Preface: The outbreak of the epidemic caught many trading companies off guard and caused numerous difficulties. This article aims to summarize the experiences of our partners during the epidemic to provide some inspiration to friends, rather than to hype or promote any unrealistic business models. On January 23, Wuhan began to be locked down. Every day thereafter, the news focused on the epidemic: a hospital was built in 8 days, cities in Hubei were locked down, policies were gradually introduced, and various industries had to delay work. With the same anxiety and concern for the business of our partners in various cities, I began to make phone calls. On the evening of January 28, I gradually called our city partners and started discussions in our internal group about the situation. The results of many city partners' communications were unexpected to me. Because they were impressive, I have organized the conversations and records as follows.
1. Xi'an Jiaping Yunshi Follow-up: [Regional B2B Platform Covering 10,000 Terminal Stores in Xi'an] Q: Mr. Fan, has the epidemic had a big impact on our business? Mr. Fan: I'll send you a screenshot of the highest-authority report from our business team showing today's order situation. This is the current state. Tomorrow's sorting will be under tremendous pressure. Q: Mr. Fan, why hasn't your order volume decreased but increased? And I see that basically all orders are placed by stores themselves. (In the first half of 2019, Jiaping Yunshi mainly relied on salesperson-assisted ordering and cash on delivery.) Mr. Fan: Now, the more difficult the times, the more the advantages of onlineization are reflected. Most of the manufacturer's salespeople and our platform's salespeople can only provide remote support, which forces stores to place orders independently. Although some small stores have closed, the average order value of the remaining stores has increased. We have obvious advantages as a local supply chain in the same city. Although there will be order backlogs, we will do our best to ensure supply, which is also the government's requirement for us. Q: Mr. Fan, I see that your daily cash order volume exceeds one million. Does this have a big impact on customer fulfillment due to the shortage of warehouse and distribution personnel during the epidemic? Mr. Fan: There is some impact. Our warehouse and distribution orders are integrated. Picking has always been done via mobile app. Warehouse sorting calculates employee income based on each person's daily picking volume. So we temporarily opened sorting accounts for employees from other departments, using their own phones to sort according to redefined waves as a supplement. But the effect can only alleviate the situation; there will be some order backlogs. We have also started recruiting for socialized shared logistics.
2. Shijiazhuang Dunjie Supply Chain Follow-up: [Local B2B Platform Transformed from Traditional Daily Necessities and Food Trading] Q: Mr. Qiang, many terminal stores have closed in many cities, and warehouses are not allowed to operate. Has the epidemic had a big impact on you? Mr. Qiang: We serve 9,000 stores, but only a quarter are still operating. To maintain good relationships with community property management, we immediately donated disinfectant in the name of community store owners in each residential area. This enhances the value of small stores in the community and ensures that delivery personnel receive support from property management when entering community stores. The shelves of operating small stores are emptied of certain categories every day. Although the overall daily order volume has decreased, the average order value per store owner has increased. Due to the severe shortage of picking and logistics personnel during the epidemic, we have raised the minimum order quantity for small stores to 2,000 yuan to reduce orders. However, more than 200 stores still place orders independently every day. Q: Mr. Qiang, why is your situation so optimistic? Many trading companies in society are experiencing the most severe sales declines due to various complex reasons. What is the reason that your sales have increased instead of decreased? Mr. Qiang: This is related to the categories we operate, channel types, and online capabilities. We made an overall transformation and upgrade in March 2018. In terms of categories, we optimized and added categories based on channel needs, while deepening our category expertise and cultivating sales capabilities for second- and third-tier brands. In terms of channels, we chose to go down to small stores and weakened distribution and KA. The integration of existing platforms is also key. It seems we are lucky now, but it is actually related to our previous layout and efforts. Q: Mr. Qiang, now that salespeople cannot visit stores, how do you maintain customer relationships and generate orders from small stores? What are the salespeople doing now? Mr. Qiang: Although the proportion of independent orders is high, salespeople still work from home. We have established a salesperson customer maintenance and sales backend service center. Each person has built a community group in the area of the small stores they are responsible for. Through WeChat, each salesperson is responsible for product knowledge promotion and new product promotion for 60 stores. At the same time, they regularly push our 2B mini-program orders in the groups. This micro-business model is mature; salespeople have long known how to do it and have been doing it. Q: Why did you get the government's attention immediately when warehouse logistics stopped in many cities? What did you do? Mr. Qiang: Actually, I didn't do anything special. The government supports this project mainly because we transformed from a trading company. To serve the Shijiazhuang channel, we expanded and optimized categories and customer relationships, built our own ordering platform and intelligent warehouse, and repackaged our corporate culture as a "supply chain platform" for external publicity, which attracted the attention of the local government. We maintained contact with the local commerce bureau. This long-term relationship built a foundation of trust. The government opened a green channel for us and encouraged us to ensure supply.
3. Yiyang Jinzhinuo Supply Chain Follow-up: [Local Supply Chain Platform with Mengniu Agency and Multi-category Business Division] Q: Mr. Zeng, as a Mengniu agent, Jinzhinuo is in a category severely affected by the epidemic. Sales peak did not reach expectations. Will this have a big impact on the annual performance? Mr. Zeng: The dairy category is indeed severely affected by the epidemic. We are now gradually handling terminal returns. Although store ordering and warehouse operations continue, overall it is still affected. Q: Will the manufacturer compensate for the losses from returns and near-expiry goods? How big are our losses? Mr. Zeng: The manufacturer does not provide compensation; they may offer some preferential strategies in the market next month. So we have to rely on ourselves. We have several points to reduce the losses of Mengniu dairy categories during the epidemic. Last year, we established a multi-category business division independent of Mengniu. The multi-category department shares warehouse, sorting, and distribution, but with separate storage locations. In the traditional trading system, most business personnel are older and have rigid thinking, so the multi-category division is a new business team. It mainly targets the sinking BC small store channels in Yiyang, and orders have been upgraded online. During this epidemic, the multi-category division's salespeople did not go to the market, but they could maintain remote relationships and guide orders through mini-programs and independent ordering. We gave policies to let the multi-category division vigorously promote our dairy products. This strategy of using the multi-category division to drive our dairy products has filled many losses overall.
4. Changsha Yizhen Yizhan Gou Supply Chain Follow-up: [Local Supply Chain Platform Transformed from Snack Food Distributor Agency] Q: Mr. Liu, I know you are the youngest successor in Changsha, and you personally led the transformation last year. I think this epidemic has also given our platform an opportunity, right? Mr. Liu: I didn't expect sales to increase by 1.5 times during the epidemic. Although overall social demand has been affected, we made sufficient preparations. At the beginning of last year, based on our agency brand business of over 100 million yuan, we established an independent business division to expand categories and built an ordering platform for the sinking small store system. This independent division had daily orders of about 150,000 yuan in the first half of last year. In the recent period of nearly half a month, daily orders have been 250,000 yuan, with 80% placed independently. All this happened when salespeople could not go to the market. Without this transformation, the agency system business might have declined severely. Because the traditional agency business system and ordering system are inefficient and have high response costs, even if market store demand is high, it is difficult to seize the opportunity. If we seize this opportunity well, this division will add nearly 100 million yuan in incremental revenue this year on top of the traditional trading traffic. I am Shang Puhe from Zhongke Shangruan, committed to serving FMCG distributors/brand owners, always thinking about how to face the epidemic with them. But the only thing we can do is to make our software well so that they can better serve small stores and users! This follow-up left a deep impression on me. In fact, partners who did not suffer from the epidemic and saw performance increase instead of decrease are not only in these four cities. Shenyang Bimai Youpin operated only 60 SKUs, and sales doubled during the current period. Most partners visited in other cities were optimistic. Zhongke Shangruan has been in the industry for over 10 years, and I have been in the industry for 10 years. I would like to briefly share my feelings. During the epidemic, sales factors vary by category, but big traders who are prepared and have changed suffer the least losses and even seize opportunities to increase sales. What preparations should everyone think about and implement now? Trade thinking should transform into channel thinking. We cannot stick to being a single-brand service provider; we should strive to be a channel service provider. Although we cannot control the channel, we should make the channel dependent on you. Do not rely on a single channel; have the ability to build omni-channel, and always value terminal small store business. Different channels should have a unified entry point. Stop questioning the importance of online ordering. If overall order volume increases, the test is not just the experience of the mini-program app, but the integrated capabilities from order entry, business customer relations, warehouse distribution, and business finance. First optimize and transform the existing business, then consider platform development. Never abandon existing commercial flow resources to focus on other things. Transform the front-end sales dependence on people into dependence on the backend and recognition of the platform. Gradually change the business logic where one salesperson can only sell and operate a single brand. Salespeople should be both multi-category platform promoters and store operation supervisors. Change the status quo of traditional trading, reposition yourself. You have the resources that other supply chain platforms have. Why position yourself as a mere goods-trading company? Through technology, structure, and category optimization, reposition yourself. New corporate culture and positioning can attract younger talent. As one partner said, "If you don't try transformation and innovation, you will have no way out!"
Zhongke Shangruan focuses on omni-channel solutions for the circulation and FMCG industries, with professional B2B+B2C platform systems, integrated warehouse WMS and logistics TMS solutions. Large FMCG traders and large chain enterprises all use it. Tips will be paid 400-2000 yuan once adopted. If you like this article, click [Watching] and share it with friends.