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In spite of the stormy rain， Zhang Gongbo is still driving his car to deliver wine to newly-recruited retailers. The four employees of his store have been delivering the products for a whole day and even his brother was invited to help.
“In this afternoon， we made the deals worth hundreds of thousand yuan，” he said. That day was the most impressive for him in the half a year after getting the dealership of Yanghe No. 1， a Chinese local brand of spirit.
“The brand of distilled spirit has a complete ecological circle. Everything is complete. However， in the Internet world， we need to build a new ecological system，” says Wang Yu， director of ecommerce with Yanghe Corp.， the manufacturer of Yanghe No. 1.
The Expansion on Steroid
Zhang Gongbo， a local in Nanjing， Jiangsu， is running a small shop that is too small to be noticed. He only needs to spend 200 thousand yuan annually renting this small shop， but Zhang Gongbo was once very concerned about the survival of his business. As a dealer of Yanghe No. 1， the government and big enterprises used to be his major clients， while the small retailers could only be counted as the supplementary force.
However， the Chinese central government’s ban over the large and unnecessary banquets of governmental departments and state-owned enterprises almost scared him to death. He once thought that he needed to give up his business but soon he found the situation was not that bad.
“From this February to now （September）， we sold the wine products worth about 1 million yuan to about 100 clients， repeated buyers included. Averagely， one client spent over 10 thousand yuan in these six months. There are 5-6 of them spending over 50 thousand yuan，” Zhang Gongbo says. The unexpected income helped him to find a new channel to offset the shrunken governmental consumption. O2O is the name of the tool. In order to finish the delivery in half an hour as promised， Zhang Gongbo bought two motorcycles and one minivan.
Zhang Gongbo’s case epitomized the O2O trading platform of Yanghe No. 1. This pattern was tentatively used in Nanjing at the end of last year. By now， Yanghe No. 1 has covered 95% of the key cities in Jiangsu and launched the platform in 22 cities of Zhejiang， Guangdong， Hainan and other three provinces. Over 3000 dealers have embraced this pattern. According to a source close to Yanghe No. 1， this brand is going to have its O2O platform cover the developed cities in China. “Yanghe has over 300 thousand dealers nationwide and one third of them have directly available data. Presently， Yanghe No. 1 has 3000-4000 online outlets. We do not have the mechanism to cover all dealers. We have to put the location， quality and experiences into consideration. We hope we can find more than ten thousand qualified dealers before the end of this year，”says Wang Yu. According to him， the development of Yanghe No. 1 with the Internet is faster than expected.
This fast expansion in the Internet world is quite rare among traditional spirit enterprises in China. This is partially attributed to the focus of its steersman Zhang Yubai on the ecommerce. An insider from Yanghe says：“Zhang Yubai attends at least one Internet-related meeting every month to know about the latest development of this industry.”
Building up a New Circle
The ban from the central government has ended the 10-year golden age of the distilled spirit. The traditional spirit enterprises， which have been enjoying the feast for a long while， are now scrambling to find ways out. This March， Yanghe set up an Internet center.
“When we first touched the B2C， our products are packaged in the same way with those sold in supermarkets. The express companies did not pay too much attention to this， causing many glass containers and bottles to shatter when they were sent to customers. This dropped our ratings in the Internet to the lowest point. The bad user experiences deprived us of many opportunities in the online platform. So we had to use a new logistics company，” Wang Yu says. In addition， the failure to find a good third-party service supplier forced Yanghe to take this business by its own.“Previously， our customer service department was only responsible for providing assistance to dealers and handling the fake products. Now they have to face the consumers directly.”
In Wang Yu’s opinion， the scatter of many dealers is the biggest problem for the traditional ecommerce enterprises to move into the sector of ecommerce， such as finding a suitable logistics company and a rightful ecommerce partner. Wang Yu divided the needed partners into 38 subcategories and finding all of them is only the first step of developing in the Internet world. “In comparison， the ecommerce is more concentrated，” Wang Yu says. The partners are like the dealers of Yanghe in the offline business， but these partners are with different industries. “So， we are now taking charge of a few things that were originally assigned to our partners， such as big data management and software update.” The new Internet center of Yanghe employs over 100 people， a size that is larger than most middle-sized companies in the IT industry.
The center consists of four departments， including the Internet business department （mainly running O2O， B2C and B2B）， the system technology department， the original design department and the ground promotion department. The departments of ground promotion and design are somewhat coincidental with the traditional departments. “The new Internet center seems to be exotic， an extension from the original business circle. So we need to take different methods and ideas from the ones we were familiar to，” says Wang Yu.
The Unconfirmed Profit Pattern
“Put more efforts into promotion，”this is the only requirement of Zhang Gongbo， who is among the first O2O dealers of Yanghe. In the past half a year， this brand only had one promotional event with obvious effect： Zhang Gongbo received 5000 orders in seven days and the sales volume hit 4 million yuan.
“When there is a big promotional event， the number of orders will increase apparently. In ordinary times， I could only receive 4-5 orders on a daily basis，” Zhang Gongbo says. “The O2O is good for dealers， but the ecommerce is the competitor.”
But when the wine enterprises could get rid of the promotion-driven sale？ By now， no one has got close to the answer. Apart from Yanghe， Jiuxian. com， which spent the most in the O2O sector， could not find the way of earning money by now， Jia Jingfeng， general manager of another O2O practitioner Jiukuaidao.com， also admits that her company could not find the profitability pattern， but this is not what’s in her mind since taking the market is the most important thing.
The brands have defects too. “There are too few products，” Zhang Gongbo says. Yanghe only sells its products. “We usually do not accept the other brands， but a brand could be diversified in， for example， introducing high-end food， health supplements and so on，” Wang Yu says.
In addition， O2O has high requirements over the offline cooperation. “It might be hard to realize the delivery within half an hour in Beijing since the traffic jam might be a nightmare here，”Wang Yu says. In addition， it is an urgent task to improve the brand awareness among clients. “The propaganda is not done well.”
“In this afternoon， we made the deals worth hundreds of thousand yuan，” he said. That day was the most impressive for him in the half a year after getting the dealership of Yanghe No. 1， a Chinese local brand of spirit.
“The brand of distilled spirit has a complete ecological circle. Everything is complete. However， in the Internet world， we need to build a new ecological system，” says Wang Yu， director of ecommerce with Yanghe Corp.， the manufacturer of Yanghe No. 1.
The Expansion on Steroid
Zhang Gongbo， a local in Nanjing， Jiangsu， is running a small shop that is too small to be noticed. He only needs to spend 200 thousand yuan annually renting this small shop， but Zhang Gongbo was once very concerned about the survival of his business. As a dealer of Yanghe No. 1， the government and big enterprises used to be his major clients， while the small retailers could only be counted as the supplementary force.
However， the Chinese central government’s ban over the large and unnecessary banquets of governmental departments and state-owned enterprises almost scared him to death. He once thought that he needed to give up his business but soon he found the situation was not that bad.
“From this February to now （September）， we sold the wine products worth about 1 million yuan to about 100 clients， repeated buyers included. Averagely， one client spent over 10 thousand yuan in these six months. There are 5-6 of them spending over 50 thousand yuan，” Zhang Gongbo says. The unexpected income helped him to find a new channel to offset the shrunken governmental consumption. O2O is the name of the tool. In order to finish the delivery in half an hour as promised， Zhang Gongbo bought two motorcycles and one minivan.
Zhang Gongbo’s case epitomized the O2O trading platform of Yanghe No. 1. This pattern was tentatively used in Nanjing at the end of last year. By now， Yanghe No. 1 has covered 95% of the key cities in Jiangsu and launched the platform in 22 cities of Zhejiang， Guangdong， Hainan and other three provinces. Over 3000 dealers have embraced this pattern. According to a source close to Yanghe No. 1， this brand is going to have its O2O platform cover the developed cities in China. “Yanghe has over 300 thousand dealers nationwide and one third of them have directly available data. Presently， Yanghe No. 1 has 3000-4000 online outlets. We do not have the mechanism to cover all dealers. We have to put the location， quality and experiences into consideration. We hope we can find more than ten thousand qualified dealers before the end of this year，”says Wang Yu. According to him， the development of Yanghe No. 1 with the Internet is faster than expected.
This fast expansion in the Internet world is quite rare among traditional spirit enterprises in China. This is partially attributed to the focus of its steersman Zhang Yubai on the ecommerce. An insider from Yanghe says：“Zhang Yubai attends at least one Internet-related meeting every month to know about the latest development of this industry.”
Building up a New Circle
The ban from the central government has ended the 10-year golden age of the distilled spirit. The traditional spirit enterprises， which have been enjoying the feast for a long while， are now scrambling to find ways out. This March， Yanghe set up an Internet center.
“When we first touched the B2C， our products are packaged in the same way with those sold in supermarkets. The express companies did not pay too much attention to this， causing many glass containers and bottles to shatter when they were sent to customers. This dropped our ratings in the Internet to the lowest point. The bad user experiences deprived us of many opportunities in the online platform. So we had to use a new logistics company，” Wang Yu says. In addition， the failure to find a good third-party service supplier forced Yanghe to take this business by its own.“Previously， our customer service department was only responsible for providing assistance to dealers and handling the fake products. Now they have to face the consumers directly.”
In Wang Yu’s opinion， the scatter of many dealers is the biggest problem for the traditional ecommerce enterprises to move into the sector of ecommerce， such as finding a suitable logistics company and a rightful ecommerce partner. Wang Yu divided the needed partners into 38 subcategories and finding all of them is only the first step of developing in the Internet world. “In comparison， the ecommerce is more concentrated，” Wang Yu says. The partners are like the dealers of Yanghe in the offline business， but these partners are with different industries. “So， we are now taking charge of a few things that were originally assigned to our partners， such as big data management and software update.” The new Internet center of Yanghe employs over 100 people， a size that is larger than most middle-sized companies in the IT industry.
The center consists of four departments， including the Internet business department （mainly running O2O， B2C and B2B）， the system technology department， the original design department and the ground promotion department. The departments of ground promotion and design are somewhat coincidental with the traditional departments. “The new Internet center seems to be exotic， an extension from the original business circle. So we need to take different methods and ideas from the ones we were familiar to，” says Wang Yu.
The Unconfirmed Profit Pattern
“Put more efforts into promotion，”this is the only requirement of Zhang Gongbo， who is among the first O2O dealers of Yanghe. In the past half a year， this brand only had one promotional event with obvious effect： Zhang Gongbo received 5000 orders in seven days and the sales volume hit 4 million yuan.
“When there is a big promotional event， the number of orders will increase apparently. In ordinary times， I could only receive 4-5 orders on a daily basis，” Zhang Gongbo says. “The O2O is good for dealers， but the ecommerce is the competitor.”
But when the wine enterprises could get rid of the promotion-driven sale？ By now， no one has got close to the answer. Apart from Yanghe， Jiuxian. com， which spent the most in the O2O sector， could not find the way of earning money by now， Jia Jingfeng， general manager of another O2O practitioner Jiukuaidao.com， also admits that her company could not find the profitability pattern， but this is not what’s in her mind since taking the market is the most important thing.
The brands have defects too. “There are too few products，” Zhang Gongbo says. Yanghe only sells its products. “We usually do not accept the other brands， but a brand could be diversified in， for example， introducing high-end food， health supplements and so on，” Wang Yu says.
In addition， O2O has high requirements over the offline cooperation. “It might be hard to realize the delivery within half an hour in Beijing since the traffic jam might be a nightmare here，”Wang Yu says. In addition， it is an urgent task to improve the brand awareness among clients. “The propaganda is not done well.”