---
title: "Zhao Bo of New Distribution: 36 Years of FMCG Marketing in China—How Marketing Power Shifted from Channels to Consumers, and Now to Algorithms"
description: "In March 2026, while working late, the author asked an AI assistant for a drink recommendation, which led to a realization that marketing power has shifted again. Over 36 years, it moved from channels (1990-2010) to consumers (2011-2023) and now to algorithms and AI (2024-present), fundamentally changing how brands must operate."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2026-04-09"
language: "en"
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---

# Zhao Bo of New Distribution: 36 Years of FMCG Marketing in China—How Marketing Power Shifted from Channels to Consumers, and Now to Algorithms

> In March 2026, while working late, the author asked an AI assistant for a drink recommendation, which led to a realization that marketing power has shifted again. Over 36 years, it moved from channels (1990-2010) to consumers (2011-2023) and now to algorithms and AI (2024-present), fundamentally changing how brands must operate.

One evening in March 2026, I was working late in the office and suddenly felt like having a drink.
Previously, I would open Meituan, JD.com, or Hema and spend a long time choosing among dozens of brands. But this time, I directly asked Claude: "I'm a bit tired and want something refreshing, but I don't want it to affect my sleep. Any recommendations?"
It asked me a few questions about my recent sleep quality, work intensity, and taste preferences, then recommended three products: a zero-sugar sparkling water, a low-caffeine tea drink, and a functional beverage with B vitamins. Each recommendation came with reasons, ingredient analysis, and which convenience store near me had it in stock.
I chose the sparkling water, and 15 minutes later, it was delivered via a lightning warehouse.
Throughout the entire process, I didn't see any brand advertising, wasn't disturbed by any promotional information, and didn't even actively "search" or "compare prices."
This suddenly made me realize: the power of marketing has shifted once again.
From 1990 to 2026, China's FMCG marketing has undergone three major power shifts:
First: 1990-2010, power was in the hands of channels. Whoever controlled CCTV, controlled shelf space in hypermarkets, and controlled the distributor network determined what consumers bought.
Second: 2011-2023, power shifted to consumers. Social media, e-commerce reviews, and KOL seeding gave consumers choice and voice. Brands began to please users rather than channels.
Third: 2024 to the present, power is shifting to algorithms and AI. It's not that consumers actively search for brands, but AI makes decisions for them based on their needs, scenarios, and health data.
This is not science fiction; it's the reality happening right now.
In this article, I want to discuss how, over these 36 years, the power of Chinese consumers' purchasing decisions has gradually shifted from the B2B side to the C2C side, and the underlying logic behind this shift.

**First Era (1990-1999): Channel Dominance, the Golden Age of Information Asymmetry**

The 1990s in China was a typical era of a "scarcity economy."
At that time, consumers had extremely limited access to information: a TV, a few newspapers, and occasionally radio. Goods were not abundant either; when you went to a department store, there were only a few brands on the shelves.
In this environment, whoever controlled the channels controlled consumer choices.

**Wahaha's Joint Distribution System: A Textbook Case of Channel Control**

In the early 1990s, Zong Qinghou did something that seemed crazy at the time: instead of focusing on advertising, he spent a lot of time building a distributor network.
His logic was simple: as long as my products could reach every county and every small shop in every township across the country, when consumers wanted a drink, the only option on the shelf would be Wahaha, so they would have to buy Wahaha.
This was the famous "joint distribution system" model. By 1998, Wahaha had established over 8,000 distributors nationwide, covering more than 2 million retail outlets.
You see, the marketing logic of that era was not to make consumers choose you, but to make consumers have no choice but to choose you.

**CCTV's "Bidding King": Whoever Has the Loudest Voice Wins**

On November 8, 1994, Kongfuyan Liquor won CCTV's first advertising "bidding king" with 30 million yuan.
What did this price mean at the time? It was equivalent to the annual profit of a medium-sized enterprise.
But Kongfuyan Liquor bet correctly. The next year, sales soared from 200 million to 950 million, nearly a fivefold increase.
This taught all enterprises a lesson: in an era of information scarcity, whoever had the loudest voice could occupy consumers' minds.
So, in 1995, Qinchun Liquor spent 66.66 million yuan to win the bidding king, and in 1996, it increased to 320 million. Aido VCD, BBK, Fenhuang Cola... one brand after another threw money at grabbing CCTV's prime time slots.
But this game soon became unsustainable.
Qinchun collapsed in 1998 due to quality issues and over-expansion, going from peak to bankruptcy in just three years. The owner of Aido VCD fled due to a broken capital chain, and BBK gradually faded after 2000.
The failure of these brands exposed a problem: when your marketing relies only on channels and media, not on the product itself, the business is unsustainable.
Marketing in the first era essentially exploited three types of "scarcity":
1. Information scarcity: Consumers had few channels to get information, so whoever occupied CCTV occupied their minds;
2. Channel scarcity: Retail outlets were limited, so whoever controlled the distributor network controlled sales;
3. Product scarcity: There were not many products on the market, so consumers had little choice.
In this environment, the core capability of a brand was the ability to occupy scarce resources.
But this era soon ended.

**Second Era (2000-2010): Big Screen + Big Channels, the Peak of Scale Marketing**

Entering the 2000s, China's economy began to grow rapidly, and the consumer market entered a new stage.
The biggest change in this stage was that channels began to diversify, but media remained concentrated.
Hypermarkets began to expand nationwide: Carrefour, Walmart, and RT-Mart entered China, while local players like China Resources Vanguard and Yonghui also expanded rapidly. At the same time, television remained the primary media channel, but content formats began to diversify, with variety shows and sports events becoming new traffic entry points.
In this stage, brands' strategies upgraded: instead of simply occupying channels, they combined media content with channel execution to form a "big screen + big channels" combination.

**Mengniu × Super Girl: The Beginning of Content Marketing**

In 2005, Mengniu Sour Milk sponsored Hunan TV's "Super Girl."
This was not a simple ad placement; it deeply integrated the brand into the program content: hosts mentioned it, contestants drank it, and viewers saw the Mengniu logo when voting... The brand and content were completely fused.
What was the result? In 2005, sales of Mengniu Sour Milk soared from 500 million the previous year to 2.5 billion, a fivefold increase.
This was the first true "content marketing" in the history of Chinese FMCG marketing.

**Yili × Olympics: A Textbook Case of Sports Marketing**

For the 2008 Beijing Olympics, Yili, as the only dairy sponsor, took sports marketing to the extreme.
From the Olympic countdown, Yili launched an overwhelming campaign on CCTV, major satellite TV channels, and outdoor billboards. During the Olympics, Yili's ads were almost everywhere.
But more importantly was channel execution: Yili set up Olympic-themed displays and promotions in hypermarkets, supermarkets, and convenience stores nationwide, deeply embedding the concept of "Olympic milk" in consumers' minds.
In 2008, Yili's revenue exceeded 20 billion yuan, surpassing Mengniu to become the number one dairy company in China.
The core of marketing in the second era was "scale":
1. Media scale: Achieve national coverage through a combination of CCTV and satellite TV;
2. Channel scale: Achieve terminal coverage through KA hypermarkets and traditional channels;
3. Execution scale: Achieve sell-through through standardized displays, promotions, and in-store guidance.
In this stage, the core capability of a brand was the ability to integrate large media and large channels.
But problems also began to emerge: this approach required huge capital investment, and small and medium-sized brands simply couldn't afford it. Moreover, with the rise of the internet, consumers' ways of accessing information began to change.

**Third Era (2011-2015): Social Media Explosion, Consumers Gain a Voice**

In 2011, Weibo users exceeded 300 million, and WeChat was also born that year.
This was a watershed.
Before this, consumers could only passively accept information from brands. But the emergence of social media gave consumers a "voice" for the first time.
Marketing power began to shift from brands to consumers.

**Durex × Rainstorm: A Classic Case of Social Marketing**

On the night of June 23, 2011, a heavy rainstorm hit Beijing, leaving many people stranded on the streets.
At 11 PM that night, Durex's official Weibo posted a picture of a person putting a Durex condom over their shoe, with the caption: "Heavy rain in Beijing today, lucky I still have two Durex in my bag."
Within 24 hours, this post was retweeted over 100,000 times, becoming a classic case in Chinese social marketing history.
You see, the core of this case was not ad placement, but using content to trigger users' spontaneous sharing.

**Three Squirrels: A Leap from Product to Experience**

In 2012, Three Squirrels launched on Tmall.
It did something that seemed "luxurious" at the time: it put a box opener, a trash bag, a resealable clip, and a cartoon sticker in every package.
These items cost little, but they gave users an experience that exceeded expectations. After receiving the package, users would take photos and post them on Weibo and WeChat Moments, creating spontaneous word-of-mouth.
In 2012, Three Squirrels' sales were 30 million yuan. In 2013, they exceeded 300 million. In 2014, they exceeded 1 billion.
This was the first true "experience premium" in Chinese FMCG.
The core of marketing in the third era was "consumer sovereignty":
1. Information symmetry: Consumers could access real information through social media and e-commerce reviews;
2. Return of choice: Consumers no longer passively accepted; they actively chose and evaluated;
3. Word-of-mouth: Good products would be spontaneously shared by users, while bad products would be quickly eliminated.
In this stage, the core capability of a brand was the ability to create content and experiences worth sharing.

**Fourth Era (2016-2023): Traffic Frenzy and Bubble Burst**

After 2016, China's internet entered a new stage, with short videos, live streaming, and social e-commerce exploding.
Douyin, Kuaishou, Xiaohongshu, Pinduoduo... new platforms emerged one after another, each competing for user time, and every brand competed for traffic.
In this stage, the marketing logic became: whoever seizes the traffic dividend can quickly ramp up sales.

**The Rise of New Consumer Brands**

From 2017 to 2020, it was the golden period for new consumer brands.
Perfect Diary, Genki Forest, Zhong Xue Gao, Florasis... these brands achieved in 2-3 years what traditional brands took 10 years to reach.
Their strategies were similar:
- Invest heavily in KOLs and user-generated content on Xiaohongshu and Douyin
- Attract young people with extreme aesthetics and packaging
- Quickly ramp up sales through low-price promotions in live streams
This model was indeed effective during the traffic dividend period. But problems soon emerged.

**The Lesson of Zhong Xue Gao: Traffic Is Not Brand**

Zhong Xue Gao was once a representative of new consumer brands.
Launched in 2018, it quickly became popular on social media with its "tile shape" and high price positioning of "66 yuan per stick." During the 2019 Double 11, Zhong Xue Gao sold 40 million yuan, becoming the top seller in Tmall's ice cream category.
But by 2023, Zhong Xue Gao began closing stores on a large scale, and online sales also dropped significantly.
What was the problem?
Traffic can bring short-term sales, but it cannot build a long-term brand.
When consumers calmed down and realized that a 66-yuan ice cream was not 10 times better in taste than a 6-yuan one, the repurchase rate plummeted.
The core of marketing in the fourth era was "traffic competition":
1. Platform fragmentation: Traffic was scattered across multiple platforms like Douyin, Kuaishou, Xiaohongshu, and Bilibili;
2. Algorithm distribution: Whether content was seen depended on platform algorithm recommendations;
3. Rising traffic costs: As more brands flooded in, traffic prices rose.
In this stage, the core capability of a brand was the ability to quickly acquire and convert traffic.
But the problem with this model was also obvious: when the traffic dividend disappeared and customer acquisition costs exceeded customer lifetime value, the business became unsustainable.
After 2023, many new consumer brands began to retreat, and the industry entered a new adjustment period.

**Fifth Era (2024-2026): Algorithms and AI, Another Shift in Marketing Power**

Starting in 2024, China's FMCG marketing entered a new stage.
The biggest change in this stage was not the emergence of a new platform, but a change in the underlying logic of consumer decision-making.

**From "People Finding Goods" to "Goods Finding People," and Then to "AI Finding Goods for People"**

In the past, consumers' shopping paths were:
- Stage 1: Go to the store, buy whatever you see (channel-driven)
- Stage 2: See an ad, remember it, and buy (media-driven)
- Stage 3: Search and compare prices, actively choose (consumer-driven)
- Stage 4: Browse content, get seeded, and buy (algorithm-recommended)
But now, a fifth stage is emerging: AI directly makes decisions for you based on your needs, scenarios, and health data.
For example:
You open the fridge and notice the milk is almost gone. Previously, you would open JD.com or Hema, search for "milk," and choose among dozens of brands.
But now, your smart fridge has already detected that milk stock is low. The AI assistant, based on your eating habits, health data, and past purchase records, directly recommends three suitable milk products and asks if you want to place an order.
In this process, brand advertising, packaging, and promotions are no longer key factors in the decision.

**Emotional Value and Quality-Price Ratio: The Dual Core of a Mature Consumption Era**

At the same time, Chinese consumers are becoming more mature.
In 2023, China's Engel coefficient dropped to 29.8%, indicating that China has entered a relatively affluent consumption stage. In this stage, consumer needs are diverging.
Some people pursue quality-price ratio, not cheapness, but a balance between quality and price. The popularity of Sam's Club, Snacks Are Busy, and Pangdonglai essentially meets this need.
Others pursue emotional value, willing to queue for 2 hours for a cup of Sexy Tea or spend hundreds of yuan on a Pop Mart blind box, because these purchases bring emotional satisfaction.
These two needs seem contradictory, but they both point in the same direction: consumers no longer pay for brand premiums but for real value.

**Channel-Specific Products: New Strategies Under Channel Fragmentation**

From 2024 to 2026, China's retail channels are also undergoing dramatic changes:
- Traditional hypermarkets continue to shrink
- Membership stores (Sam's Club, Costco) are expanding rapidly
- Discount stores (Snacks Are Busy, Zhao Yiming) are springing up everywhere
- Instant retail (Meituan Flash Purchase, Ele.me) penetration is increasing
- Community group buying is gaining a foothold in lower-tier markets
Facing this channel fragmentation, brands are adopting "channel-specific product" strategies:
- Sell large-pack, high-quality family packs at Sam's Club
- Sell high-cost-performance basic products at discount stores
- Sell small-pack, instant-consumption products at convenience stores
- Do scenario-based combination sales in instant retail
This is not simple channel distribution, but providing different products and values according to the consumption scenarios of different channels.
The core of marketing in the fifth era is "scenario adaptation":
1. Algorithm intervention in decisions: AI is beginning to play an important role in consumer decisions
2. Return to value: Consumers no longer pay for false premiums
3. Highly fragmented channels: Different channels serve different scenarios and groups
In this stage, the core capability of a brand is the ability to understand consumers' real needs, adapt to different scenarios, and collaborate with algorithm recommendations.

**The Essence of Marketing Power Shifts**

Looking back over these 36 years, China's FMCG marketing has undergone three major power shifts:
First shift (1990-2010): From brands to channels
In an era of scarce information and goods, whoever controlled CCTV, shelf space, and distributor networks controlled consumer choices. In this era, the core capability of a brand was to occupy scarce resources.
Second shift (2011-2023): From channels to consumers
The emergence of social media and e-commerce gave consumers choice and voice for the first time. Brands could no longer force purchases through channel monopolies; they had to create content and experiences truly worth sharing.
Third shift (2024-present): From consumers to algorithms
As AI begins to intervene in consumer decisions, the logic of marketing changes again. Brands no longer face consumers directly; they must make algorithms "understand" the value of their products and recommend them to the right people in the right scenarios.
What is the underlying logic behind these three shifts?
Essentially, marketing power always shifts to the party with "higher decision-making efficiency."
- Stage 1: Consumers had scarce information, so channel decision-making was most efficient
- Stage 2: After information symmetry, consumer autonomous decision-making was most efficient
- Stage 3: After information overload, algorithm-assisted decision-making is most efficient

**What Does the Future Hold?**

I don't know what marketing will look like in 10 years, but I know one certain trend: brand competition is shifting from "controlling channels and media" to "understanding consumers, adapting to scenarios, and collaborating with algorithms."
Brands that remain stuck in the mindset of "buying traffic, doing distribution, and placing ads" will find it increasingly difficult.
Brands that can truly understand consumer needs, provide real value in different scenarios, and be "understood" and recommended by algorithms will have more and more opportunities.

**Three Suggestions for Brands**

Standing at this point in 2026, I have three suggestions for FMCG brands:
1. Return to the product itself
No matter how marketing changes, the product is always the "1," and marketing is the "0" behind it. Without a good product, no amount of traffic will result in repeat purchases.
2. Understand scenarios, not channels
Stop asking "Which channel should my product enter?" Instead, ask "In what scenario can my product solve what problem for consumers?"
3. Learn to talk to algorithms
Future brands must not only talk to consumers but also to algorithms. Your product information, ingredients, and applicable scenarios must be understandable and recommendable by AI.

**Final Thoughts**

Over these 36 years, China's FMCG marketing has gone from channel hegemony to algorithm collaboration, from information asymmetry to information overload, and from a scarcity economy to an affluent society.
Marketing power is constantly shifting, but what remains unchanged is: truly good products will never be buried.


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