Recently, the ninth B-end e-commerce inspection class of New Distribution, comprising over 150 distributors, brand owners, and industry transformation pioneers from across the country, visited Changsha, Guangzhou, and Dongguan to inspect three representative B2B platforms in China: Changsha Xingaoqiao, Guangzhou No.1 Life, and Dongguan Caihua Trading. The inspection class members benefited greatly from the three-day visits and spoke highly of the three companies. From a third-party perspective, New Distribution recorded the highlights of these B2B platforms and the founders' unique insights, while also expressing its own views and opinions, hoping to provide some reference and inspiration for outstanding distributors, brand owners, and pioneers in the FMCG industry who are actively engaging in this field. I Xingaoqiao, No.1 Life, and Caihua Trading: Each Platform Has Its Own Characteristics 01 Changsha Stop – Xingaoqiao Teacher Liu Chunxiong once said: B2B2C is the future trend, but if B2C is used to save B2B, it will not succeed. If B2B is done successfully first and then extended to C-end, it can succeed. Without a main business, a side business cannot save the main business. If the main business succeeds, the side business will form an ecosystem. Recently, convenience stores have become extremely popular, and convenience stores are being developed all over the country. Some do B2B first and then convenience stores, while others do convenience stores first and then B2B. Xingaoqiao, No.1 Life, and Caihua Trading all belong to the former. Xingaoqiao founder Tang Guangliang told New Distribution that Xingaoqiao's predecessor was actually doing convenience stores. Four years ago, Xingaoqiao had the "Kuailehui" convenience store brand. Initially, investors did not suggest Tang Guangliang do convenience stores and give up the Kuailehui brand, but Tang Guangliang insisted on doing it. Now, the Kuailehui brand alone has more than 5,000 convenience stores in Changsha. Convenience stores are divided into direct-operated stores and franchise stores, and franchise stores are further divided into close franchise and loose franchise. Kuailehui under Xingaoqiao belongs to loose franchise. Tang Guangliang believes that entrepreneurial companies should be clear about their track. If they identify the convenience store track, they should settle down and either do direct-operated stores or close franchise. If they do not want to do direct-operated stores and want to do supply chain or FMCG B2B, then they should focus on franchise. Many entrepreneurial companies initially want to do supply chain, but when the supply chain is not done well, they want to do convenience stores. When convenience stores are not done well, they want to do unmanned convenience stores, resulting in nothing being done well. Tang Guangliang told New Distribution that to do FMCG B2B well, one should do franchise stores well; to do convenience stores well, one should do direct-operated stores well. Although the two may have no boundaries in the future, at the current stage, choosing which track to take and doing that track well is the most important. 02 Guangzhou Stop – No.1 Life No.1 Life founder Tan Xiaoping came from the home appliance industry and worked in home appliances for 10 years. From 2002 to 2012, he witnessed the glory and decline of the home appliance industry. With the rise of Gome, Suning, and JD.com, after 2012, there was no distributor left in Guangzhou's home appliance industry. Watching the distributors in the home appliance industry die one by one is very similar to the current FMCG industry. Tan Xiaoping believes that within five years, FMCG distributors will also undergo a major reshuffle. Distributors can only be the first or second in the region, and then wait for others to acquire them. Otherwise, if they become the third, fourth, or lower, they basically see no opportunity. Tan Xiaoping told New Distribution that this era leaves distributors with only change. The only thing distributors can do is innovate, and the only thing they can practice is to forget themselves and do things they dare not think or do. Except for founder Tan Xiaoping himself, all employees at No.1 Life are post-90s. Tan Xiaoping personally hires third-party institutions every year to conduct a six-month special training for employees. In addition, new employees are required to do nothing for the first seven days after joining, only one thing: learning. No.1 Life develops a learning plan for each new employee. After learning, they participate in company training. Each training session has a very cruel elimination mechanism. A training class has 60 people. On the first day, 20 are eliminated; on the second day, 10; on the third day, 5; from the fourth day, PK begins, and after PK, elimination continues. Finally, only 16 people remain. The last ones stay to give a speech and promise what they will do. Such strict militarized management and recruitment mechanism are rare in the FMCG field, but it has become one of No.1 Life's core competitiveness. In addition, No.1 Life's approach to developing convenience stores differs from traditional foreign-brand convenience stores. No.1 Life convenience stores are mostly distributed around communities, and their main products are daily necessities such as snacks, rice, flour, and cooking oil. Tan Xiaoping told New Distribution that doing convenience stores can not only effectively improve the platform's product structure but also further enhance the store's stickiness to the platform. Because in Guangdong, products like snacks and daily chemicals are generally sold by vehicle sales, where distributors or wholesalers drive directly to the door to sell, making it difficult for B2B platforms to compete with local distributors and secondary wholesalers. In addition, snacks, daily chemicals, and other products have relatively short shelf life, and stores have very high requirements for return and exchange services. Therefore, small store owners will only choose promotional products on the platform, making it difficult to establish strong relationships and usage stickiness. Operating convenience stores allows No.1 Life to become familiar with the marketable product structure, thereby improving revenue and service stickiness. 03 Dongguan Stop – Caihua Trading Caihua Trading Vice President Wu Jinghe believes that all channels for commodity circulation have value. Whether brand owners, distributors, or retailers, Caihua hopes to combine resources to build a community of shared destiny for channel distribution. Caihua currently cooperates with more than 30 manufacturers to produce products, and the sales of its own brand products alone can exceed 100 million yuan. Wu Jinghe told New Distribution that the platform's product development and management capability is key. To meet the needs of a small store, only 1,500 SKUs are needed. If the platform can meet the largest customer demand with the smallest number of SKUs, that is core competitiveness. Currently, Caihua has a total of 2,500 SKUs and strives to reduce the number to 2,000, or even 1,800, because every product placed in the warehouse is a cost. In convenience store management, Caihua Trading does not simply rebrand stores, install POS systems, or provide direct subsidies. Caihua Trading has established the Yueheji Convenience Store Free Alliance, providing professional store operation experience output, thereby truly empowering small stores and providing value to them. II What Common Characteristics Do Excellent B2B Companies Have? Through the in-depth visits and exchanges with the three platforms above, New Distribution believes that these three B2B companies share the following commonalities: 1. Product combination capability is the key to profitability Most B2B platforms initially use beverages, alcohol, and other categories as entry points to quickly establish connections with stores. However, as the industry develops deeper, profitability has become a problem that every B2B platform must face. In this situation, optimizing product combinations and finding profit points to achieve self-sufficiency early has become the core competitiveness of each platform. Through observation of Xingaoqiao, No.1 Life, and Caihua Trading, New Distribution believes that the product combination capabilities of these three platforms are worth learning from. For example, in Xingaoqiao's product structure, low-frequency long-tail products such as snacks and daily chemicals account for a high proportion; No.1 Life, due to its distribution around communities, has a higher proportion of rice, flour, cooking oil, and daily chemicals; Caihua Trading selects a certain number of products for special supply to stores, combined with its own brand products, to meet store needs, enhancing store stickiness while improving its own profitability. 2. B2B2C: From wholesale to retail Doing convenience stores is one of the commonalities of Xingaoqiao, No.1 Life, and Caihua Trading. In New Distribution's view, doing convenience stores is not only a business but also, through the operational data of convenience stores, can provide a more accurate basis for the platform's product structure, including head, waist, and long-tail products, laying the foundation for platform profitability. In addition, convenience stores will further expand the platform's business scope, extending from serving stores to serving consumers, providing the possibility for the platform to establish a consumer membership system in the future. 3. Focus on the region and expand gradually Regional kingship is another common point of the three platforms. Xingaoqiao is mainly in Changsha, No.1 Life in Guangzhou, and Caihua Trading in Dongguan. The three platforms continuously deepen their regional markets, increase the density of network coverage, thereby minimizing warehousing and distribution costs, while continuously adjusting product structure, self-generating blood, gradually achieving profitability, and establishing strong competitive barriers in regional markets. Attachment: Inspection class members gained a lot and shared their insights Click the image to view by pulling up, down, left, and right < < Swipe to see the next image >> III What Should Be Paid Attention to When Starting a B2B Company? In recent years, New Distribution has visited nearly a hundred excellent B2B companies. Through in-depth observation and understanding of the industry, we have summarized some viewpoints, hoping to provide some reference for entrepreneurial B2B companies: 01 The money-burning approach is not advisable After experiencing early野蛮 expansion, the development of FMCG B2B has entered the deep water zone. Especially after the entry of Internet platforms such as JD.com, Alibaba, and Tencent, the industry's capital, in terms of scale and quantity, is far less than before. At this time, the test is the platform's refined operation capability and self-sustaining capability. Unlike the C-end operation logic, capital can cultivate user habits, but it cannot bring sustained user stickiness. In this situation, supply chain efficiency and the completeness of supplied products become the core competitiveness of each platform. Only by deeply cultivating the region can user stickiness be brought, and only a perfect and reasonable product category structure can bring sustainable development to the platform. 02 Focus on operational and financial indicators Many attributes of FMCG (low value, high-frequency consumption, heavy goods, etc.) determine that B2B platforms must improve profit margins through refined operations. The biggest difference between B2B and traditional distributors is the ability to use data. B2B can achieve two-way empowerment of upstream suppliers and downstream retailers through data analysis. B2B is not only a commodity trading platform but also a data platform. Guided by data financial indicators, it manages users and products with labels to achieve precise operations. 03 Focus on team and talent cultivation Capital determines the lower limit, and the team determines the upper limit. Capital is more like a ticket. Having money means being qualified to compete with players at a certain level on a certain track, but how well you perform depends on the team. Therefore, in this process, participants in the industry need to focus on team cultivation and talent retention. Technology is soft power, while a professional, efficient, and collaborative team constitutes the hard power of each B2B platform in external competition. Summary New Distribution founder Zhao Bo believes that the development of B2B will go through three stages. The first stage is called the new platform stage, from 2013 to 2017, a period of rapid development. At this time, a large number of B2B platforms emerged, with various forces competing, and a large amount of scale-oriented asset investment. Many platforms received huge amounts of funds. Then it enters the second stage, called the new business stage. In this stage, B2B tests the efficiency of the entire supply chain and the ability to integrate data and visualization, and begins to slowly empower the industry. New Distribution has seen Zhongshang Huimin supplying unmanned retail, including this inspection of Caihua Trading's Yueheji small stores, and seeing many unmanned retail vending machines placed at the entrances of convenience stores. In the process of continuously empowering small stores, the boundaries of market competition begin to blur. In the third stage, retailers begin to enter the B2B track, such as Caihua Trading, RT-Mart's E-Lufa, Xi'an Every Day, and Hebei 36524. These are the real giants. At the same time, Ele.me and Meituan are also entering this industry, and even the logistics industry is eyeing it. The entire supply chain field is already in chaos, no longer a game played by a single industry or a single player like brand owners and distributors. All kinds of players have gathered in this market. What will this blurred competitive boundary bring? For distributors, technology costs are rapidly declining, almost following Moore's Law. Perhaps the year before last, a distributor needed a system costing about 300,000 to 500,000 yuan, or even over a million. But by last year, a system could be obtained for 100,000 yuan. This year, it is even possible to get a new system for free. The emergence of this phenomenon proves that technology has gradually become infrastructure. At the same time, urban distribution logistics everywhere is gradually strengthening, and many brand owners are trying to actively cooperate with B2B. The market has begun to change. The current FMCG B2B may have various problems, but there is no doubt about this track. This track may not be suitable for some players, but this track is definitely viable! -END-