△In the picture: Tang Yijun, General Manager of Zhongshang Huimin's Product Center; Su Xiaoxin, Executive President of Zhongshang Huimin; and the author.

Zhongshang Huimin is one of the earliest players in the FMCG B2B field in China. After nearly five years of development, it has covered 22 provinces and cities, with self-built warehouse area exceeding 200,000 square meters, serving more than 550,000 retail points. In 2017, Zhongshang Huimin's GMV reached nearly 10 billion yuan.

With the influx of capital, the FMCG B2B industry has entered a period of rapid development. However, while industry giants such as JD.com and Yijiupi are expanding frantically nationwide and continuously strengthening their market layouts, Zhongshang Huimin has chosen to stop exploring new markets and shift its development focus to refined operations in existing markets. What is the logic behind this?

01 Deep Data Mining and Refined Operations

In the traditional distribution channel, goods typically pass through distributors, wholesalers, and retail stores before reaching consumers. B2B platforms, on the other hand, can connect with brand owners upstream and directly serve terminal retail points downstream, shortening the distribution chain to some extent and thereby improving operational efficiency for the entire industry. In the view of Su Xiaoxin, Executive President of Zhongshang Huimin, the value of B2B goes far beyond this.

"The biggest difference between B2B and traditional distributors lies in data. B2B can leverage its data capabilities to empower both upstream suppliers and downstream retail terminals. B2B is not just a commodity trading platform; it is also a data platform. Without data capabilities, a B2B platform cannot provide additional value-added services or value to its own daily operations, nor to upstream brand owners or downstream retail points."

02 Label-Based Operations

Since last year, Zhongshang Huimin has slowed down its pace of market expansion and shifted to refined operations in existing markets. Su Xiaoxin believes that blindly covering the market is meaningless; serving existing market customers well is far more valuable than simply expanding market coverage. Achieving the same sales volume with different numbers of retail points has different implications. The fewer retail points needed to achieve the same sales, the higher the output per store. In this case, not only is customer relationship management improved, but warehousing and distribution costs are also reduced. Increasing output per store can only be achieved through refined operational capabilities.

After the rapid development of FMCG B2B in recent years, refined operational capabilities and precise marketing capabilities have increasingly become the core competitiveness of B2B platforms. Zhongshang Huimin's refined operations are reflected in its label-based management of users and products.

User Label Management

By mining information about retail points, different types of retail points are classified based on location, enabling targeted product recommendations and marketing activity pushes, truly achieving "thousand stores, thousand faces" and maximizing user value.

Secondly, Zhongshang Huimin also classifies small stores based on different dimensions such as product prices, activity levels, transaction amounts, and product structure, and then carries out differentiated marketing and services for customers at different levels.

Product Label Management

With the increase in SKU numbers across Zhongshang Huimin's branches, higher requirements are placed on its ability to segment product categories. Regional differences lead to product variations across areas, and brand owners' market strategies also differ by region, requiring the platform to move beyond the previous rough approach to product operations and management.

By restructuring and refining product labels, Zhongshang Huimin continuously optimizes inventory quantities and product structure, while effectively controlling product shelf life.

03 Empowering Brand Owners

Through deep data mining, Zhongshang Huimin has not only improved internal operational efficiency but has even achieved profitability in some warehouses in certain cities despite industry-wide losses. The value of refined operations and deep data mining is also reflected in empowering upstream brand owners.

"A B2B platform is not just a trading platform; it is also a data platform. Because the platform generates a large amount of data during order transactions, after filtering and processing, this data is of great value to brand owners, helping them achieve more precise distribution and better decision-making. These are exactly what traditional distributors cannot feedback to brand owners."

In Su Xiaoxin's view, the success of B2B cannot be achieved without the recognition and support of brand owners. Since Zhongshang Huimin operates fully directly, cooperation with brand owners is essential to ensure product quality and further reduce the occurrence of counterfeit goods and expired products. Moreover, if the platform wants to obtain more favorable product prices and sufficient profit margins, it also relies on the support of brand owners.

To this end, Zhongshang Huimin has specially developed a brand owner inquiry platform to help brand owners understand real-time product sales information and new product distribution status.

04 Empowering Users

"Zhongshang Huimin is committed to building a world-leading community O2O comprehensive service platform." Clearly, establishing connections with retail stores through B2B is only the first step in realizing its vision. Earlier this year, Zhongshang Huimin quietly launched its closely franchised fresh convenience store brand "Hijia Convenience" (嗨家便利). As a franchise chain brand under Zhongshang Huimin, Hijia Convenience is positioned for professional brand operation of convenience stores, providing one-stop supply and operational guidance services to traditional retail stores.

"Currently, there are 550,000 small B-end customers on the Zhongshang Huimin platform, many of which are community convenience stores or mom-and-pop shops. Due to their timeliness and convenience, these stores are difficult to replace by e-commerce. Even O2O platforms like JD Daojia are less timely than the corner store downstairs. After establishing close relationships with these small B-end customers, they will believe that Zhongshang Huimin can truly help them increase income. At that point, adding community O2O empowerment will make them truly willing to do business with Zhongshang Huimin."

In addition to traditional convenience store business, Hijia Convenience also integrates businesses such as Aixianfeng online mall and Huifutong. By connecting the online mall with offline value-added services, Hijia Convenience truly helps traditional retail stores achieve information empowerment and operational upgrades.

New Distribution has always insisted that channel digitalization is irreversible. Zhongshang Huimin, by connecting upstream with brand owners and using technology to help them achieve full-chain product visibility, has to some extent broken the data vacuum in traditional distribution channels, thereby helping brand owners precisely target their marketing activities. Downstream, it has achieved data empowerment, effectively helping small stores improve their daily operational management efficiency. This is worth learning from for every B2B industry practitioner. As B2B penetration in the national market accelerates, Zhongshang Huimin's deep data mining capabilities and refined operations in existing markets will increasingly become its core competitiveness for development.

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