On February 11, Yijiupi announced a strategic merger with Zhangshang Kuaixiao, a leading FMCG B2B company in South China. After the merger, Yijiupi will hold 100% equity in Zhangshang Kuaixiao. The news quickly sparked heated discussions among industry insiders. To this end, New Distribution organized a live discussion on the topic 'During the epidemic, Yijiupi strategically acquires Zhangshang Kuaixiao: Is the spring of FMCG B2B in 2020 coming?' The following is a transcript of a conversation between Zhao Bo, founder of New Distribution, and Zhou Bin, co-founder and COO of Renwoxing Technology, which has been edited and released. -01- Yijiupi acquires Zhangshang Kuaixiao: Is the spring of FMCG B2B in 2020 coming? Q1. Why did Yijiupi choose this time to acquire Zhangshang Kuaixiao? A: I want to say that M&A is a rigorous and long-term process. It's not that the acquisition was completed today; they just took advantage of the epidemic and hot topics to release the news. Yijiupi's 20 billion GMV is just one year's performance of a big brand, nothing to be afraid of. Brands have been threatened by channel stuffing and are afraid, right? Q2. From this acquisition, what changes have we seen in the FMCG B2B industry landscape? A: In the past five years, FMCG B2B referred more to pure e-commerce platforms like Alibaba's Retail Link, JD's New Channel, and Yijiupi. Pure e-commerce B2B will only be a capital game for a few players. Now B2B more refers to physical brand enterprises + channel digitalization and business online. In the next 3-5 years, physical enterprises + internet will spring up everywhere. This epidemic has also spurred a surge in home delivery services, forcing traditional enterprises to accelerate their business online, otherwise they can't do business. It can be asserted that any enterprise will eventually transform to business online, but whether the digital tools are built by the brand, or the channel or retailer purchases B2B or O2O software themselves. This is like 20 years ago when Guanjiapo predicted that all enterprises would install ERP inventory software. 25 years have passed, and we have solidly served millions of SMEs using Guanjiapo ERP. Therefore, traditional enterprises will inevitably move from the 1.0 information era to the 2.0 digital era. Q3. Has the era of B2B expansion through M&A arrived? A: Pure B2B e-commerce platforms have indeed experienced competition in capital strength, operational capability, and business models, and will usher in an era of survival of the fittest and M&A expansion. B2C has left Tmall, JD, and Pinduoduo; Centralized B2B (pure e-commerce platforms) will see a strong-get-stronger oligopoly M&A effect; Decentralized B2B (i.e., physical brand owners and distributors) building their own B2B for existing inventory digitalization is the general trend. Based on channel warehousing, capital advances, customer relationships, etc., regionalization and industry specialization are natural attributes of B2B. In other words, these are physical channel resources that brands and distributors have cultivated for decades, and they cannot all be handed over to pure B2B platforms. Digitalizing existing inventory is the way out and the blue ocean. Q4. What implications does this acquisition have for FMCG manufacturers? A: This epidemic and the acquisition inspire and force traditional brands and distributors to transform online. Overnight, 'isolation economy,' 'home delivery business,' and 'digital transformation' flooded social media. I checked the WeChat index, and hundreds of thousands of people search for digital-related topics every day. Supply chain digitalization, business online, and home delivery will be inevitable trends. For example: 'During this epidemic, the Red Cross couldn't coordinate supplies in half a month, but a medical supply chain platform solved it in 2 hours. When the entire pharmaceutical industry's integration, dataization, and onlineization are complete, we can know how many masks are available from manufacturers, distributors, and retail terminals nationwide. As long as the front-end hospital demand is connected, automatic distribution can be achieved. The epidemic will continue to drive supply chain dataization and onlineization, which is the so-called industrial internet.' This epidemic is more severe than imagined. SARS took half a year, and Q1 this year is definitely wasted. In 2003, SARS made TO C e-commerce represented by Taobao successful. This year's epidemic will drive TO B market supply chain dataization and onlineization. Traditional enterprises should seize this historical opportunity! -02- Besides pure B2B e-commerce platforms, how can our brand enterprises implement digitalization? (1) What is 'digitalization'? Many traditional enterprises have heard the word digitalization but are confused about what it really is. Digitalization, simply put, is 'business online.' Transactions that originally had to be done offline can now be completed on mobile phones. Not only do you need to be online yourself, but the entire supply chain upstream and downstream must also be online. Now 1.1 billion consumers are on WeChat. Shouldn't your business be online? Wherever customers are, channels should be deployed. Huge costs were spent building offline distribution and retail channels. Large brand enterprises spend 10-20% of their marketing budget, up to hundreds of millions, on offline channel layout and promotions every year. This epidemic has brought it all to a halt. So we not only need offline channels but also need to build our own online channels (the concept of channel digitalization). This will become standard for all physical enterprises. (2) Why do it? I think this doesn't need much explanation. This epidemic has forced it, today's Yijiupi acquisition, Alibaba and JD's market education, etc. All brand enterprises and distributors see the crisis and are researching how to transform digitally. (3) How to do it? I think during this period of working from home, everyone has listened to many online live shares and hopes to hear practical content. How to actually implement digitalization? How to choose the right technology platform? Today I will focus on sharing common issues in implementation through some cases we have done (due to client confidentiality, I won't mention client names), hoping to bring some inspiration. 1. How can distributors play the 'digital economy'? Distributor pain points:

1) Business is hard (large inventory backlog, tight cash flow, rising costs, thinner profits); 2) Salespeople are hard to manage (customer data is all in salespeople's hands, they leave at the slightest disagreement, and door-to-door order taking is inefficient); 3) Second-generation succession is difficult (thousands of SKUs and prices are in the boss's mind, customers are in salespeople's phones, and the office environment is poor, so such a porter business can't be taken over by the second generation). Kuaima B2B digital solution: digitalize existing inventory, 5 online aspects:

  1. Products online 2) Transactions online 3) Marketing online 4) Business online 5) Operations online It's no exaggeration: without an online mall and QR code, enterprises are embarrassed to do business now. You can search the WeChat public account 'Kuaima Pifa' for a free trial. Kuaima B2B new wholesale system, as the only ordering tool officially released by the Guanjiapo Group that seamlessly connects with ERP, is helping the millions of customers served by Guanjiapo upgrade from 'internal enterprise informatization' to 'external business digitalization.' 2. How can brand owners implement 'channel digitalization, business online, and operational networking'? Problems brand owners hope to solve with digitalization:
  1. Channel data visibility: Can they know the inventory, sales, and sell-through of their products in the channel? 2) Rapid new product release and reach: How to quickly reach distributors, terminals, and consumers? 3) Precise marketing spend: How to have online Double 11 every day, with fees and gifts subsidized to terminals? 4) Sales force system control: work routes, customer acquisition, customer data, performance, etc.? 5) How to reduce costs and increase efficiency: Large brands spend up to 20% annually; can digitalization reduce costs by one-third? 6) How to develop new products: Use data to guide R&D and produce based on sales? 7) Build brand IP communities: Originally channels could only reach distributors, not touch C-end. How brand owners can implement digitalization: 1) Top-led project: Mindset online, consensus from top to bottom; 2) Digital positioning: Don't talk about platforms first; first solve digitalization of existing channels and private traffic; 3) Will it burn money? When talking about platforms, everyone thinks it will burn money. First treat it as a cost-reduction and efficiency tool. Existing inventory online is just moving offline to online, adding a more cost-effective method to the same business. No need for traffic attraction. Do you think it will burn money? It will only save a lot of labor costs. What's saved is net profit. Saving money is making money; 4) Will distributors be willing to use it? The original intention is not to revolutionize distributors but to empower them (distributors' difficulties are what brand owners need to solve; first empower with tools); 5) Regional and price protection issues: After going online, will prices become transparent? How to manage cross-regional sales? Our Yunliushui solution uses an authorization model, with different views for different users, empowering distributors to do business with customers in their regions. Business is done as usual, just transactions are online. 6) Can they only sell the brand owner's products? Yunliushui combines centralization and decentralization. Distributors can not only sell products from the brand providing the system but also upload and sell products from other brands. 7) Synchronization of online sales and offline inventory: Yunliushui achieves real-time inventory synchronization with ERP. 8) How to do online digital marketing? Both brand owners and distributors can run promotions separately, with fees accurately distributed online to each role; 9) How to quickly launch new products? No longer through ordering meetings; new product launches reach distributors, salespeople, terminal store owners, and consumers' phones instantly, with forced ad placements and red packet distribution. They can not only sell the brand's own products but also other OEM brand sources. Distributors or stores don't need to stock; the brand can directly drop-ship to terminal stores. This way, small stores don't need to stock but still get profit sharing. Small stores use their last-mile advantage and community groups to achieve distribution, truly realizing the brand's three-network integration of sky, ground, and people networks. This builds and shares digital channels, making small stores distributors in the brand's digital era. 10) How to find diversified profit models? No longer just earning product price differences. Like B2B platform profit models, there are also advertising fees, transaction commissions, financial credit spreads, payment fees, warehousing and distribution spreads, big data revenue, capital gains, etc. ...... The path of brand owners or distributors building their own digitalization will be a long-term game with pure B2B platforms. It's not simply following trends to upgrade tools; the core is to seize online digital channels. Whoever puts their business on others' phones will own the future! This is the digital channel war and ecosystem war. Otherwise, when brands are controlled by pure B2B e-commerce platforms, it will be too late to cry. (4) Why choose Guanjiapo? Several listed companies I've recently served, such as Nanfu Battery, Ninestar, and Zhengxin Chicken Steak, are all well-known Chinese brands with tens of billions in revenue. When I asked why they chose us, they all said something that made us gratified: 'After researching thousands of distributors and hundreds of thousands of terminals, they found that 60-70% use our Guanjiapo ERP.' Our Yunliushui can seamlessly connect with Guanjiapo ERP inventory software, integrating online and offline. The path for brand digitalization: Step one is to empower distributor channels with B2B; Step two is to solve F2B2b2c full-chain production-sales integration, achieving F-end new product launches and promotions, and b-end new retail O2O home delivery services; Step three is to integrate third-party service providers such as supply chain finance, warehousing and logistics, technology service providers, big data middle platform services, community IP building, open supply chain platforms, incubating multi-brand strategies, and building a large ecosystem of integrated production, supply, and sales. This is the way out and historical opportunity for brand digitalization. Our Yunliushui, as a flagship product of Guanjiapo, is continuously iterating and upgrading through co-operation with some brand owners. We hope to have more exchanges with various brand enterprises. You can search the WeChat public account 'Renwoxing Yunliushui' for our sharing on brand digitalization paths and some implementation cases. -03- After the epidemic, what changes will occur in the B2B market in 2020? 1. Which categories have attracted attention during the epidemic? A: Daily necessities like rice, flour, oil, and fresh produce. 2. Will small stores form the habit of ordering online after the epidemic? A: Small store O2O home delivery, and brand and distributor online ordering will gradually become habits. 3. What advantages does B2B have during the epidemic? A: SKU quantity, inventory, and promotions are online, allowing 24-hour operation without salespeople, and rapid response across all channels (such as inventory allocation, effective stocking, replenishment, and improving sell-through rates). 4. Can brand owners use B2B to connect to 2C? A: Once brand owners complete the F2B2b2c integrated online layout of production, supply, and sales, and provide tools, products, and marketing empowerment to channels and small stores, relying on channel and small store resources and small store community WeChat group resources, new product launches, hot product promotions, and inventory clearance become a reality. Our Yunliushui not only solves small store online ordering but also small store O2O new retail, and community group buying similar to three-level distribution and three-level distribution models, enabling WeChat group sharing, QR code scanning for online ordering, and profit sharing. 5. In 2020, how can brand owners use B2B to achieve new product breakthroughs? A: First, digitalize existing channels. New products and promotional policies reach distributors, salespeople, small stores, and consumers' phones instantly. Of course, there are habit issues, interest conflicts, etc., but as long as the original intention is right and the direction is right, the road is not far. Tips will be paid 400-2000 yuan once adopted.