This round of "big price cuts" has stirred the industry and put immense pressure on countless distributors... Facing shrinking margins, inventory fluctuations, and channel turmoil, can distributors still make money? How are they finding opportunities in the cracks? In market visits, three distributors from South and North China have made timely adjustments based on regional market changes. Their real situations and coping strategies in the "price cut storm" may offer reference and inspiration for more distributors.
Tearing Open a Gap in the Stock Market Building Channel White-Label Products
"Since the second half of last year, price competition in the market has become very fierce. Both traditional and emerging brands are increasing promotional efforts, with prices generally trending down," said Mr. Chen, a distributor in a first-tier city in South China. Especially in basic beverage categories such as bottled water and tea drinks, retail prices have been continuously pushed down, putting enormous pressure on distributors. Facing price competition, Mr. Chen did not choose to blindly follow price cuts. Instead, he bypassed mainstream price competition, integrated downstream store demand, and collaborated with the supply chain to create channel white-label products. Since 2016, Mr. Chen has established a B2b platform covering 7,000 small and medium-sized stores, of which 6,000 are mom-and-pop shops. All orders are placed digitally online, with real-time monitoring of sales data for sub-categories such as electrolyte water and coconut water, identifying products with fast turnover and high purchase frequency. Mr. Chen noticed that coconut water has been steadily growing since monthly sales exceeded 10,000 boxes in 2024. This fits his white-label product selection strategy: categories in the explosive growth phase, already validated by the market for fast turnover, but not yet dominated by leading brands. After gathering market demand, Mr. Chen found factory partners for custom production, focusing resources on 6,000 small terminal stores. Such white-label bestsellers achieve a gross margin of 40% in the small store channel, far higher than Red Bull, Nongfu Spring, etc., becoming the profit pillar for stores. "With the same quality at half the price, neither stores nor consumers will refuse," Mr. Chen emphasized. How do such white-label products stand out on the shelves? Mr. Chen stressed that besides lower prices than mainstream brands, the quality and packaging must be close to mainstream brands. Consumers are attracted by packaging and price, and after trying once and finding the quality good, they will repurchase. Mr. Chen believes that emerging categories in the market use health marketing gimmicks, such as sugar-free drinks. Because they save on sugar costs, they are cheaper to produce but sold at higher prices. Some consumers have misconceptions, but consumers are not stupid; such products will not sustain repurchase rates. What consumers truly need are low-priced, high-quality products. Mr. Chen said: "It's not about selling whatever the manufacturer gives me; it's about making what consumers need. Now that beverages are so competitive, brands may not necessarily give you much profit; they can even be a burden. Making white-label products not only avoids price competition but also gives you the initiative in pricing and profit margins, allowing you to build your own operational system and tear open a new gap in the stock market."
Winning Through Stability Focusing on Mature Brands, Cautiously Testing Emerging Categories
Unlike Mr. Chen, another distributor in South China, Mr. Li, operates in a conservative third-tier city with high price sensitivity, where the mainstream price band is 3-4 yuan. Consumers are more accustomed to national brands like Nongfu Spring and Yili, and health-oriented products struggle to break through. The channel structure is relatively simple, mostly traditional supermarkets and small terminal stores, but supermarket channels are shrinking, and delivery costs to small stores are high. As a traditional distributor with over 30 years of deep market cultivation, 80% of Mr. Li's business comes from supermarket channels. Mr. Li admitted: "This year, supermarket channel sales have declined significantly. Big brands grab share with low prices, small brands survive with cost-effectiveness, and middlemen have a harder time." After experiencing the rise and fall of supermarket channels, based on local market consumption characteristics, Mr. Li has developed a "winning through stability" approach, adapting to the survival path of conservative markets. In product mix, he adopts a "one main, multiple auxiliary" strategy, focusing on mature brands and strictly controlling selection criteria for small brands. National brands account for 90%, maintaining basic sales through brands like Nongfu Spring and Coca-Cola to ensure stable cash flow. Small brands must have good quality and clean ingredient lists, excluding "concept products" such as health drinks without actual health value, to avoid inventory buildup from gimmicks. In market tactics, for emerging categories, he cautiously tests the waters with a "slow penetration" rule. Before penetration, there must be a sample market validating sustainability. Mr. Li typically benchmarks against adjacent first-tier markets; when a category becomes popular there, he waits 1-2 years before considering introduction locally. Mr. Li emphasized: "Gross margin is key; blindly following new products may crush cash flow." In an era of price wars and consumption stratification, this "winning through stability" approach may seem conservative, but it is an opportunity to deepen and solidify the base. Mr. Li put it bluntly: "We don't chase explosive growth; we want to still be alive in ten years."
Breaking Traditional Thinking Online C-End Reach, Offline B-End Feedback
Similar to Mr. Li's conservative consumption characteristics, Mr. Ji, a distributor in North China, also operates in a third-tier city with lagging consumption power. He has been deeply involved in the mid-to-high-end beverage market for ten years, focusing on "differentiated products" with higher margin space—imported drinks and niche brands—with annual sales of over 15 million yuan and a gross margin as high as 20%. This path was initially effective, but as beverage consumption downgraded and price wars impacted, niche products slowed down, and this approach hit a "ceiling." So Mr. Ji added to the existing structure by introducing mainstream big products such as Nongfu Spring and Master Kong, walking on two legs: "mainstream products for volume, differentiated products for profit." How can differentiated products sustain stable profits? Since 2022, Mr. Ji has been operating on Douyin, building a 3-person team for live streaming, short videos, and a Douyin store. Content formats include tasting shares, unboxing displays, and small promotions. The account now has over 70,000 followers, with peak live streaming attracting 30,000 concurrent viewers. Mr. Ji places great importance on online data feedback: "Our market response speed is now very fast; online sales and reviews can directly influence offline product selection." Whenever a new product arrives, it is first tested in small batches on the Douyin store to see consumer purchase feedback, comments, and repurchase rates before deciding whether to launch it widely offline. For example, before a certain natural soda water was listed, a 3-day online trial showed high conversion and fast repurchase, so it was quickly put on shelves in stores simultaneously. Moreover, products sold online via Douyin are the same as those in offline stores; every product sold in each live stream comes directly from nearby partner stores, delivered within one hour through hourly delivery services, and to surrounding cities by the next day, thus integrating the entire inventory. When offline stores run out of stock, Mr. Ji continuously replenishes, forming a closed loop. Additionally, Mr. Ji has opened platforms like Meituan, Ele.me, and JD Daojia for instant delivery, precisely reaching local consumer groups. This closed loop also brings confidence to offline stores for new product sales. Offline stores are usually cautious about new products, but when they see that a product sells well and has good reviews on the Douyin store, their willingness to accept increases significantly. Mr. Ji said: "Stores are not afraid of selling new products; they are afraid no one will buy. We share online sales screenshots and review videos with stores, and they are willing to put them on shelves for trial sales." This "C-end first validation, B-end then distribution" approach greatly reduces the trial-and-error cost of new product promotion, using traffic and sales results to boost store confidence. Mr. Ji stated: "I don't force stores to stock by pressuring them; I give them products that sell, making them willing to sell voluntarily." Therefore, for more distributors in third- and fourth-tier cities, if the price war is a "head-on" battle, Mr. Ji's "differentiation + mainstream, online + offline" approach is a flexible breakout strategy, providing a viable path of "borrowing mainstream, doing differentiation" for distributors lost in the price war.
Final Thoughts Through the analysis of three regional distributors, we conclude that when facing price wars, distributors do not only win by cutting prices. On the contrary, flexibly responding to market demand, strengthening channel execution, and enhancing customer stickiness are the keys to helping distributors survive the price war cycle. Although the three distributors have different approaches, they share two common points in dealing with the price cut wave: no longer "waiting for brand instructions," but actively setting their own pace; and moving away from the anxiety of "competing on price" to transforming toward "competing on efficiency and execution." As one distributor said: "After the price war, it will not be 'winner takes all,' but 'the capable eat more.'"