---
title: "Wusu Beer Pilots Platform Distributor Model in Beijing: A Trend or a Flash in the Pan?"
description: "On March 6, New Distribution exclusively published a case study of Wusu Beer's upgrade from 'distributor' to 'platform distributor' in the Beijing market, sparking numerous inquiries from distributors on how to make this transition. This article clarifies the concept of the platform distributor model, its underlying logic, and key success factors, emphasizing that its future depends on brand manufacturers and requires careful consideration."
author: "陈思廷"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-03-09"
language: "en"
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# Wusu Beer Pilots Platform Distributor Model in Beijing: A Trend or a Flash in the Pan?

> On March 6, New Distribution exclusively published a case study of Wusu Beer's upgrade from 'distributor' to 'platform distributor' in the Beijing market, sparking numerous inquiries from distributors on how to make this transition. This article clarifies the concept of the platform distributor model, its underlying logic, and key success factors, emphasizing that its future depends on brand manufacturers and requires careful consideration.

**Scan the QR code in the image to register**
On March 6, New Distribution exclusively published a case study of Wusu Beer's upgrade from 'distributor' to 'platform distributor' in the Beijing market. We received a large number of messages from distributors asking about 'how to upgrade to a platform distributor.' A group of distributors with a sense of crisis and development awareness have made 'where will distributors go tomorrow' one of their most pressing concerns.
However, before truly starting the upgrade to the 'platform distributor model,' there are many concepts to clarify and a need to see through the fog to understand the true essence of a platform distributor.
**-01-** **The Platform Model Emerging from the Internet**
The giants of the internet model are almost all based on the platform model. Only internet companies with a platform model can truly become giants in the business world. The internet platform model is very attractive, with three notable characteristics: 'marginal costs approaching zero,' 'extreme Matthew effect,' and 'bilateral or multilateral effects.'
How to understand this? **First, upfront costs are high, but once scale is achieved, the larger the scale, the lower the cost.**
**Second, an extreme winner-takes-all phenomenon: within the same field, only one or a few platforms can exist.**
**Third, the larger the platform, the stronger its gravitational pull on upstream and downstream players. In the end, almost no one can escape the gravity of a super platform.**
Now, in the offline distribution of FMCG, does the so-called 'platform distributor' model have the same platform effects?
The effects still exist, but they are not as extreme. Commodity circulation is a B2B business, and physical factors are its natural moat. The three characteristics of platforms are still reflected offline, but much more mildly.
The nature of offline distribution determines that whoever enters, their development speed and scale will be far inferior to online. Even if internet giants enter the offline space, it is the same.
Therefore, some say that offline FMCG distribution is the last fortress the internet needs to conquer.
The FMCG B2B boom that started in 2015 has not yet achieved its expected goals.
Why must we deeply understand these characteristics of the platform model? Because making a platform successful is very difficult. Internet platforms are, of course, the hardest, burning through countless cash and stepping over the corpses of many failed peers before finally achieving a throne of bones.
And to become a platform distributor in an offline region is also difficult and requires considerable distributor capabilities. Considering defeat before victory is something distributors must think through before transformation.
**-02-** **The Evolution Logic of Consumer Goods Channel Models**
Since the reform and opening up, consumer goods channel models have undergone several changes. Each change was driven by external competition or changes in market demand, leading to changes in manufacturer-distributor relationships and channel models.
Today, the relationship between FMCG manufacturers and distributors has become tense again. In New Distribution's channel research, distributors' satisfaction with their business has declined year by year, competition intensity and management difficulty have increased, while operating profits have declined; manufacturers (brand owners) are also dissatisfied with the lack of channel motivation or capability. Another major transformation in FMCG channel models is gradually taking place.
What is the driving force behind each change and evolution in channel models?
As we learned from Marxist economics, productive forces determine relations of production, and relations of production react on productive forces. How does this law manifest in the distribution field?
We can try to understand the relationship between the two in the distribution field. The three elements of productive forces in distribution include labor (distributors), means of labor (technology, teams, and capital), and objects of labor (product promotion and sales). The three elements of relations of production mainly include ownership of means of production (brand and product ownership, distribution rights), status and relationships in labor (manufacturer status and relationships), and distribution relations (the mechanism for distributing the added value of products).
It is undeniable that after market baptism, distributors, especially some new distributor groups in first-tier cities, have made significant progress in their 'productive forces.' In terms of labor, distributors have become younger and more capable in recent years; with social progress, distributors' means of labor (sales visit systems, team capabilities, capital capabilities) are also improving; and the product power led by manufacturers is gradually rising.
**While productive forces have advanced, the manufacturer-led channel model remains the provincial office system. The industrial status, market management authority, and profit distribution rights of FMCG distributors have not changed at all.**
The manufacturer-led provincial office system has been mainstream for the past two decades. Under the provincial office, manufacturer managers manage down to each county-level distributor, and after dividing regions, distributors can only promote and sell within their designated areas.
When some distributors improve their productive forces, they inevitably demand larger market areas, more market authority, and profit distribution, which requires new relations of production to match.
The entry barrier to trade circulation is very low, so the progress in productive forces and competitiveness of most distributors is not necessarily significant.
Thus, we can see a common phenomenon: when a distributor's productive forces and competitiveness improve, they will inevitably seek to form new relations of production. If the brand owner can satisfy this, a new form of relations of production emerges; if not, the distributor will choose to switch or add brands, or even change categories.
In recent years, FMCG represented by beer and beverages has mainly used deep distribution as the primary model. Many excellent distributors who started in FMCG have recently crossed over to baijiu, retail, catering, and even automotive and IT fields. The reason is that the original industry's relations of production design no longer matches the distributors' productive forces.
Channel model transformation is essentially a contradiction between relations of production and productive forces. Channel model design is the redesign and adjustment of relations of production. If there is a mismatch, adjustments are needed; otherwise, there will be loss. After adjustments are in place, there will be a period of stability, and then another change will come. This is the contradictory movement between productive forces and relations of production.
Therefore, if distributors want to improve their status in the relationship with manufacturers, they should first look at the three elements of productive forces and see whether their own weight is heavier or the product as the object of labor takes up more.
Why do big brands have low channel gross margins, and increasingly lower? Because in the three elements, the productive force contribution of the brand and product accounts for the vast majority. So, your weight as a distributor is not determined by how much you invest or pay, but by how much you contribute and how much you can continue to contribute.
**Business rules have no true right or wrong; they are just that cold.**
**-03-** **Whether Platform Distributors Become Mainstream Depends on Brand Owners**
If you ask distributors whether they are willing to become regional platform distributors, I believe no one would say no. But unfortunately, brand owners are the chain masters of the industry chain. The main designers of FMCG industry relations of production are brand owners, not distributors.
How do brand owners view the platform distributor channel model?
The vast majority of FMCG brand owners have also been suffering in the past two years.
First-tier brands have large deep distribution teams, but the rapid rise in labor and management costs is a headache for enterprise managers. Many foreign brands have no solution and watch their market share and profits decline, or even exit the Chinese market.
Another group of first-tier brands mainly has three coping strategies:
**First, optimize personnel scale. For example, through technology empowerment, reduce production line personnel and market direct sales team size.**
**Second, cater to consumption upgrades, upgrade products, and expand gross margin space.**
**Third, while reducing direct sales teams, empower distributors to maintain sufficient service capability at offline terminals.**
China Resources Snow Breweries, Nongfu Spring, and Uni-President have all done quite well in recent years. Their focus points may differ, but they all fall within these three strategies, and their volume and profit growth have been very good.
The pain of quasi-first-tier and second-tier brands is twice that of first-tier brands. Their brand power is inherently weaker than first-tier, and they cannot afford direct sales teams. Currently, the only thing that can attract distributors is sufficient gross margin space.
At present, the channel model of second-tier brands resembles a rough platform distributor model. This is not surprising; in form, platform distributors are very similar to regional general distributors from over a decade ago.
If first-tier brands want to reduce labor costs, they need to pull back their regional sales and management hands, but at the same time, they need to overcome issues of 'security' and 'control.' This is very difficult, and unless the company is at a life-or-death juncture, it is hard for brand professional managers to make such a decision.
Therefore, although the platform distributor model in Wusu Beijing has been very effective, I personally think it is difficult to simply replicate, and even Wusu Beer will find it hard to promote nationwide in the short term. Unless the CEO of Carlsberg China or the head of Wusu has such boldness and determination.
**-04-** **Key Factors for Platform Distributor Success**
The road to the future is never straight. Although the platform distributor model is unlikely to become mainstream in the short term, we can still see the sprouts and dawn of hope.
Some excellent emerging brands, without historical burdens, have used the regional operation platform model to build an ironclad nationwide network. For example, Jiangxiaobai, using a two-track approach of factory-run self-operation plus regional platforms, has built a nationwide network covering 3 million terminals, which can be called the first in the liquor industry.
Uni-President once explored converting direct-operated markets to customer-operated markets, returning the market to capable distributors; Nongfu Spring's strategic distributor plan in recent years, and China Resources Snow Breweries' proposal to build a million-dollar distributor club, are all meaningful explorations and attempts. Although the trials of first-tier brands cannot be considered a platform distributor model, they are breakthroughs from the past and tests of future possibilities.
For the vast majority of FMCG brands and distributors, for the platform distributor model to succeed, the following key points must be noted.
**First, the platform distributor model must be co-built by manufacturers and distributors. For relations of production to progress, both ends must participate, multiple parties must benefit, and joint efforts are necessary. Given the current pain of both manufacturers and distributors, this is still possible.**
For first-tier brands, manufacturers lead, and excellent distributors participate; for second-tier brands, excellent distributors lead, and manufacturers participate.
**Second, the platform distributor model is a founder's project. At present, the platform distributor is not a regional channel strategy but a channel model design, and it will not be smooth sailing from the start.**
The platform distributor model has advantages such as agile market response, flexible strategies, effective execution, clean teams, and reduced internal friction within the region, but it also has hidden concerns such as becoming too large to control and conflicting with headquarters in the future. It is necessary to objectively view the pros and cons and scientifically design corresponding mechanisms.
Therefore, regardless of who leads, both manufacturers and distributors need profound insight into the future, strong tolerance for the twists and turns of development, and high strategic determination to persist with the model. Only the boss can possess these three points.
**Third, the development of the platform distributor model is tortuous and gradual, and the manufacturer-distributor relationship will always be cooperation with game-playing.**
Some enterprise managers have pointed out that the platform distributor model may intensify manufacturer-distributor game-playing in the future. That is true. But in this segment of relations of production between manufacturers and distributors, a certain degree of game-playing is an eternal phenomenon.
The current relationship between first-tier brands and distributors cannot really be called game-playing; it is basically manufacturers bullying distributors. But many excellent distributors have left first-tier brands for this reason, or even left the FMCG industry.
The dominant position of first-tier brands should not be based on making distributors smaller and smaller. When all your customers are getting smaller and earning less, the brand owner's hard times are also coming.
A truly strong brand should have the ability and willingness to make distributors bigger and bigger. The brand should have this confidence.
Can the platform distributor model become mainstream in the future? How should the platform distributor model be specifically designed? Can regional distributors form alliances to adopt the platform distributor model? Who can integrate regional distributor forces? These questions will be discussed at the 6th China FMCG Channel Innovation Conference in Chengdu from April 1-3, where operators from first-tier brands, excellent regional super distributors, and platform distributor pioneers will share and exchange ideas. Distributor friends are welcome to actively register and scan the QR code to secure a seat.


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