--- title: "In the Era of Concentrated Rise of Channel Brands, Where Are the Dangers and Opportunities for Distributors?" description: "In recent years, two trends have been evident in the marketing world: first, distributors are increasingly forming voluntary alliances and associations, independent of manufacturers, signaling a channel awakening. Second, new brands that have risen and grown in our lives, such as Liangpin Shop and Xianyu, are more focused on integrating other brands or categories, or on information matching, and they excel at channel management rather than manufacturing. This can be seen as a second signal of channel awakening." author: "黄润霖" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-11-06" language: "en" canonical: "https://xinjignxiao.com/en/articles/in-the-era-of-concentrated-rise-of-channel-brands-where-are-the-dangers-1b5580d5/" markdown: "https://xinjignxiao.com/en/articles/in-the-era-of-concentrated-rise-of-channel-brands-where-are-the-dangers-1b5580d5.md" original_source: "https://mp.weixin.qq.com/s/CZsJY8QKb62I1FS3fy0iNQ" translation: "https://xinjignxiao.com/zh/articles/%E5%9C%A8%E6%B8%A0%E9%81%93%E5%93%81%E7%89%8C%E9%9B%86%E4%B8%AD%E5%B4%9B%E8%B5%B7%E7%9A%84%E6%97%B6%E4%BB%A3-%E7%BB%8F%E9%94%80%E5%95%86%E7%9A%84%E5%8D%B1%E4%B8%8E%E6%9C%BA%E5%9C%A8%E5%93%AA%E9%87%8C-1b5580d5.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/in-the-era-of-concentrated-rise-of-channel-brands-where-are-the-dangers-1b5580d5/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # In the Era of Concentrated Rise of Channel Brands, Where Are the Dangers and Opportunities for Distributors? > In recent years, two trends have been evident in the marketing world: first, distributors are increasingly forming voluntary alliances and associations, independent of manufacturers, signaling a channel awakening. Second, new brands that have risen and grown in our lives, such as Liangpin Shop and Xianyu, are more focused on integrating other brands or categories, or on information matching, and they excel at channel management rather than manufacturing. This can be seen as a second signal of channel awakening. In the past two years, two trends have been evident in the marketing world: First, there has been an increase in voluntary alliances and associations among distributors, who are joining forces independently of enterprises. This is currently one of the most enthusiastic activities among distributors. Within the industry, distributors 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 their hands and applauds in unanimous agreement, a non-governmental organization independent of manufacturing enterprises is declared established. This is one of the signals of channel awakening. Another trend is that in our lives, new brands that have risen and grown in recent years are more focused on integrating other brands or categories, such as Liangpin Shop, or even on information matching, like the website "Xianyu" (Second-hand Fish), which are rapidly rising. Their common characteristic is that they are not skilled in 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 world that the success of Chinese entrepreneurs in the past was achieved through marketing, branding, and channel reform to win markets, but in the past two years, there has been a return to focusing on production and products. At least, I currently hold reservations about this judgment. In fact, the development of marketing practice in China, from phenomenon to essence, is still in a stage from product transformation to channel transformation, and in this stage, the discourse power 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 skilled in channels, marketing, and the "demand to sell" of products, although they have packaged better services and better brands. **From an essential perspective, the more advanced "demand to buy" has not been released, the niche market of high quality and high price is not mature, and the concept of customization is still in the exploration of marketing methods and strategies.** Product transformation and channel transformation are mutually reinforcing. 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 remains at the stage of digesting surplus production capacity (for example, still relying on low quality and low price to compete for markets) rather than triggering new consumer demand (such as the underdevelopment of niche markets), 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. There is currently no authoritative definition of channel brand, so basically everyone is speaking for themselves. There are usually two understandings: one refers to a brand that is well-known among channel merchants or distributors, but has little concept in the minds of consumers. For example, Kingston memory sticks when computers were just popularized were in a stage of upgrading from a channel brand to a consumer brand; The other refers to a brand that integrates other similar or multiple categories of 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, the new brands that are more likely to jump into consumers' vision in the past two years are precisely 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 is said to require queuing to buy, Diaoye Niurou (Sculpting Master's Beef Brisket), which has now lost much of its voice, and even countless micro-businesses. The times make heroes; it is both the misfortune and great fortune of heroes. Following this trend, in the era of concentrated rise of channel brands, where are the dangers and opportunities for distributors? Where are the dangers and opportunities for distributors? 1. Distributors collectively lose their voice, and 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 and 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, not a 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: in the past, who visited stores? Mainly the business personnel of various manufacturers, with the only purpose of getting 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 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, and the intelligent adapt to circumstances. **Currently, we are in the stage of concentrated outbreak of channel brands. Distributors should either use vertical alliances (such as joining B2B alliance systems) or horizontal alliances (such as cooperation among distributors), or even self-reliance to strengthen their own brand building, taking advantage of the gap of production surplus and strong demand for sales 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 the hands of 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 where we mainly rely 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 continuously obtained by satisfying or guiding new consumer needs to meet 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.** **The 2017 (3rd) FMCG + Internet Conference** will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology" and invite **1000+ distributors, 500+ brand owners, 200+ founders of B2B platforms, and 100+ investment and financing institutions** to jointly explore a new chapter of cross-border integration! **The conference is now hot for registration, with only 20+ tickets left... Long press the QR code below or click "Read Original" to register** Click the links below to review the highlights of the first and second FMCG + Internet Conferences: [2016 " ]()[FMCG + Internet ]()[" ]()[Summit Forum]() -END- --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671