We wanted to understand what brands need from distributors, so we discussed the question with the companies we serve. They identified the following priorities for operating in China:
- Financial strength: A reliable capital position is fundamental to uninterrupted operations. In China’s policy-led environment, a private company’s own funds are more dependable than borrowed capital. For brands focused on cross-border e-commerce, offshore funding capability is especially important.
- Operating capability: SME brands often have no Chinese subsidiary, or only a subsidiary with limited capabilities. A distributor therefore needs comprehensive operating capabilities and should be able to build the brand’s presence across major channels, including Tmall, JD, Pinduoduo, Douyin and distribution networks.
- Team and communication: A stable team is essential for efficiency. High turnover increases communication costs and slows execution. Stability also supports longer relationships and more considered decision-making.
- Supply-chain capability: The distributor needs a reliable international supply chain. Within China, it needs infrastructure such as warehouses, transport and ERP systems to meet the warehousing and delivery requirements of different channels and models.
- Data analytics: Data reveals the needs of Chinese consumers, while the right strategy helps a brand compete more effectively. Strong analytical capability is therefore an important criterion when selecting a partner.
- Operating philosophy: Alignment helps both sides work together. This includes views on the market, channel management, product positioning, and whether to pursue aggressive or steady growth. Different perspectives can inspire new ideas, but fundamentally irreconcilable philosophies create the seeds of conflict.
GANDE · Insights