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Dealer management system of FMCG market in China has experienced three stages of evolution. The first is the general agent system, but almost none of the dealers who is still in the formative years can really operate the business of a province. Money, staff, distribution capabilities are all inadequate. The second stage is the stage of regional management, the mainstream on the current dealer management is at this stage. The new term fleeing goods is generated at this stage. Currently, at the third stage the approach that pides the dealers according to the channel is slowly forming, some fast moving consumer goods companies, especially food companies, has broken the concept of pision of dealers by geographical boundaries, and classify them as traditional channels or modern channels, who are respectively responsible for operating supermarkets and mom-and-pop stores and wholesale markets. In fact, in most parts of China, dealer management of FMCG industry is still at the second stage.
The main features of dealers in this stage are:
1. The private enterprise is the major part, the sales network does exist but it is difficult to completely cover a region or a channel.
2. The general sales personnel quality is not high.
3. Improvident and lack of brand development in the long run.
4. Logistics ability is not strong enough.
5. Credit level is not very high.
These characteristics have decided that the dealers in the present stage are difficult to become long-term partners to manufacturers.
In the manufacturer-retailer-dealer session, the dealer is the slowest in developing and also the weakest group. The feature determines that the current principle of setting and management of dealers is that intensive setting of dealers adapt to the market better than the big dealer system. The Chinese FMCG market has also shifted from the seller’s market to the consumer’s market. In China, there are two kinds of force that cause channel change in the FMCG market, one is the change of the market; the other one is the reform of the economic system in China.
In recent years, foreign investment in manufacturing and foreign retail industry accelerate their moving to China, which speed up the channel reform. But foreign investment power is effective only in big cities. What is important is that they bring the change of the idea of marketing and management. In the first and second levels of markets, the large-scale retailers(KA) is constantly devouring business areas of dealers but dealer’s role cannot be completely replaced.