"China Resources Snow Breweries has integrated distributors in the Chengdu area." Recently, a source familiar with the Chengdu beer market told reporters, "Several primary distributors in the corresponding region have been integrated to form a company." "The manufacturer does not hold shares in this company, but it has the leading role; market spending and operations are directed by the manufacturer, with distributors executing." the source added. In the beer industry, there is a saying: "Win Chengdu, win Sichuan; win Sichuan, win the Southwest." As one of China Resources Snow's most important strongholds, the Chengdu market's "sudden change" in strategy is bound to affect the entire Southwest beer market. What business logic lies behind China Resources Snow's move to integrate Chengdu distributors? "Change of Tactics" Behind China Resources Snow's Dual Considerations After interviewing a beer expert familiar with the matter, reporters learned that the main purpose of China Resources Snow's integration is to improve the profitability of local beer distributors in Chengdu. "In Chengdu, China Resources Snow holds an absolute dominant position. Its vast sales network ensures market share, allowing products to reach consumers directly, with good performance in channel penetration and store coverage," a distributor familiar with the Chengdu market pointed out. "The number of distributors is large, but their individual scale is generally not very big, which is a legacy issue after China Resources Snow's high-frequency corporate acquisitions." "Although China Resources Snow's beer prices are stable and distributor product profits are relatively considerable, fighting alone consumes too many resources, and net profit levels are not high. This makes distributors susceptible to being 'lured away' by competitors that do not have such a strong sales network," the expert said. In his view, improving distributor profitability is crucial for China Resources Snow. "After integration, distributors' profitability has improved significantly, mainly due to the compression of channel costs such as warehousing and logistics after integration," an insider told reporters. "For example, warehouse resources can be effectively utilized. Originally, each small regional distributor might need three to five warehouses, but now, in a large region, only eight warehouses are needed in total. After reducing operating costs like warehousing and logistics distribution, distributor profits increase," he further explained. From the perspective of China Resources Snow's strategic planning in the Chengdu region, distributor integration is also a necessary move. "Snow Beer's strategy is to unswervingly fight the mid-to-high-end product battle. Introducing mid-to-high-end new products like Masks and Craftsmanship requires a sales network that can respond to market dynamics in a timely manner and carry new product flows. However, the current sales network is somewhat fragile in terms of brand loyalty and stability," a wine industry insider emphasized. "Now, through integration, China Resources Snow has taken control of regional operations through personnel allocation and tactical control, enhancing systematic management of distributors, strengthening the stability of China Resources Snow's vast sales network in Chengdu, and driving resonance between distributors and the manufacturer. This can lay a solid foundation for the distribution and sales of mid-to-high-end products." Distributors: Blessing or Curse? China Resources Snow's sudden "change of tactics" in the Chengdu market has also sparked heated discussion among industry insiders. One beer distributor believes that distributors uniting for development is also a good thing for distributors themselves. "Not only can it improve profitability, but it can also achieve systematic development," the distributor said. "Currently, many distributors' business logic is still stuck in the simple stage of using channels to sell goods. After integrating into a regional company, resource allocation, team collaboration, and channel management will become more systematic, and marketing actions within the region will be more unified." In addition, an insider familiar with the Chengdu beer market told reporters: "The resistance to development will be smaller when uniting, the ability to open up and stabilize markets will be greater, and tactical strikes against competitors within the region will be more powerful." "At the same time, distributors in the region forming a company creates a strong scale advantage, which can increase bargaining power with the manufacturer and secure better policy resources for the region," he added. However, some beer distributors have expressed anxiety: "If my system's strength and resources are the weakest in the corresponding region, after integration, my market will definitely be affected by distributors with greater resource advantages, and I may even gradually lose my control advantage in my own area. Although profitability improves, in the long run, it is still detrimental to my own development." Another distributor mentioned: "Snow has strengthened its control over the region, further simplifying the functions of distributors. The anxiety of distributors being reduced to 'delivery agents' is intensifying, and this anxiety is most prominent among distributors with weaker resources." Facing other distributors and the manufacturer, "not being able to compete" has become the biggest concern for some distributors with relatively less prominent resource advantages. In response, a beer expert analyzed that distributor integration is not simply pooling regional resources together. The manufacturer should formulate appropriate profit distribution methods as a "glue" to achieve shared interests among all parties, dispel the concerns of some distributors, and "build a true community of shared interests." Only then can the sales shortcomings be truly addressed and system optimization achieved. Source: Micro Wine Tips will be paid 400-2000 yuan once the report is adopted. China FMCG + Internet Professional New Media Dedicated to FMCG manufacturer and distributor transformation and channel digital solutions