---
title: "12 'Food Stores' in a Wholesale Market, Annual Sales Over 100 Million, 30% Annual Growth: How Did This Distributor Do It?"
description: "A distributor who started in a wholesale market has built a chain of 12 snack food stores with annual sales exceeding 100 million yuan and 30% growth, by leveraging product selection expertise, scale advantages, and innovative distribution models."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-06-26"
language: "en"
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# 12 'Food Stores' in a Wholesale Market, Annual Sales Over 100 Million, 30% Annual Growth: How Did This Distributor Do It?

> A distributor who started in a wholesale market has built a chain of 12 snack food stores with annual sales exceeding 100 million yuan and 30% growth, by leveraging product selection expertise, scale advantages, and innovative distribution models.

Wholesale markets are not unfamiliar to distributors. Since the 1990s, most of the earliest distributors started their businesses by opening a storefront in a wholesale market. As their businesses grew, they gradually moved out of the wholesale market to establish independent operations.

In the eyes of many practitioners, wholesale markets are mostly associated with small traders, mom-and-pop shops, and individual businesses, often with limited scale. Either they barely make a living, or they are just starting out. In short, businesses in wholesale markets are often just getting by. It is difficult to build a large-scale trading company in a wholesale market.

However, at a recent New Distribution conference in Guangzhou, I met a distributor who has built a "big business" in a wholesale market.

This distributor is Mr. Chen Shouxian, General Manager of Guangzhou Baogong Trading Co., Ltd., who is also the founder of Qianhe Imported Food.

Recently, New Distribution interviewed Mr. Chen to learn how he expanded his snack food trading business and how he understands the distributor business. We hope his business logic can inspire other distributors.

**-01-**
**From Executive to Entrepreneur: 7 Years to Over 100 Million Revenue**
Guangzhou Baogong Trading was established in 2004. Before that, Chen Shouxian worked at China Foods' Le Conte Chocolate for 12 years, responsible for national marketing.

Speaking of entrepreneurship, Chen told New Distribution, "I considered many directions when transitioning from employee to entrepreneur. I chose the distributor business for two main reasons: first, low entry barriers; second, I had been in marketing and was familiar with distributors."

At that time, 2004 was the golden era for the rise of modern KA stores. With his professional marketing background and the rapid development of retail chains, his business went smoothly. By 2011, Baogong Trading's revenue exceeded 100 million yuan for the first time. Among them, the agency brands Wuqiong and Le Conte each exceeded 20 million yuan that year.

Baogong Trading's market coverage focused on KA stores in South China, such as RT-Mart, Carrefour, Aeon, Lotus, and ParknShop Yonghui.

By 2012, Chen felt the business was hitting a ceiling in KA store growth. To break through, he began new experiments and adjustments.

Chen told New Distribution that in megacities like Guangzhou, competition is fierce and opportunities may be limited. "Since there are no opportunities in big cities, let's go elsewhere—from being a distributor in a big place to a small place."

**-02-**
**Second Venture with Lower Market Entry: Another 7 Years to Over 100 Million Revenue**
In April 2012, Chen Shouxian established another trading company in his hometown Yichang, Hubei—Qianhe Trading—completely replicating Baogong's distribution model, focusing on local KA chain stores. Of course, in a place like Yichang, the number of modern channels is limited, so growth bottlenecks soon appeared.

But doing business in Yichang changed the market environment Chen faced. On one hand, the ceiling of KA store business was easily visible, so he had to consider broader channels to increase sales; on the other hand, during market visits, he found that although wholesale market business is traditional, it remains a major window for FMCG circulation in a city, and it is the most flexible and active business entity.

At the same time, in recent years, some wholesale markets in certain cities have completed infrastructure renovations with government support, improving transportation. The state has also introduced favorable policies to support wholesale markets, especially in taxation.

Moreover, costs are lowest in wholesale markets; operations are more flexible, less constrained by upstream and downstream, and cooperation terms are good; the service targets of wholesale markets are small shops, which are still a rapidly growing channel. Even with the rapid rise of e-commerce, its impact on small shops remains limited.

**Considering these factors, six months later, Chen Shouxian shifted from the "high-end" trading business to the mom-and-pop style wholesale stall business.**

**In January 2013, he found a stall in Yichang's wholesale market and started a food store business. In the first year, Qianhe Imported Food's revenue reached 1.2 million yuan.**

By the end of 2019, Qianhe Imported Food had opened 12 stores in wholesale markets across Hubei, Jiangxi, Shaanxi, Sichuan, and Guangdong. In 2019, sales exceeded 100 million yuan, achieving 30% growth compared to 2018.

**Again, within a 7-year cycle, Mr. Chen Shouxian built an independent trading business from zero to over 100 million yuan.** The 12 Qianhe Imported Food stores collectively cover nearly 30,000 terminal outlets, with 200+ partner brands and 3,000+ SKUs.

Unlike Baogong Trading, Qianhe Imported Food seems more profitable and has more business extensibility.

**-03-**
**What's Behind the 35% Annual Return on Investment?**
**Why can a snack food store based in a wholesale market open 12 stores in succession, with an average annual ROI of 35%?**

I think this is a topic every distributor is very interested in.

Let's break down the business logic behind it. First, I believe the most important factor is that **the success of Qianhe Imported Food is based on Baogong Trading's years of snack food distribution in Guangzhou, which provided a wealth of first-hand snack food information for Qianhe's product selection.**

Which snack foods sell well, which might become internet-famous products, and relatively popular items—whether it's the advantage of geographical location, Baogong Trading's years of KA store distribution, or Chen Shouxian's years of snack food business experience—all provide a massive product library for Qianhe Food.

This is also the key to why Qianhe Food stores can achieve a high turnover rate of 10-12 times per year!

Chen told New Distribution, **the logic for product selection in wholesale market stores is "more, new, and fast." Qianhe Food sells 200 brands a year, eliminates 30%, and introduces 30% new ones the next year. Through continuous screening, they gradually master the best-selling products based on the commercial characteristics of wholesale markets.**

**At the same time, as more stores are opened, product selection capabilities further improve, and the cost of trying new products becomes lower. Each new store opens with a complete product portfolio that has been verified to sell well in other markets.**

Chen explained that a normal snack food distributor might only represent a few brands, but in my wholesale market storefront, I supply 60 brands at once. For the snack food category, many small shops are willing to try new things.

This is the competitiveness in product selection. Additionally, **in terms of price, due to economies of scale, there is also a clear advantage. In wholesale markets, in fact, 80% of other merchants are not first-tier distributors; they source from local or nearby distributors, and to maintain the market, distributors generally don't offer cheap prices.**

But for Qianhe Food, it may directly be a first-tier distributor with scale procurement, allowing for high bargaining power. In Chen's understanding, this is a "dimensional reduction attack" strategy.

**With a rich product portfolio and scale price advantages, when small shop owners enter the store, it's not difficult to drive sales conversion.**

In terms of customer acquisition, in the first year, Qianhe Food "kept the store," relying on natural foot traffic in the wholesale market and waiting for customers to come; in the second year, they proactively developed external customers, as local and surrounding retail stores had more or less heard of Qianhe Food. At this point, with the wholesale market store as a carrier, development becomes more effective.

**-04-**
**Either Innovate Distribution Models or Improve Operational Efficiency**
In 2014, although Qianhe Food's business was still growing, Chen Shouxian was **very confused about the future direction of the distribution business.**

Even though he had completed an MBA at Renmin University in 1999, he continued his studies, enrolling in the Business Administration program at Grenoble Ecole de Management in France, and obtained a doctorate in 2019.

Chen told New Distribution that during his studies, he concluded: **To strengthen or expand a distributor business, one must either innovate in the distribution model or improve efficiency in distribution management.**

In fact, my second venture, Qianhe Imported Food, was an innovation in model. By combining upstream diversified products and using the wholesale market business format, I provide a rich variety of snack food procurement for surrounding small shops.

In Chen's view, **although not every distributor has access to such upstream product resources, some distributors can still reference and learn from this model.** At the same time, for other distributors, Qianhe Food can also generate more cooperation.

Additionally, Qianhe Food's cross-regional distribution path can inspire other distributors: when local market space is limited, consider releasing your advantageous resources across regions. If you've done well in urban areas, can you do well in surrounding county-level markets? If you've done well in first-tier cities, can you do well in surrounding third- and fourth-tier cities?

**Don't limit your business to the local area; instead, combine your resource advantages and achieve "dimensional reduction attack" across regions—this is also a good business logic. Knowing your strengths, focusing, and extending—I think this will bring different inspiration to every distributor who wants to further develop in the field of commodity circulation!**

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