---
title: "In the Era of Concentrated Rise of Channel Brands, Where Are the Crises and Opportunities for Distributors?"
description: "Two trends are evident in the marketing world: distributors are forming alliances and associations, and new brands are rising by integrating other brands or categories. This signals the awakening of channels. The article argues that we are still in the stage of channel transformation, where channel brands are emerging, and distributors must seize the opportunity to build their own channel brands before the market shifts to product innovation."
author: "黄润霖"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-03-02"
language: "en"
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# In the Era of Concentrated Rise of Channel Brands, Where Are the Crises and Opportunities for Distributors?

> Two trends are evident in the marketing world: distributors are forming alliances and associations, and new brands are rising by integrating other brands or categories. This signals the awakening of channels. The article argues that we are still in the stage of channel transformation, where channel brands are emerging, and distributors must seize the opportunity to build their own channel brands before the market shifts to product innovation.

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In the past two years, two trends in the marketing world have been quite obvious:
> First, there are more self-initiated alliances and associations among distributors, who are joining forces independently of manufacturers. This is currently one of the most enthusiastic activities among distributors. Distributors in the industry find a time and place, rank themselves according to their status in the industry, and whether through election or appointment, as long as everyone raises their hands and applauds in unanimous approval, a non-governmental organization independent of manufacturing enterprises is declared established. This is one of the signals of channel awakening.
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> Another trend is that in our lives, new brands that have risen and grown in recent years are more often those that integrate other brands or categories, such as Liangpin Shop, or even those that focus on information matching, like the "Xianyu" website, which are rapidly rising. Their common characteristic is that they are not good at manufacturing, but they are adept at channel management. This can be seen as the second signal of channel awakening.
There is a judgment in the marketing world that the success of Chinese entrepreneurs in the past relied on marketing, branding, and channel transformation to win the market, but in the past two years, they have begun to return to focusing on production and products. At least, I currently have reservations about this judgment.
In fact, the development of marketing practice in China, from phenomena to essence, is still in a stage from product transformation to channel transformation, and the discourse power in this stage still lies with the channels.
From a phenomenological perspective, from the online Three Squirrels to the offline Miniso, the new brands that have become famous overnight in the past two years are not representatives of craftsmanship. They are still good at channels, marketing, and the "demand to sell" of products, although they have packaged better services and better brands.
From an essential perspective, the higher-level "demand to buy" has not been released, the high-quality and high-price niche market is not mature, and the concept of customization is still in the exploration of marketing methods and strategies.
Product transformation and channel transformation promote each other. The early product surplus stimulated the demand for channel transformation. The emergence of distributors, small shops, hypermarkets, specialty stores, and e-commerce are all normal reactions of channels to this stimulus. However, **when channel transformation remains at the stage of digesting surplus production capacity (for example, still relying on low quality and low price to compete for the market), rather than triggering new consumer demand (such as the still underdeveloped niche market), the mission of channel transformation is not completed, and a new round of product transformation cannot occur.**
If we accept this judgment, that is, we are still in the stage of channel transformation, but within this stage, we have moved from the past channel construction to the concentrated outbreak of channel brands. As channel stakeholders at all levels who follow the trend, especially the distributor group, how should they grasp the opportunities contained therein?
**What is a channel brand?**
Before discussing, we must first unify the concept of channel brand. There is currently no authoritative definition of channel brand, so basically everyone is talking about it in their own way.
There are usually two understandings: one refers to brands that are well-known among channel merchants or distributors, but have little concept in consumers' minds. For example, Kingston memory modules when computers first became popular were in a stage of upgrading from a channel brand to a consumer brand;
The other refers to brands that integrate other similar or multi-category brand products for distribution, so that the vast majority of retail enterprises belong to channel brands.
The channel brand we discuss today is more inclined to the latter.
From the general trend, in the past two years, new brands that are easier to jump into consumers' vision are exactly the channel brands we define.
Using inductive and deductive methods, in the first decade of reform and opening up, it was the best stage for personal brand growth, such as Bu Xinsheng, Ma Shengli, and Mou Qizhong; in the 1990s, it was the spring for physical manufacturing enterprises, such as Lenovo, Haier, and Midea; later, integrated trading platforms began to rise, first Gome, Suning, Dazhong, then Tmall, JD.com, and Vipshop. Further on, the ones with the highest exposure frequency in the public are the channel brand companies we talk about today, such as Heytea, which claims to require queuing to buy, and Diaoye Niunan, which has not had much voice now, and even countless micro-businesses.
The times create heroes, which is both the misfortune and great fortune of heroes. According to this trend, in the era of concentrated rise of channel brands, where are the crises and opportunities for distributors?
**Where are the crises and opportunities for distributors?**
> **1. If distributors collectively lose their voice, they will miss an era!**
Logically speaking, with the improvement of production efficiency and the intensification of homogeneous competition, distributors with sales capability should become more valuable. Why is the reality that they are becoming more and more depreciated?
If it is only because of the impact of e-commerce that sales are divided, then the dilution of sales by new channels will be the norm rather than a temporary pain. In the future, more and more new channels will join. If distributors do not have the ability to resolve the impact of new channels, they will only have a dead end. In that case, it might be better to change careers early.
From another perspective, as distributors who are like ducks that feel the warmth of spring water first, they should have already noticed: who used to visit stores and make calls? Mainly the sales personnel of various manufacturers, whose only purpose was to get you to help them sell goods; now? There is an additional type of person visiting stores: peers who talk about joint brand creation, B2B brand owners who talk about acquisitions and franchising, and channel entrepreneurs who seek financing and investment from distributors. These people repeatedly mention a word to distributors: build a channel brand.
Distributors have been doing this for so many years. Why is it that every time there is a channel transformation, distributors are the easiest to be replaced? **At the root, it is because there is no brand; distributors are just a point of sale.** The vast majority of distributors, whether due to vision or strength, are unwilling to invest too much in branding, so it is not surprising that manufacturers cross the bridge after crossing the river.
The wise change with the times, and the intelligent adapt to events. Currently, we are in the stage of concentrated outbreak of channel brands. Distributors, whether through vertical alliances (such as joining the B2B alliance system) or horizontal alliances (such as cooperation among distributors), or even self-reliance to strengthen their own brand building, should use the gap of production surplus and strong sales demand to enhance the gold content of channel brands. If we wait until we enter a more advanced stage of product transformation, the discourse power of the market will shift to manufacturing enterprises, and the bargaining power of distributors will be greatly weakened.
> **2. Before the niche market fully develops, the current channel brand entrepreneurship is still resource-based entrepreneurship.**
The maturity of the niche market is a prerequisite for entering a higher level of product transformation. If we are still in an environment that mainly relies on low quality and low price to seize the market, expecting product upgrades can only be empty talk.
Why make this judgment? Because product transformation and channel transformation are two completely different driving models. Product transformation is mainly driven by innovation and creation, continuously profiting by satisfying or guiding consumers' new needs, and meeting their own growth; channel transformation is mainly driven by the integration and utilization of existing resources. If these resources are not mastered or cannot be integrated, channel transformation, or more specifically, the construction of channel brands, will be difficult to succeed.
Precisely because we are still in the stage of channel transformation, the dependence on innovation and creation is far less than the mastery and utilization of resources. **For the construction of channel brands, those enterprises, organizations, or individuals that have already mastered channel resources have more opportunities for channel brand entrepreneurship, which of course includes tens of thousands of distributor organizations.**
Therefore, the opportunities for channel brand entrepreneurship are more for those who were originally channel practitioners. Starting from scratch is becoming increasingly difficult, although it is cruel to say this reality.
New Distribution will hold the **2019 (5th) FMCG + Internet Conference** during the Chengdu Spring Sugar and Wine Fair from March 15 to March 18. This conference will focus on the topic of **"Breaking the Situation"** and conduct in-depth discussions with many brand owners, supply chain service providers, distributors, retailers, and others.
Compared to previous conferences, this summit will be fully upgraded. In addition to the original topics such as **channel innovation, city distribution logistics, and distributor transformation**, it will also add multiple parallel forums such as **new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail**. Through three days of ten high-density and high-quality expert sharing and exchanges, it is believed that every brand owner and distributor can learn the latest business models, expert opinions, and landing methods, find new tools and methods for their own breakthrough in 2019, and return to the track of rapid growth.
Review of previous conferences
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