In the wave of transformation in the FMCG industry, the role and value of distributors are being redefined. In the past, it was often believed that as long as you could get low prices, you could sell goods, and distributors' profit margins mainly came from 'price differences.' However, with intensifying competition and channel fragmentation, this logic is becoming obsolete.

At the 5th China Retail Innovation Conference on August 20, Zhou Xu, Vice President of Biyoute Commercial Group and Co-founder & General Manager of Zhenshimei Supply Chain Management Company, spoke as a distributor about Zhenshimei's practice and reflections since its inception a year ago.

'I used to think that if you hadn't been a distributor, you'd think low-cost procurement would lead to good sales. But after operations, I realized that the functions of a distributor cannot be reduced.'

In August 2023, Zhenshimei was born out of Biyoute's business transformation. In its early days, Zhenshimei didn't even have full-time purchasers, but a year later, it had firmly established its direction: the future of FMCG supply chains lies in building a 'symbiotic supplier-retailer relationship' that transcends traditional buying and selling.

Today, this young supply chain company has established multiple warehouses in Northeast China, North China, and East China, serving over 1,000 stores. In 2024, its sales exceeded 2 billion yuan, and in 2025, it aims for a target of 'guaranteed 3 billion, striving for 4 billion.'

The following is an excerpt from Zhou Xu's on-site speech (partially edited), compiled by New Distribution, to show how Zhenshimei uses the three pillars of 'symbiosis, efficiency, and ecosystem' to reconstruct the logic of FMCG supply chains.

'Shareholders are customers,' binding needs and interests together

'Zhenshimei has over 30 shareholders, 24 of which are corporate clients. Customers are shareholders, and shareholders are customers,' Zhou Xu stated directly.

This binding model brings direct advantages: each client sells Zhenshimei's products as if selling their own company's products, making the cooperation not a game between suppliers and retailers but a natural integration.

To make cooperation truly synergistic, Zhenshimei holds monthly joint meetings of purchasing directors from 55 chain stores, bringing sales ideas and product needs from regional channels to the table.

Zhou Xu introduced that Zhenshimei's team aggregates these dispersed needs and then negotiates with manufacturers in reverse. 'In practice, roughly 100 million yuan in sales share comes from integrating feedback from client companies' procurement spaces into sales results.'

Benefit sharing is key to consolidating symbiosis. In terms of profit distribution, shareholder clients enjoy both dividends and higher gross margins than traditional channels.

'Because shareholders are customers and customers are shareholders, it means everyone has dividends, and Zhenshimei's products, compared to the best retail channels, have higher gross margins and higher contribution rates to enterprises.'

Additionally, there is a pain point in procurement positions: controlling costs while preventing corruption. Zhenshimei's transparent pricing system and 'one inventory' supply model help partner companies plug loopholes, which is an important reason why many clients are willing to deeply bind with them.

From 'one inventory' to 'replicable experience'

If equity binding solves the cooperation problem, then scale efficiency and professional empowerment allow Zhenshimei to achieve efficiency in actual operations.

Currently, Zhenshimei cooperates with over 700 brands, with over 5,000 SKUs per warehouse. The warehouses in Shenyang and Jinan collectively manage over 12,000 items, serving over 1,000 stores.

Whether it's one box or 3,000 boxes, clients can quickly pick up goods within the 'one inventory' system. Zhou Xu told us: some clients from Zhejiang and Jiangxi travel over 1,500 kilometers to the Jinan warehouse to stock up because of the rich product variety and high efficiency, solving gaps in their local channels.

In product management, Zhenshimei proposes a 'dual focus' strategy: focusing on manufacturers and key items. Not all products are placed in the warehouse; instead, they resolutely choose leading brands and concentrate resources on promoting key categories.

For example, in the self-heating rice segment, Zhenshimei only retains the brand Mo Xiaoxian and no longer introduces other brands. Although this choice seems like a 'sacrifice,' it helps clients focus sales at the terminal and improve distribution efficiency.

Beyond the product side, Zhenshimei also provides systematic capability empowerment.

Relying on Biyoute's over 20 years of retail experience, Zhenshimei has compiled over 50 practical cases covering more than 130 category groups. Through regular ordering meetings and special training, it transforms experience into systematic learning content.

For example, how to analyze financial statements, how to determine promotional products, and how to design poster structures—these seemingly trivial but actually decisive factors for business efficiency are systematically conveyed to clients.

More valuable is their introduction of Japan's '52-week MD' system, learning with the Tetsuo Suzuki team to put product planning and marketing planning into practice. 'Most clients now use it as a business tool. Some bosses say that with 52-week MD, they have clearer ideas for consistently running activities and overall planning.'

Additionally, Zhenshimei has made new attempts in product development. Over the past year, it completed the customization and private label development of 37 items, with total sales exceeding 18 million yuan. Among them, Zhenshimei soda water sold over 1 million units in its first month, and facial towels exceeded 1 million units in sales.

Deep distribution and data-driven approach: making channels more controllable and sustainable

If mechanisms and scale solve the 'cooperation' and 'efficiency' problems, then deep distribution and data-driven approaches bring the supplier-retailer relationship into a 'sustainable' phase.

Zhenshimei launched the 'Thousand-Store High Penetration Plan': 40% of warehoused products must be distributed in 1,000 stores to ensure that brands can truly land after entry. Zhou Xu bluntly stated: 'This is a strong binding mechanism. If requirements are not met, products may be returned and cooperation terminated.'

In new product management, Zhenshimei uses product selection meetings and data models to increase the success rate of new products to 90%, while shortening the elimination cycle from 6 months to 90 days. 'New products are key to maintaining vitality. Customers want to see new things in old stores, and we must quickly replace slow-moving products,' Zhou Xu emphasized.

Price and distribution control also reflect Zhenshimei's 'dare to manage' attitude. It implements a transparent markup rule of '3% warehousing + 2% operation,' supplemented by an 'N-factor' flexible rebate, which avoids price conflicts with brands and guides clients to price reasonably. To maintain the stability of brand price systems, Zhenshimei even requires terminal display and selling prices to be executed. 'As an intermediary service provider and distributor, we also need to control the retail end,' Zhou Xu said.

Meanwhile, data tools are also playing a role. Intelligent replenishment algorithms and inventory lock mechanisms solve the problem of clients 'grabbing goods'; the 'Data Compass' allows clients to view single-store sales and gross margins in real time on their phones, improving decision-making efficiency.

In risk management, Zhenshimei proposes a '5+N' flexible pricing mechanism and inventory risk hedging clauses. In 2024, the average rebate reached 2.5%, and excellent enterprises could even receive 8%. For near-expiry products, Zhenshimei discounts and promotes them, proactively sharing inventory risks. 'As a retailer, I know too well the importance of having someone help with promotions,' Zhou Xu said.

Final Thoughts

From its establishment in August 2023 to today, Zhenshimei has achieved sales growth from 0 to 2 billion yuan in just over a year, and this year it is expected to challenge 3 to 4 billion yuan. Supporting this achievement is not simply 'selling more goods,' but the combined force of mechanism innovation, scale efficiency, professional empowerment, and data-driven approaches.

'Retail business owners are lonely, but Zhenshimei is willing to be that third-party organizer, working together with everyone to learn from each other's strengths and make progress together.' Zhou Xu's final words also highlight the essence of the new type of supplier-retailer relationship: in today's channel reshaping, going it alone is no longer sustainable; only by building symbiosis together can we go further.