open ecosystem platform. On March 20, JD New Channel held a strategy conference in Chengdu, where Zheng Hongyan announced the opening of new channels, introducing the role of distributors/wholesalers, launching a joint warehousing and distribution system, and comprehensively upgrading B2B channel efficiency. 'Joint warehouses' that meet corresponding conditions (goods, warehouse, vehicles, people) can settle in as third-party merchants on JD Zhangguibao, supplying and delivering to surrounding retail stores. △ Diagram of New Channel's joint warehouse business model It is understood that as of now, JD New Channel has settled 2,000 joint warehouses, covering 400 cities in 30 provinces nationwide. In New Channel's plan, high-frequency, high-service-demand products are shipped and delivered by joint warehouses; low-frequency, slow-moving products are shipped from JD's central warehouse, transferred by JD Logistics to joint warehouses, where they are combined with high-frequency, high-service-demand products and then uniformly delivered to stores. In this process, small and medium distributors and wholesalers become partners of New Channel, earning additional delivery income, and can also open stores on Zhangguibao to achieve a broader source of business. In the view of New Distribution, China's FMCG distribution chain has evolved from the institutional supply and marketing cooperatives to centralized wholesale markets, and then to independent corporate systems. Its existence has value. If B2B comes in with a disruptor mentality, destroying and rebuilding, it will inevitably be 'bruised and battered.' New Channel clearly knows that to become an ecosystem platform, it must involve multiple parties; the more participants, the greater the platform's value. Only through openness and co-creation can a 'Boundless Retail' map be truly completed. 3. Retailers: Multi-Dimensional Empowerment, Life Center Regarding JD convenience stores, Zheng Hongyan once described, 'JD's role is not to open stores itself, but to upgrade existing stores, transforming from a single retail product service to platform-based life services, which include not only product services but also all aspects of life.' Traditional small stores in communities, within a 1-kilometer radius, are not only places for product sales but also hubs for traffic. Consumers need not only products but also a variety of services. In the past, small stores, due to their weak strength and lack of voice, could not gather related service resources and could only sell products. New Channel, perceiving the pain points of small store operations, fully empowers small stores through its platform, providing not only basic products but also assistance in business concepts, application of technological tools, and support for diverse value-added services. This makes small stores not just small stores, but life service centers in small areas. New Channel has a clear definition of 'similar life service centers'—based on JD convenience stores, creating a half-hour life circle for consumers. Regarding the empowerment of technological tools, New Channel has already widely applied them in convenience stores. It is understood that New Channel has equipped JD convenience stores with an intelligent store management system that integrates product management, customer management, and marketing services. At the same time, it combines JD's online big data advantages to provide intelligent replenishment and intelligent product selection support based on consumer profiles. This thoroughly upgrades traditional stores, which were solely based on product transactions, into modern stores with a diversified business system centered on life services. This is an era not lacking in data. The internet brings billions of data points to people every day, but usually such data has only short-term value or value for a single link. For driving the industry, truly valuable data is full-chain data, where each link is no longer an information island or a patchwork. Only with an open and empowering mindset, allowing multiple entities to participate, can data momentum be formed, which in turn feeds back to the platform, optimizing the entire chain and truly reducing costs and improving efficiency for retailers, channel providers, and brand owners. JD has always emphasized 'Boundless Retail.' The author cannot help but wonder: if the boundlessness of retail is the high integration of online and offline, what is the 'boundlessness' of FMCG distribution? Perhaps New Channel, after three years of refinement, already knows the answer. As an FMCG industry platform, New Channel is empowering all parties with an open attitude, promoting the industry's development toward digitalization and intelligence, and realizing overall network synergy and data intelligence. In this, New Channel plays not only the role of a platform but also a high-efficiency, low-cost solution for the FMCG chain, a key to unlocking FMCG digitalization. -END-