---
title: "The \"Leading by a Small Step\" Methodology of the Largest Condiment Distributor in Southern Zhejiang and Northern Fujian, Representing Brands like Heinz Weishida, Lee Kum Kee, Totole, and Unilever"
description: "This article explores how Wenzhou New Era Food Co., Ltd., the largest condiment distributor in southern Zhejiang and northern Fujian, has maintained growth amid changing market conditions by adopting a \"leading by a small step\" philosophy, efficient management of over 200 brands and 5,000 SKUs, and strategic channel expansion and market penetration."
author: "周群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-07-17"
language: "en"
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# The "Leading by a Small Step" Methodology of the Largest Condiment Distributor in Southern Zhejiang and Northern Fujian, Representing Brands like Heinz Weishida, Lee Kum Kee, Totole, and Unilever

> This article explores how Wenzhou New Era Food Co., Ltd., the largest condiment distributor in southern Zhejiang and northern Fujian, has maintained growth amid changing market conditions by adopting a "leading by a small step" philosophy, efficient management of over 200 brands and 5,000 SKUs, and strategic channel expansion and market penetration.

**Click to read the original article for details**
A couple of years ago, a saying circulated: "All industries in China are worth doing all over again." Does this apply to the distribution and circulation sector?
Many distributors probably disagree with this statement. "E-commerce came, community group buying came, online is getting better and better, offline business is getting harder and harder." It seems that every new retail format is competing with distributors for business. But the fact is that whether it was the rise of KA stores or the emergence of e-commerce, a group of distributors have done better in the process. The new environment has made distributors' businesses more complex, and this stage also requires distributors to adapt and learn. **The environment cannot be changed; you can only change yourself.**
Recently, New Distribution interviewed Mr. Ma Xuzhong, Chairman of Wenzhou New Era Food Co., Ltd. As one of the most important distributors in China's condiment industry, New Era Food has continued to develop its business forward despite the constantly changing macro environment.
We hope that this description of New Era Food's business development can bring some inspiration and food for thought to more distributors.
**"Leading by a Small Step" Makes a Big Difference**
First, let me briefly introduce Wenzhou New Era Food Co., Ltd. Founded in 1996 and located in Wenzhou, Zhejiang, it represents nearly 200 brands including Heinz Weishida, Lee Kum Kee, Totole, and Unilever, with over 5,000 SKUs. It covers all channels and more than 10,000 retail points, making it the largest condiment distributor in southern Zhejiang and northern Fujian.
Before starting his business, Ma Xuzhong served in the military for three years. His military experience cultivated a spirit of not admitting defeat, which laid the foundation for overcoming difficulties in his later entrepreneurial journey. In 1983, after leaving the military, Ma Xuzhong entered a state-owned enterprise, starting as a grassroots salesperson, then progressing to business department manager, business section chief, and by 1990, he became the head of a branch company.
At that time, state-owned enterprise reforms adopted a branch contracting system, so Ma Xuzhong contracted the entire branch and developed it well. However, due to the heavy pressure of contract fees, after six years of contracting, Ma Xuzhong decided to start his own business. In the first year of entrepreneurship, relying on years of experience in state-owned enterprises, the company was quickly established. But because of the initial stage, both products and investment were far inferior to those of state-owned enterprises, resulting in sales of tens of millions in the first year but losses of nearly 2 million yuan.
It wasn't until 1998 that New Era Food took on an oil brand. Through this high-frequency demand product, they quickly deepened their network and turned losses into profits, gradually getting the company on track. During the development process, New Era Food also found some methods and strategies through exploration.
In terms of positioning, Ma Xuzhong was clear from the start: definitely not a wholesaler, but a first-tier agent.
Even if the brand is an absolute leader in its category, if it is not the regional first-tier agent, they choose not to do it. New Era Food was once an early distributor for Haitian in the Wenzhou area, but later the manufacturer opened other distributors in the Wenzhou area, and Ma Xuzhong decisively chose to stop.
**Strategically, through the combination of brands and categories, expand influence at the terminal and do deep channel cultivation.** When the market was mostly "sitting merchants," New Era Food began to sink channels and deeply cultivate terminal outlets.
At the same time, **after opening up the channel network, based on the characteristics of the condiment category, where brand concentration is not high, New Era Food began to do its own OEM factories and brands.** Using existing channels, they quickly distributed their own products to terminals, with annual sales of their own brands reaching tens of millions.
There was also an episode during development. In 2003, Ma Xuzhong did something sensational in Wenzhou: he spent nearly 15 million yuan to acquire Shideng, a famous clothing brand in Wenzhou, including its factory, equipment, and trademark. The trademark was later transferred.
**Ma Xuzhong told New Distribution, "Looking forward" and "leading by a small step" are very important. If you do business the same way as most distributors, you can only be average. But if a distributor can see the future development of the business and lead by a small step, the business will naturally be at the forefront.** The acquisition of the clothing brand was also for this reason; the core was to obtain factory resources, as many distributors at that time had not yet realized the importance of logistics and warehousing. This included having his child choose international logistics as a university major. New Era Food now has a very complete warehousing and logistics system, with a storage area of over 10,000 square meters, and high-rack warehousing with an actual usable area of over 20,000 square meters.
**200+ Brands, 5,000+ SKUs: How to Manage Efficiently?**
In the big direction, New Era Food focuses on condiments, with multi-category and multi-brand development. The number of brands it represents is among the top in the country, with over 200 brands and more than 5,000 SKUs. With so many products, managing them alone is very difficult, and it is even harder for salespeople to promote them.
New Era Food's approach is: **First, set up a customer service department in the organizational structure, which is rarely seen in traditional distributors.** The customer service department is essentially the intelligent brain of the salesperson. With such a large number of brands and SKUs, it is difficult for salespeople to remember everything completely. The customer service department helps salespeople with product promotion.
For example, product promotions, price fluctuations, product information, sales tracking, customer issues, etc., are all managed by the customer service department. Salespeople only do one thing: make customer visits and promote products into stores.
This is a change at the organizational structure level. At the salesperson level, during the initial onboarding period, they are taken by department supervisors to visit terminals and familiarize themselves with the sales situation of each store. They also regularly invite brand training departments to provide product and professional training to employees.
**Second, the main products promoted at different stages are different.** Products are promoted in stages, for example, one quarter as a stage, with 10 brands promoted each stage. During this period, salespeople become extremely familiar with the products of the 10 promoted brands. This cycle continues, giving salespeople a certain understanding of the company's products.
**Third, digital distribution, with classified and graded management of products and customers.** Match outlets with products; not all products need to be sold to all outlets. Nor are all outlets suitable for selling all products.
For example, the same product may not have an obvious effect when promoted in high-end residential community stores, mainly because this consumer group focuses on quality rather than price, and it sells better without promotions.
Through the system's backend data, customers are graded. High average transaction value customers are the main battlefield for promoting high-end products, while low average transaction value customers are mainly promoted with mid-to-low-end products.
In Ma Xuzhong's view, segmenting customers is very important. Many distributors cannot escape the vicious cycle of "growth stagnation" because of this; they have not found incremental customers through data.
**Fourth, product digitization and refined management.** To ensure the accuracy of all data, New Era Food has been gradually using digital tools since 2000, from the business end to the warehousing end, basically achieving digital management.
Taking date management as an example, all shelf products are monitored by the system. For example, if a supermarket product has a shelf life of more than 10 months, the warehousing system will automatically intercept it. The mobile terminal can check the date of each shelf and each batch of goods at any time, with real-time monitoring.
Through such systematic management, New Era Food can still achieve precise distribution and sales with such a large number of brands and SKUs, covering nearly 10,000 stores of different systems, and continuously expanding its business scale.
**Finding Incremental Growth from Channels and Consumer Groups**
The era of material scarcity is over. Today's market has long entered a stock market. Whether for stores or consumers, there are more and more product choices. Distributors need to find incremental growth in the stock market, and they can dig deep for increments from two entry points: channels and consumer groups.
**1. Channel Expansion and Market Sinking**
In recent years, special channels have been very popular in the industry, such as government agency canteens and school canteens. These are typical special channel customers.
These customers have a characteristic: once cooperation is successful, users have no choice, no need to invest too much personnel, time, and energy, and they have stable sales. Unlike traditional channels, where products are placed in stores and require a lot of sales promotion actions, consumers are users and have choices, resulting in unstable sales.
Taking government agencies and schools as examples, these institutions' primary requirement for products is quality, and they are not highly price-sensitive. This channel should be supplied with the best products, and the core should be to use first-line brands.
Channel expansion is only one aspect; market sinking is also a key link. China is a super-large, multi-level, three-dimensional market. This complex geographical environment is also an opportunity for some distributors because most distributors do not do well in market sinking.
New Era Food has been doing market sinking since 2015. The initial investment was very large, often with sales revenue not enough to cover salesperson salaries and store expenses. But the benefit is that once the sales network is formed, it lays a solid foundation for later large-scale development.
The sinking method is in the form of task distribution. For example, in a county, from village to town and finally to county, each level corresponds to development task requirements, such as at least 3-5 per village, and so on up to town and county.
Through this expansion and sinking method, New Era Food has achieved full-channel coverage in its operating area, with the total number of outlets across various systems exceeding 10,000.
**2. Precise Positioning Based on Consumer Groups to Maintain Market Competitiveness**
New Era Food focuses on family consumption, thereby avoiding the advantage of core competitor Haitian in the catering channel, and concentrating efforts to attack the weak channels of competitors.
Focusing on family consumption faces the issue of consumer stratification. The younger generation of consumers advocates individuality, likes to buy internet-famous products, and is not highly price-sensitive. This leads some distributors into a misunderstanding, thinking that internet-famous products can capture young consumer groups.
In fact, this is not the case. At present, especially in the condiment industry, no internet-famous condiment brand has a long life cycle. Young people may like one internet-famous brand today and another tomorrow, with low loyalty, which is a high risk for distributors.
New Era's approach is to target housewives as the breakthrough point, with well-known brands covering the main consumer group. Other low-tier brands imitate internet-famous brands in packaging and taste but are priced lower than internet-famous brands to attract some young groups and maintain their competitiveness.
**Final Thoughts:**
Recently, I visited many major condiment distributors and found some commonalities in communication:
**First, they are all doing their own brands.** This is based on the characteristics of the condiment industry, where market concentration and consumer brand awareness are not high. Distributors use their mature sales networks and existing resources to quickly complete distribution and sales promotion actions.
The benefits of this, besides high profits and good returns, are that it can also exercise the distributor's operational capabilities. In the past, distributors were middlemen who sold goods for price differences. For brand operations and channel operations, they were basically passively executing.
Doing their own brands actually forces distributors to think from a higher dimension: how to deeply operate a brand, resource allocation, personnel configuration, channel construction, etc., all require deep thinking by distributors, making them more advantageous as brand operators.
**Second, they are all doing channel expansion.** Channel fragmentation and consumer stratification have led to the original market cake being recut, and the market share of original mainstream channels is gradually being divided by some segmented channels.
In this process, the share of distributors' original channels decreases. To maintain sustained growth, in addition to intensive cultivation in original channels, they must explore market share in other channels, such as e-commerce, community group buying, and other online shares.
**Note:** Ma Xuzhong, Chairman of Wenzhou New Era Food Co., Ltd., will be a speaker at the 2021 (4th) China FMCG Conference held by New Distribution in Shanghai from August 24-26. He will share more practical content on innovative distribution for distributors. Interested friends should not miss this conference!
**PS**: From August 24-26, 2021, the 2021 (4th) China FMCG Conference hosted by New Distribution will be held in Shanghai. Centered on **"Industry Frontier Collection" + "Practical Exploration New Cases" + "Industry Connection New Growth"**, with **100+ big-name guests and 10 thematic forums**, it will bring an ideological feast on industry trends for FMCG practitioners!
Some of the confirmed heavyweight guests include: **1. Tao Shiquan, Founder of Jiangxiaobai; 2. Yao Xuhong, General Manager of Meiyijia Holdings Co., Ltd.; 3. Bi Chaojiao, General Manager of China Resources Snow Breweries (China) Marketing Center; 4. Yang Hongbin, Vice President of Junlebao Dairy Group; 5. Jin Yanze, Chief Data Officer of Uni-President Group; 6. Guo Xulin, Assistant to the President of Hema Fresh; 7. Li Zhihong, Senior Vice President and Director of Xibei Catering; ...**
**3000+** industry audience, **1500+** first-line brand executives, **1000+** new e-commerce platforms & regional leading distributors, 3 full days. Everything you want to know about the latest industry trends, changes, models, and business opportunities is here!
**Are you "watching" me?**


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