The author has always believed that the optimal ideal for FMCG B2B might be an ecosystem centered on B2B2C plus supply chain finance and warehousing logistics, but each company or entrepreneur has different focus and landing points.

I. Value Delivery Regardless of the business format, the FMCG B2B industry, from a performance perspective, improves the efficiency of the original channels and reduces the cost of the original channels. This is where the platform's value is reflected. A platform without stable value delivery is purely a scam.

In the initial stage of platform development, it is difficult to provide comprehensive services to all platform participants. It is necessary to prioritize service targets, using small wins to achieve big breakthroughs. The current market is a buyer's market, so the B2B platform's first service target is the terminal stores, the second is distributors, and the third is brand owners. As the platform gradually develops, with increased scale and control, it will gradually add more service targets.

Service to terminal stores will be typical "headache treat head, foot pain treat foot" (reactive). Terminal stores with long-term vision are an absolute minority. The needs of terminals can be summarized into three points: First, low purchase price; Second, complete variety; Third, good service.

Current distributors face B2B with four types of mindsets:

First type: Hesitant – typical "transformation is death, no transformation is waiting to die," like a hedgehog, wanting to do it but with various concerns;

Second type: Trouble-averse – for this type, the platform just needs to help them sell goods; don't bother them with anything else;

Third type: Advantage-taking – especially for platform-based business formats, the common customer acquisition and activation measures are coupons. Distributors collude with terminals to swipe coupons and extract fees;

Fourth type: Proactive – they see the future trend clearly and actively follow and cooperate. This type is an absolute minority.

Overall, regardless of the type, the common needs of distributors can be summarized into three points: First, cost reduction. Currently, the biggest costs for distributors are warehousing, distribution, and personnel costs. Second, turnover efficiency, including capital turnover and inventory turnover. Most distributors currently make money from turnover efficiency. Third, incremental growth.

At this stage, what do brand owners need? Data! Including channel data, terminal data, and consumer data. Many brand owners are implementing deep terminal operations, wanting to control terminals deeply, implementing self-operated e-commerce strategies, wanting to understand consumer needs, and buying a bunch of data from professional data agencies like Nielsen to understand market conditions and brand influence. The result? A mess! Currently, channel supply chain B2B is a relatively important channel that can provide such data.

What about consumer needs? Nothing else but buy conveniently, buy affordably, buy with confidence. The reasons are simple, but how to achieve them? What reason can make consumers shop from a new e-commerce platform compared to JD and Taobao? This is probably why everyone generally believes that B2C is the ultimate direction but also the biggest pitfall, and why O2O went from overall explosion in 2014 to decline.

Therefore, whether you are a new entrant or preparing to enter, first analyze from the "Dao" (principle) level: do you have stable and unbreakable value delivery for the first and second service targets, i.e., the direct upstream and downstream? If not, or if it cannot withstand scrutiny, just go to sleep.

II. Model Selection From the three operating models: matchmaking platform model, vertical self-operated trading model, and a hybrid of the two. Each model has many platforms in operation. The author believes that the hybrid model is the most stable and risk-resistant operating model.

Looking at the current B2C market, it is saturated, and the competitive trends and patterns are very clear. Future B2C competition is likely to be in vertical niche segments (whether regional or category segmentation, as evidenced by Alibaba and JD's actions). In vertical niche competition, there is a considerable possibility of market segmentation by giant platforms. Giant B2C platforms are very mature in brand, service, product, and supply chain, and have formed brand positioning in consumers' minds (according to consumer psychology research, a consumer's awareness of brands is at most around 7). Relying on terminal stores to carry out B2C will be a long-term interest guidance process (except for large-scale burning of money, such as Baidu Waimai, Ele.me, Meituan, Didi, etc.), including guidance for terminal stores and consumers (dual market education).

During the 12 years of rapid B2C growth, driven by considerable market dividends and demographic dividends, it currently only accounts for about 10% of total retail sales. The larger blue ocean market lies offline. Optimizing and upgrading offline channels is essentially optimizing and upgrading the supply chain of offline channels, which gave birth to B2B. This is corroborated by the actions of the two giants Alibaba and JD, numerous new B2B entrants, and capital's tendencies. The optimization and upgrading of offline channel supply chains will undoubtedly become the next important competitive point, and it is also the market most likely to give birth to "unicorn" platforms.

So regardless of which model you choose, no one can say for sure whether it is right or wrong, or which model is good or bad. This will only be judged after five years. But at this stage, B2C may be a big pitfall. Those who choose B2B2C as a whole operation and want to rely on B2C to drive B2B should consider carefully.

III. Implementation Path It is difficult for B2B platforms to emerge as national-level distributed platforms. The most likely to become distributed platforms currently are Alibaba Retail Link and JD's Jingdong Zhanggui Bao. The prediction is that the most likely outcome is regional or category-specific "warlord separatism." There are three arguments: First, the FMCG industry is highly fragmented in channels, and a single internet platform is unlikely to achieve nationwide integration; Second, manufacturers will not put all eggs in one basket. Regardless of competitive changes, suppliers (including distributors or manufacturers on the platform) and retailers are irreconcilable contradictions; Third, cost. The nature of terminals determines that the final landing point of B2B is an efficient service process, and high labor and operating costs are hard for any company to bear.

The B2B platform track is short if you consider it short, and long if you consider it long. The track is short because B2B models replicate quickly, and the entry barrier is low. Once a platform takes the lead in claiming territory, later entrants must first break the competitive barriers of the earlier entrants. The track is long because B2B is a process of continuously optimizing the supply chain and maintaining terminal customer relationships. Price comparison and service comparison will become the norm, but the long track is relative to the remaining platforms. During the short track competition, the vast majority of competitors will be eliminated. Channel resources and terminal resources are limited, and integration and mergers will also become the norm.

Currently, there are many entrants in the FMCG B2B platform space, including new projects incubated by giant platforms and experienced entrepreneurs with VC funding. Competition will further intensify, and close combat (price wars or subsidy wars) is likely to occur within the next year. In some regions, the author has already smelled the flavor of a "hundred-regiment war."

-END-

Domestic best FMCG distributor learning platform Focusing on 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 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 Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Sales | 015 Internet, Brands | 016 Distributor B2B Transformation | [Long press QR code to follow]