---
title: "The Dealer Development Led by First-Tier Brands Such as Yili, Mondelez, Unilever, and Haitian Is Being Replaced!"
description: "Hello friends. I am Yuan Lai. \"In the past, first-tier brands led the development of local dealers' businesses; in the future, it will be the competition among local dealers that shapes the business landscape of local dealers.\" I have been saying this on many occasions recently. In the past, the rise of dealers was often due to catching a good brand and following it, accompanied by demographic dividends and supermarket dividends, gradually growing from an individual or family business into a trading company with dozens of employees."
author: "袁来"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2023-08-15"
language: "en"
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# The Dealer Development Led by First-Tier Brands Such as Yili, Mondelez, Unilever, and Haitian Is Being Replaced!

> Hello friends. I am Yuan Lai. "In the past, first-tier brands led the development of local dealers' businesses; in the future, it will be the competition among local dealers that shapes the business landscape of local dealers." I have been saying this on many occasions recently. In the past, the rise of dealers was often due to catching a good brand and following it, accompanied by demographic dividends and supermarket dividends, gradually growing from an individual or family business into a trading company with dozens of employees.

Hello friends.
I am Yuan Lai.
**"In the past, first-tier brands led the development of local dealers' businesses; in the future, it will be the competition among local dealers that shapes the business landscape of local dealers."**
I have been saying this on many occasions recently.
In the past, the rise of dealers was often due to catching a good brand and following it, accompanied by demographic dividends and supermarket dividends, gradually growing from an individual or family business into a trading company with dozens of employees, thousands of square meters of warehouse, a dozen vehicles, and hundreds of square meters of office space.
It can be said that in the past, dealers rose by relying on brands and took root locally, gradually forming a regional urban FMCG distribution pattern.
**You do Yili, I do Mengniu; you do Haitian, I do Lee Kum Kee; you do Nongfu Spring, I do Master Kong; you do Unilever, I do Nice Group...**
But now, as dealers enter formalized corporate operations, coupled with the low-margin era of stock grabbing in the overall industry, whether dealers can continue to grow stronger and hold their own turf without being taken by competitors depends more on their own management capabilities.
On a larger scale, it depends on the strategic layout and vision of the dealer boss.
At this point, brand owners are still important, but in fact, they can no longer play a decisive role.
Even if you rise with a brand, the quality of operations depends more on the dealer boss's ability and the strength of local competition.
Therefore, we believe that **the local distribution landscape is entering a new cycle, and this cycle will be led by local dealers themselves.**
**If you are strong, you can survive and even merge or take over competitors' businesses; if you are weak, sorry, after two or three years without profit, you won't be able to hold on.**
Against this backdrop, combined with my summaries and classifications from exchanges and research with over 300 dealers, let's discuss the future development trends and business models of local dealers.
**Five Types of Dealer Business Models**
FMCG is a large category, including beverages, snacks, daily chemicals, condiments, and other subcategories. Although the categories vary greatly, the dealer business models can be roughly divided into five types. Let's provide complete explanations for each.
**Type 1: Warehouse and Distribution Dealers**
**Type 2: Brand Dealers**
**Type 3: Category Dealers**
**Type 4: Channel Dealers**
**Type 5: Platform Dealers**
**Warehouse and Distribution Dealers:** Our "standard definition" is:
Local dealers reach regional distribution cooperation with several brands, providing only warehousing, distribution, and financial support. Due to factors such as manufacturer models or personal capabilities, they cannot complete independent distribution.
Common categories: beverages, alcoholic drinks, snacks.
Typical brands: Coca-Cola, Master Kong, Mars Wrigley, etc.
**This is a common distribution model in the beverage and alcohol field, where manufacturers deeply distribute and directly control terminals.** It is **generally operated by small businesses, such as husband-and-wife teams with three to five people.**
**Brand Dealers:** Our "standard definition" is:
Dealers reach deep regional cooperation with 1-2 brands. They treat these as core brands, which account for more than 50% of the dealer's business. Other brands are auxiliary and not the focus of daily operations. At the same time, dealers have their own salespeople and independent distribution capabilities.
Common categories: beverages, alcoholic drinks, milk and non-staple foods, grain and oil, washing and care.
Typical brands: Mengniu, Arawana, Nice Group, Nongfu Spring, etc.
Currently, "brand dealers" are the mainstream in the distribution industry. One or two brands account for more than 50% of the overall business, and brand cooperation often lasts over 10 years, being the brands that helped the business start.
Internal organizational management and external business management logic are also designed around these brands.
**Compared to "warehouse and distribution dealers," "brand dealers" have distribution and promotion capabilities, with their own salespeople visiting stores to obtain orders and provide after-sales service.**
**Category Dealers:** Our "standard definition" is:
Combine multiple brands under the same category to form a brand matrix - category distribution. Through the brand matrix, maximize the shelf resources, display resources, and promotion resources of that category in stores. Combine no fewer than 3 brands under the same category.
Common categories: snacks, daily chemicals and household goods, condiments and sauces, etc.
Currently, **"category dealers" appear most frequently in the snack and daily chemical/household goods fields**, which is closely related to category capacity and brand concentration.
For the above two large categories, due to category turnover and capacity, it is unrealistic for brand owners to directly control terminals. Therefore, local dealers have the space to horizontally expand categories.
**Channel Dealers:** Our "standard definition" is:
Focus on a specific type of channel, with more than 80% of business coming from that channel. Build their own organizational structure and management philosophy around the channel's operational characteristics and models.
Common channels: KA modern channels, CVS convenience channels, government and enterprise special channels, etc.
Common categories: beverages, snacks, daily chemicals, condiments, etc.
**Currently, "channel dealers" mostly appear in first-tier or provincial capital cities, focusing on a specific channel**, such as national or regional KA stores like Walmart, Carrefour, Yonghui, RT-Mart, or emerging retail formats like O2O self-operated platforms such as Puyu Supermarket, community group buying platforms, etc.
Deep cooperation with modern KA channels, through relatively professional communication and collaboration, continuously increasing business share in that channel.
**Platform Dealers:** Our "standard definition" is:
Focus on the largest number of traditional mom-and-pop stores (traditional catering stores) in a specific region, providing them with all categories of FMCG products (catering and food ingredients) that account for 60%-70% of their business, excluding tobacco and alcohol. With the store's product needs as the core business starting point, design the internal organizational management system.
**"Platform dealers" are also what dealer bosses commonly refer to as "B2B platforms." Currently, "platform dealers" are one of the business directions that many local big dealers are considering expanding into.**
Looking across the country, although it is blooming everywhere, the "platform dealer" model is still in exploration and not truly mature.
The above is our five-fold classification of current dealer business models.
Models themselves have no good or bad, but obviously, **channel dealers, category dealers, and platform dealers are the best paths for different dealers to become large-scale and achieve sales of over 100 million yuan.**
Of course, I also want to emphasize that there is no absolute classification. From a category perspective, a dealer might be a category dealer, such as focusing on daily chemicals. At the same time, from a channel perspective, they might only focus on KA channel distribution. Which model they belong to depends on the dealer's own development direction and planning.
**First classification, then cognition.**
**The purpose of classification is to help us understand the dealer business more clearly.**
**The Business Panorama Behind the Five Business Models**
With the classification of the five dealer business models, let's look from a city perspective: what is the distribution pattern and development trend of FMCG dealers?
This chart is a judgment by "New Distribution" on the distribution pattern for a third-tier city with a population of 1-3 million.
**The top two rows are mainstream brand-type dealers.**
With the current stock grabbing and rising operating costs, as well as the encroachment and division of the market by platform-type and category-type dealers, the number of brand-type dealers will decrease.
**The middle row is snack, daily chemical, and condiment category dealers.**
Based on the combination of dozens of brands to form category distribution, and around the local market to achieve deep channel coverage, including local LKA, single large stores, CVS, CS, snack chains, agricultural trade and catering wholesale, campus stores, etc.
**The last row is platform dealers.**
Focusing on covering mom-and-pop stores and small and medium catering stores, with beer, beverages, snacks, and other daily chemicals, condiments, etc.
This is the distribution landscape in a third-tier city.
Due to space limitations, we cannot elaborate on the business panorama of FMCG dealers one by one.
Therefore, **at the 5th China FMCG Conference and the 1st China FMCG Dealer Conference organized by "New Distribution" from October 9-11, we will systematically elaborate and release the industry's first "City X Population Dealer Development Model."**
In addition, **we will also officially release the "2023 China FMCG Dealer Survival and Development Report."**
Over the past six years, "New Distribution" has been paying attention to, researching, and reporting on dealers. Taking the opportunity of the first China FMCG Dealer Conference, we hope to systematically and completely present our research insights to the industry.
As the most important link in the FMCG industry, what changes are happening to the dealer group, and where will they go in the future?
If you are an FMCG dealer, or a practitioner, manager, or operator engaged in dealer management, you must come to this conference!
See you in Shenzhen in October!


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