"In the past two years, I've tried many methods, but it feels like nothing works anymore." This was shared by a distributor boss as he showed me around his warehouse during a market visit in Changsha. "You've hyped up B2b too much. I've tried it for two years myself, but from practice, not all distributors are suited for B2b. This path is really tough." His words were blunt, yet they highlighted the real situation for most distributors: it's not that they don't want to change, but that even if they do, they may not succeed. During recent market visits, I've heard similar voices frequently: the familiar playbook is failing, and new directions are elusive. Some distributors still cling to KA and chain supermarkets, only to see stores close one by one and sales decline. Others try the "online + platform" route, only to find that traffic costs are unsustainable and fulfillment is overwhelming. It seems they can do "anything," but in reality, they "do nothing well." The distributor community is losing its sense of direction. This loss is not merely tactical failure but the result of systemic changes in the industry's underlying supply-demand structure, channel logic, and business models. Major Trends Are Tearing Apart the "Old Playbook" In the past, distributors had relatively stable functions: select a few brands, focus on one or two channels, serve a batch of stores, and achieve decent turnover and profit in a year. But today, this logic seems to have failed. A major snack food distributor from Henan told me, "My stores are increasing, but sales are decreasing. The manufacturer's pressure to stock up is suffocating." Why is this happening? Over the past two to three decades, distributors' businesses relied on "structural dividends": stable terminal traffic, scarce product supply, and a stable channel chain. But today, these foundations no longer exist. On one hand, business in old channels is tough: KA is shrinking, supermarkets are retreating, and small and medium stores are seeing declining per-store output. A beverage distributor told me, "Previously, one order from a hypermarket equaled ten stores. Now we have to negotiate order by order, exhausting the staff and earning little." Meanwhile, emerging channels are aggressively capturing traffic. Instant retail, community e-commerce, O2O platforms, etc., are not only more efficient but also reshaping consumer shopping paths, rapidly diverting traffic that once belonged to traditional terminals. "Consumers don't come to stores anymore; no matter how well you stock, it's useless. Now they tap on their phones and get delivery in half an hour." Another critical issue is distributors' over-reliance on certainty. Distributors generally lack the ability to reassess products, channels, and models in rapidly changing environments. When the market undergoes drastic changes, information lag and slow response become fatal. Many distributors attribute poor business to intense platform competition, rampant channel conflict and price chaos, and excessive pressure from manufacturers. Indeed, these are objective realities. But essentially, this is a deep shift in the market's supply-demand structure. When supply is severely oversupplied, consumer demand becomes more segmented, personalized, and scenario-based, naturally altering the distribution path of goods. The old logic of "grabbing stores and prices" is replaced by "whoever understands consumers better gets the orders." The loss of direction among distributors is never superficial chaos but a structural cognitive disconnect. Only by acknowledging this can one truly understand "what exactly should I do." Distributors Must Shift from "Inertial Operations" to "Capability Operations" There is not just one way out for distributors, but multiple. Some are becoming B2b platform operators, some are doing unified warehousing and distribution, some are transforming into category operators, some are becoming instant retail O2O channel operators, and some are core suppliers to the KA system... Paths can be diverse, choices can be multiple, but ultimately, one thing is crucial: future distributors must move from "inertial operations" to "capability operations." What is inertial operations? In the past, distributors relied on personal connections, territorial inertia, upstream support, and traditional methods to sustain business growth. In this model, they were more executors of brand owners than operators with market leadership. But today, the market has changed. With faster information flow, quicker product iteration, and channel fragmentation, relying solely on inertia can no longer sustain growth, let alone defend existing positions. Distributors must rebuild their value with capabilities as core assets. First, the ability to cover effective channels. "Channels are becoming more fragmented now." This is the deepest feeling many distributors have had in the past two years. Traditional supermarkets are seeing declining foot traffic, chain convenience stores are adopting refined management, and mom-and-pop shops and community stores are closing at increasing rates. At the same time, emerging formats like instant retail, community group buying, community e-commerce, and discount retail are rising, vying for share that once belonged to traditional channels. The total market size remains, but the channel pie is being cut into more pieces. Previously, five channels divided the cake; now ten channels do. Second, the ability to manage products. In the traditional model, many distributors followed the principle: "I sell whatever the manufacturer pushes." Brand owners set strategies, goals, and investments, and distributors executed accordingly. In an era of strong channels and scarce brands, this path indeed worked. But today, sell-through returns to the product itself. Consumer preferences change rapidly, attention shifts frequently, and purchasing decisions are increasingly based on content and scenarios—this means distributors need "product selection judgment." "Previously, I pushed new products when the manufacturer asked; now I tell the manufacturer which products are more likely to take off." This was shared by a major snack food distributor from Anhui. He said he browses Douyin and Xiaohongshu every month for hot keywords, sees what products young people are interested in, exchanges with peers about which categories are growing fast, and then combines his own store sell-through data to select SKUs to list. Third, the ability to provide deep service to terminal outlets. "We've always been providing service." Many distributors say this. Their salespeople still make daily visits, do displays, and follow up on after-sales, which under the old logic is considered diligent. But the problem is that today's stores are also facing huge changes—consumers don't come in, online platforms divert traffic, and store operations are increasingly difficult. In this context, for distributors to deeply bind with terminals, they must rely not just on supply and promotions but truly become business partners of the stores. In Xi'an, I exchanged ideas with a major dairy distributor who shared a great point: "My core competitiveness is that I don't push inventory on stores; I help them sell goods." "What store owners need most is not stocking, but someone who can teach them how to sell. I have store sales data; I help analyze which products sell well, which promotions are effective, and what product mix is profitable." This is true deep service, helping stores improve operational efficiency, and it is one of the most moat-worthy competitive advantages for distributors. In today's era of channel proliferation, product renewal, and terminal restructuring, distributors are no longer just movers in the distribution chain but must become operators with judgment, execution, and service capabilities. The days of relying on inertia are over; the future demands growth and survival through capabilities. The essence of capability is the valuable contribution you can make to channels, terminals, and brands. Directions can differ, paths can be diverse, but it all comes down to one point: whether you possess core operational capabilities that are replicable and scalable. In Conclusion In the past, the market had a "sense of direction." Business grew naturally; as long as you "kept stock and waited to sell," you could make money. In this state, distributors mostly "followed the market" and didn't need to make many judgments themselves. But today, distributors are rapidly losing their sense of direction. A distributor friend in Changsha said frankly, "I never considered categories before; I stocked whichever brand sold well. Now, I'm afraid to stock up because it might not sell." The lack of direction among distributors is essentially a "loss of operational gravity." Previously, brand owners provided direction, stores shipped steadily, and distributors only needed to maintain stability. Now, brand owners are also testing directions, stores are losing customers, consumers are shifting, and what's left for distributors is only shrinking profit margins and increasingly frequent inventory pressure. Many distributors are not unaware of the need for transformation, but they don't know where to turn or how to do it. B2b, O2O, platformization, digitalization... Each sounds hot, but when it comes to implementation, they find: resources don't match, capabilities aren't ready, pace can't keep up—and more critically, "no one can provide a clear path to success." More importantly, "old experience" has failed, and "new capabilities" have not yet been established. So how should distributors change? In August, in Shanghai, at the [2025 New Demand · New Supply 7th FMCG Conference], we invited outstanding distributors from across the country, including Zhong Xiaoping, General Manager of Jiecang Wanggou; Zhang Shicheng, General Manager of Tianjin Shicheng Bobo Trading Co., Ltd.; and Chen Jianfu, General Manager of Jiayuan Convenience Store & Vice President of Hubei Shoukang Yongle Commercial Group, as well as representative B2b platforms, leading brand owners, and retailers—frontline operators—to discuss how distributors should go, transform, and win in the market environment of new demand and new supply. 🔺