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Currently, the development and changes of super terminals have confined distributors to an awkward position. The weakening of marketing functions and the gradual loss and substitution of core competitive advantages have become major obstacles on their development path. Against this backdrop, we selected some successfully transformed distributors in the Yangtze River Delta region for a six-month research period, aiming to summarize their successes and failures, and provide reference for those who are undergoing or about to undergo transformation. Transformation means a dialectical negation of past operating methods; the process of negation of negation is a process of changing traditional rules and introducing new operating models.

Below are three key points and nine directions for transformation we found from numerous distributors.

Integration, Focus, and Branding

From successful FMCG distributors, we see that integration, focus, and branding are three important aspects for strategic breakthrough.

Integration. First, integrate internal resources to become a professional public service platform, such as Xueyun and Xintiantian. Second, integrate external resources to become a public logistics platform. Third, integrate terminal resources, which is reflected in many successfully transformed distributors. Achieve franchise chain control through unified concepts, unified branding, and unified procurement. Fourth, integrate regional resources. Distributors become integrators of regional markets, becoming the makers and controllers of regional channel rules, holding absolute dominance and management power. Fifth, integrate product resources. Integrate various product resources from manufacturers to provide retail terminals with the most reasonable product category combinations.

Focus. Become a leader in a market segment. The new transformation for distributors is to focus on more refined segmentation within their original region. Avoid capital dispersion and improve input-output ratio; establish a professional image and create a clustering effect. For example, the recent emergence of campus distributors, catering distributors, pharmacy distributors, and hospital distributors in the market is a beneficial attempt by distributors to seek partial breakthroughs. Build a service marketing brand. Most distributors are keen to promote the brands of the products they represent. This is acceptable for those just starting out, but after strength increases, if they lack this awareness, they may fall behind. At every point of contact with customers, strive to disseminate information about their own brand. This brand refers not only to the represented brand, but more importantly, the distributor's own brand and corporate brand. Distributors should change their previous speculative approach of "shooting and moving," build their brand with a long-term perspective, and start brand building through investment.

The Road Ahead

Direction 1: Build your own terminals, moving from behind the scenes to the front. There are two methods: use your own funds and manpower to independently set up points; use your own brand and image to develop franchising. The latter requires distributors to have not only certain capital and brand strength, but also a high level of management capability.

Direction 2: Create your own brand. The advantages of own brands are as follows: reduce procurement costs and increase price competitiveness; achieve a gradual role transformation for distributors, moving towards a comprehensive enterprise. Conditions for OEM: distributors must have a certain foundation, personal grasp of the overall development of the enterprise, and certain capital and brand management capabilities.

Direction 3: Grow together, seeking win-win. By finding a manufacturer with growth potential or becoming an agent for a well-known brand, through joint efforts, both parties can work together to expand the market and build the brand, which is a good path for healthy growth. In the process of representing well-known brands, distributors can not only obtain stable returns, but also learn from well-known brands to comprehensively enhance their own scale and strength.

Direction 4: Borrow a chicken to lay an egg, cleverly using external forces. Use the manufacturer's resources and advantages to fill gaps in the original channels and networks, compensate for deficiencies in one's own network, enable other products represented to enter more channels, and strengthen distribution capabilities.

Direction 5: Specialize, strengthen your own advantages. When a distributor cannot focus on every link in the industry chain, build advantageous links to form aggregation effects and professional advantages, and construct professional barriers.

Direction 6: Optimize the category "airport". Form a combination of multiple varieties and brands, and a comprehensive channel combination covering traditional channels, modern channels, and emerging channels. Through an "airport" model, achieve resource sharing and professional division of labor. The airport is like an airport, where flights such as Air China and China Eastern can pass through the "airport" to reach different destinations.

Direction 7: Alliance, create a business together with manufacturers. For distributors with low visibility, it is a good choice to engage in deep cooperation with manufacturers that have potential but low visibility. The reason is that products from lesser-known manufacturers generally have price competitiveness; early involvement in market cultivation of new products can yield rich returns.

Direction 8: Unite. Unite to build a discourse system with one voice to counter manufacturers' constraints and retailers' exclusion. Such unity is relatively difficult and may easily fail when individual interests and collective interests are not balanced.

Direction 9: Fill gaps, go deep into the rural market. The rural market is one of the target markets for deep marketing. Distributors choosing this strategy generally anticipate being at a disadvantage in future competition, but their original channels have a certain foundation in the rural market, which can be further expanded.

The above nine directions are not isolated, nor are they a one-way street. They need to be combined or crossed according to the different situations of each distributor.

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