Zskuaixiao.com (掌上快销), an FMCG B2B Platform, has raised RMB 205 million (approx. $32.6 million) in a Series B round led by Longzhu Capital, a sub-organization of Meituan-Dianping and Global Logistic Properties, with participation from Source Code Capital and Hina Group.
The startup has previously received funding from Longzhu Capital and Source Code Capital in 2017.
China is currently home to nearly 7 million mom-and-pop stores, which combined contribute around 40% to all the consumer goods sold in China, according to data released by Kantar Retail, a consulting company involved in consultation of e-commerce, retail and shopper insights.
Unable to reach all the mom-and-pop stores through a unified channel, the brand owners (suppliers) have to establish intricate, multi-tier distribution channels. Although it has eased the coverage problem, complicity and inefficiency also arose.
And that’s what the FMCG B2B platform has set out to address. With a view to establishing a more efficient supply chain, the FMCG B2B platform looks to wean the brand owners off their dependence on multi-tier distribution channels by bringing their goods directly to the deluge of mom-and-pop stores dotted around China.
Ever since its emergence in 2015, many companies in China have ventured into this business. Among them include JD’s Xintonglu (新通路) and Alibaba’s LST (零售通). The FMCG B2B platform can be further divided into two types in terms of how it is run. One is a pure go-between platform and the other is one that’s backed by actual involvement in wholesale business.
Read more: How to Build a Successful Platform Business? The VC Behind Didi Explains with Classical Examples
As opposed to a go-between platform, which is not involved in the actual process of supplying goods and executing contracts whatsoever, the latter one honors supply contracts itself and engages directly in supplying goods.
What’s good about this is the platform operator gets to hold sway over the quality of supplied goods and service. Either way, the ultimate goal of the FMCG B2B platforms is to shorten the procurement cycle and marry up suppliers and buyers efficiently, thereby paring down the procurement cost for those store owners (Plus, as the platform evolves, the platform operator could add to its platform more functions including data-based selection of products and supply chain finance).
Zskuaixiao.com is an FMCG B2B platform backed by its own procurement of goods and warehouse & logistics networks. With a special focus on supplying mom-and-pop stores in medium-sized cities, Zskuaixiao.com has, as of now, established its presence in 15 cities in Guangdong and Fujian provinces, covering more than 50,000 retail stores.
Its founders ZHENG Yubin, CEO of Zskuaixiao.com, and Wang Lu, COO of Zskuaixiao.com, are both former employees at retail giant P&G, who were in charge of the distribution channels in Shanxi and north Zhejiang respectively. Having been indulged in the FMCG sector for so many years, they have developed their unique understanding of the FMCG and FMCG B2B sectors.
Read more: Meituan-Dianping Invests in Zskuaixiao.com, an FMCG B2B Platform that Marries up Suppliers and Mom-and-Pop Stores