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- From wholesaler to online distributor with nearly 1 billion yuan in sales, what transformations did this traditional trading company undergo?
- As deep distribution evolves, what changes has digitalization brought to channels?
- Under the digital wave, where are the opportunities for brands and distributors?
With rising operational costs in labor, materials, and management, the profit margins of traditional FMCG distribution businesses have been further squeezed. Coupled with slowing market growth across the industry, traditional distributors are finding it increasingly difficult to do business. In this context, where exactly is the way out for traditional distributors? How should they respond to the wave of digital channel transformation? Recently, New Distribution interviewed Jiang Xiaoyun, General Manager of Shanghai Haige Trading Co., Ltd., to see how this nearly 30-year P&G veteran is navigating digital channel changes.
1 From Second-Tier Wholesaler to Online Distributor with Nearly 1 Billion Yuan in Sales Shanghai Haige Trading Co., Ltd. was established in 2010 as a distributor specializing in online daily necessities. Its distribution channels include Taobao, Tmall Supermarket, Alibaba Retail Link, Tmall Global, and Pinduoduo. To date, Haige has represented leading domestic and international brands such as Pampers, Sofy, 3M, Gillette, Vinda, and Safeguard. By the end of 2017, the company's sales officially exceeded 700 million yuan, with GMV from the Retail Link business alone reaching nearly 200 million yuan in just over a year. Before that, Haige was merely a traditional offline second-tier wholesaler, without even a single independently distributed brand.
On November 11, 2009, Taobao, together with multiple merchants, held its first large-scale online promotional event, achieving sales of 50 million yuan in just one day. Although the number of participating merchants and brands was limited, the turnover far exceeded all participants' expectations, which to some extent stimulated Haige, which was still in the wholesale business at the time.
Haige Tmall Supermarket event
"We originally did traditional wholesale, and the rapid growth of online orders showed us another opportunity. With a trial mindset, we officially opened our first online store on Taobao in September 2010. Although the store had only been open for a few months, performance grew quickly, showing us the huge potential of online business. So in August of the following year, we launched P&G's full product line, officially entered Tmall Supermarket, and gradually shifted our business focus to online. As online business volume grew, our sales officially surpassed 100 million yuan in 2011. When Retail Link came out in 2016, we realized it would conflict with our traditional offline business. In this situation, we had only two choices: either reject and refuse to cooperate, waiting to die, or proactively embrace change and adapt to it."
Jiang Xiaoyun, General Manager of Shanghai Haige Trading Co., Ltd., told New Distribution, "Deep distribution is an inevitable trend. At that time, we also planned to do deep distribution, but building our own team and distribution system was too costly, so we chose to cooperate with third parties. Because Retail Link weakens the hierarchy of the entire supply chain, it will inevitably bring higher circulation efficiency and lower distribution costs compared to our traditional wholesale business."
Haige Retail Link promotional event
As one of the earliest TP (Third-Party) operators, Haige initially treated Retail Link as a supplementary distribution channel, launching only the Pampers brand at the start. However, after a month of familiarizing with the platform's rules and processes, Haige decided to fully commit to B2B operations, subsequently launching brands like Sofy, 3M, Gillette, Vinda, and Safeguard, and establishing a dedicated team for B2B operations. After more than a year of development, Haige's overall sales on the Retail Link platform have approached 200 million yuan.
2 A Veteran P&Ger on Operational Shortcomings: Data Before joining the Haige team, Jiang Xiaoyun worked at P&G in big data analysis and market sales. Her years of industry experience gave her a unique understanding of the value of data. After joining Haige, she first added a data analysis department to the original organizational structure, because in her view, only data capability can form a company's core competitiveness and better guide daily business decisions.
Haige wins the 2017 First Retail Link Best Trade Partner Award
"Previously, all our decisions were very blind. The data shared by the platform was not detailed enough to guide our decisions. Now, reports are generated daily, including sales by brand and SKU, on-shelf rate, inventory, and daily sales. This allows us to analyze the causes of problems—whether they are due to insufficient inventory or poor online marketing activity design—so we can make timely adjustments, ensuring every decision is evidence-based. However, this does not mean we adjust our business daily based on data changes; it just keeps everyone informed about daily sales figures. Additionally, we review monthly data every month and track progress against annual plans, so every step of our daily work proceeds methodically, unlike the blind approach before."
Beyond daily operational decisions, big data guiding daily purchasing is another manifestation of data's value. Jiang Xiaoyun told New Distribution that previously, purchasing relied on team experience, often resulting in significant errors. Now, the big data system can automatically plan suggested purchase quantities for each brand and SKU based on historical and period-over-period data, greatly reducing reliance on people and experience for each purchase.
3 Opportunities and Challenges for Brands Different brands have different market strategies, leading to varying attitudes toward different channels, which is also reflected in their strategies for emerging e-commerce. Brands with deep offline distribution tend to be more conservative toward online B2B channels, while new brands are more aggressive and willing to cooperate with emerging e-commerce channels.
"Brands are more involved with Tmall Supermarket online. Whether it's activity planning or product management, brand personnel have direct departments for management and liaison, and the design of each link is relatively complete. We are more responsible for execution," Jiang Xiaoyun told New Distribution. However, regarding cooperation with B2B platforms, brands show significant differences: some actively participate, some move from passive observation to participation, and others are still watching. Even those already participating are mostly led by the sales department, with low marketing department involvement, so daily activity design, execution, and communication with platform personnel are often handled by TP teams. This is an area that needs further optimization. When asked why, Jiang Xiaoyun analyzed the following two main points:
1. Long decision-making cycles. For large brands, whether to invest significant time and energy into a new channel or market path requires a long period of observation and consideration. However, once they decide to enter a new channel, internal response is quick. Even if they miss some market opportunities in the process, it is much less costly than blindly investing in the market. Especially when existing market channels still account for a high proportion, brands remain in a wait-and-see stage regarding new channels like B2B.
2. Cost comparison: The cost investment in emerging versus traditional channels is also an important consideration for brands. Brands with deep distribution systems have comprehensive product distribution systems and sales teams nationwide, which have been formed and perfected through years of continuous investment. This makes it necessary for brands to weigh costs such as personnel and marketing expenses when facing new channel choices.
"Channel transformation requires a relatively long process, but it is undeniable that informatization and digitalization are inevitable trends. In this environment, no brand can stay aloof." In Jiang Xiaoyun's view, B2B platforms like Alibaba Retail Link represent a significant development opportunity for brands, especially small and medium brands without deep distribution systems. They can leverage the existing sales network of B2B platforms to quickly complete product distribution and break into the market in a very short time. However, brands that have already established deep distribution systems should not ignore emerging channels like B2B. How to correctly handle the relationship between different channels is the real issue that large brands should consider.
Previously, most brands focused their main market efforts on traditional KA supermarkets and hypermarkets. On one hand, KA channels contributed a large portion of sales; on the other hand, traditional retail small stores are numerous and scattered with relatively low per-store output, deterring many brands. In this situation, brands had to rely on numerous distributors to cover small retail stores and distribute products. However, with the development of various B2B platforms, traditional distributors have come under further pressure.
New Distribution believes that the transformation of information channels is both a challenge and an opportunity for every industry participant. Brands that can seize this wave can use emerging channels to further strengthen their deep distribution capabilities and quickly complete new product coverage, achieving "the strong get stronger." Conversely, brands that ignore the rise of emerging channels may lose a chance to overtake on the curve in the face of drastic changes and eventually decline.
The same applies to distributors. If they seize this opportunity, they may transform from traditional trading companies into information-based internet companies, such as Dunjie in Shijiazhuang, Hebei, and Huashang in Jiangsu. Not only have they significantly improved their business scale, but more importantly, they have completed their digital upgrade and transformation. Distributors who ignore these changes may find their business even more difficult in the future.
Digitalization is inevitable, and traditional distribution channels will inevitably evolve toward greater information transparency, more efficient communication, and streamlined hierarchies. In this process, some will fall behind, and some will achieve counter-trend growth by grasping trends. The core difference between the two lies in their attitude toward new things, as Jiang Xiaoyun said, "How can a distributor who leaves work at 5 or 6 PM compete with a B2B platform that is still working overtime at 10 PM?"
In late August, the "2018 China Digital Innovation Conference (2018FDIC)" will be held in Shanghai, hosted by the China FMCG Industry Association and organized by New Distribution, with the theme "Finding New Growth Engines."
The conference will last three days, focusing on two main themes—marketing and supply chain—and six parallel forums: brand, channel, communication, B2B, same-city logistics, and innovative retail. We will invite industry experts, CEOs, and brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry.
We will invite over 500 FMCG enterprise executives, 200+ B2B industry CEOs, and 1000+ major FMCG distributors to gather and discuss how the FMCG industry can use digital tools to achieve renewed rapid growth in the digital era. This conference will build a bridge for brands, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers obtain the latest information, understand best practices, and master more transformation skills.
The following is the list of invited companies
Conference Time August 22-24, 2018
Conference Venue Shanghai Baohua Marriott Hotel
Conference Content August 22: Full-day registration Afternoon 14:00-17:30: Distributor same-city logistics parallel forum Evening 18:30-21:00: New Distribution Night Gala Dinner
August 23: Theme: Marketing Digital Innovation Morning 9:00-12:00: Marketing Digital Innovation Main Forum Afternoon 14:00-17:30: Brand, Channel, Communication Parallel Forums
August 24: Theme: FMCG Supply Chain Digital Upgrade All day: FMCG Supply Chain Conference
Registration Method Registration is now open. Long press the QR code below or click 'Read Original' to register. Early bird tickets are limited to 200, with a 50% discount, available while supplies last!
Registration Consultation Ticket inquiries: Media cooperation inquiries:
New Distribution Previous Conference Highlights Click the links below to review the highlights of the 1st, 2nd, and 3rd FMCG + Internet Conferences:
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