---
title: "Acting as Agent for Hengan, Fortune Lin, Mondelez, etc., with Annual Sales of 80 Million and 7 Fresh Supermarkets, Let's See His 'Cross-Border' Business Strategy!"
description: "New Distribution has been advocating category-focused distribution, but cross-category operation can also succeed. Zhiyuan Trading in Leshan, Sichuan, started with daily chemicals and expanded to multiple categories, achieving annual sales of over 80 million yuan. Its general manager, Zou Yin, shares his methods for cross-category management, including internal controls, brand portfolio strategy, and goal-oriented business management, as well as his vision for future development beyond simple selling."
author: "周群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-02-17"
categories: "Brand Marketing, Management & Methods, Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/ic-iZQxoddYifOw21ZbX3Q"
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citation: "周群. “Acting as Agent for Hengan, Fortune Lin, Mondelez, etc., with Annual Sales of 80 Million and 7 Fresh Supermarkets, Let's See His 'Cross-Border' Business Strategy!.” New Distribution, 2021-02-17. https://xinjignxiao.com/en/articles/acting-as-agent-for-hengan-fortune-lin-mondelez-etc-with-annual-sales-of-dc8e943f/"
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---

# Acting as Agent for Hengan, Fortune Lin, Mondelez, etc., with Annual Sales of 80 Million and 7 Fresh Supermarkets, Let's See His 'Cross-Border' Business Strategy!

> New Distribution has been advocating category-focused distribution, but cross-category operation can also succeed. Zhiyuan Trading in Leshan, Sichuan, started with daily chemicals and expanded to multiple categories, achieving annual sales of over 80 million yuan. Its general manager, Zou Yin, shares his methods for cross-category management, including internal controls, brand portfolio strategy, and goal-oriented business management, as well as his vision for future development beyond simple selling.

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In the past, New Distribution has been advocating category distribution, where distributors should deeply cultivate a specific category, specialize and refine around it, and become one-stop category suppliers for small stores. Indeed, many category distributors who specialize and refine have developed well, but this does not mean that cross-category operation is necessarily bad. There are also many excellent cross-category, multi-brand distributors who have unique business methodologies in distribution and have achieved good results.
Zhiyuan Trading, located in Leshan, Sichuan, is an excellent comprehensive trading company. Starting from a single daily chemical category, it has expanded to focus on daily chemicals while spanning several categories including daily chemicals, leisure food, and grain and oil. It represents numerous well-known international and domestic brands such as Hengan Xinxiangyin, Seven Space, Free Point, Lafang, Diao Pai, Chao Neng, Lanju, Mars Wrigley, Dove, Fortune Lin, and Mondelez, with over 3,000 SKUs, covering nearly 3,000 outlets across all channels, with annual sales exceeding 80 million yuan.
Recently, New Distribution interviewed Zou Yin, General Manager of Leshan Zhiyuan Trading, to see how he continuously expanded through cross-category operation and achieved rapid business growth. We hope his methods in cross-category operation can provide some thoughts and inspiration to distributors who are in a state of confusion.

**-01-**
**Second "Entrepreneurship": From Single-Category to Cross-Category Operation**
Before starting his business, Zou Yin was a sales representative for a manufacturer, deeply involved in the frontline market for many years. It was his years of familiarity with the industry that accumulated upstream and downstream resources, and daily chemicals, as a necessity in people's lives, had great development potential. So in 2003, Zou Yin chose to start his own business, distributing daily chemical products.
At that time, he was still an individual business operator, not yet a trading company, and the products he represented were very single, only shampoo categories such as Caile and Lafang.
In the early days, leveraging the industry's dividend and his accumulated resources, the business was not bad. But the good times did not last long. Around 2008, package operators began to enter Leshan. Because he did not have strong shampoo brands, **his products were relatively single, and he could not control some high-quality and weighted stores, so his market share was gradually squeezed by package operators.** Therefore, in 2010, Zou Yin chose to transform, formulated a multi-category strategy, and formally established Leshan Zhiyuan Trading, which was equivalent to a "second entrepreneurship." Zou Yin told New Distribution that it was precisely because of this transformation that the company gradually improved. In the Sichuan region, many trading companies of the same type and scale that did not change have disappeared.
Starting from 2012, Zhiyuan Trading gradually got on the right track, expanding from a single daily chemical category to multiple categories including daily chemicals, leisure food, and grain and oil.
Moreover, with his keen insight into new things, when the community group buying model just emerged in 2018, Zou Yin believed this model was feasible, so he built a mini-program. In a short time, the number of members quickly expanded to tens of thousands, with the highest single-day orders reaching several thousand. But later, Zou Yin found that these customers lacked stickiness; sales only occurred with promotions.
So, he changed the model and opened chain fresh supermarkets, with 70% fresh produce and 30% standard products. In December 2019, he opened the first fresh food store, and until the last two days, he opened the 7th fresh supermarket. All stores are profitable.
From 2012 when the business got on track to now, Zhiyuan Trading has maintained business growth, with scale increasing from over 10 million before 2012 to 80 million, and maintaining a positive development momentum.

**-02-**
**"First Stabilize Internally, Then Expand Externally": Establish Advantage Barriers**
Zou Yin told New Distribution that in company management, he believes that internal management must be done well first, and then external operations and expansion. The core advantages of Zhiyuan Trading all come from past organizational reforms. First, financial and data internal control; second, brand and category portfolio; third, establishing goal-oriented business management.

**1. Financial and Data Internal Control**
Financial issues have always been a headache for many distributors. **In the past, most distributors did business based on experience, and the accounting of financial data did not form a standardized system, often leading to a series of financial problems such as untimely expense verification and inconsistency between expense data and actual conditions.** Zou Yin also deeply understands the importance of data, so in management, he puts 70% of his energy into internal control. **Through the data system, the company's financial data is connected with warehouse data, using the backend to drive the frontend.** This not only solves the manufacturer's expenses and policies, as well as basic financial issues such as accounts receivable, but also achieves accuracy between warehouse backend and frontend data, so that purchase data and sales data can match.
For example, in the past, if purchase data was 100 pieces and sales data was 90 pieces, the two data did not match, and the difference could not be found. But now, through data connectivity, purchase data and sales data are matched in real time, and any problem in the middle can be traced.

**2. Multi-Brand, Multi-Category Combination Punch to Quickly Occupy Terminals**
Taking daily chemicals as an example, in the past, distributors mostly did exclusive sales, but now it is clearly felt that many exclusive distributors cannot survive. **First, channels are fragmented, and terminals have more and more purchasing channels. Brand prices are basically completely transparent, leaving no other advantages to compensate for price. Coupled with increasing demands from supermarkets and rising personnel costs, exclusive sales cannot support it.**
**Second, there are more and more brands, and competition is increasingly fierce. The resource integration ability of a single brand is very weak, and the control over stores and voice in various aspects is certainly much smaller.** This is also the main reason why Zhiyuan Trading positions itself as multi-category and multi-brand. After determining the new positioning, Zou Yin also summarized a set of market strategies.
**First is product selection. After determining the category, you must choose strong brands within the category, selecting 2-3 of the top 5 brands in the category, with the combined market share of the selected brands accounting for at least 1/3 or even absolute leadership.** For example, for sanitary napkins, they represent Anleer, Seven Space, Free Point, etc.
Leveraging the influence of these brands themselves, they quickly open up the market and gain terminal voice. After opening up, they appropriately match one or two low-end brands to increase profits, but mainly focus on head brands.
When you have a market share of more than 1/3 in that category, you have enough voice at the terminal. It becomes difficult for brands of the same category to enter the market and support a competitor, and they often still come to you for agency.
Through this product selection method, the brands represented by Zhiyuan Trading are almost all first-line well-known brands, with very few low-end brands. With a combination punch of well-known brands, they quickly establish monopolistic advantages at the terminal. For example, representing Anleer, Seven Space, and Free Point, they account for more than 70% of the local market share in that category; representing Mars Wrigley, they account for more than 80% of the chewing gum market share; and washing products also account for more than 40% of the market share.
Of course, this product selection method will inevitably face two problems: **one is the conflict of interest between brands, and the other is the issue of profit margins.** Zou Yin told New Distribution that in fact, once you have an absolute advantage at the terminal, these are not problems. When you first start doing multiple brands in the same category, manufacturers will definitely have opinions, worrying about unfair resource allocation. **But you have enough voice at the terminal and can control it. Through the combination of these brands, Zhiyuan Trading can get 70% of the shelf space in the category shelves of supermarkets, and then allocate these shelf resources reasonably according to the resources given by manufacturers. Manufacturers often do not have too many opinions.** As for the profit issue, it mainly depends on how to operate. Although big brands have transparent prices and are easily impacted by e-commerce, the impact on large stores is limited. **Large stores need resources and expenses, and their requirements for price are not so high. Some products can have a price space of up to 30%, and as long as they are operated reasonably, the profit is enough to support.**
**Second, if you master store resources well, sales are guaranteed, and the expenses and rebates invested by manufacturers are enough.** These manufacturer expense resources can be integrated.
For example, the resources of brand owners in daily chemicals, leisure food, and grain and oil can be comprehensively utilized, entering stores in combination, buying displays, floor displays, etc. Concentrating resources to do front-end will reduce resource usage, which is also a way to generate profits. Therefore, even when representing mostly first-line brands, Zhiyuan Trading's profitability is not low, with net profit reaching 7-8 percentage points.

**3. Establish Goal-Oriented Business Management**
In the distribution business, business management is the most headache for distributors. **In the past, distributor compensation was relatively rough, mostly sales-oriented, which was neither here nor there for employees and lacked drive.**
Based on this, Zou Yin promoted the reform of the sales department's salary system, refining business management. **The composition of a salesperson's salary is 60% basic salary + gross profit tiered commission, and 40% market construction assessment and brand assessment.** The role of gross profit tiered commission is to increase employee work enthusiasm. For example, if gross profit is below 30,000, the commission is 3.5%; for the portion above 30,000, the commission is 7%. This huge gap makes employees pay more attention to profit improvement, and the company can also get more profit.
As for market construction and brand assessment, it is to increase the assessment of the salesperson's process, such as market construction including outlet development, internal tasks, PK, etc. Brand assessment mainly includes the brand owner's expense investment, terminal image requirements, etc.
Through this method, the most obvious change is in the salespeople: they have a stronger sense of goals. Whatever goals the company sets, they follow them, and employees' wages have also increased significantly. The wages of salespeople who follow the goals generally increase by 15%-25%.

**-03-**
**The Future Capability of Distributors Must Be More Than Just Selling Goods**
Returning to the essence of the distributor business, at present, it is still a middleman business, connecting manufacturers and terminals. Relatively speaking, it is still a relatively traditional business. But Zou Yin believes that **the future development of the trading business must be more than simply selling goods; there must be more new ways to connect.**
Zou Yin told New Distribution that **in the future, distributors will gradually develop towards platformization, and the function of distributors will shift from product output to solution output. The distributor's goods are only part of the product; terminal services, marketing plans, activity planning, etc., are also new products in the future.** For example, making joint business plans with small stores. Stores are the source of C-end traffic and the main source of sales. But many small stores, although they care about sales, do not have a methodology for doing business. For distributors, this is an opportunity: to make business plans for small stores, formulate sales promotion and distribution strategies, help small stores do business, and thus obtain more resources.
Not only that, but employees can also be allowed to do private domain traffic, such as having employees post on their Moments. For products sold through employees' private domain traffic, give high commissions. This is also what Zhiyuan Trading wants to do in the future: skip the B-end and go for C-end traffic.
To this end, Zou Yin also established Zhiyuan Business School as a planning company for Zhiyuan Trading. It is responsible for the company's brand output, product output, and solution output, and in the future will also serve as a platform for exporting talent, plans, and solutions.

**In conclusion:**
Recently, I visited many distributors in the East China region. From their actual operations, I observed some commonalities that are worth thinking about for other distributors. **When facing the impact of new retail, distributors' business encounters growth bottlenecks. Is there an opportunity for distributors to achieve curve growth? For example, the fresh supermarket chain opened by Zou Yin, or the regional convenience store chains opened by some distributors in Jiangsu. Could these chains become the second growth curve for distributors?** In the view of New Distribution, it is very possible. Taking regional convenience store chains as an example, although there are many mom-and-pop stores in many places, frankly speaking, these traditional small stores are not very competitive. Their characteristics are "messy," without vivid and visual displays, and without professional business guidance. They only have unchanging "old products."
But when distributors open regional convenience store chains, they must stand from a more professional perspective, using a complete set of methods, from product selection to selling, every link can attract consumers. Compared with most traditional small stores, they are more competitive.
From this level, distributors who open stores in familiar markets with familiar consumer groups and use professional models still have a great possibility of creating increment. **As Zou Yin said, the future opportunities for distributors must be more than just selling goods; there are more ways and methods to explore and try to increase increment.**

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## Citation metadata

- Publisher: New Distribution
- Author: 周群
- Published: 2021-02-17
- Canonical: https://xinjignxiao.com/en/articles/acting-as-agent-for-hengan-fortune-lin-mondelez-etc-with-annual-sales-of-dc8e943f/
- Original source: https://mp.weixin.qq.com/s/ic-iZQxoddYifOw21ZbX3Q

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