---
title: "Dialogue with Chen Liping: 'De-intermediation' Is a False Proposition!"
description: "In the winter of 2025-2026, China's FMCG and retail industry seems to be in a collective 'confusion'. On one hand, there is visible involution: e-commerce platforms compare prices, livestream e-commerce breaks prices, and hard discount stores slash prices. On the other hand, there is a panic spreading deep in the channels—de-intermediation. Platforms shout 'direct sourcing from the source', various new retail models shout 'direct supply from manufacturers', and brands ponder DTC (Direct to Consumer). It seems that overnight, distributors, agents, and wholesalers who have been struggling in this industry for decades have become redundant roles hindering efficiency."
author: "任文青Andy"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-01-21"
categories: "Dealer Operations, Distribution & Channels, E-commerce & Instant Retail, Retail Formats"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/CbP8-X2M8sdH11qfGC9-DQ"
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citation: "任文青Andy. “Dialogue with Chen Liping: 'De-intermediation' Is a False Proposition!.” New Distribution, 2026-01-21. https://xinjignxiao.com/en/articles/dialogue-with-chen-liping-de-intermediation-is-a-false-proposition-9ecb43e0/"
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---

# Dialogue with Chen Liping: 'De-intermediation' Is a False Proposition!

> In the winter of 2025-2026, China's FMCG and retail industry seems to be in a collective 'confusion'. On one hand, there is visible involution: e-commerce platforms compare prices, livestream e-commerce breaks prices, and hard discount stores slash prices. On the other hand, there is a panic spreading deep in the channels—de-intermediation. Platforms shout 'direct sourcing from the source', various new retail models shout 'direct supply from manufacturers', and brands ponder DTC (Direct to Consumer). It seems that overnight, distributors, agents, and wholesalers who have been struggling in this industry for decades have become redundant roles hindering efficiency.

In the winter of 2025-2026, China's FMCG and retail industry seems to be in a collective 'confusion'.
On one hand, there is visible involution: e-commerce platforms compare prices, livestream e-commerce breaks prices, and hard discount stores slash prices. On the other hand, there is a panic spreading deep in the channels—de-intermediation.
Platforms shout 'direct sourcing from the source', various new retail models shout 'direct supply from manufacturers', and brands ponder DTC (Direct to Consumer). It seems that overnight, distributors, agents, and wholesalers who have been struggling in this industry for decades have become redundant roles hindering efficiency.
'Does our trade still have a future?' 'Will distributors no longer be needed in five years?'
Carrying these anxieties and questions from the front line, on the eve of the 11th China FMCG Conference (CFC) in Chengdu in March, I paid a special visit to Professor Chen Liping from Capital University of Economics and Business, an authoritative expert in China's circulation field. In a tea-scented meeting room, we had an in-depth conversation.
In the dialogue, Professor Chen did not use ambiguous academic jargon but, in a tone almost like a 'wake-up call', threw out a judgment that subverts industry consensus:
'Everyone is talking about "de-intermediation" now, but in a market as complex as China's, where demand is fragmented due to drastic demographic changes, I believe "de-intermediation" is actually a false proposition!'
He asserted: The urgent problem the market needs to solve is not to eliminate intermediaries, but to call for the birth of a 'new type of intermediary'.
### **'De-intermediation' Is a False Proposition:**
### **A Counterintuitive Truth About Efficiency**
In the dialogue, Professor Chen Liping first deconstructed the logical trap behind 'de-intermediation'.
Many people think that shipping directly from the factory to consumers, or having factories directly connect with retail terminals, shortens the chain, thus maximizing efficiency and minimizing cost.
'This is a linear, industrial-era outdated mindset,' Professor Chen retorted. 'Look at Japan, where commerce is highly developed, and the United States. Have their distribution systems been "de-intermediated"?'
On the contrary, in Japan, super wholesalers (shosha) like Mitsubishi Foods and Itochu Corporation have not only survived but, through cross-shareholding, mergers, and reorganizations, firmly control the lifeline of Japan's retail industry. The strength of Japan's 7-Eleven convenience stores is supported by a powerful wholesale system.
Why? Because the essence of efficiency is the sum of social division of labor.
Professor Chen gave us a calculation: Facing millions of mom-and-pop stores and community stores in China, and hundreds of millions of fragmented consumers, if a soy sauce factory or a milk factory were to directly connect with every endpoint—
Your logistics costs would become astronomical (shipping a full truckload vs. shipping 10,000 express parcels);
Your communication costs would become a disaster (dealing with one distributor vs. dealing with 10,000 store owners);
Your after-sales system would collapse directly.
'The more mature the market and the more segmented the demand, the more important the value of intermediate links.'
In the current economic environment, the retail end faces huge uncertainty, with a high risk of inventory backlog. Who will be the buffer? Who will provide advance payment services? Who will handle near-expiry returns and exchanges?
Even if retailers negotiate 'naked prices' directly with manufacturers, functions such as logistics, in-store services, and financial credit terms still exist and must be undertaken by someone.
'Only intermediaries rooted in regions and deeply embedded in local areas can solve these problems at the lowest cost.'
So, Professor Chen's first core point is very clear: The crisis in China's circulation industry has never been due to too many links, but because the links are 'ineffective'.
Those 'middlemen' and 'scalpers' who only move boxes in warehouses and make profits from information asymmetry will indeed be eliminated by retail evolution, algorithms, and e-commerce.
But that is not called 'de-intermediation'; it is called 'survival of the fittest'.
### **The Real Crisis: 'People' Have Changed,**
### **But Your Logic of Selling Goods Is Still Stuck Ten Years Ago**
If 'de-intermediation' is external noise, then the drastic demographic changes are the internal 'tsunami' that Professor Chen Liping believes the industry must face head-on.
During my daily visits, many distributors complain to me that business is hard and goods don't sell. I ask them, 'What are you selling? Who are you selling to?' They answer: to families. According to Professor Chen's observation, such a mindset is already ten years behind the times.
Professor Chen pointed out that Chinese society is undergoing an unprecedented wave of 'fewer children, aging population, and singlism'.
In the past: We faced the typical 'three-person household' or even three generations under one roof. The logic then was 'large packaging, stockpiling, and pursuing average cost-effectiveness'. Distributors could lie flat and earn money by simply distributing general goods to hypermarkets;
Now: The average household size in first-tier cities has dropped sharply, with single young people and empty-nest elderly becoming the main consumers.
This means that 'cooking at home' is becoming a luxury, and 'difficulty in eating' has become a new social pain point.
> A single young person, after work, doesn't want to buy a whole cabbage; they need pre-cut, pre-matched semi-finished products;
>
> An elderly couple can't finish a 10kg bag of rice; they need healthy, easy-to-cook elderly-friendly food;
>
> A small family doesn't have time to push a cart in a hypermarket; they need three meals a day that can be solved within 15 minutes at the community entrance.
The contradiction lies here: Our upstream factories are still mass-producing standardized industrial products; but our downstream consumers need fragmented, personalized, service-oriented 'life solutions'.
Between the two, a huge gap has emerged.
Whoever can fill this gap will be the king of the future.
Professor Chen Liping believes this is precisely the opportunity for the rise of 'new-type intermediaries'. Retailers (especially small and medium-sized supermarkets and convenience stores) lack the ability to customize upstream, and factories lack the ability to serve downstream.
There must be a group of intermediaries that transform from 'selling goods' to 'selling solutions'.
### **Where Is the Way? Japan's LOPIA and**
### **Three Functional Forms of 'New-Type Intermediaries'**
So, what is the specific path?
Professor Chen has mentioned Japan's retail 'dark horse'—LOPIA supermarket—on multiple occasions. This company has maintained astonishing high growth for many consecutive years against the backdrop of a major recession in Japan's retail industry.
Although it is a retailer, the essence of its success lies in its extreme supply chain integration capability, which is precisely the core function that future 'new-type intermediaries' must possess.
Professor Chen believes that future intermediaries will no longer be simple trade transit points but will evolve into the following three functional forms:
First, evolve from 'porters' to 'supply chain organizers'
LOPIA's predecessor was a butcher shop. The reason it can sell beef well and cheaply is that it has connected the entire chain of breeding, slaughtering, processing, and retail.
Professor Chen proposed that future intermediaries must have 'deep processing capabilities'. You can no longer just transport potatoes from farmers' fields to supermarkets. You need to turn potatoes into mashed potatoes, pre-made dishes, or semi-finished products. 'Create value through processing, not profit through markup.'
This is what Professor Chen repeatedly emphasizes: Low prices have no stickiness; only strongly relevant services truly have stickiness.
Second, evolve from 'traders' to 'product managers' (PB developers)
'Current retailers, especially regional retailers, are very painful. Selling general goods yields no gross profit and is compared by e-commerce; but rushing into private brands all at once is also complete nonsense.'
Professor Chen pointed out that in mature markets, private brands are often developed with the assistance of professional intermediaries (shosha).
New-type intermediaries should become the 'shared product department' of retailers. You use your familiarity with the upstream to help ten or a hundred small and medium-sized supermarkets jointly customize products. You no longer sell the manufacturer's brand; you help retailers build their brands.
Third, evolve from 'game players' to 'digital service providers'
At a time when traffic in first- and second-tier cities has peaked, Professor Chen specifically mentioned that intermediaries must build data-based service capabilities.
'It's useless to just talk about prices with retailers. You need to use data to tell them: What sells well? How to arrange shelves? How to make product combinations?'
In the future, what intermediaries provide to retailers is not just goods, but also the 'profit logic' based on data.
### **The Era of Intermediary Consolidation:**
### **A 10 Billion Yuan Entry Ticket**
At the end of the dialogue, Professor Chen gave a very cruel but very realistic prediction.
'China's intermediaries will enter an unprecedented period of major consolidation in the next decade.'
Traditional 'markup-type intermediaries' are collapsing, and the market is brewing the rise of 'service-oriented intermediaries'. Whether it is retailers uniting upward to build supply chains or traditional distributors transforming, it is still in the early stages of development.
He mentioned a number in the dialogue: 10 billion.
'In the future, intermediaries may need to reach a scale of 10 billion yuan to be qualified to "sit at the table".'
This does not mean you have to achieve 10 billion alone, but rather 'joining forces for warmth'. Current distributors are too scattered; scales of tens of millions, or even 200-300 million or 1 billion, will be hard to survive in the future. Professor Chen suggested that distributors in the region must break down barriers of parochialism and form regional giants through cross-shareholding, mergers, and reorganizations.
  * Only with sufficient scale can logistics costs be minimized;
  * Only with sufficient scale can there be bargaining power with upstream manufacturers;
  * Only with sufficient scale can the high cost of digital transformation be borne.
De-intermediation is a cognitive false proposition; functional restructuring is the real revolution in circulation. This is not just a simple industry adjustment; it is a gene-level evolution.
### **Conclusion: Chengdu in March, Understand the Way to Survive**
After communicating with Professor Chen Liping, I have a genuine feeling:
The industry seems to have entered winter, but winter freezes to death only the weak and sick. For those species with strong bodies and the wisdom to adapt to climate change, winter is precisely the best season.
If you don't want to be the 'old intermediary' ruthlessly crushed by the wheels of the times;
If you want to know which 'service-oriented intermediaries' are already on the road and how they do it;
If you want to connect deeply with them on-site and explore cooperation;
Then, on March 18th, the 'CFC China FMCG Distribution and Retail Conference' held in Chengdu is an event you absolutely cannot miss. The first awakened group of 'new-type intermediaries' in China will gather together.
We are honored to invite Professor Chen Liping to the scene for a重磅分享: 'Crossing the Cycle: Value Creation and the Rebirth of China's Circulation Industry'.
Here, you will hear not only viewpoints but also ideas and practices.
March, Chengdu, we'll see you there.
**【Moving Toward the C-End】The 11th China FMCG Conference**
**Time: March 16-18, 2026**
**Location: Chengdu, China**


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## Citation metadata

- Publisher: New Distribution
- Author: 任文青Andy
- Published: 2026-01-21
- Canonical: https://xinjignxiao.com/en/articles/dialogue-with-chen-liping-de-intermediation-is-a-false-proposition-9ecb43e0/
- Original source: https://mp.weixin.qq.com/s/CbP8-X2M8sdH11qfGC9-DQ

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