---
title: "Brand Owners Can No Longer Resist Low Prices!"
description: "The retail industry is undergoing dramatic changes, with price competition intensifying both online and offline. Brand owners are losing control over pricing and product assortment as retailers adopt new models like store renovations, instant retail, and discount retail, forcing a shift from confrontation to collaboration."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-10-23"
categories: "Brand Marketing, E-commerce & Instant Retail, Retail Formats"
language: "en"
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attribution: "New Distribution — https://xinjignxiao.com/en/articles/brand-owners-can-no-longer-resist-low-prices-f7b6ce00/"
citation: "袁来. “Brand Owners Can No Longer Resist Low Prices!.” New Distribution, 2025-10-23. https://xinjignxiao.com/en/articles/brand-owners-can-no-longer-resist-low-prices-f7b6ce00/"
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---

# Brand Owners Can No Longer Resist Low Prices!

> The retail industry is undergoing dramatic changes, with price competition intensifying both online and offline. Brand owners are losing control over pricing and product assortment as retailers adopt new models like store renovations, instant retail, and discount retail, forcing a shift from confrontation to collaboration.

Dear readers, I'm Yuan Lai from New Distribution.
Over the past two years, the changes in the retail industry can only be described as "earth-shattering." Both managers and executors in the market have felt this profoundly.
Of course, when these changes manifest in daily frontline business, the most obvious sign is price.
Things like whole-network price comparison, bare-price direct sourcing, everyday low prices, rock-bottom prices, and price deflation...
A couple of years ago, the price-related struggles were mainly with online e-commerce platforms, especially during 11.11 and 6.18. During these promotional periods, distributors would start complaining.
Now, distributors have stopped worrying because worrying doesn't help; they've gotten used to it.
Meanwhile, offline retailers have also begun aggressively comparing prices. They compare not only retail prices but also supply prices, online prices, same-city prices, and competitor prices.
Offline retail channels can't ignore price comparison. External sourcing, price cuts, stockouts, and declines not only directly impact sales but also potentially disrupt the price order across the entire channel.
I vividly remember that during the 2020 pandemic, the community group buying model expanded rapidly. Platform giants and capital entered the fray, heavily subsidizing prices to attract traffic. Nongfu Spring 550ml water at 0.9 yuan per bottle was common, as were Yili, Mengniu, Red Bull, etc.
At that time, major brand owners issued statements resolutely boycotting community group buying platforms. They blocked and cut off supply!
But now, at various retailers, the suggested retail price has long become a "decoration" and is useless. Take discount community supermarkets as an example: most daily chemicals, grain and oil, and condiments are priced at 60-68% of the suggested retail price in mainstream supermarkets.
Discount retail chains and renovated supermarket stores across the country are completely uncontrollable and don't listen at all.
In summary: **Today's retail changes mean that for brand owners, it's not just that there are more and more fragmented channels, but more importantly, they are increasingly uncontrollable. The past product discourse power seems to be gradually shifting.**
What changes are happening in offline retail today? I believe there are three core directions to focus on:
1. Supermarket renovation—establishing independent product management rights;
2. Instant retail—business dividends from new traffic;
3. Discount retail—exploring and co-building private labels.

**Supermarket Renovation**
Supermarket renovation has been the most frequent term in supermarket operations from 2024 to now.
Regarding the logic behind supermarket renovation, besides external factors like population and economy, I'd like to use a report jointly researched by BCG (Boston Consulting Group) and the China Chain Store & Franchise Association to help everyone understand why renovation is happening.
This is a chart of the evolution of the US and Chinese supermarket markets.
I want to show you the time periods corresponding to market development stages.
In the US, it took 14 years for the supermarket format to take initial shape; another 50 years for the chain store format to emerge, continuously improving supply chain and operational capabilities; another 30 years to start differentiating to meet the consumption needs of different customer groups. By 2010, e-commerce rose.
That's a full century of accumulation and iteration.
In contrast, China's supermarket market took 4 years to explore chain supermarkets, 15 years to complete land grabbing, and after 2010 entered the impact period of internet e-commerce, lasting until 2020.
Now it's in the stage of format differentiation.
From this perspective, compared to European and American markets, the development speed of Chinese supermarkets is simply "fast." Fast isn't bad, but for business operations, once speed increases, the foundation often becomes unstable.
Therefore, BCG made an evaluation that I think is very accurate: In 30 years, Chinese retail has completed the century-long journey of Europe and America.
European and American physical retail spent 50 years polishing modern lean management, 30 years iterating customer-driven business models, and the last 10 years exploring omnichannel models. Chinese physical retail, in just 30 years, completed "land grabbing" but didn't fully master the skills.
Now, with the demographic dividend disappearing and the economic downturn, it's time to catch up on three lessons: retail management, customer insight, and organizational culture building.
In the past, the logic of supermarket operations was: based on location, how many customers within a 5-kilometer radius, what's their income level, what are their customer profiles... Draw a circle, open a store, set up shelves, turn on the lights, run a promotion, and business would come.
Now that doesn't work. E-commerce has daily billion-yuan subsidies, community stores at the doorstep offer discounts, and instant retail delivers in 30 minutes. Offline supermarkets must adjust and clearly define their positioning: with so many channel choices, why should customers come to your store? What's the compelling reason to visit?
Selling good products and the right products is definitely the core competitiveness for sustainable supermarket operations. Therefore, controlling product discourse power is a core measure for supermarket improvement.
In the past, what products to sell, how to display them, what promotions to run, and what prices to set were all rules set by brand owners. These rules are now being broken. Wide categories with narrow selections, streamlined SKUs, bare-price direct sourcing, and cancellation of display fees are examples.
As supermarkets enter the lean management stage, it will inevitably have a fundamental impact on brand owners' original sales management systems.

**Discount Retail: Exploring and Co-building Private Labels**
Discount retail was most rampant in 2023 and 2024. Now the temperature seems to have cooled down somewhat.
The two leading groups, Wanchen and Henmang, have completed the initial stage of land grabbing and scale expansion. Other discount retail systems are also basically focusing on steady regional development, concentrating on optimizing store efficiency.
Why can discount low-price retail emerge? It's closely related to the overall market background of FMCG, with two core points:
First, China currently has overcapacity, making it easy to find upstream partners;
Second, China's distribution and distribution channels are more cumbersome, leaving more room for optimization.
I'll use the following chart to help you understand.
We believe that the barbaric growth phase of discount retail, driven by shortening the supply chain, is over. The next development goal must be on private labels.
In the past, local retailers lacked confidence in private labels, thinking they couldn't do it. But with the success of regional leading retailers like Pangdonglai, Taoxiaopang, and Xianfeng Life, represented by Henan, in exploring private labels, it has brought confidence to other peers.
As long as they maintain their original intention, follow the concept of "good quality at low prices," and keep trying and exploring, I believe they will succeed.
Not just discount retail, but for any retailer, private labels are a required course.
I believe that retailers' future category management strategies will likely strive for this ratio: 50% (private labels) + 25% (differentiated products) + 25% (top-tier name brands) = 100%.
In the face of retailers' awakening to products, confrontation is useless. Because today is an era of oversupply, the best response is co-construction.
Manufacturers and retailers should join hands, co-develop and customize, and build flexible supply chains.
On one hand, assist retailers in doing private labels and differentiated products. On the other hand, use sales channels to create common large single products for the category.

**Instant Retail**
With Alibaba's heavy investment, instant retail has seen another round of explosive growth.
Regarding instant retail, I'll focus on the instant retail model centered on platform flash sales. Others like Dingdong Maicai, Hema, Sam's Club Cloud Warehouse, and Pupu Supermarket can basically be treated as KA, so I won't elaborate.
I've made a chart for the instant retail model centered on flash sales to help you simply understand the differences between instant retail and other e-commerce or KA.
From the chart, you can understand that in instant retail, supply and traffic are separated. Supply is offline, traffic is online, and both are indispensable.
If the backend flash warehouse has your products but there's no frontend traffic, there's no business; if there's frontend traffic but the flash warehouse doesn't have your products, it's also meaningless.
It's both divided and strongly linked. Therefore, the operation of instant retail is relatively complex.
After discussions with friends in the industry, the core of instant retail flash sales business has three key points:
> 1. Supply system
> 2. In-store marketing
> 3. Platform traffic
From 2020 to 2025, before Alibaba entered, if there was only Meituan Flash Sales.
For brands, Flash Sales was more of a new traffic platform. The consumer group was young, mainly using emergency searches. Investing in platform-side fees was treated as brand advertising and brand mindshare occupation.
But with Alibaba's heavy investment and continued subsidies to educate users, plus the interweaving and integration with Alibaba's Tmall far-field e-commerce, instant retail will no longer be a simple emergency supplement in the future.
Additionally, it's likely that Tmall's far-field e-commerce will migrate to near-field e-commerce. The 30-minute instant retail model will have more room for imagination in the future.
Therefore, for brand managers, instant retail is a new format that must be heavily invested in over the next two to three years. At the same time, the core work to sort out at this stage is on the supply side, especially systematic supply cooperation with head and waist flash warehouse merchants.
To succeed in instant retail in the future, the first priority is: controllable supply and controllable operations. If the frontend platform has traffic but the backend supply doesn't have the right products to carry it, it won't work. At this stage, building the backend supply for instant retail is a critical period.
These are the three retail topics I see that brand owners need to focus on.
In summary, the core message is that today's offline retail is entering a new development stage: lean retail management.
We've always said that FMCG has entered an era of stock, but in fact, retail has also entered a stock phase. The core issue in the stock era is iteration. And the key measure for iteration is consumer-centric product structure optimization.
The era of just giving retail expense policies and gross margins is completely over! Today, every brand owner needs to re-examine this.


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## Citation metadata

- Publisher: New Distribution
- Author: 袁来
- Published: 2025-10-23
- Canonical: https://xinjignxiao.com/en/articles/brand-owners-can-no-longer-resist-low-prices-f7b6ce00/
- Original source: https://mp.weixin.qq.com/s/jLsWt1UE8nkLaGdd4hxojA

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