In the FMCG industry, channel dominance has always been a strategic priority for manufacturers. Almost every successful company has a unique channel coverage model. For example: Nongfu Spring achieved qualitative and quantitative growth through its exclusive distributor model; Jinmailang achieved growth through its four-in-one manufacturer-dealer cooperation model; Tsingtao Beer achieved growth through its two-tier distribution model; Coca-Cola achieved growth through its 101 model at a specific stage. Looking back at the history of China's FMCG development, the most representative aspect is actually the history of FMCG marketing channels. This is typical Chinese-style marketing. Seven or eight years ago, some marketing experts who admired foreign companies would consider this a low-end refinement, a short-sighted acumen, and typical smallholder economy characteristics. But today, local enterprises with Chinese marketing characteristics stand at the forefront of the marketing history stage, and local marketing practitioners with Chinese characteristics have stepped onto the stage of foreign enterprise executives. Today, let's briefly discuss the evolution of offline channel coverage in China's FMCG industry. Explanation of terms used in the article: ** Athlete: market operator and competitor** ** Sparring partner: practices with the athlete, both coaching and operating** ** Coach: supervises the athlete's practice, does not practice with the athlete** ** Referee: judge of market performance** 01
Offline Channel Coverage 1.0:
Traditional Agency Model
Time: Around 1995 Model features: Material supply falls short of demand; agents operate independently; companies only provide products. Brand owners race to secure provincial, city, and county agents, then distribute through second and third tiers. The channel is multi-tiered, with volume built through layer-by-layer distribution. For distributors, obtaining agency rights is the key to success; for brand owners, the deeper the agency level, the more agents, and the more secure the sales volume. Agents operate independently; companies only provide products and management personnel (whose duties mainly involve payment, shipping, and expense communication). Relying on demographic dividends, in an era of material scarcity, as long as a factory could produce quality products, natural circulation sufficed to meet the network coverage needs of small and medium enterprises. Representative brand: Wahaha's joint distribution model: brand owner--provincial company--first tier--second tier--third tier--outlets. The company's marketing team is responsible for developing and managing the entire channel. Channel role analysis: Brand owner is athlete, agent is athlete, each doing their own thing. 02
Offline Channel Coverage 2.0:
Deep Distribution Model
Time: Around 2000 Model features: Intensified competition, terminal dominance, channel model focused on controlling terminals, brand owner-led operations, distributors as delivery partners. Product proliferation intensifies competition, exposing the drawbacks of crude channel distribution. Brand owners begin optimizing channels, and deep distribution takes the stage, shifting focus to terminal outlets with the slogan "Win at the Terminal." Various methods emerge, such as Coca-Cola's "101" and manufacturer-agent-KA tripartite cooperation, all aimed at strengthening terminal maintenance and customer relations. Key indicators: distribution rate and single-store sales increase. Leading FMCG brand owners begin implementing deep distribution operations. To improve operational efficiency, they recruit large numbers of sales personnel for a human-wave tactic, indiscriminately sweeping streets. The basic requirement is that brand owners possess a replicable, adaptable operational efficiency. At this time, domestic leading brand owners' channel coverage becomes dense, albeit simple and crude. Representative brands: PepsiCo, Master Kong, Coca-Cola, etc. Channel role analysis: Brand owner is athlete, distributor is sparring partner, dividing work and cooperating. 03
Offline Channel Coverage 3.0:
Traditional Distributor Model
Time: Around 2005 Model features: Distributors dominate market operations, brand owners support, relying on corporate resources and operational guidance. Around 2005, with the booming domestic economy and increasing demographic dividends, the gap in market product demand widened, and many FMCG companies sprang up like mushrooms. Meanwhile, more people began to pay attention to this low-barrier business, and agents were educated by companies like Wahaha and Master Kong. The channel chain was quickly established. New brand owners needed to build local distributor networks to reduce operating costs, giving distributors more responsibilities, rights, and benefits, and retreating to "logistics services." Representative brands: All new brand owners during this period. Channel role analysis: Distributor is athlete, brand owner is sparring partner. 04
****Offline Channel Coverage 4.0:
Distributor Contract Model
Time: Around 2010 Model features: Distributor-led operations, brand owners provide macro guidance, with clear division of responsibilities, rights, and benefits. As demographic dividends disappear, the incremental market becomes a stock market, and brand owners' growth becomes less easy, bringing profit pressure. Additionally, with labor law regulations and rising prices, labor costs surge, making the human-wave tactic unsustainable for many brand owners. Some brand owners design rights and begin delegating authority to distributors. The basic requirement here is that distributors possess high operational efficiency. Representative brand: Nongfu Spring. Channel role analysis: Distributor is athlete, brand owner is coach + referee. 05
********Offline Channel Coverage 5.0:
Jinmailang Four-in-One Contract Model****
Time: Around 2015 Model features: Distributor owners partner with frontline sales staff; brand owners act as sparring partners. The employment relationship between distributor owners and frontline salespeople transforms into a partnership. Jinmailang believes that the more decentralized the distribution rights, the stronger the initiative of personnel. Only by stimulating people's primal desires can market competition be invincible. As a result, Jinmailang has achieved annual growth rates leading FMCG head enterprises for several consecutive years despite a weak market, under the four-in-one model. The basic requirement here is that both the execution team and distributors possess certain operational efficiency. Representative brand: Jinmailang. Channel role analysis: Distributor is athlete, brand owner is referee. 06
********Offline Channel Coverage 6.0:
Three-Power Separation Partnership Model
Time: Around 2020 Model features: Distributor owners, professional managers, and frontline salespeople form a tripartite partnership; brand owners provide logistical support. The three-power separation model is the endpoint of channel coverage models, provided distributors exist. It not only fully defines the rights of manufacturers and distributors but also more precisely empowers distributor managers and sales teams in daily operations, using management as the core incentive logic to stimulate initiative at all levels. The basic requirement here is that execution operations, frontline management, and distributors possess operational efficiency. △Image source: Internet Representative brands: Some liquor companies, some first-tier brands' new marketing departments. Model features: Distributor is athlete, brand owner is referee, professional manager is sparring partner. 07