---
title: "The Unchanging Distributor Is Being Eliminated"
description: "Distributors are facing a market that no longer feels directional, as traditional channels shrink and new ones rise. The old model of moving goods from brands to stores is failing, and distributors must adapt by mastering new channels, data-driven product selection, and agile supply chains to survive."
author: "何雯"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2025-07-23"
categories: "Dealer Operations"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/vpKrr_p3lV2R0O9sfyNUAA"
translation: "https://xinjignxiao.com/zh/articles/%E4%B8%8D%E5%8F%98%E7%9A%84%E7%BB%8F%E9%94%80%E5%95%86-%E6%AD%A3%E5%9C%A8%E8%A2%AB%E6%B7%98%E6%B1%B0-f3c03fe3.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/the-unchanging-distributor-is-being-eliminated-f3c03fe3/"
citation: "何雯. “The Unchanging Distributor Is Being Eliminated.” New Distribution, 2025-07-23. https://xinjignxiao.com/en/articles/the-unchanging-distributor-is-being-eliminated-f3c03fe3/"
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---

# The Unchanging Distributor Is Being Eliminated

> Distributors are facing a market that no longer feels directional, as traditional channels shrink and new ones rise. The old model of moving goods from brands to stores is failing, and distributors must adapt by mastering new channels, data-driven product selection, and agile supply chains to survive.

**“The market no longer feels as directional as it used to.”**
This was a sentiment expressed during a visit to a snack food distributor in Changsha, and it reflects the real predicament many traditional distributors are experiencing.
“I feel like I’ve forgotten how to sell. I’m still using the same channels, familiar customers, and the same working methods that used to be effective, but the results are getting worse and worse...”
Similar feedback has repeatedly surfaced in my recent interviews with six frontline distributors. In many cases, it’s not that distributors aren’t working hard; it’s that the rules of the game have changed.
1. Channel fragmentation is intensifying, with traditional offline store traffic declining and new channels rapidly emerging.
2. Consumer demand is more diverse, and the logic of product distribution and sell-through has changed.
3. Distributors’ living space is being squeezed, and old models can no longer adapt to new supply-demand dynamics.

**Old Channels Are Shrinking**
**Distributors Must Seize New Channels**
“The biggest change in business is not the brand or the price, but the channels that change every day!” This remark from a frontline distributor captures the current industry dilemma.
In the past, distributors’ business logic was built on stable channels and accumulated relationships: stocking, distribution, and inventory pressure followed clear operational paths with controllable rhythms—a typical experience-driven business.
But this approach is becoming increasingly ineffective today.
Traditional channels are rapidly shrinking. For example, in third-tier cities, many chain supermarkets are closing at an accelerating pace. One distributor shared, “Of the dozen or so supermarkets I originally worked with, three closed last year, and the remaining ones cut their purchase volumes by a third.”
Small and medium stores are also unstable, suffering from declining foot traffic and lower sales per square meter, squeezing profit margins. Consumers’ shopping paths are completely changing; they no longer browse shelves in stores but habitually open their phones to search, compare prices, and order, receiving goods within 30 minutes.
Meanwhile, new channels are quickly reshaping market share. Instant retail, community group buying, B2b platforms, content e-commerce, and discount chains are rapidly capturing consumers’ shopping paths with stronger fulfillment efficiency, higher user reach, and fewer intermediate links.
Take instant retail as an example: according to data from the Ministry of Commerce Research Institute, China’s instant retail market reached 650 billion yuan in 2023, a year-on-year increase of 28.89%, with 580 million users—covering half of China’s internet users. The convenience and advantages of these platforms—ordering with immediate delivery and complete product ranges—are significantly undermining the survival space of traditional stores.
Moreover, these new channels do not rely on extensive local distributor networks. Most adopt models like “core distributors + systematic fulfillment” or even “platform direct operation + one inventory pool,” bypassing traditional distributors and directly connecting warehousing networks with front-end terminals.
In Anhui, a dairy distributor told me that when a certain instant retail platform first entered the local market, he was the core supplier for the dairy category. But now that the platform has scaled, it plans to implement a nationwide one-inventory supply chain. The regional manager has already privately hinted that they will likely cut him off and switch to direct supply from headquarters.
The deeper issue here is that distributors’ understanding of their own channel capabilities remains stuck on customer coverage and distribution volume.
But today’s channels are no longer determined solely by the number of stores. The key is consumers—wherever consumers are, that’s where sales happen.
The old channel networks are failing. Distributors need to re-examine channel changes and seize the channels where consumers are.
Today’s distributors, if they don’t proactively update their understanding of channels and learn how to reposition themselves in the new chain, will find that no matter how hard they work, they’re heading in the wrong direction.

**The Logic of Product Distribution and Sell-Through Has Completely Changed**
In the past, when supply was relatively scarce and consumer choices were limited, the product flow logic was relatively simple. Distributors only needed to cooperate with brands on stocking, distribution, and display, and sales were largely guaranteed. But this logic is also rapidly failing.
Today, when we walk into a traditional supermarket, the products and displays are probably not much different from ten years ago. Shelves hold old SKUs that have been sold for over a decade, end caps are piled with high-sugar, high-salt snacks and beverages, and promotions are still buy-one-get-one or price reductions.
“These products have been sold since I started in business, and they haven’t changed much,” a distributor from Shandong told me. “I’ve tried promoting new products from these brands, but most don’t sell well.”
This shows that consumers are no longer buying it. It’s not that consumers don’t want to shop in stores; it’s that the stores don’t have products that meet consumer needs.
Today’s young people no longer buy just familiar brands. They care about whether a product has content and topics, whether it can be shared on social platforms, whether it’s healthy and low-burden, and whether it fits their “self-label” consumption expression.
So the core of today’s retail adjustments is the restructuring of product assortments. For example, a Yonghui Superstore in Zhengzhou, during its 2024 adjustment, removed over 80% of its original SKUs, and new products accounted for 80% of the assortment.
This is not a simple update but a transformation of the entire product operation logic from brand-led to user-oriented. Supermarkets are now actively selecting new categories with strong communication power, better sell-through data, and stronger social recognition, rather than mechanically accepting brand push-ins.
The entire retail channel is increasingly operating like a platform, not a passive display space. Since retail channels are changing, distributors—as the link between brands and channels—can no longer just be “porters”!
A full-category distributor shared, “Previously, we stocked whatever the manufacturer recommended. Now that doesn’t work. If we stock it and it doesn’t sell, we bear the loss.”
Now they have to adjust: “Regularly analyze store POS data, track hot words and bestsellers on content platforms, research new products that sell well in peer channels, and help stores improve sell-through.”
Behind this is a reconstruction of product selection capabilities, consumer insight, and content adaptation. For distributors, today you’re not selling the brand’s products; you’re helping stores find products that truly sell.
The product flow logic has shifted from “brand push” to “user pull,” from “distribution chain” to “user demand-driven.”
And the distributor’s role has changed from the old “pressure-stock, push, clear inventory” to “screen products, allocate, and drive sell-through.”
This is a fundamental shift, not just a tactical adjustment, but a comprehensive reshaping of business logic.
Whether future distributors thrive depends not on how many resources and inventory they have, but on whether they have a systematic mechanism and methodology to judge “what products are worth selling, can sell, and can keep selling.”

**The Role of “Porter” Cannot Adapt to New Supply-Demand Dynamics**
In the past, the distributor’s role was mainly to complete the transfer of goods—moving products from brands to channels, then to stores and secondary wholesalers, earning the middleman’s margin.
This porter model was reasonable in the past.
In an era when goods were scarce, brand concentration was high, retail terminals were fragmented and information was relatively closed, consumer demand was homogeneous, and decision paths were stable, brand manufacturers had to rely on regional distributors’ warehousing capabilities, relationship networks, and channel coverage to complete distribution and sell-through.
But today, these preconditions are gradually weakening.
**First, brands’ direct supply capabilities are strengthening.** In the past, only large KAs dealt directly with brand headquarters. But today, many brands have expanded direct supply to regional chains and even leading convenience stores, building their own teams, connecting with retail systems, and reducing intermediate links.
**Second, the mindset at the retail end is changing.** From “what I sell” to “what I want,” more and more chain stores are taking the lead and no longer relying on distributors.
Some retail chains even build their own supply chains, not only seeking direct supply from upstream but also exporting their product assortments, encroaching on distributors’ share.
**Third, consumers’ decision chains are shorter, and personalized demand is stronger.** This leads to shorter product life cycles and higher replacement frequency of bestsellers. Faster product turnover and quick push-and-pull require a sufficiently flexible supply chain. The traditional pressure-stock-turnover-inventory clearance system can’t keep up; it’s not only inefficient but also prone to high inventory.
The supply-demand structure of the FMCG industry has fundamentally changed. The old system based on “brand-led, linear channels, passive consumer acceptance” is being replaced by a new structure of “user-led, flat paths, immediate feedback.”
Today’s distributors can no longer do business just by moving goods quickly and distributing widely. They must truly understand the structural changes behind products and channels and build a capability system that adapts to “new demand and new supply.”
The distributors that will survive in the future are not those with the most warehouses or the most staff, but data-driven distributors with refined operational capabilities—business operators who understand channel portfolio strategies, product selection judgment, and terminal services.
Building these capabilities is not a matter of relying on experience or imitating others overnight. It requires systematic reshaping based on trend judgment, structural understanding, and methodological tools.

In August, in Shanghai, we will gather brand owners, retailers, and leading distributors at the 【2025 New Demand · New Supply 7th FMCG Conference】 to confront this challenge together—in a volatile FMCG market, what exactly should distributors change and how, to avoid being eliminated? At the 5th China FMCG Distributor Conference, we have invited benchmark cases of distributors transforming in different directions: regional B2b platform representative—General Manager of Jiecang Wanggou, Zhong Xiaoping; retail channel operator representative—General Manager of Tianjin Shicheng Bofa, Zhang Shicheng; regional category operator and General Manager of Zhengzhou Dapeng Trading, Zhang Gaifeng; and General Manager of Xuzhou Runzhong Supply Chain, Li Fen, among others, to share their practical experiences and insights from their transformation journeys. At the same time, we will release the industry-exclusive “2025 China FMCG Distributor Operating Conditions Survey Report” to see which distributors are growing and which are being eliminated this year, the reasons for growth, and where operational focus lies. We will also release the in-depth case collection “Top Ten Growth Case Models for FMCG Distributors,” which presents real cases and provides structural thinking to help distributors find direction amid chaos. Particularly noteworthy is our 【Regional B2b Platform & Key Brand Cooperation Seminar】, which brings together 40+ regional B2b platform owners to explore incremental opportunities in the sinking market covering 200,000 small stores; on-site release and interpretation of the “Regional B2b Cooperation Guide”; and a bridge for dialogue between regional B2b platforms and key brand leaders for discussion and one-click connection. There will also be supply-demand matching for 1-yuan and 2-yuan products on site! 🔺


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## Citation metadata

- Publisher: New Distribution
- Author: 何雯
- Published: 2025-07-23
- Canonical: https://xinjignxiao.com/en/articles/the-unchanging-distributor-is-being-eliminated-f3c03fe3/
- Original source: https://mp.weixin.qq.com/s/vpKrr_p3lV2R0O9sfyNUAA

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