"Doing B2b is like a piece of fat meat, you can see it but can't eat it." A distributor once said this. In the past, based on judgment of industry trends, New Distribution has been advocating for capable distributors in various regions to transform into B2b platforms, especially in the leisure food and beverage categories. But B2b has certain thresholds and is not suitable for all distributors. As industry competition intensifies, is there a second path? Previously, New Distribution reported on Henan Shizhirui's "whole-store output" model for daily chemicals, which attracted attention from many distributor bosses. We believe that deep cultivation of categories and becoming a category operator is also a certain direction. So, besides B2b, are there similar cases of whole-store or whole-shelf output in the leisure food category? Recently, I had the opportunity to visit Ms. Zhang Gaifeng, General Manager of Zhengzhou Dapeng Trading. Dapeng Trading currently represents over 300 brands, with more than 2,000 SKUs, covering over 2,000 stores, with business scale exceeding 100 million yuan. Amid the sharp decline in supermarket business, Dapeng Trading has bucked the trend by deeply cultivating categories and channels, empowering stores through whole-shelf output. This article shares the case of Dapeng Trading, hoping to inspire distributor friends.

Embrace change and actively lay out new channels

In 1997, Zhang Gaifeng graduated from university and entered a leading local food company. A year later, she joined a foreign enterprise as a regional manager. Since entering the industry, she has dealt with well-known domestic and international brands such as Perfetti, Xizhilang, and Lotte, which laid the foundation for her pursuit of high-quality products. As business scale gradually expanded, to better balance family life, in 2002, Zhang Gaifeng transitioned from a manufacturer manager to a distributor, officially entering the trading field. To achieve "walking on two legs," she initially focused on both circulation and supermarkets, but as the business was just starting, she couldn't manage both in terms of professionalism and energy, so she focused on the flexible circulation channel, making it deep and thorough. The growth from a single channel is always limited. With continuous improvement in channel capabilities and operational professionalism, when the Bailong Market opened its commercial building in 2017, Zhang Gaifeng entered Bailong Market, started a second venture, adjusted product structure, and returned to the supermarket channel. Zhang Gaifeng highly admires Alibaba's "embrace change" philosophy. Over the past two decades, facing industry changes, she has practiced it herself—embracing change and actively laying out new channels.

In 2016, when Retail Link started, Dapeng Trading was among the first suppliers. Having previously worked with Bestore, Zhongshang Huimin, etc., the team was able to respond quickly and fully embrace Retail Link. Later, when representing a certain brand, they chose to cooperate directly with Alibaba, cutting off all distributors nationwide. To compensate for the declining share, Dapeng Trading responded promptly, seeking new breakthroughs—community group buying—and became one of the first suppliers when Xingsheng Youxuan entered Henan. When community group buying growth slowed, Dapeng had already moved to the next trend—e-commerce live streaming. Zhang Gaifeng said that distributors must have a sense of crisis. While doing current business well, they should also think about whether there will be business in the next 3-5 years. Once there is an opportunity, actively try it, extract a small branch to practice. If successful, it becomes the next growth point; even if it fails, it won't affect the overall. For example, when deciding to lay out e-commerce live streaming, they did community group buying during the day and learned how others stream at night, trying to contact anchors and influencers, and only after matching did they start building an online team. Since 2019, they have built an e-commerce live streaming team, and almost all top and mid-tier anchors in Henan have become partners of Dapeng. At its peak, they opened 6 stores on Douyin's single platform, with a single live stream selling over a million yuan. Just last year, Zhang Gaifeng noticed that customers coming to Bailong were very anxious, with supermarket traffic declining sharply and business shrinking significantly. "The decline in traffic is just a surface phenomenon. The deep reason is that the products currently offered by supermarkets cannot meet consumer needs; offline products urgently need updating." "Dapeng has rich e-commerce operation experience. Why not introduce new and unique products that have been successfully sold online into offline?" So, Dapeng Trading seized this entry point, positioning itself as e-commerce hit snacks, and with its professionalism, empowered supermarkets through category operations and whole-shelf output.

Whole-shelf output, small categories leverage big business

How to differentiate in such fierce market competition? Dapeng Trading's answer is to find opportunities in frontier categories. Frontier categories are small categories that are growing. For example, coffee. In July 2023, Zhang Gaifeng found two growing categories from data disclosed by major platforms: coffee and low-temperature dairy. Weighing both, coffee is a high-ticket category that can lock in high-value consumers, and it occupies a small share in supermarkets. Small businesses can't do it well, and big businesses overlook it, making it easier to break through. After determining the direction, Dapeng Trading quickly assembled ten major brands and further expanded product richness. With products in hand, how to expand influence? Zhang Gaifeng's approach was to use whole-shelf output to find top 100 national enterprises to set benchmarks. Thanks to a good reputation in the industry, Dapeng Trading successfully connected with Xinyu Lou. As an old retail enterprise in Hebei, Xinyu Lou is known for its quality products and "extreme" service, and was a model for Pangdonglai in early years. Currently, it has 43 stores in Hebei, Shandong, etc., with single-store revenue exceeding 100 million yuan. If they could set a good example at Xinyu Lou, it would validate the idea and be easily replicated nationwide. Previously, Xinyu Lou's coffee category had no golden brand. Facing such a small category, they only allocated one shelf for trial. Based on online data and analysis of store consumer demographics, Dapeng sorted out the coffee category and price bands, categorizing coffee liquid, freeze-dried, instant, coffee beans, etc., and placed them on shelves. Initially, it was very difficult; display space was limited, and all distribution had to be broken into pieces, which was very costly for a cross-regional supplier. But Dapeng Trading had one principle for Xinyu Lou: even if they lose money, they must do it. To support sell-through, in display, Dapeng used the best standards in the industry for product presentation, using Pangdonglai supplier standards for shelves and floor displays. From October when they started building the model to the official opening, Xinyu Lou's coffee category saw significant growth in average transaction value and sales. Within half a year, coffee shelves increased from 1 to 3. The success of Xinyu Lou's coffee category validated Zhang Gaifeng's idea: to improve product categories, one must do high-growth categories. Zhang Gaifeng said, "As living standards improve, consumers' requirements for quality will also increase. If we deny the display value of high-end products because of slow turnover, we will lose some high-quality consumers. Moreover, Xinyu Lou's service and product quality are famously good. With such a good foundation, we should not only do high-quality business but also continuously upgrade!" After discussing with the department head, Dapeng Trading introduced high-ticket products like imported coffee beans and freeze-dried coffee, further enriching the category structure, and used three shelves to cover the entire coffee category across 43 stores. The successful creation of a benchmark market has made Dapeng Trading an "expert in the coffee category" in the industry. Based on the cooperation with Xinyu Lou, Dapeng Trading has developed a standardized display for supermarket coffee areas, and based on different shelf positions and store traffic flows, it provides a complete set of solutions and detailed shelf displays with different scales, price bands, and flavors. This also led to new business opportunities—retail enterprises from various regions came to seek cooperation, even creating "coffee towns" within stores. It also drove sales of other categories.

Do a good job in store services and deeply empower supermarkets

The above case is based on category operations, but how to implement it at the terminal and help stores sell through? Supermarkets want differentiated products that sell well. Dapeng Trading focuses on e-commerce hit snacks, so differentiation is there, but not all internet-famous products can sell well offline. To avoid problems caused by "acclimatization," product selection has become the top priority. Unlike traditional distributors, Dapeng Trading completely delegates product selection to the team, with triple checks and combined selection.

First check: The post-00s team selects for appearance. The main consumers of leisure food are young people. The first step is controlled by the young team to catch consumers' eyes with appearance. Second check: The post-80s and 90s team selects for quality. Only products with good quality will generate repeat purchases. Third check: The boss checks the company's background and strength to ensure reasonable profit margins and stable upstream supply.

Only products that pass the triple screening can enter Dapeng Trading's shelves and be provided to downstream stores. Zhang Gaifeng said, "Besides product selection, the timing of introducing internet-famous products is also important. If you do it too early, you become a martyr; half a step earlier, you become a pioneer. Everyone is different; you need to have nodes and rhythm to fight." In cooperation, basically all customers will focus on the top banners, but Dapeng Trading does not recommend blindly copying, but adjusts according to actual market conditions and provides targeted solutions. For example, a certain supermarket's hot-selling category is coffee powder, but in the same region, the best-selling single item in convenience store systems might be coffee liquid. Products in stores are not static; they are adjusted in display and category proportion based on subsequent data feedback. In Zhang Gaifeng's view, what distributors need to do is not just put products on shelves, but truly stand in the store's position and help stores sell through. By deeply cultivating channels and categories, based on different store characteristics, they help stores do category management and product combination to better serve consumers. Therefore, Dapeng Trading proposed the service concept of double compensation for price differences and after-sales support. If products don't sell well, Dapeng will provide a full set of operation and sell-through methods, and at critical moments, send teams for on-site support, follow up on all customer needs, and help customers turn goods into cash. It is precisely because of such structural product selection, product combination, and continuous follow-up and adjustment that stores transformed by Dapeng Trading typically achieve 20%-30% growth in sales, in addition to increased category capacity.

Final thoughts

After talking with Zhang Gaifeng, I have a deep feeling: the market changes quickly and is complex, and distributors must evolve with market changes. In the past, based on entrance dividends and market dividends, distributors only needed to do distribution coverage to complete sales tasks and achieve good growth. But now, the market has entered an era of stock or even shrinkage. If distributors still only take on the functions of transportation, capital advance, and ordering, they cannot meet market demand. The era of making quick money is over. In the future, for distributors to survive better, on the one hand, they compete on sensitivity to market changes. Whoever notices industry change trends earlier and takes countermeasures will gain an advantage in market competition. On the other hand, they compete on their own professionalism. If you want to do retail store business, you must understand retail better than the stores. Based on stores, do category management well, help stores do brand combination and product promotion, and better achieve sell-through.