Click to read the original article for details
Core Guide:
Serving not only Tmall and JD.com, but also NetEase, COFCO, and China Post, how did this company become one of the top warehousing and distribution service providers in the industry?
With C-end e-commerce so mature, why did it turn its attention to the low-margin FMCG B2B sector?
In transitioning to unified warehousing and distribution for FMCG, what advantages does this company have compared to its peers? The more backward an industry, the more infinite opportunities it hides. With low technology penetration, large market size, and still driven by intensive labor and substantial capital, there is no doubt that the FMCG industry satisfies most people's imagination of a backward industry, leading to a general belief that there is potential to improve efficiency through technology. Among all participants using technology to enhance the circulation efficiency of the FMCG industry, there are B2B platforms that start from commodity intensification, such as Zhongshang Huimin and Yijiupi; retailers that start from the retail perspective, such as Meitian and Bianlifeng; and service providers that start from the warehousing and distribution angle, such as Zhoushu Data and Wanchaobang. The company we are introducing today, Wangcang Technology, also enters the FMCG field from the warehousing and distribution perspective. So what are the differences in Wangcang Technology's development path? 1 Born from B2C E-commerce In 2009, Taobao's first Double 11 single-day sales reached 50 million yuan. Although the online shopping trend had not yet formed, it had already shown people the enormous potential of e-commerce online transactions. The following year, Double 11 single-day transaction volume reached 936 million yuan, a year-on-year increase of 1772%, which was widely regarded by the industry as a sign that e-commerce had entered a period of strong development. The rapid development of e-commerce brought a surge in the number of personal parcel deliveries. At the same time, warehousing and distribution issues increasingly troubled e-commerce enterprises. Of course, Xinguang Group was no exception. To solve the delivery problems of its agency operation company, a company specializing in warehousing and distribution was spun off from Xinguang Group, which formed the predecessor of Wangcang Technology. In June 2011, Wangcang Technology was officially established and began providing professional, information-based warehousing and distribution services to more and more enterprises. Its clients included not only top sellers on Tmall and Taobao, but also well-known companies such as COFCO, NetEase, Suning, Dangdang, and Vipshop.
In 2012, Wangcang shipped 2.2 million orders for the year;
In 2013, Wangcang shipped 5.5 million orders for the year, a year-on-year increase of 150%;
In 2014, Wangcang shipped 13 million orders for the year, again achieving doubled order growth;
In 2015, annual shipments reached 19 million orders;
In 2016, annual shipments reached 36 million orders;
In 2017, Wangcang shipped 52 million orders for the year;
...... To date, Wangcang Technology has developed into a leading fourth-party warehousing and distribution enterprise in the industry. Corporate development plans often embody the will of management, and the development path of a company is mostly inseparable from its founder. Wangcang Technology is no exception. Its founder, Zhong Shuo, worked at Panasonic for many years before starting the business, responsible for internal lean management, and obtained the certification of Six Sigma Black Belt Master (Six Sigma is a technique for improving enterprise quality process management, with the perfect business pursuit of "zero defects," driving a significant reduction in quality costs, ultimately achieving financial performance improvement and corporate competitiveness breakthrough). It is also because of this experience that Wangcang has shown more foresight in response to changes in the business environment during its development, and it also makes it pay more attention to the control of processes and efficiency. To date, Wangcang Technology has a warehousing area of 400,000 square meters nationwide, serving hundreds of clients across multiple categories including maternal and infant, food, clothing, and cosmetics, covering millions of SKUs. 2 Opportunities in the B2B Track The maturity of B2C e-commerce has led more and more participants to enter this track. At the same time, intensified competition and rising customer acquisition costs have broken the original profit distribution system among e-commerce links, and profit distribution among levels has become increasingly transparent. In addition, technological development has greatly lowered the threshold for entering the warehousing industry. Many e-commerce companies have begun to build their own warehousing and distribution systems, and the boundaries between different roles in the entire industry chain have become increasingly blurred. Cross-industry phenomena occur frequently, and even companies making packaging materials have begun to get involved in warehousing and distribution. Ultimately, in the C-end field, warehousing and distribution service providers have increasingly weaker bargaining power, and cargo owners are less willing to pay. In this context, many fourth-party warehousing and distribution companies have been unable to support operating costs and eventually failed. In contrast, the traditional B2B field presents a different situation. "Although the B2B industry has developed and changed rapidly in recent years, no good solution has been produced in the warehousing and distribution field," Zhong Shuo told New Distribution. C-end distribution can be classified by function into freight, urban distribution, and express delivery solutions, and the market has basically been divided up by S.F. Express, EMS, and the Four Links and One Da (STO, YTO, ZTO, Yunda, and Best). However, in the FMCG B2B urban distribution field, there is currently no enterprise that can unify the market. Different types of logistics enterprises are in a state of constant cross-border integration, adjustment, and the boundaries between different models of logistics enterprises are becoming increasingly blurred. For example, express companies are beginning to gradually enter the B-end urban distribution market, while urban distribution enterprises also show a trend of encroaching on the express and line-haul logistics markets. At the warehousing level, the market remains highly fragmented. Even the enterprise with the highest market share holds only about 3%, leaving significant room for development. Analyzing the reasons for low warehousing concentration, Zhong Shuo believes there are three main points: Warehouse types are diverse, such as multi-story warehouses, high-standard warehouses, and flat warehouses;
Different product categories correspond to different warehouse types, such as appliance warehouses, clothing warehouses, food warehouses, and beverage warehouses;
Different business models also lead to significant differences in warehouse types. For example, B2B and B2C, cross-border warehouses and urban distribution warehouses, central warehouses and front warehouses. The high transparency among various links in B2C e-commerce has honed Wangcang's survival ability, enabling it to continuously optimize business processes through technology and survive in a low-profit environment. The low technology penetration and high fragmentation of warehousing and distribution in the traditional FMCG B2B field, however, showed Zhong Shuo a new development possibility. In 2016, Wangcang shifted its business focus and began to gradually expand into the traditional FMCG B2B market. 3 Technology Empowers Traditional Distribution Years of experience in the warehousing and distribution industry have given Wangcang the technical strength to connect all operational links and processes in e-commerce. As early as 2012, Wangcang Technology launched its self-developed integrated warehousing and distribution management system—Wangcang No. 2—which integrates multiple functional modules including WRP (Warehouse Resource Planning) management, warehousing and distribution business management (OMS, SCM, FM, DMM, TMS), thereby achieving visual management of all business processes inside the warehouse, including inbound, quality inspection, counting, shelving, picking, weighing, sorting, and outbound. To date, dozens of warehousing and distribution enterprises in various fields still use the Wangcang No. 2 management system for information-based management of their backend supply chains, which has laid a certain foundation for Wangcang's expansion into the traditional FMCG field. So, in the traditional FMCG field, what value can Wangcang Technology deliver to distributors? 1. Improve Warehousing and Distribution Efficiency Different product categories have significantly different warehousing and distribution requirements. When facing such product differences, traditional distributors often attempt to handle all differentiated warehousing needs with a unified solution. As a result, problems such as serious product damage and high supply chain costs in the warehousing and distribution process are common. Wangcang Technology, however, has accumulated rich management experience in the C-end warehousing and distribution field over the years. By exporting technical means and standardized operating processes, it shares warehousing and distribution operation experience with traditional distributors, helping them avoid detours in operations and improve operational efficiency. 2. Improve Product Management Capability and Turnover Efficiency For trading companies, the efficiency of product turnover determines profitability. To improve product turnover efficiency, it is necessary to have real-time, visual control over product shelf life, specifications, and properties. For example, shelf life management can help distributors reduce the occurrence of expired products, while specification management can improve the vehicle loading rate in the logistics and distribution process. In fact, most distributors lack this kind of product management capability, especially when the number of brands they represent increases, their product management capability becomes even weaker. Through professional warehousing and distribution enterprises, this phenomenon can be effectively avoided. 3. Revitalize Own Assets and Improve Resource Utilization Distributors mainly assume two functions in the traditional FMCG circulation chain: capital advance and market service. However, in the process of market development, as brand owners increasingly demand distributors to stock up, capital issues have increasingly become a major factor constraining the development and growth of distributors. At the same time, the high vacancy rates of warehouses and vehicles keep distributors in a predicament of resource waste. In this context, through a flexible warehousing and distribution system, entering third-party warehouses for unified warehousing and shared distribution can effectively alleviate the situation of low resource utilization, thereby driving the improvement of the overall internal operational efficiency of distributors. It is revealed that in addition to the currently large-scale operation of the Wangcang No. 2 warehousing and distribution management system, Wangcang Technology has been developing the Wangcang No. 3 system since 2016. The new system can not only provide standardized information management solutions for e-commerce supply chain enterprises, but also add various business modules in real time according to the personalized business needs of different enterprises. This may become a new engine to help traditional distributors reduce costs and increase efficiency. During the Autumn Sugar and Wine Fair on October 23-24, the "2018 FMCG Urban Distribution Logistics Conference" hosted by New Distribution will be held. We will invite industry bigwigs, FMCG warehousing and distribution experts, and distributors who have transformed into unified warehousing and distribution platforms to discuss and answer questions about the future development trends of FMCG urban distribution logistics and practical cases of distributor transformation to unified warehousing and distribution, under the theme "New Distribution, New Urban Distribution." We hope to bring you different inspiration and thinking! The specific meeting topics are as follows: List of Participating Companies In no particular order Hunan Zonglan Diandan Network Technology Co., Ltd. Jingbang (Wuhan) International Freight Forwarding Co., Ltd. Mengniu Dairy Qinghai Hanxiang E-commerce Co., Ltd. Unilever Service (Hefei) Co., Ltd. Shanghai Branch Huicong Hunan Xuanang Food Co., Ltd. Guangzhou Tongdaoren Information Technology Co., Ltd. Qingdao 888 Trading Co., Ltd. Uni-President Enterprises (China) Investment Co., Ltd. Hunan Province Zhongxiang Gongpei Logistics Co., Ltd. Shenglong Ingredients COSCO Shipping Logistics Warehousing and Distribution Co., Ltd. Guangxi Yongpai Liquor Co., Ltd. Shangqiu Kangrong Trading Co., Ltd. Jinan Dingzhong Economic and Trade Co., Ltd. Liaoning Bimai Agricultural Technology Co., Ltd. Kunming Xiongjia Trading Co., Ltd. Shaanxi Houheng Trading Co., Ltd. Guangzhou Dingwo Enterprise Information Consulting Co., Ltd. Shaodong Jiajiale Commercial Firm Boda Trading Industrial Bank Changsha Branch Wuhan Muchen Convenience Store Chain Co., Ltd. Fujian Fuxing Yuncang Logistics Co., Ltd. Guizhou Yilimi E-commerce Co., Ltd. Jiangxi Xiao Laoer E-commerce Co., Ltd. Jinshankoufu Shanxi Taihang Yuanjing Supply Chain Management Co., Ltd. Shanxi Dezhun Supply Chain Management Co., Ltd. Shaoyang Tongdeli Trading (Xiangbang Logistics) Huanfu Tongda Express Urban Distribution Beijing Xinjingxiang Food Co., Ltd. Wuhan Huizhong Tianhong Liquor Co., Ltd. Changsha Paide Biotechnology Co., Ltd. Chaoan Tuqiang Guizhou Yihe Bopin Supply Chain Management Co., Ltd. Jiangxi Kang'en Industrial Development Co., Ltd. Xiangtan County Yisuhe Town Yuhua Paper Store Luoyang Yuanlang Trading Co., Ltd. Tongchuan Yaozhou Huayuan Supermarket Co., Ltd. Hunan Yongfu Jiujiu Trading Co., Ltd. Zhejiang Chengchengtong Logistics Co., Ltd. Chongqing Kaiguo Materials Trading Co., Ltd. Beijing Xianmaixianmai Data Technology Co., Ltd. Hanchuan Qixing Trading Co., Ltd. Tongxin Jiuzhiru Trading Co., Ltd. Guizhou Meiguo Guoguo Network Technology Co., Ltd. ...... Representatives of Distributor Transformation (Proposed) In no particular order Jiangsu Huashang City Distribution Network Co., Ltd. Chairman, Rong Jun Hubei Yijiaren Logistics Co., Ltd. Chairman, Wang Bo Sichuan Chengdu Xingrenxing Trading Co., Ltd. General Manager, Jiang Shuming Shandong Yunbang Warehousing and Logistics Co., Ltd. Chairman, Liu Jichen Chongqing Lingyu Consumer Goods Supply Chain Management Co., Ltd. Chairman, Tu Mingyu Guangzhou Zhongshan Wanrong Marketing Co., Ltd. Chairman, Yang Su Sichuan Bajie Supply Chain Management Co., Ltd. Chairman, Yuan Xia Hubei Pengdun Meiyitian Supply Chain Management Co., Ltd. Co-founder, Li Qiangyun Henan Xuchang Jiulegou E-commerce Co., Ltd. Chairman, Zhang Jianyong Hebei Changyi Logistics Co., Ltd. Founder, Ma Haichao Hebei (Chengde) Wulian Yuncang Co., Ltd. General Manager, Meng Yucun Xinjiang Urumqi Su'an Jinchi Logistics Co., Ltd. Chairman, Zhang Xun Jilin Sansheng Lianguo Chairman, Zhang Hailing Hebei Dunjie Supply Chain Management Co., Ltd. Founder, Qiang Huitao Hunan Damei Supply Chain Management Co., Ltd. General Manager, Liao Lei ...... -END-