The retail landscape is undergoing a major transformation! Snack discount stores are expanding rapidly, and discount supermarkets are emerging. Pangdonglai is helping traditional supermarkets reform, and they are joining the self-transformation wave to find a way out. New retailers are rewriting the rules of the retail game, forcing traditional retailers to seek transformation. The establishment of a new retail order often means a leap in efficiency and a major change in business. Distributors, as key players in the circulation chain, have become the most affected group in this transformation. Business is tough, profits are declining, and where is the future? Can the distributor business still be viable? Only by understanding what is changing in the market can you know where your new business opportunities lie. The current changes in the retail market are complex and multi-dimensional; this article only provides one perspective to offer distributors some information and insights to cope with the current changes. Retailers are collectively iterating and transforming Currently, besides discount supermarkets, snack discount systems are also being forced to consider where to find growth due to intensifying market competition. They are beginning to expand store formats and extend into discount supermarket businesses. Discount supermarkets under various snack discount systems Distributors need to expand their functions in the industry chain Three directions for distributor business transformation (role extension or capability extension) Of course, extending upstream or downstream requires higher strength and capability from distributors. For most distributors, the main consideration is how to create value for retailers and find new business opportunities. After summarizing the needs of retailers, it is not difficult to find that the demand for "advance payment + logistics" is shrinking, while the demand for "buyer + assortment" is emerging. The latter, as a new demand arising from industrial development, is also a new capability that distributors need to grasp new profit opportunities. Let's elaborate on the internal logic below. Distributors need buyer and assortment capabilities First, let's talk about the buyer capability of distributors. In the involution environment, the life cycle of new products is severely shortened, and even many good products cannot succeed due to various reasons. But the market, especially retailers in the pursuit of competitive differentiation, always has a demand for new good products. Good products, while meeting consumer needs, can be priced at a level acceptable to the mass market, thereby driving terminal sales to improve retailers' output per slot and per square meter. The matching of "people, goods, and places" is a screening process that requires time and effort to test sales, and it is also an important part of retailers' work. Therefore, the value of being able to screen out good products faster and improve the efficiency of retailers' assortment optimization is obvious. As a partner of retail customers, if distributors can help procurement complete these tasks and gradually develop into external buyers for retail partners, it is clearly what retailers are willing to accept. This is very evident from the role of Sam's Club's distributors. Moreover, the long-term cooperative relationship built through buyer capability is mutually dependent and relatively equal. Second, let's talk about the assortment capability of distributors. Some retail systems, especially local KA and BC supermarkets, do not have the ability to coordinate their product assortments, possibly due to the complexity of supplier management or the inability to solve stable supply issues, for various reasons. Currently, to reduce price differences to compete with peers, this assortment coordination capability is particularly important. Reducing price differences lowers the tolerance for errors in assortment coordination; choosing the wrong products that don't sell is a loss for retailers. Therefore, the ability to coordinate assortments directly affects store output. But at its core, it is still a matter of matching "people, goods, and places." A full assortment for a category needs to be built from multiple dimensions, such as price points (high, medium, low) and product characteristics, to better meet the diverse needs of consumers. Only when consumers buy can retail efficiency per square meter be improved. Improving efficiency per square meter is the foundation for retailers' survival, and it determines who can last in the competition. If distributors can help retail customers through their assortment capability, this value is undoubtedly huge. For example, a typical BC supermarket has over a hundred SKUs in the household cleaning and daily chemical category, and the needs of the surrounding consumer base are certainly multi-dimensional. If through customer surveys and analysis, adjusting the assortment structure, and other series of actions, they can maximize the satisfaction of surrounding residents' needs, thereby driving sales in the entire household cleaning and daily chemical category. Obviously, this is a win-win situation for both distributors and BC supermarkets. This capability is not possessed by traditional BC supermarkets. However, in the industry, distributors with such excellent capabilities have already evolved. As long as distributors think from the perspective of retail customers and solve their problems, they will surely demonstrate their unique value in competition. Whether as buyers or assortment planners, the Chinese FMCG market will ultimately rely on distributors with industrial value. The new business playbook for distributors still has great potential!