--- title: "New Distribution's Ren Wenqing: The Old Distribution System Fails in an Era of Oversupply!" description: "At the 11th China FMCG Conference held in Chengdu from March 16-18, 2026, Ren Wenqing, CEO of New Distribution, delivered a keynote speech titled '2026 New Distribution Annual Insight: From Linear Distribution to Supply-Demand Matching System.' This article summarizes the core of his speech, which argues that the FMCG industry is shifting from a linear distribution model to a supply-demand matching system, driven by the need to address oversupply and changing consumer behaviors." author: "任文青Andy" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2026-03-19" language: "en" canonical: "https://xinjignxiao.com/en/articles/new-distribution-s-ren-wenqing-the-old-distribution-system-fails-in-an-e-f9021977/" markdown: "https://xinjignxiao.com/en/articles/new-distribution-s-ren-wenqing-the-old-distribution-system-fails-in-an-e-f9021977.md" original_source: "https://mp.weixin.qq.com/s/dEQDPjx0sQMWBXHu2zQ0Xg" translation: "https://xinjignxiao.com/zh/articles/%E6%96%B0%E7%BB%8F%E9%94%80%E4%BB%BB%E6%96%87%E9%9D%92-%E6%97%A7%E7%9A%84%E6%B5%81%E9%80%9A%E4%BD%93%E7%B3%BB-%E5%9C%A8%E8%BF%87%E5%89%A9%E6%97%B6%E4%BB%A3%E5%A4%B1%E7%81%B5%E4%BA%86-f9021977.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/new-distribution-s-ren-wenqing-the-old-distribution-system-fails-in-an-e-f9021977/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # New Distribution's Ren Wenqing: The Old Distribution System Fails in an Era of Oversupply! > At the 11th China FMCG Conference held in Chengdu from March 16-18, 2026, Ren Wenqing, CEO of New Distribution, delivered a keynote speech titled '2026 New Distribution Annual Insight: From Linear Distribution to Supply-Demand Matching System.' This article summarizes the core of his speech, which argues that the FMCG industry is shifting from a linear distribution model to a supply-demand matching system, driven by the need to address oversupply and changing consumer behaviors. At the 11th China FMCG Conference held in Chengdu from March 16-18, 2026, Ren Wenqing, CEO of New Distribution, delivered a keynote speech titled "2026 New Distribution Annual Insight: From Linear Distribution to Supply-Demand Matching System." This article summarizes the core of his speech. Last December, a distributor boss who had been in the business for over a decade told me something particularly poignant: "I know the products the manufacturer is pushing won't sell in this channel. But I have no choice; I have to push them." I've remembered this sentence, not because it's unique, but because it's so common. All friends in the FMCG industry know what I'm talking about. In the past, manufacturers pushed products, and channels followed. This worked for the past two or three decades. But today, this statement evokes more of a sense of frustration. Why is that? Let me first present my core judgment: China's FMCG industry is transitioning from the era of linear distribution to the era of supply-demand matching. This is not just a slogan; it's a structural shift that is already happening. **Using an Old System to Face a New World** The industry has been undergoing tremendous changes in recent years, and you've all felt it. On the retail side: the wave of discounting, the explosion of instant retail, large-scale supermarket renovations, and retailers starting to develop private labels and self-built supply chains... In the distribution segment: B2b platformization, the rise of whole-store output models, some distributors starting to do channel white-label products, and others giving up major brand agency or even exiting the market... On the brand and factory side: scenario marketing is becoming mainstream, white-label, co-branded, and collaborative private-label manufacturers are emerging in droves, and internet-famous products are going offline on a large scale... All three ends are moving simultaneously, each seeking change in its own way... Everyone I've met says: "Now is different from the past." That's true. But the question is, what exactly is different? I've found that most people see only parts, and few can systematically explain it. The less clear the explanation, the more anxious people become. They wonder why past methods no longer work. Is it because we're not working hard enough? Actually, I want to tell you: it's not that we're not working hard, but that we're still using an old system to face a new world. What is the old system? It's a linear distribution system centered on distribution, using inventory pressure as a means, and coverage rate as a KPI. This system was very effective in an era of insufficient supply—whoever distributed faster and wider won. But now, the world has changed. **What Has Changed?** Let's understand this change through four levels. This is a systematic analytical framework I've developed from three years of industry research, thinking, and summarization. At the surface level, there are micro-changes in retail formats—discounting, instant retail, supermarket renovations—these are phenomena. Below that, there are meso-level changes in circulation models—from PUSH-driven order to PULL-driven order, vertical integration, disintermediation, and reducing markup rates—this is the direction. Next, there's the macro-level of the FMCG industry—the supply side has long chains, large inventory, and severe homogenization; the demand side sees population differentiation, demand stratification, and increasingly diverse choices. Supply and demand are moving in opposite directions—this is the fundamental contradiction. At the deepest level, there's the macro-economy of society—GDP growth slowing (from double digits to a 4-5% plateau), limited growth in per capita disposable income (from under 1,000 yuan to over 50,000), urbanization rate (from 17.9% to over 66%, basically complete), Engel coefficient (dropping from over 60% to below 30%, entering an affluent society), demographic changes, and so on. These four levels are like point-line-surface-body, gradually deepening and expanding, giving you a more macro and three-dimensional view. The keyword for the "point" change is "retail transformation." Behind it, the "line" is undergoing "circulation modernization." Underneath that, the "surface" is in the "era of oversupply." All of this is because the "body" of China's social economy has officially entered the "consumer society." From top to bottom, you see that all changes have systemic causes. From bottom to top, you understand that all changes are results. I think this is the most systematic understanding of our current environment that you can see. Here, I want to specifically discuss the "era of oversupply" from an industry perspective. **Not a Stock Market, but an Era of Oversupply** In the past, we were in an era of incremental growth, but now people commonly call it a stock market. However, I think this term is wrong. The assumption of "stock" is that demand is no longer increasing, so we have to compete and grab shares. The facts are: First, demand is increasing, but supply is growing faster. Second, demand is structurally diversifying, but supply is still increasing according to old logic. The truth is: consumers are no longer a monolithic group; they are split into countless segments with different scenarios, preferences, and purchase paths. But our supply side still tries to respond with uniform SKUs and uniform distribution logic. Calling it an era of oversupply aims to direct the problem to the supply side, prompting adjustments. What we need to do is not to work harder than before, but to re-match supply and demand. Because in an era of oversupply, what's lacking is not products, but reasons to buy. There are already dozens of choices on the shelf. Why should consumers choose you? This question didn't need answering in an era of insufficient supply. But now, it's the core question. Supply needs to match demand. **What Exactly to Match?** What does supply-demand matching match? People, scenarios, channels, and fulfillment methods. These four terms sound familiar. But stringing them together and operating as a system is fundamentally different from past logic. Simply put, we need to answer three questions: * First: Whose needs?—Not everyone, but specific groups with clear profiles. * Second: In what scenario is it triggered?—Not all channels, but purchase impulses generated at specific times, places, and states. * Third: Who fulfills it and how?—Not just anyone, but those with matching fulfillment capabilities. These three questions form the underlying logic of the supply-demand matching system. This is the core shift I want to talk about today: from linear distribution chains to supply-demand matching systems. This is not a denial of the old model, but an upgrade and reconstruction. Because all models are compatible with their times. **From Linear Distribution to Supply-Demand Matching System** Let's look at the structural differences between the two models. The old model, linear distribution: brand creates products—distribution spreads them—retail shelves them—consumers buy. Information flows one-way, from the supply side to the consumer end. Demand is invisible; brands and distributors hardly know what consumers bought, why they bought, or when they stopped buying. The new model, supply-demand matching: consumer purchase behavior generates data, data drives insights, insights guide flexible production, and channels fulfill. The entire system revolves around consumers; demand is visible, real-time, and responsive. The fundamental difference between these two models is not the number of channels or SKUs, but the direction of information flow—whether it's pushed from supply to demand, or pulled by demand from supply. In this new system, the roles of all three parties need to be redefined. Retailers: from selling space to buying space. Instead of waiting for suppliers to stuff goods, they determine products based on consumer demand. Distributors: from distribution to operation. Not just moving goods and shelving, but doing data feedback and audience operations. How well you know the consumers in your coverage area determines how irreplaceable you are. Brands: from distribution to scenario building. Not just pushing products in, but answering the question: Who will buy you in what scenario? If you can't answer that, distributing through more channels is useless. In the past, our KPIs were: How many dealers opened? How many stores covered? How many products listed? These metrics measured coverage breadth. In an era of insufficient supply, broader coverage meant better sales. Now, the questions we need to answer have changed: Where are the people? What are the scenarios? Who fulfills and how? These metrics measure matching precision. Coverage breadth isn't important; entering the consumer's decision radius is. Simply put, in the past, it was "who covers wider," and in the future, it's "who enters the consumer's decision radius first." What does entering the consumer's decision radius mean? It means when a consumer has a need, they think of you first, find it most convenient to buy from you, and are most willing to repurchase from you. Think of you—brand mindshare; convenient to buy—channel coverage and fulfillment capability; willing to repurchase—continuous matching of product and experience. All three are indispensable. In the past, we only did the middle one—ensuring channel coverage. But now, we must do all three simultaneously. **Advancing Toward the C-End** The structural model of the supply-demand matching system: C-end consumers are at the center; around them are retail touchpoints—scenarios, shelves, and transaction locations; further out is the distribution fulfillment layer—operations, delivery, data feedback; the outermost circle is brand strategy—product, content, and budget formulation. The logic of the entire system is: demand originates from the C-end and drives the entire supply side to respond. It's no longer pushing from the outer circle inward, but pulling from the inner circle outward. Note that the distribution circle is dashed. This means it's optional; in short chains, brands can directly connect with retail without going through the distribution layer. The value of the distribution layer depends on whether it can provide localized operational capabilities and data relay functions. If it can't, it will be bypassed. Based on this model, the three parties are responsible to the C-end, with two specific coordination methods. First, brand × retail, short chain. The distribution layer disappears, and brands directly connect with retail terminals. The chain is shortest and data is most direct, suitable for strong brands, DTC models, or self-operated retail. Look at Sam's Club and Costco's private label logic—essentially this path. Second, brand × distribution × retail, long chain. Distributors transform into local operators, taking on data relay and localized coverage functions. Coverage is broadest and penetration deepest, suitable for fragmented markets and specific channels. There's no distinction between these two models; it depends on your category characteristics, channel structure, and consumer distribution. Regardless of the model, the goal is the same: to be responsible to the C-end. Of course, I want to clarify: linear distribution hasn't completely disappeared, but it's no longer sufficient to explain today's growth. The result of evolution is complexity and diversity, not simple replacement. It's about who is on the rise and who is on the decline, who is increasing and who is decreasing. At least in the short to medium term. Change is ongoing. What we truly feel in the market is the superposition of old and new systems and different models, not simple replacement. The new order cannot be built in a day, but the direction is clear. Finally, let me summarize today's content in three sentences. * First: In an era of oversupply, what's lacking is not products, but reasons to buy. * Second: Not to work harder than before, but to re-match supply and demand. * Third: Advance toward the C-end—this is the common direction for brands, distributors, and retailers. _PS: Click **Read Original** to view more about the 11th China FMCG Conference and the 6th China FMCG Distribution and Retail Conference..._ --- ## 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