(Source: https://pltfrm.com.cn)
Introduction
Many overseas brands entering China ask the same question: should we build our own sales channels or rely on local distributors?
The answer depends less on company size and more on strategic priorities. Brands focused on speed and risk reduction often favor distributors, while those seeking long-term customer ownership typically invest in direct-to-consumer models. This article provides a practical framework for making the right choice.
1. Define Your China Objectives
1.1 Market Testing vs Long-Term Expansion
Testing Demand: Distribution partners often provide a lower-risk entry route.
Building a Long-Term Presence: DTC strategies support stronger market control and customer ownership.
1.2 Revenue vs Data
Prioritizing Sales: Distributors may accelerate revenue generation.
Prioritizing Consumer Insights: DTC channels provide direct access to customer data.
2. Evaluate Internal Resources
2.1 Operational Capabilities
Local Team Availability: Successful DTC execution requires dedicated China operations.
Marketing Expertise: Brands need expertise in platforms such as Xiaohongshu, Douyin, WeChat, and Tmall.
2.2 Financial Resources
DTC Requires Investment: Marketing, technology, customer service, and logistics all require budget.
Distribution Requires Partner Management: Lower operating costs but reduced control.
3. Analyze Product Category Dynamics
3.1 Categories That Favor DTC
Beauty and Skincare: Strong content and community influence.
Premium Wellness Products: High reliance on education and trust-building.
3.2 Categories That Favor Distribution
FMCG Products: Large-scale retail networks remain important.
Traditional Consumer Goods: Physical availability often drives sales.
4. Assess Customer Acquisition Strategies
4.1 DTC Customer Acquisition
Digital Marketing Driven: Brands acquire customers through content, influencers, and paid media.
Private Traffic Development: Customer retention becomes a strategic advantage.
4.2 Distributor Customer Acquisition
Retail-Driven Exposure: Distributors often leverage existing sales channels.
Reduced Marketing Complexity: Some customer acquisition responsibilities shift to partners.
5. Consider Hybrid Approaches
5.1 Use DTC for Consumer Insights
Collect First-Party Data: Direct sales provide valuable customer intelligence.
Test Products and Messaging: Brands gain market feedback rapidly.
5.2 Use Distributors for Scale
Expand Market Reach: Distributors accelerate geographic coverage.
Support Offline Growth: Retail partnerships improve accessibility.
Case Study: A German Skincare Brand Chooses a Hybrid Growth Strategy
A German skincare company initially considered signing an exclusive national distributor agreement. However, management was concerned about losing visibility into customer behavior.
We recommended a hybrid strategy. The company launched a direct Tmall store and WeChat CRM program while partnering with regional distributors for offline retail expansion.
The result was stronger market intelligence, improved marketing optimization, and more sustainable growth. The brand retained control over customer relationships while benefiting from distributor scale.
PLTFRM is an international brand consulting agency that works with companies such as Red, TikTok, Tmall, Baidu, and other well-known Chinese internet e-commerce platforms. We have been working with Chile Cherries for many years, reaching Chinese consumers in depth through different platforms and realizing that Chile Cherries’ exports in China account for 97% of the total exports in Asia. Contact us, and we will help you find the best China e-commerce platform for you. Search PLTFRM for a free consultation!
