Over the past six months, walking the market front lines, you'll find a consensus: it's getting harder for brands.
Whether online or offline, emerging retail companies are offering more private label (PB) products, and they always seem to grab the prime shelf space.
Top brands that once avoided retail white-labeling are now proactively manufacturing for retailers.
Some leading companies in certain regions can't even find distributors willing to take their goods—prices are severely inverted, leaving distributors with no profit.
A large number of mid-tier brands, neither top-tier nor emerging, are being quietly cleared off shelves under the retail trend of "wide categories, narrow product selection."
What exactly is happening?
"China's market, this tropical rainforest, is undergoing dramatic changes."
That's a phrase that suddenly popped into my head recently.
"Tropical rainforest" is a comparative analogy.
Looking at the world horizontally—the US, Europe, and China have completely different market structures.
In the US, the top 100 retailers cover over 80% of national sales. In major European countries, the top 5–10 retail groups typically cover 60%–80% of FMCG sales.
Whether in the US or Europe, retail concentration is extremely high, and brands face large-scale, systematic channels.
In China, the situation is entirely different.
Our market is extremely fragmented. The top 100 retailers together cover only about 15% of the market.
In China, a brand may have to deal with over 6 million retail outlets.
— This means:
You not only need to produce goods, but also penetrate, coordinate, and manage countless intermediaries; you must find ways to get consumers to notice you amid the flood of information; you need to promote, distribute widely, drive sell-through, and make the numbers work; you need to build and manage sales teams of hundreds or thousands.
This is an extremely complex, internally draining environment. But precisely because of this, the capacity and layers of the Chinese market are unprecedentedly rich.
It has sufficient breadth, sufficient depth, and a diverse range of consumption scenarios. In the same country, you can see high-end supermarkets in first-tier cities, wholesale markets in third-tier towns, village corner stores, instant retail on Meituan, and social commerce on Xiaohongshu.
The Chinese market is like a tropical rainforest.
Species are numerous, competition is fierce, and ecological niches are abundant. Various brands, small factories, and channel players coexist. Countless brands compete for sunlight and nutrients in the same jungle.
But now—the ecology of this rainforest is quietly changing.
Let's first talk about the obvious evolutionary trends:
- Chain acceleration—retailers are actively integrating outlets.
Snack chains are surging, supermarkets are adopting "bare procurement" and "joint procurement," and instant retail is penetrating faster. Channel entrances are being rapidly consolidated, and retail's organizational level and bargaining power are unprecedentedly strengthened. This means: brands no longer define channels; they are redefined by channels.
- Rise of retail private labels—Sam's Club, Hema, and Yonghui are all ramping up PB, with private label share continuously rising.
For consumers, it means higher cost-performance; for retailers, it means higher margins and stronger control; and for brands, it's a new structural threat—retail is partially replacing brands as the dominant symbol of consumer trust.
- Reorganization of attention—Douyin and Xiaohongshu have redefined how brands launch.
Besides top-tier brands and private labels, channels are also more inclined to introduce emerging brands that "bring traffic." "Traffic momentum" has become the passport for new products to enter the system. Today's competition is no longer about shelf space, but about attention allocated by algorithms.
- Danger for waist brands—a large number of brands that are "neither top-tier nor emerging" are being cleared off shelves.
Their product strength can't compete with top brands, and they lack the traffic and social momentum of emerging brands. Stuck in the middle, they get neither resources nor shelf space.
These things are happening simultaneously, breaking the original ecological balance. The rainforest is still there, but the canopy is closing, and sunlight is becoming scarce.
In the past, brands could grow through "brand voice + distribution speed + channel momentum." Now, these logics are being systematically restructured.
Many brands lament that they simply can't find incremental channels!
Specific analysis, of course, has its reasons.
But from an overall market perspective, this isn't a marketing problem; it's that the ecology has changed, the system is changing.
Only by seeing the ecological changes can you know where the direction lies and what to do next.
To more intuitively understand this "systemic change," the best way is to look at markets that are already ahead: the US and Europe.
If China is like a rainforest, then the US is more like a "manicured plantation."
The US retail market is highly concentrated—the top 10 retailers (Walmart, Kroger, Costco, Target, etc.) control over 80% of national sales; the brand side is dominated by giants like P&G, Coca-Cola, Pepsi, and Unilever. Retail and brands form a stable "oligopolistic collaboration structure."
In such a system, the growth space for new brands is limited. They either become supply chain partners of giants or attach to gaps outside the system, briefly emerging through DTC, e-commerce, or niche channels, but eventually being absorbed by the system.
Competition in the US market is not ecological but efficiency-based. Innovation is absorbed by institutions, and variables are digested by the system.
Unlike the US, Europe is a "multi-polar symbiotic forest," a "multi-polar ecosystem" dominated by several retail groups, concentrated but not monolithic.
In major countries, the top 5–10 retail groups cover 60%–80% of the market—
Germany's Edeka, REWE, Aldi, Lidl;
France's Carrefour, Leclerc, Intermarché;
UK's Tesco, Sainsbury's, Asda, Aldi.
But the difference is that the relationship between brands and retail in Europe is more complex:
- Traditional brands (like Unilever, Nestlé) maintain national influence;
- Retailers' private label (PB) penetration is as high as 30%–50%, forming "symbiotic competition" with brands;
- Many manufacturers have transformed into PB suppliers, becoming part of the system's collaboration.
Retail-led, brand-collaborative is the foundation of the European market. Brands and retail are no longer in a simple buying-selling relationship but in systemic symbiosis: retail reconstructs shelves around private labels (PB), and brands redefine their roles through efficiency and supply chain capabilities.
Many traditional brands, such as Unilever and Nestlé, operate a dual-track system of NB+PB in Europe—doing both branding and supplying retail. Many manufacturers have also transformed into system partners.
China cannot remain in a "rainforest-like fragmentation" state for long, because retail chainization, private labeling, and supply chain intensification are already happening.
So, which model is China closer to?
If we compare horizontally, the Chinese market is more like an evolutionary experiment. It has both the scale and efficiency demands of the US and is beginning to show European-style systemic restructuring.
From the results, it's unlikely we'll move toward the "extreme oligopoly" of the US—China's market is too large, regional differences too complex, and distribution layers too deep.
For Chinese brands, Europe offers more reference value:
- Reconstructing brand-retail relationships—Europe has long shifted from "brand listing" to "brand co-creation," and China is following the same path;
- Supply chain becomes the core of competition—European brands and retailers compete on system efficiency, not advertising spend;
- Manufacturer role transformation—more companies are transitioning from producers to system partners, co-creating private labels and new categories with retail.
The protagonist in the European market is not the brand, not the channel, but the system. This system is led by retail groups, with brands and manufacturers playing collaborative roles.
In such a system, brands compete on whether they can integrate into the system, improve efficiency, and co-create value.
It must be noted that the eventual direction of the Chinese market cannot be identical to any other market. However, such a reference is extremely valuable.
Because there, we have already rehearsed everything we are about to face—retail restructuring, brand redefinition, and the transformation of manufacturing roles.
Cognitive upgrades often don't happen in the office. The real answers lie in markets that are already ahead.
So, this time, we've decided to take our questions to Europe.
From January 9 to 17, 2026, we will lead 30 brand founders, manufacturing business owners, and retail and distribution system operators to Europe to see the more mature side of the FMCG industry.
We will delve into four key topics—
1 Benchmark companies | Deep dive into ALDI and Edeka to understand how they achieve extreme efficiency through SKU control, supply chain collaboration, and PB strategy; 2 Typical formats | Visit over 20 European retail samples, from hard discount to hypermarkets, convenience stores to drugstores, to see how formats adapt to structural transformation; 3 Peer dialogue | Visit European distribution and manufacturing companies like SRG, Martens, and MAXIM to explore how they find new value coordinates in the PB era; 4 Expert accompaniment | Two former ALDI executives will lead the entire trip, providing on-site analysis of the underlying logic of the European retail-brand collaboration system.
This trip is not just an "overseas study tour" but a reboot of systemic cognition.
Because today's brands are not just about making products, doing marketing, and distributing channels, but learning to survive and grow within the system.
If you are:
- A brand owner wanting to reconstruct growth logic;
- A manufacturer exploring a second growth curve;
- A distributor or retailer owner hoping to understand the underlying logic of the retail system—
Then this European trip will be a true systemic learning experience and a departure to see the future clearly and rebuild confidence.
More importantly, in an era of systemic restructuring, find new collaborative partners and build your own "system circle."