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Looking at FMCG B2B from four perspectives

Enlarge fontReduce font Release date: 2019-10-10 source: billion euro network views: 295
Core tip: At present, FMCG B2B has entered a period of rational development. During this period, both brand owners, distributors, and platform vendors need to think more rationally about the core value of B2B.
At present, FMCG B2B has entered a period of rational development. In this period, both brand owners, distributors, and platform vendors need to think more rationally about what the core value of B2B is and how to do B2B.

What is B2B?
Earlier, the concept of B2B was a bit confusing. As soon as I talk about B2B, I have approved these platform vendors such as Retail Link, New Channel, and Yijiu. Think of them as B2B, or they represent B2B. This understanding is incomplete.
B2B is literally a B-to-B transaction, which is a business-to-business transaction.
At present, accurately speaking B2B means relying on the Internet to transform from traditional offline transaction methods to online transaction methods.
The original transaction happened offline, and the main transaction links were realized offline. B2B is to turn this offline transaction into an online transaction, and the main transaction links must be implemented online.
Therefore, the accurate definition of B2B is actually a way of trading. It is from the original offline transaction method to an online transaction method relying on the Internet.
What can this change in trading methods bring? It's the word "efficiency".

It is mainly reflected in five aspects:
One is that B2B can turn transactions into anytime, anywhere: the most direct manifestation of B2B is to change transaction efficiency. The original offline transaction was limited in time and space. People only had transactions when they were present, and they had orders during normal working hours.
Under the B2B transaction model, transactions can be turned into anytime, anywhere by relying on the online transaction method established by the links of the mobile Internet. Eliminating past space-time constraints, this simply means that transaction efficiency will be significantly changed.
The second is that B2B can open up the entire transaction link: the original transaction was divided into links, and there were many links: from brand dealers to middlemen, there are multiple distribution levels for middlemen, and then from middlemen to retailers. The links are relatively independent, and there are independent business systems and logistics delivery systems.

In theory, multiple links will inevitably lead to a reduction in transaction efficiency, and in particular, a reduction in order efficiency, inventory efficiency, and delivery efficiency.
The B2B transaction model can theoretically realize the connection between various transaction links, and can realize order sharing, inventory sharing, and delivery sharing. In theory, a set of order system, a set of inventory system, and a set of delivery system can be directly reached to the terminal. In theory, it can support the reduction of intermediate links, or the full link data connection and sharing.

This will bring very important value to the change in transaction efficiency.
Third, B2B can generate digital decision-making, digital execution and digital collaboration: Chinese society has gradually become a digital society, or digitalization has played a very important value in Chinese society. Especially in the field of e-commerce, a digital operation mode has basically formed. For example, JD.com can achieve Double Eleven when facing 6.5 million SKUs of products to hundreds of millions of users, relying on a digital operation system.

The change brought by digitization is to change the previous business operation from people as the main body to digitization as the main body, forming a new operation system of digital decision-making, digital execution and digital collaboration.
Achieving digital operations requires the establishment of a set of digital tool systems that take connectivity as the mainstay: linking to generate data, and data to generate intelligent digital decision-making, execution, and collaboration.

Digitalization is bound to be the basic mode of operation in Chinese society in the future. All enterprises will also run under this basic model. The immediate priority is that companies need to build such a digital operation system.
From a certain perspective, B2B is the infrastructure to help companies achieve digital transformation in marketing. And this infrastructure must be very important in the future.
The fourth is that B2B can achieve more efficient delivery: essentially, the core link of enterprise marketing is two: order and delivery. The design of the company's marketing model is about changing order and delivery efficiency. In a narrow sense, the main function of B2B is to solve the problem of order efficiency, but at the same time, it can realize the important value of improving enterprise delivery efficiency.

For the enterprise, delivery efficiency must be very important, whether it is the delivery to the B side or the delivery to the C side. In the current omnichannel environment, companies must study both the delivery efficiency to the B-side and the delivery efficiency to the C-side.
B2B can use the opening of the entire transaction link and the system's order aggregation function to achieve the separation of orders and delivery, which can achieve fixed orders for goods. This is very valuable for changes in delivery efficiency and cost reduction; and in this mode, it can support omni-channel multi-form delivery, which can support both the enterprise's B-side delivery and the enterprise's C-side delivery.

The fifth is that B2B can innovate the marketing efficiency of enterprises: compared with the diversified marketing methods that can be achieved online, the previous offline marketing model is very single. From now on, in the online trading environment, both the marketing model and marketing methods can innovate a lot of new gameplay.
In particular, you can use the link environment to manage users more effectively.

Therefore, in general, transforming the B2B model is very important and urgent for enterprises. The marketing model of the future enterprise must be based on the reconstruction of the model in the B2B environment.
Enterprises must understand B2B in essence, not just look at current phenomena.

There have been many chaos in the development of B2B in recent years. In fact, these chaos are normal, which is the price that must be paid during the development discussion.
However, companies must not just look at chaos, they must see the nature of the B2B model through phenomena, and the future of the industry.
Through the exploration of various platforms and various types of enterprises in the past few years, the development trend of B2B is becoming clearer and clearer, and the market pattern that may be formed in the future is becoming clearer.

B2B from four perspectives
I have always believed that: B2B is the infrastructure to promote the marketing transformation of FMCG companies, and it is the underlying structure to reconstruct the new marketing model of the FMCG industry.
The future FMCG company's marketing model is to build a new marketing model based on the B2B model.
From the current point of view, there are four main links involved in this model reconstruction: brand owners, middlemen, platform vendors, and terminal vendors. These four links must find their new position and new model in the reconstruction.
In this, the focus should be on in-depth study of mode conversion from two aspects:

The first is technical logic: from a specific perspective, B2B is mainly a tool that uses technology to change efficiency. That is, B2B mainly uses technology to solve the problem of transaction interest rates. B2B itself does not represent a specific business model, or no matter what kind of transaction model, you can solve the problem of efficiency through B2B means.
The second aspect is business logic: this is the key aspect. That is, what the enterprise needs to study is: in the B2B environment, how to combine the business reality of the enterprise and reconstruct a new set of business models. Because B2B is technology changing efficiency, but he is breaking some traditional business logic.
In this regard, whether it is a brand or an intermediary, the business model logic between different companies is very different.

It also needs to be clear: B2B itself does not have the natural property of de-intermediate. Whether to go to the middleman is a matter of designing your business model. This is not a problem to be solved by B2B.
What needs to be seen more clearly is that in the future, the Chinese market, both the B-side market and the C-side market, will move towards a diversified market structure. Enterprises must adapt to this diversified market structure change as soon as possible.
From this perspective, there is no question of who replaces who controls who controls who B2B model of enterprise transformation. That is, the issue that everyone is paying special attention to will be controlled by platform vendors. Platform vendors are a component of channel diversification. Of course, a strong platform has a larger value, and a weak platform has a smaller value. From the perspective of market competition, there are bound to be strong and weak.

Of course, in recent years, some platform vendors have set great goals and tried to "control". Control is a wish, and whether reality can be realized is another result.
Therefore, the key to enterprise transformation B2B is to adapt the business model design to the diversified development trend.

From the above analysis, brand owners, middlemen, platform vendors, and terminal vendors all need to redesign and plan new business models in the B2B environment based on their own business practices.
--Brander's perspective: I believe that the B2B transformation of brand owners is the main driving force for the next B2B development. And the transformation of B2B will definitely bring the greatest value to brand owners.
Because from a direct perspective, B2B is a complete set of new efficiency measures to completely change the marketing efficiency of brand owners.

Judging from the outstanding problems faced by some B2B platform vendors in recent years, it is mainly because the brand owners have not yet taken action. Therefore, they lack the product support and promotion support of upstream brand owners. In this environment, platform vendors will be uncomfortable.
The key to the B2B transformation of brand owners is the design of new business models based on the B2B environment.

There are two key points here: first, how to restructure the existing distribution system, that is, the transformation of the stock market; second, how to face the mode adjustment of channel diversification, that is, how to do a good job in incremental markets. Of course, the solutions to these two problems are intertwined.
Enterprises must use new B2B methods to solve the efficiency problem of the existing distribution system, and they must also use the new B2B model to deal with the development trend of channel diversification. It is impossible to abandon the stock market, and it is unrealistic to incorrectly face the new market opportunities brought by diversification.
Therefore, it is critical for enterprises to resolve these two contradictions as soon as possible. Through the B2B transformation, the existing stock market must be smoothly transitioned, and the potential of the stock market can be better tapped by new means. At the same time, new opportunities in incremental markets brought by diversification must be seized to achieve better Market development.
The core point of the entire business model design: is it limited to the existing distribution field, or can it sink the business and open the entire transaction link. From the perspective of future development, opening up the entire transaction link is an inevitable direction of development.

In fact, the opening of the transaction link is only the opening of the order link and the delivery link, not the full control of the entire transaction link. Because there are many factors that affect orders, from the theoretical and actual landing aspects, the middleman link has important value in terms of affecting the efficiency of the order. Therefore, the transformation of B2B is not to cut off the dealers, but to promote the transformation of the dealers. Of course, in this transformation, the function and value of dealers will change.

Therefore, the key point of B2B transformation for brand owners is to design a new distribution system that is open and capable of facing the diversified development trend of the future market. On this basis, with the support of B2B technology, a highly efficient trading system is formed.
--Dealer perspective: At present, the B2B transformation of dealers is very urgent.

Don't think too much about the B2B transformation of dealers. From the perspective of the eyes, it is to position B2B as a tool to solve the existing business efficiency.
Therefore, the dealer's B2B transformation is to make good use of the five B2B efficiency values mentioned earlier, first of all, this tool that can change the current business efficiency is well used.
The traditional business model of the dealer is definitely not working. If you can do B2B well, the efficiency change it will bring you is very huge.

In recent years, many dealer companies that have transformed B2B have seen that the dealers that have been transformed according to their tools have achieved good development, but some companies that want to become a platform have encountered some problems. Of course, there are many factors involved here, the most important of which is the problem of business model design.
Never before, the overall market structure will be: Under the B2B trading model, regional B2B trading platforms will play a very important role. In the future regional markets, there may be large platforms such as Retail Link, New Channel, Yijiu Approval, and Shuhai to cover the market. There may also be regional platforms with strong market service capabilities, regionalization and vertical expertise.

My judgment: In the future distribution market, the B2B transaction model is the main body. In the market, there are some B2B systems built by large brands, some regional B2B systems, and B2B systems covered by national markets such as Retail Link, New Channel, and Shuhai.
These B2B systems, or have strong marketing capabilities, can have a strong ability to capture orders. Or have strong delivery capabilities to cover the market with the advantages of delivery capabilities.

From the point of view, it is necessary for large brands to build their own new B2B distribution system. At the same time, in the face of the development trend of channel diversification, to be able to open up the connection with various platforms and make full use of the market coverage value of each platform must also be considered.
For dealers who have the ability, conditions and the desire to grow in the future, they must seize the current opportunities and transform the B2B model as soon as possible. Relying on the current product and team advantages of being a distributor, we must systematically transform as soon as possible. The key to the dealer's B2B transformation is to form a regional market coverage density. For enterprises that do not have the ability or conditions, they should also explore how to cooperate with the B2B platform as soon as possible to explore new distribution models in the future B2B environment.

-From the perspective of platform vendors: After several years of reshuffle, there are basically several major platforms left by the platform vendor community. Judging from the recent market research, several large platforms are also undergoing market adjustment.
At present, from the perspective of platform vendors, the key is to return to rationality. It is unrealistic to seek speed, and it is difficult to control stores.

Regarding the transformation of platform vendors, there are several suggestions:

The first is to adjust the direction: from controlling the store to controlling the goods, from the main energy to serve the small shop, to focus on serving the upstream brand.
Judging from the practice in recent years, it is difficult to get through the store control to force the brand owners to stay in cooperation. Stores are difficult to control, and stores without upstream product support or promotion support are even more difficult to control.
Although I saw that some platforms signed up with hundreds of brand cooperation, there was no substantial cooperation, that is, the brand owner did not shift his channel focus to B2B. From the point of view, the platform vendors do not have the ability to serve good brand owners.
To transform their platforms, they must shift their focus to serving the brands, or serving the head brands, or serving the small and medium brands.

Starting from the end of serving a good brand, you must have the ability to serve a good brand to get the corresponding merchandise and marketing support, so that you can have the ability to catch small shops. Without this ability, you cannot effectively control the store.
The second is to shift from the national market layout to the key market layout: make the regional market thorough. It does not necessarily have to be 1 million. It is more important to be able to penetrate the regional market to generate market value, which will have a greater impact on brand owners.
The third is to be solid in the market: don't be too vague. The market does not rely on shouting, mainly depending on the results, a lot of business logic still needs to be fundamentally clear, and to solve the current problem still needs to fundamentally find the right method.
Platform vendors are one of the future B2B market components, but they will not be the only ones. The key is to find out where you are and take advantage of yourself.

-Terminal vendor perspective: In fact, the terminal vendor link is the best link to solve in the B2B transformation process. Don't worry about their acceptance of new tools and models. Pay attention to the new value that new models can bring to them.
For the terminal business, the most important thing is to pay attention to his own interests. No matter what mode, it will be welcome to create new value for him. On the contrary, only some illusory values are difficult for small shops to accept.
The advantages of products, the advantages of prices, and the advantages of promotional support must be the main focus of the shop.

In short, the new Internet environment has created important transformation opportunities for companies to transform new marketing models. The core of enterprise transformation B2B is to use new technology to change marketing efficiency, and the focus is to reconstruct the business model in the new environment.
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