Editor's note: This article is adapted from the keynote speech by Nie Biquan, General Manager of Baihui Commerce Co., Ltd., at the CFC2026 11th FMCG Conference's forum on "Changes in the Relationship between Retailers and Suppliers under Supermarket Adjustments." Baihui Commerce has been deeply involved in the distribution field for nearly two decades, navigating multiple industry cycles, and has maintained scale growth in recent years.
Having been a distributor for nearly 20 years, Baihui Commerce has weathered multiple industry cycles and encountered many challenges. But we believe these difficulties are not isolated cases but common issues the entire industry faces at a turning point in the era.
Our assessment is that the industry is undergoing several fundamental shifts:
On the supply side, homogenized competition is intensifying, demographic and economic dividends are fading, and the era of rough management is completely over.
On the demand side, consumption trends are pursuing cost-effectiveness, which has now upgraded to "quality-price ratio"—consumers not only want cheapness but also a match between quality and price.
In terms of competition, the core of product competition has shifted from pure brand power and product strength to supply chain capability.
Based on this, Baihui Commerce proposed a core business philosophy in 2023: Turnover rate is greater than gross margin. This concept has profoundly changed our business approach.
Our core judgment is: Only by returning to the essence of retail can we achieve sustainable development. When retail enterprises truly return to operating products, they need category operators that provide professional services.
Baihui Commerce has gone through four development stages from brand distributor to category operator—
We are currently in the deepening phase of the fourth stage, which involves two coordinated core actions:
Manufacturer-distributor integration. We form deep strategic partnerships with upstream manufacturers. For example, in the Shenzhen market, we co-invested with C&S Paper to establish Shenzhen C&S Company, sharing investment and benefits, allowing flexible response to market demands.
In the Shenzhen market, we have built a three-dimensional omni-channel network:
From a strategic perspective, investing in a shared supply chain company reflects "long-termism—countering market uncertainty with certainty," aiming to build long-term competitive barriers and symbiotic relationships. From a tactical perspective, continuous deep cultivation of regional markets ensures this strategy generates actual value and responds to market changes.
From an operational perspective, we understand distributors better than manufacturers, understand retailers better than manufacturers, respond faster and more efficiently, and have firmer goals. At the same time, we understand manufacturers better than retailers and distributors, understand consumers better than distributors, and can quickly respond to the market, using regional big data to precisely develop big products that suit the market.
From a channel perspective, we root downward in traditional terminals (hypermarkets, standard supermarkets, small stores), with growth driven by foundational improvements; expand upward into emerging formats (community group buying, flash warehouses, e-commerce), and horizontally cover special channels (business sales, campus).
We are upgrading from regional distributors to regional operators. Through production-sales coordination, we ensure products not only "get in" but also "sell well," achieving dual improvements in supply chain efficiency and terminal sales.
This is not simple channel distribution but true regional market co-construction.
Category co-construction with retailers. Baihui Commerce establishes close strategic alliances with retailers of various formats. Taking Yonghui Superstores as an example, during the national adjustment process, we deeply participated from category planning, single-product customization to store display, "embracing the adjustment" with them to jointly improve store efficiency.
Deep Category Operation:
Five Dimensions and Four Implementation Methods
With the direction clear, the next question is: How exactly do we do category operation? Our practice is mainly reflected in five dimensions and implemented through three specific methods.
Five Dimensions
First, long-termism, growing with partners. Baihui Commerce plans every store and every market with a time horizon of three, five, or even more years. We are not "doing business" but "building a career," growing together with partners.
I remember once discussing supermarket adjustments with a manufacturer, and he asked my opinion. I asked back: "If we don't adjust, what will happen?" My judgment is: If we don't adjust, we may not necessarily go bankrupt, but we will definitely face great difficulty. Therefore, whether upstream or downstream, we must change our thinking—Only win-win can lead to symbiosis.
Second, keep up with the market and expand categories.
Third, seize trends and optimize structure.
Fourth, upgrade marketing and improve services.
Fifth, gain insights into changes in consumer behavior.
Through continuous deep cultivation in these five dimensions, we have achieved a batch of quantifiable results:
All these results stem from breaking down barriers between us and the stores, truly achieving symbiosis and win-win. We are no longer in a game relationship but open our cost structures and sit together to discuss: Where are the opportunities in this business?
Four Implementation Methods
To implement the philosophy, we need specific handles. Baihui Commerce mainly relies on three methods: data-driven, C-end marketing, joint customization, and joint procurement.
Method 1: Data-driven, trade area analysis and precise category positioning
We have established a complete data-driven system covering four levels: trade area analysis and positioning, category trend research, category project operation, and technology empowerment.
Taking category trend analysis as an example, we pull historical data from 2021 to 2023 and review with the store: Which price band's average transaction value is rising? Which is falling? What is the trend for this category across the entire network? In which direction should this region move?
Taking trade area analysis as an example, we precisely depict the population profile around the store: Is this trade area dominated by elderly, young people, or families? Combining these data, we achieve precise operations in holiday marketing, channel optimization, and category structure adjustment, truly maintaining the business together.
Method 2: C-end operations, traffic monetization
Our marketing formula is: Sales = Traffic × Average Transaction Value × Conversion Rate. Our core work is to assist retailers in acquiring traffic, improving conversion rates, integrating resources, and deep operations.
In marketing strategy, we adhere to "big events for festivals, create festivals when there are none, cross-industry cooperation, and linked marketing." For example, we cooperate with Meituan to jointly operate C-end with stores and customers on a city basis; with Ele.me, we achieve multi-brand joint operations, connecting online and offline, and pulling together the entire city.
We always adhere to the tactic of "hit big stores, hit flagships, use flagship products to drive overall victory," not pursuing immediate one-time gains but looking long-term. Taking the oral care category as an example, our judgment is: In the next decade, there will be more consumers with money and leisure, and human aging must start from the mouth—this is the strategic logic of our long-term layout with stores, expanding category scale by recreating an oral care area.
Method 3: Joint customization to meet consumer needs
Baihui Commerce analyzes competitor conditions and industry trends through data, deeply co-develops customized products with retailers—from packaging, weight, design to raw materials and processes, deeply participating throughout to develop exclusive products that suit local channel needs.
In specific tactics, we have four key actions: First, remove inflated prices, systematically reduce procurement and operating costs; second, joint customization, meet consumer needs and co-develop customized products; third, adhere to the core guiding philosophy of turnover rate greater than gross margin; fourth, omni-channel layout, continuously explore growth opportunities.
In the Yonghui cooperation project, we spent three months from market insights and research on differentiated customer needs, to product specifications, raw materials, processes, packaging design, through Xiaohongshu omni-channel marketing, to establishing a store inspection and feedback optimization mechanism, launching a sales target competition, and promoting sales with all staff, jointly creating a big product—monthly sales reached 100,000 units, becoming an excellent case promoted internally by Yonghui.
Method 4: Supply chain organization—joint procurement reshaping the daily chemical internet celebrity ecosystem
Through consumption trends, industry insights, and store pain points, we precisely target products to meet adjustment needs, and simultaneously visit brands/factories with customers, use buyer logic for product selection, and achieve rapid new product launches and structure optimization through unified warehousing and distribution in terminal stores.
Under Retail Transformation
The Value Reconstruction of "Middlemen"
Under retail transformation, the core value of distributors lies in becoming professional service providers—empowering sharing, joint operations, and aggregating consumer needs. This is what a category operator should truly do.
The Shenzhen C&S Company we co-invested in with C&S Paper is not just a supply chain platform but also an FMCG regional growth engine—with the ability to independently develop products and operate channels, flexibly responding to market demands.
We are becoming a new species: neither a pure manufacturer nor a traditional distributor, but a deep operation company set up by the manufacturer locally, similar to a "shareholder" nature. This model responds faster, understands the market better, and can promote better products.
Our core competitiveness is reflected in:
- Understanding retailers better than manufacturers, with faster speed, higher efficiency, and firmer goals;
- Understanding manufacturers better than retailers, and consumers better than distributors;
- Being closer to the market than any single role, able to operate independently and respond flexibly.
From resource-driven growth to capability-driven growth is the inevitable future.
Baihui Commerce's future strategic direction is clear: deepen digital transformation and build a smart supply chain platform; build an ecosystem and co-create value with partners; expand service boundaries from products to services, from B-end to C-end; achieve consumption upgrade and become an industry benchmark enterprise.
In the future, we will continue to gain insights into market consumption changes, build an ultimate supply chain, deeply operate core categories, enhance industry competitiveness, embrace change, and cross cycles.