---
title: "In the Era of Concentrated Rise of Channel Brands, Where Are the Crises and Opportunities for Distributors?"
description: "This article discusses two trends in the marketing industry: the rise of distributor alliances and the emergence of new brands that excel in channel management rather than manufacturing. It argues that we are still in the stage of channel transformation, where channel brands are booming, and analyzes the crises and opportunities for distributors in this context."
author: "黄润霖"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-06-11"
language: "en"
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# In the Era of Concentrated Rise of Channel Brands, Where Are the Crises and Opportunities for Distributors?

> This article discusses two trends in the marketing industry: the rise of distributor alliances and the emergence of new brands that excel in channel management rather than manufacturing. It argues that we are still in the stage of channel transformation, where channel brands are booming, and analyzes the crises and opportunities for distributors in this context.

Click to read the original article for details.
In the past two years, two trends in the marketing industry have been quite obvious:
**First, there are more self-organized alliances and associations among distributors, who unite independently of manufacturers. This is currently one of the most enthusiastic activities for distributors.** Distributors in the industry find a time and place, rank themselves according to their status in the field, and whether through election or appointment, as long as everyone raises hands and applauds in agreement, a non-governmental organization independent of manufacturing enterprises is established. This can be seen as one signal of channel awakening.
**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 website 'Xianyu', 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 now a judgment in the marketing industry that the past success of Chinese entrepreneurs was achieved through marketing, branding, and channel transformation to win the market, but in the past two years, there has been a return to focusing on production and products. At least, I currently have reservations about this judgment.
In fact, the development of Chinese marketing practice, from phenomena to essence, is still in a stage from product transformation to channel transformation, and in this stage, the discourse power is still in the hands of 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. What they are good at is still channels, marketing, and the 'need to sell' of products, although they have packaged better services and better brands.
From an essential perspective, the higher-level 'need 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 approaches.
**Product transformation and channel transformation promote each other.**
The earlier 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 is still at the stage of digesting excess production capacity (for example, still relying on low quality and low price to compete for the market), rather than triggering new consumer demand (for example, the niche market is still underdeveloped), 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 entered the level of concentrated outbreak of channel brands from the past channel construction. 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. Regarding channel brands, there is currently no authoritative statement, so basically everyone is talking about their own views.
There are usually two understandings: one refers to brands that are well-known among channel merchants or distributors, but do not have much 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 multiple categories of products for distribution, so that the vast majority of retail enterprises belong to channel brands.**
The channel brands we discuss today are more inclined to the latter.
From the general trend, the new brands that have been easier to jump into consumers' vision in the past two years 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, Mou Qizhong; in the 1990s, it was the spring for physical manufacturing enterprises, such as Lenovo, Haier, Midea; then, integrated trading platforms began to rise, first Gome, Suning, Dazhong, then Tmall, JD.com, Vipshop.
Further on, the ones with the highest frequency of exposure to the public are the channel brand companies we talk about today, such as Heytea, which is said to require queuing to buy, and Diaoye Niunan, which no longer has much voice now, and even countless micro-businesses.
**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. Distributors collectively losing their voice will miss an era!**
Logically, with the improvement of production efficiency and the intensification of homogeneous competition, distributors with sales capability should become more valuable, but 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 know the warmth of spring water first, they should have already noticed: who used to visit stores and make calls? Mainly the business personnel of various manufacturers, whose only purpose was to let you 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 channel transformation, distributors are the easiest to be replaced? At the root, it is because there is no brand; distributors are just a point for selling goods.** 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 river and burn the bridge.
**The wise change with the times; the intelligent adapt to circumstances.**
Currently, we are in the stage of concentrated outbreak of channel brands. Distributors, whether through vertical integration (such as joining B2B alliance systems) or horizontal integration (such as cooperation among distributors), or even self-reliance to strengthen their own brand building, can use the gap of production surplus and strong demand for sales to enhance the gold content of channel brands.
If we wait until entering a more advanced stage of product transformation, the discourse power of the market will shift to the hands of manufacturing enterprises, and the bargaining power of distributors will be greatly weakened.
**2. Before the niche market is fully developed, 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, and profits are obtained by satisfying or guiding consumers' new needs, thereby achieving 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 in a smaller sense, the construction of channel brands, is also 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 originally worked in channels. Starting from scratch is becoming increasingly difficult, although it is cruel to say this reality.


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