"Being a distributor, I have no sense of security at all now." A few days ago, while chatting with two distributor friends, one of them shared this sentiment. "Manufacturers can't be relied on, customers aren't loyal, and salespeople want to jump ship." The other distributor responded, "Distributors can no longer have a sense of security!"

The market isn't growing, but manufacturers' targets are still increasing. From mid-last month to now, I've visited seven or eight distributors, with annual sales ranging from tens of millions to hundreds of millions. When discussing Q2 business, the common feedback was that compared to the same period last year, there was more or less a decline. A daily chemical distributor shared, "In Q4 last year, I clearly felt poor market sell-through, but to meet the annual target, I still paid for a batch of goods and pushed them to terminals through relationships. The side effects showed up early this year: the manufacturer wanted a strong start, but I had millions in warehouse inventory, and store goods hadn't sold through, leading to a vicious cycle." Starting three or four years ago, the industry has been saying the market is a stock market. In the past year or two, the pressure of this stock competition has become more evident. From the financial reports of major listed companies, it's clear that FMCG manufacturers are facing a situation of competing fiercely within a stagnant market. As channels become more fragmented, the offline market is being continuously segmented. We used to say the offline business pie was bigger, but today we see offline share trending toward flat. This means distributors have fewer and fewer business opportunities in their regional markets. "Killing yourself to outcompete peers has become the real market picture."

"Although the market isn't growing, manufacturers' targets haven't stopped increasing. This year, a leading seasoning brand demanded a 20% growth from me," said a distributor. In the end, if the target can't be met, they'll definitely dump goods into the market to still get rebates. The agency nature of China's FMCG industry determines that the manufacturer-distributor relationship is unequal. In most cases, some leading manufacturers require distributors to "obey, follow, and execute." If distributors fail to meet the manufacturer's targets, they often lose many rebates, and the annual calculation might result in losses. Not only do sales targets increase every year, but some manufacturers are also making it harder for distributors to complete them. A seasoning distributor shared an interesting phenomenon: A certain seasoning manufacturer has 20-30 distributors in the same city, divided by region, channel, product line, and even custom products. On one hand, they require distributors to sell more; on the other, they open more distributors in the same area, making it harder for existing ones to sell.

In the past, manufacturers always talked about regional protection, but when facing growth pressure, they often break it themselves. Many provincial managers even tacitly allow cross-region selling within a province, not counting it as such because the sales count toward the province's target. For manufacturers, they just want to sell goods and maximize profits, whether online or offline, as long as the sales count for them. Distributors can't influence manufacturers, especially those dependent on brands; without the agency right, their business is gone. But in the current environment, with no market growth and brands still demanding growth, if distributors can't meet targets, their agency rights are challenged, and switching is common. The shift from manufacturer support to pressure is itself the biggest source of insecurity for distributors.

Relationships Can't Beat Price Terminal Stores Have No Loyalty "In the past, it was second-tier wholesalers who lacked loyalty, but now some terminal stores are gradually losing loyalty too. When salespeople push products, store owners often open various online platform mini-programs to show prices, and relationships are only worth about 50 cents." A snack food distributor told me. For most stores, the distributor's biggest advantage is service. When products don't sell well, stores demand exchanges or even returns, shifting that risk and loss onto distributors. But now, some terminal store owners don't appreciate the relationship and service. The reason is that terminal stores' business has indeed become harder.

On one hand, online e-commerce has already taken away part of the market, especially for planned purchases like paper products, personal care, and cleaning supplies, where consumers have developed the habit of stocking up online. On the other hand, new retail models like community group buying, discount stores, snack stores, and chain convenience stores are all vying to steal supermarket business in various ways. For example, snack stores sell 555ml C'estbon water for 0.9 yuan and 500ml Oriental Leaf for 3.9 yuan, with prices for standard products 20%-40% lower than traditional channels, and even 50%-60% lower for some hot-selling items. Surrounded by such stores, small shops in the same area are bound to have their business squeezed. During New Distribution's terminal research, some small shop owners said bluntly, "I run a small shop and I stock up on community group buying platforms because their supply prices are cheaper than what distributors offer me, let alone for ordinary consumers." Behind these big platforms are economies of scale and efficiency advantages, while traditional small shops are numerous, scattered, unorganized, and outdated. Facing big platforms and capital, small shops have no defense. If these platforms weren't prohibited from selling cigarettes, small shops would be even worse off. In such an environment, distributors can't really blame terminal stores for lacking loyalty. Small shops' traffic is being stolen by other formats, sales are declining, and if they can't even guarantee profits, they can't survive.

Can't Recruit or Retain Salespeople, Talent Shortage While visiting a distributor in Chengde, we discussed an interesting topic: "According to media data, many people can't find jobs now, but we can't recruit anyone, and we worry daily about existing salespeople leaving." The inability to find and retain salespeople is a common issue for many FMCG distributors. Essentially, this is a problem for the entire FMCG industry. Many young people think FMCG sales isn't advanced enough, see no future in frontline sales, and more importantly, the field can't pay higher wages to attract top talent. During terminal research, I talked with several salespeople. In third-tier cities, their monthly salary is only 4,000-5,000 yuan, which is less than what delivery riders or couriers earn. Over the years, prices and living costs have risen, but many salespeople's wages haven't changed much compared to seven or eight years ago. And they have to do more work because goods are harder to sell. Is a salesperson's job simple? Actually, it's not. Compared to delivery riders, frontline sales work is not only complex but also difficult. For a delivery rider, they just follow system instructions, pick up at the store, and deliver to the specified location via navigation. It's very standardized; anyone can do it. But a salesperson's job is different: it's a sales role, requiring entering stores to explain products, persuade small shops to order, help owners place orders, and compete for the best shelf positions. Besides selling, there are terminal account reconciliation, payment collection communication, after-sales service, and tasks from manufacturers like terminal display photo check-ins. Salespeople have many tedious tasks daily. And the pressure is significant. For example, at year-end, manufacturers push inventory onto distributors; goods can't stay in the warehouse, so salespeople must push them to stores through relationships, but if the market doesn't move, it consumes relationships and requires finding solutions. Just from the salesperson's actions, their effort and income are mismatched. Of course, this isn't the distributor's fault; it's an industry-wide issue. Food and beverage is a livelihood industry; costs have risen over the years, but profits are increasingly thin, so distributors can't afford to pay higher wages. This puts distributors in a painful position: they can't pay more, can't attract or retain good talent, existing salespeople are complacent but can't be fired, and the business operates at a low level.

Final Thoughts Market changes are irreversible, and the uncertainty and crisis they bring are beyond distributors' control. For distributors, the only way to increase security is to strengthen themselves. Can they achieve higher efficiency through digitalization? Can they cover more effective terminals? Can they design better compensation and performance plans to cultivate talent? Since the external environment can't be changed, start by changing yourself.

From August 19-21 in Shanghai, at the 2025 [New Demand · New Supply] 7th China FMCG Conference and 5th China FMCG Distributor Conference, we've invited benchmark cases of distributors transforming in different directions:

  • Representative of regional B2b: Zhong Xiaoping, GM of Jiecang Wanggou;
  • Representative of platform brand transformation: Li Yong, Chairman of Shenzhen Yataixuan Industrial;
  • Representative of retail channel operators: Zhang Shicheng, GM of Tianjin Shicheng Bofa;
  • Representative of regional category operators: Zhang Gaifeng, GM of Zhengzhou Dapeng Trading.

Together, we'll discuss how distributors should move, transform, and win in the new demand and new supply market environment.

At the same time, we'll release the exclusive industry report "2025 China FMCG Distributor Business Status Survey Report," to see who is growing and who is being eliminated among distributors this year, the reasons, and where operational focus should be. We'll also release the in-depth case collection "Ten Growth Case Models for FMCG Distributors," which presents real cases and provides structural thinking to help distributors find direction amid chaos.

Additionally, we'll hold the [Regional B2b Platform & Key Brand Cooperation Seminar], bringing together 40+ regional B2b platform owners to explore incremental opportunities in the sinking market covering 200,000 small shops; release and interpret the "Regional B2b Cooperation Guide"; and build a bridge for dialogue between regional B2b platforms and key brand leaders for discussion, exchange, one-click connection, and on-site supply-demand matching!

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