Over the past thirty years, China's FMCG channels have evolved from department stores to supermarkets and convenience stores, from B2C e-commerce to content commerce, and then to O2O, snack stores, and discount retail.

Every wave has reshaped consumption occasions, distribution efficiency, and the structure of supply and demand.

For manufacturers and distributors, this is not simply a matter of having more channels. It resets the underlying logic of market operations and resource allocation.

Each channel demands a different combination of product strength, brand strength, and operating capability. Behind those differences, the coordination between manufacturing and distribution is moving away from a linear model built on channels, distribution layers, and wholesale volume. It is becoming a network built on multiple channels, rapid response, and lighter inventory.

Before 2022, new retail formats emerged at extraordinary speed. After 2022, the channel landscape became more stable. The period of countless experiments and aggressive subsidies gave way to stronger fundamentals and a return to the realities of retail.

That stability benefits leading brands. They can focus on the channels that now exist, improve operating efficiency, adopt better tools and management practices, and grow market share.

O2O and Instant Retail

Instant retail has recently become one of the most closely watched formats in the retail sector.

  • In September 2024, Douyin expanded Hourly Delivery nationwide and increased its investment in instant retail.
  • On October 15, 2024, Meituan said it had more than 30,000 flash warehouses and set a target of more than 100,000 by 2027.
  • In February 2025, JD.com launched its food-delivery service with a 5 percent commission rate, below the 6 to 8 percent rates cited for Meituan and Ele.me.
  • In May 2025, Taobao launched its instant-commerce service. On July 2, it announced RMB 50 billion in subsidies over the following twelve months, including consumer coupons, free-order cards, merchant commission reductions, and delivery subsidies.

Heavy investment from Meituan, JD.com, and Alibaba has changed the value chain and the balance of incentives among manufacturers, channels, and consumers.

Instant retail is not merely an online transaction followed by offline fulfillment. It is a reconstruction of the last mile and a redistribution of traffic around immediate consumer demand.

Channel competition is therefore shifting away from physical location alone and toward speed and traffic efficiency.

The distributor model of holding large amounts of inventory is being replaced by a rapid-response system based on local stock, front warehouses, and dynamic replenishment.

Brands must help platforms build local fulfillment networks while adjusting product assortments and promotions in real time according to regional data.

Platforms also control the principal traffic gateways and much of the data. Brands that lack precise platform operations, dynamic regional inventory management, and full-chain data collaboration will fall behind in the race on traffic, speed, and cost.

B2C E-commerce

Traditional B2C platforms such as Tmall and JD.com grew through broad online traffic dividends and blockbuster-product strategies. Today, e-commerce has entered a phase of intense traffic competition and uncontrolled acquisition costs.

As traffic becomes more expensive, many established FMCG brands find that even heavy online spending cannot guarantee a positive return on investment.

More importantly, platform algorithms and internal traffic-allocation systems now separate brands suited to long-term development from those capable only of short bursts of growth.

Traditional FMCG brands often lack strong content and interaction capabilities, so they are losing position at major traffic gateways. Newer brands use precise product seeding, collaborative content, and flexible channel pricing to penetrate the market.

B2C platforms have therefore evolved from simple sales channels into brand positions and testing grounds for new products.

Established brands must move from a strategy centered on a few large products toward multiple categories, smaller breakout products, and rapid iteration. They also need a closed operating loop that connects in-platform livestreaming, content commerce, and community conversion.

The value of B2C no longer lies only in completed transactions. It also lies in the accumulation of consumer touchpoints and behavioral data.

Without data-driven product development and user operations, traditional manufacturers will find online competition increasingly difficult and gradually lose control of their digital brand presence.

Snack Stores

The rapid expansion of snack-store chains represents an evolution in how the snack category monetizes channels.

Offline snack collections use high frequency, low prices, and rapid assortment changes to capture consumer demand in lower-tier markets and residential communities.

Their product logic is no longer driven primarily by brands. It prioritizes breakout products, gross-margin targets, and sales productivity per square meter.

Streamlined assortments, deep inventory in selected items, and rapid replacement have become the core supply-chain capabilities of snack stores.

Brand value is significantly weaker in this environment. Consumers care less about whether a product comes from a major brand and respond more directly to products that taste good at an attractive price.

This model forces manufacturers to compete simultaneously on price and product. It also requires rapid response to breakout products and inventory designed to avoid slow-moving stock.

The traditional formula of broad distribution plus advertising investment no longer works in this channel.

Snack-store chains are also developing brand-like capabilities of their own. Private labels, exclusive products, and tighter supply-chain relationships help them increase repeat purchases and margins.

For established snack brands, these stores are both a threat to market share and an external force compelling changes in cost structures and channel design.

Discount Retail

Discount retailers are a product of the removal of excess cost and pricing layers from retail.

They place two extreme demands on brands: the lowest possible price and the fastest possible turnover.

To enter this channel, a brand must reduce its premium, remove intermediate layers, and sometimes accept less brand exposure and promotion.

Discount retail changes the relationship between FMCG brands and prices by separating the two. Consumers purchase perceived value rather than a brand halo.

Brand value and profit are reconstructed in this system. Price-band advantages once supported by brand strength and channel spending are largely absent.

Discount retailers also choose products around essential demand, high purchase frequency, and low prices. This compresses the time available for product innovation and brand building.

A manufacturer without advantages in cost, scale, and supply-chain coordination has almost no negotiating power.

For many brands, the channel may generate attention without profit. Yet refusing to participate can mean losing access to traffic and distribution.

This is a process of converting brand strength into economic value. Only brands with strong control and clear scale advantages can preserve margins under a low-price strategy.

For mid-sized brands, entering discount retail is more often a form of strategic defense than profitable expansion.

Supermarket Revamps

Supermarket remodeling moved from a limited industry discussion to a mainstream priority over the course of a year. Regional operators and national chains alike began revamping stores or preparing to do so.

These changes are the physical supermarket's response to lost traffic and pressure from e-commerce.

With strategies built on broad category coverage, fewer items per category, fast turnover, and controlled inventory, supermarkets are moving from renting shelf space to curating it.

Brands and products are now evaluated more directly. Products without breakout potential, rapid sales, or strong repeat purchase are removed.

The revamp is fundamentally a reconstruction of offline retail efficiency. It also resets the qualifications for brands that want to remain on the shelf.

Supermarkets no longer need a brand's ability to pay for entry. They need product strength and sell-through.

Manufacturers that cannot optimize products, prices, packaging, and promotions—or provide items with strong repeat purchase and rapid turnover—will struggle to enter the next generation of supermarket assortments.

The balance of power between retailers and suppliers is changing as well. Brands are no longer automatically the dominant party. Retailers and brands must act as partners, sharing responsibility for profit, sell-through, and brand enablement.

Supermarkets increasingly expect joint full-chain data, shared inventory visibility, and coordinated product and sales operations.

For manufacturers, a supermarket revamp is not merely a channel adjustment. Without stronger product and distribution capabilities, a brand can become marginalized across mainstream offline retail.

Physical supermarkets may be the last major area of untapped offline value for brands, but they are also becoming a decisive test of survival.

The Omnichannel Requirement

The old approach to channel planning was built around isolated points and linear routes to market.

Today's landscape connects multiple points into a network. Online and offline channels are converging, and the full value chain is becoming digital.

Manufacturers must therefore stop applying one operating model everywhere. They need channel-specific products and economics, rapid supply-chain response, local inventory coordination, and shared data across platforms, retailers, distributors, and brands.

The omnichannel challenge is ultimately a coordination challenge. Competitive advantage will belong to companies that can manage different retail models as one connected operating system without ignoring the distinct economics of each channel.