These two years of B2B vents can be described as hot, a large number of entrepreneurs come to the wind, and soon smashed the sand, even the giants are crossing the river by feeling the stones. Under the big waves, this B2B company, which started from the beginning of the wine market, achieved sustained profit in 2017, which is very valuable.
Have a good opportunity, transformation online
Before 2014, we were a traditional regional wine chain enterprise, and we have been working in Hefei and Changsha markets for seven or eight years. Because we do chain stores, our category is relatively complete, and the wine category almost covers the local wine demand in Hefei. At the same time, inventory is particularly large, and how to turn the product turnover rate higher is a question that management has been thinking about.
The market slowly gave some feedback to our chain stores, such as the surrounding small shops asking if we could supply them. This is a very good signal. Under careful scrutiny, we found many pain points in existing stores, such as too many suppliers, inconvenient to buy things, untimely delivery, and uneven prices. Seeing this opportunity, we immediately made a simple version of the APP ordering platform, and began to push to the surrounding stores in a planned manner. Unexpectedly, a very simple APP, there are really many people who buy things on it. The initial model also confirmed the prototype of the long-term batch to cut into the B2B in the wholesale market.
In 2014, no one has mentioned any B2B outlets. We don’t know what B2B is. There are certain coincidence factors from the offline to the online. When I started the experiment, I found it very interesting because the demand was increasing month by month. Three months later, we made a major strategic decision to separate the APP as a separate project. In September of that year, we established an independent company in Beijing.
Quickly expand by capital
At first, it was just to do it as a business. The management team’s original expectation was to first make a base market in our base camps in Hefei and Changsha, and then slowly expand to other places. Fortunately, an accidental meal awakened us in time.
In December 2014, we met Long Yu, the general manager of Bertelsmann Asia Fund, at a dinner party. She is very interested in talking about our APP project. At that time, our app had more than 2 million yuan of sales per month. It was set up for about four or five months, and the total sales was 8 million yuan. Although this data is not worth mentioning now, B2B was not popular at the time. Our market growth curve is still quite beautiful. The market smell of investors is naturally more sensitive than us, and she gives us two suggestions:
First, this is a very good thing, but if you don’t expand and copy it now, others will lose market opportunities in the future.
Secondly, Yijiu has only done two cities in Hefei and Changsha. This is the city where the original enterprise supply chain exists. It does not mean that it can be replicated in other cities.
To put it simply, if we go slowly and step by step, we may lose strategic opportunities.
With the support of investors, this matter has changed from a small business to an investment project. We began to plug in the wings of capital to expand rapidly.
Category expansion, traffic realization
In the beginning, we locked in one thing – let Yijiu become an online wholesale market.
After the company was founded, the first two years of doing things was to move the wholesale market online. Rent a warehouse in the local area, and then the sales staff go to the small store to promote our app, so that the terminal does not have to go to the physical facade of the wholesale market to buy goods, but search on the mobile phone, and then we deliver the goods to the door. Instead of a prototype that is offline, it has also expanded smoothly. In two years, it has established direct sales teams and warehouse facilities in 84 cities. The GMV has quickly reached the scale of several billion yuan. But after all, the wholesale gross profit is low. As with all e-commerce startups, we didn’t make a profit, but we got huge traffic, and the long-term approval soon became the traffic entry point for the national terminal procurement.
After the booth was rolled out, we began to consider the flow of cash. There are two main ideas:
The first is to make branded products. For example, we cooperate with big-name wine companies to develop new products, and we will be the sole operator. Because it is factory-to-end direct supply, so the price is very good, there is no layer of channels, we have enough profit margins. This type of customized product is then sold through online wholesale city traffic.
The second is to expand the category. Our app was originally called “Easy Wine Batch” and was later renamed “Easy Batch”. In fact, category expansion was driven by the market from the beginning. Some tobacco and alcohol shops asked us if we could distribute drinks in addition to the wine, because the smoke hotel has a beverage demand. At the time, there were some well-performing B2B companies on the market, and they mainly made fast-moving products. We found that some customers buy wine on our app, but buy drinks through someone else’s app, which is a dangerous sign.
The Internet pays attention to frequency, and frequency is life. If someone else’s frequency is high, you can add wine to the app, then we are very dangerous. So we started to add drinks. After doing the beverage category, we found a new market opportunity: in addition to the smoke hotel, small supermarkets, convenience stores and even food and beverage stores also need drinks, but also our potential customers. This is a bigger market. Beginning in 2017, we expanded our categories more comprehensively and almost met the basic needs of convenience stores.
Fortunately, we have achieved great success in the implementation of these two ideas, on the one hand, to achieve the profitability of the enterprise; on the other hand, to become a fast-moving integrated B2B platform, occupying on a larger track. Leading edge.
The ultimate logic of B2B
In the second half of 2017, we have truly rationalized the future direction of B2B and carried out a new round of strategic expansion.
What is the ultimate state of B2B? Our understanding is the digital integration of the industry chain. B2B must ultimately be fully involved in the industry chain. We may have entered through one of these links. For example, Yijiu batch is cut from the wholesale market, and other companies may enter this track in another way. But in the end, only fully engaged companies can become the channel chain’s integrators. Because you don’t participate, others participate, and he has better control over the entire chain than you. Now, different B2B companies in this chain have almost certain advantages in a certain link.
All B2B, if using offline thinking to understand its prototype, includes three types: one is the dealer, the second is the wholesale market, and the third is the chain store. At present, we have made layouts for these links.
Micro-lending
From the business to the dealership, we have made a financial project. Traditional dealers concentrate on making money before the peak season every year. The demand for funds is large. The dealers’ funds are often insufficient. However, because they sell well and the agents have high gross profit, they are willing to borrow money to do distribution. Our micro-alcohol loan is to provide loans for dealers to purchase goods. When the loan is made, the dealer needs to pay 30% of the deposit, and we borrow 70%. Then the company sends all the goods to our warehouse and pledges the goods.
The reason why we do industrial chain finance is because we have identified three rules: we can estimate it, we can see it, and we can sell it. First, how much is this thing worth? The actual trading occurs on the platform every day, we are very clear; second, the product is under the control of our warehouse, the dealer wants to adjust the package will not work; third, if the dealer defaults, we can immediately realize the disposal of the product, because there is ready-made Sales channels. It can be said that this project has basically no risk, and the difference between the cost of capital and the lending rate is our profit. The essence of micro-alcohol loans is the participation of goods in disguise in the form of capital investment.
Shared warehouse
We have made a cloud warehouse allocation project that integrates the warehouses of all dealers in the market to realize warehouse sharing, and dealers can put their goods directly into our warehouse. Dealers do not have a professional warehouse management method, especially liquor dealers, liquor sales are seasonal, and warehouse turnover efficiency is particularly low. I have been to some dealers’ warehouses, 2000 square meters of large warehouses, only 200 square meters in the summer, and a rent of 200,000 yuan a year. The dealer said that there is no way, in the winter, the goods are piled up, not enough. Our warehouse sharing is to reduce the warehouse cost of the dealer. The dealer’s goods are placed in our warehouse. A commodity is only a penny a day, which is very affordable.
In addition, our sharing is not only the sharing of the area, but also the sharing of space. The traditional dealers will not have warehouse shelves and will not be willing to invest. Our warehouse has special shelves and compartments to make the space very good. . Now we have 84 shared warehouses across the country, probably between 3,000 and 5,000 square meters.
Warehouse allocation also includes distribution sharing. Dealer delivery is generally scattered, not economical, we are responsible for a street, a car is always saturated, and then add some dealers’ bulk cargo, nothing more than a little increase in the frequency of delivery, but still short-distance delivery. Distribution sharing is completely online. The dealer’s merchandise is in our warehouse, he can synchronize the merchandise information into our system, and we will deliver it directly after the customer purchases. At the same time, dealers can also send orders directly on the platform, which is very convenient. Shared warehouse allocation has improved social efficiency, and Yijiu has also participated in the digital transformation of traditional dealers.
New retail chain
We will build a strategic new retail chain in 2018. Our goal is to make 10,000 professional tobacco and alcohol chain stores across the country, bringing together our existing high-quality smoke hotel customers and making it a brand terminal.
The brand value of the hotel is much stronger than the convenience store, especially for the wine category. Unfamiliar consumers buy a bottle of mineral water, and don’t care where to buy it, but if you buy a bottle of Maotai, not the chain stores will not go in and buy. The tobacco and alcohol chain brand is extremely important for the endorsement of the quality of the product.
Our chain store is not just a change of door, but the entire chain store system is replaced. Chain stores install our systems and operate them in full accordance with our rules. This system is all online. In essence, we are a strong management of the chain stores, as long as he used our system, the invoicing problem is basically solved.
In addition, the owner of each chain has an online store of his own. We provide apps and applets to the chain. Users can directly install the store in the storefront by scanning the code in the chain store. For the end user, this is also a membership chain. After scanning the code, all users are members. For this storefront, each member can be personalized, including the control of the reconciliation period, the management of one customer and one price, the management of the member, the distribution radius (based on the location to determine whether the delivery fee is required), truly the traditional The storefront has become a chain of new retail.
In this industry chain, from small B (terminal) to C is our chain store, from dealer to small B, is our warehouse allocation and long-term approval platform, from the enterprise to the dealer, is our supply chain financial micro Alcohol loans, from the enterprise to the small B, are our own exclusive products… The core links of the industry chain, we basically participated. It is also based on this understanding and continuous advancement that today’s Yijiu batch has the most valuable infrastructure for new retail: supply chain advantage, user flow, and warehouse system. I believe that the ultimate state of B2B must be through the industrial chain, and only one link will definitely die. Through the online and digital transformation of the industrial chain, empowering the original participants and improving the efficiency of the industry, this is a valuable B2B.
