---
title: "How to Handle KA Channels to Avoid the Dilemma of 'Entering Means Death, Not Entering Means Waiting for Death'?"
description: "Mr. Wang, a daily chemical distributor, partnered with a local hypermarket two years ago, investing hundreds of thousands in fees, yet profits remain unsatisfactory due to high contract terms that increase annually. He admits, 'After a hard year, I'm still working for the supermarket; KA is like chicken ribs—tasteless to eat, but a pity to discard.' KA hypermarkets, as the ultimate form of retail terminals, represent the largest sales channel for many distributors. As China's economy rapidly develops, major domestic and international chain groups have expanded from first-tier cities to second- and third-tier cities, covering a wide area. Therefore, KA channels are indispensable in a distributor's business system. However, under the current backdrop of 'not doing terminals means waiting for death, doing terminals means seeking death,' how to effectively manage KA channels to achieve sales growth remains a challenge for many distributors."
author: "李锋"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-10-07"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/X3ZbELVYLSwkzjv58tXF2Q"
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---

# How to Handle KA Channels to Avoid the Dilemma of 'Entering Means Death, Not Entering Means Waiting for Death'?

> Mr. Wang, a daily chemical distributor, partnered with a local hypermarket two years ago, investing hundreds of thousands in fees, yet profits remain unsatisfactory due to high contract terms that increase annually. He admits, 'After a hard year, I'm still working for the supermarket; KA is like chicken ribs—tasteless to eat, but a pity to discard.' KA hypermarkets, as the ultimate form of retail terminals, represent the largest sales channel for many distributors. As China's economy rapidly develops, major domestic and international chain groups have expanded from first-tier cities to second- and third-tier cities, covering a wide area. Therefore, KA channels are indispensable in a distributor's business system. However, under the current backdrop of 'not doing terminals means waiting for death, doing terminals means seeking death,' how to effectively manage KA channels to achieve sales growth remains a challenge for many distributors.

Mr. Wang, a daily chemical distributor, partnered with a local hypermarket two years ago, investing hundreds of thousands in fees over two years. Sales are passable, but profits remain unsatisfactory. The reason is that the initial contract terms were too high, and KA hypermarkets almost demand higher terms each year.
Mr. Wang admits: "**After a hard year, I'm still working for the supermarket; KA is like chicken ribs—tasteless to eat, but a pity to discard.** " KA hypermarkets, as the ultimate form of retail terminals, represent the largest sales channel for many distributors.
With China's rapid economic development, major domestic and international chain groups have extended their reach from first-tier cities to second- and third-tier cities, covering a wide area. Therefore, KA channels are a market that distributors cannot ignore or abandon in their business system.
However, under the current backdrop of "**not doing terminals means waiting for death, doing terminals means seeking death**," how to effectively manage KA channels to achieve sales growth remains a challenge for many distributors.
**-01-**
## **Want to Increase KA Channel Sales? Focus on These Three Key Indicators**
Is it difficult to increase sales in KA channels? I think it's actually simple. First, identify the three key indicators that drive KA channel growth, which are also three ways to achieve sales growth. **1. 20% of sales growth comes from new consumers** **Continuously developing new consumers is an important means of increasing sales; new consumers are the most obvious source of growth.** A KA hypermarket has thousands of customers daily. How to retain foot traffic and get those who didn't plan to buy to purchase is the growth. To do this well, train promotional staff to improve their ability to intercept customers and concisely introduce product selling points. If you can retain 10 or 20 out of 100 consumers, the growth is considerable. **2. 25% of sales growth comes from brand switching** **Brand switching means competing for market share with competitors.** Because compared to new consumers, competitors' consumers will inevitably stop in the same product area. What you need to do is use product selling points or price promotions to shift their intention from buying competitors' products to buying yours. For example, if your product is mineral water, brand Ganten, and a consumer originally wanted to buy another brand's purified water, your promoter can introduce Ganten, explaining the health benefits of long-term mineral water consumption over purified water, or other advantages. Or a Master Kong promoter intercepts a child wanting to buy Uni-President instant noodles, telling them Master Kong has a tomato flavor they like, and only Master Kong has it—might they buy Master Kong? That's brand switching. **3. 55% of sales growth comes from existing loyal brand consumers** Finally, I want to emphasize existing loyal consumers. Although we talk about growth, these existing loyal consumers are actually the biggest source of growth. **Consumers loyal to a brand are high-quality; they often ignore promoters, go straight to the shelf, grab the brand they want, and leave.** Of course, those who recognize the brand are generally loyal, but there's a risk of interception, as in brand switching. What we need to do is ensure these loyal consumers' purchase intentions aren't replaced by other brands. These consumers buy our products more frequently than average. We need to educate consumers through continuous promotions, tastings, and other activities to develop loyal customers.
These loyal consumers are also lost over time; retaining them and reducing churn is the biggest sales growth. If you can achieve all three indicators, your KA channel sales will see a good growth rate. Many distributors think consumer education is the brand's job, but distributors can do it too. Of course, we can align with the manufacturer's strategy to save costs. So how to improve our business strategy to achieve KA channel sales growth?
**-02-**
## **Optimize Business Strategy Around Consumer Trends and Business Indicators**
To develop consumer customers, we need to understand consumer needs. In the past, many distributors didn't pay much attention to this, but today's consumers are more autonomous and rational, so consumer needs must be taken seriously. Current KA hypermarket consumer demand changes show four trends:
> **1. Healthier products; 2. Better consumption experience; 3. Online-offline integrated purchasing; 4. Products with labels like premium, high-price, organic, imported are more popular.**
Based on these demand trends and the three indicators above, I believe we can optimize operations and attract more consumers through improvements in four areas.
**1. Promotion** **Unlike traditional channels, KA hypermarkets rely heavily on promotions, often accounting for over 60-70% of sales.** Therefore, promotion is the top priority for improvement in KA; how to formulate an effective promotion policy is crucial.
**In formulating promotion policies, planning the schedule is key. **Generally, plan the schedule one to one and a half months in advance. For example, for next month's Dragon Boat Festival or Children's Day, plan around the theme in advance and prepare materials.** By planning ahead, you can request policies and fees from the brand. Brands are now standardized, planning next month's expenses this month; you can't ask for fees or policies at the last minute.
Because as a distributor, many costs in KA channels come from upstream brands, including materials. Without brand support, doing KA channels would only lose money. Also, planning ahead gives ample time to prepare: purchasing, stocking, specific promotion plans, and staff training.
Without advance planning, you often can't calculate accounts accurately. Also, if a new store opens in your area, can you plan in time? Or if a temporary promotion unexpectedly boosts sales, lack of advance stocking could affect final sales. Besides knowing your own brand's resources and profits, study competitors, monitor their recent promotion products and pricing, then formulate your own schedule, items, and prices, choosing specifications with price competitiveness, profit, and sales volume, and arrange the schedule! **2. New Product Promotion** **KA hypermarkets have always been the best window for launching high-end new products; consumer trends also dictate that KA is suitable for mid-to-high-end products.** Therefore, once a mid-to-high-end new product launches, promote it in KA channels.
New products generally have higher gross margins, and manufacturers provide support policies and materials. Entering KA can achieve multiple goals, and results are generally better than other channels. **3. Experiential Marketing** KA hypermarkets are one of the best channels for experiential marketing because they allow large floor displays, materials, interactive activities, and a better environment for consumer experience. Beyond basic sales, KA can serve as a key venue for consumer cultivation. Especially in off-peak seasons, consumers in a quieter environment are more willing to stop and participate in draws, tastings, interactive games, etc., effectively enhancing experience and engagement.
**4. Promoter Execution** In addition to the above, promoter execution is fundamental because all actions ultimately rely on promoters' professionalism and diligence. These are ensured through two aspects: **First, training**—before promotions, train promoters on product selling points, promotion policies, communication scripts, etc., to make them as professional as possible. **Second, incentive policies and inspection systems**—reasonable incentives and strict supervision ensure promoter diligence. I suggest distributors have a written process system, from pre-promotion planning to post-promotion, with clear steps so salespeople and promoters know what to do when. This improves professionalism and provides a basis for rewards and penalties. Since distributor categories vary, details differ; I won't elaborate here. Emphasize that advance planning is the premise; with it, you have time to adjust when problems arise.
**-03-**
## **Balancing Profit and Sales: Promotion Is Good, but Know What You Want**
**Discounts and gifts are the most common promotion methods; their effectiveness comes from understanding consumers and competitors' similar promotions. **Adapting to consumer needs, moderately learning from other distributors' promotions, and ensuring promotion intensity is not lower than competitors is important.** The lifeline of KA channels is promotion; it can greatly boost sales, that's true. But as distributors, we must be clear: sales growth is just a process; our ultimate goal is profit growth. If there's only sales without profit, what's the benefit of such promotions besides wasting time and energy and slightly increasing market share? What if excessive promotion leads to price collapse? So, promotion is good, but there's a limit. After planning the balance between costs and profits, note a few points: **First, KA products should be high-priced**, preferably mid-to-high-end, because during promotions, we should guide consumers to think, "This product is discounted; the price is tens of yuan cheaper than usual, so it's a good deal," not "This product is cheaper than at the corner store." If it's the latter, is there any profit margin? **Second, don't promote too frequently**; if every schedule includes it, consumers get the illusion: "This brand's product is worth this promotional price; it's always on sale." **Third, don't always feature the same product with the biggest discount; rotate promotional products to prevent price imbalance.** Avoid the same issue: don't let consumers' perception of low price for that product solidify. **Finally, evaluate each promotion.** Assess sales, profit, which products have higher relative profit, promoter professionalism and diligence, and compare sales volume and costs across stores.
After evaluation, consider issues for the next promotion: if last time was poor, should you cut two promoters? Can you negotiate lower fees with the store? KA channels are an unavoidable topic for most distributors, and many bosses find it a headache. But from my experience with KA promotions, if methods are chosen correctly, sales during promotions always grow 20%-50% or more. **If you truly do KA well, whether it's your brand's market share in the region, brand image, or profit margins, all can improve significantly, even making it your top sales and profit channel.**
Then KA channels won't be tasteless "chicken ribs" but enviable "hotcakes."
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