Olivier Verot is founder and CEO of GMA, a marketing and distribution agency based in Shanghai since 2012. He has helped more than 200 foreign brands set up sales and distribution in China.
There is no single right distribution strategy for exporting a product to China. Business factors decide which model fits. Trends and what a competitor did last year should not drive the choice.
If you want to grow in China, you need a strong sales strategy behind your distribution network. One without the other rarely works.
Cultural differences, and a poor read on how distribution actually works in China, have put many brands in trouble while they tried to integrate into the Chinese market.
In this guide we cover:
- Logistics and distribution in China
- The main distribution models, updated for 2026
- How to vet a distributor and avoid the usual contract pitfalls
- Where 1688 fits as a sourcing and distribution discovery tool
The state of distribution in China
A distribution strategy is a necessary step for any company that wants to export to China, and it is not a simple one. Here are the challenges we see most often with B2B multinational companies entering the market:
- Fragmentation of distributors: given the size of China, many small distributors will not expand across regions. Companies end up needing several partners, or they limit their own growth in China.
- Regional differences: pricing and positioning that work in Shanghai do not automatically work in Chengdu or Guangzhou. Distributor capabilities also vary a lot by region.
- Diversification is required: with the growth of B2B online platforms, most companies now need a multi-channel plan that mixes online and offline distribution.
- Financial tightness: many local B2B distributors run on thin funds and cannot carry large inventories.
- Legal complexity: foreign firms need channel partners able to handle a multi-layered approval process, especially in regulated categories like food, cosmetics, or medical devices.
Entering the Chinese market is a real challenge, whatever the reward looks like on paper.
China runs on its own business logic. You need to plan for a cultural gap and for business behavior that does not match what works at home.
Before picking a strategy, decide on these points first:
- The degree of control you want over your product
- The degree of control you want over your pricing
- The regions you plan to cover (China is a big country)
- Whether you need to keep some business channels separated
- What it takes to manage multiple distribution channels or distributors
- What marketing support and budget you can commit
- Whether you handle this yourself or bring in outside help
Three distribution models, one choice to make
The distributor model
This is the most common way for companies to enter a new market.
How it works:
- You give up a share of your sales revenue, often around 50 percent, in exchange for a local distributor handling sales on your behalf.
- Depending on your product’s reputation and how the negotiation goes, a distributor may purchase your inventory outright, which gives you a clean bottom line.
What this means for you: the distributor does the selling, so your margin drops and you have less control over quality and branding. If your product already sells, they will move it. If it does not, it waits behind their proven brands.
Distributors already carry several brands close to yours. They put effort behind the ones that produce results. Without a reputation in China, you will not get much attention.
Three ways to work with distributors:
- The exclusive route: we do not recommend it. A distributor is a supplier, not a partner, and an exclusive deal puts their interest ahead of yours.
- Multi-distributor: a solid strategy. You keep control of the distribution process, build a real presence in China, and register your own operation while still using local partners.
- Direct distribution: you sell and deliver yourself. Full control, no middleman cost, but real upfront costs for shops and warehousing.
Direct-to-platform: Tmall and JD flagship stores in 2026
This model means:
- Your company enters the market and works with an export partner to lower the cost and complexity of shipping product into China.
- Your company hires people or a service provider to handle inventory, logistics, warehousing, and store operations.
This lets you run your China e-commerce operation closer to how you run it at home, without giving up a share of revenue to a distributor.
The platforms are also changing how this works. Alibaba announced a plan to put 100 billion RMB, roughly 14 billion USD, into supply chain integration over three years, and its retail unit is opening self-operated Tmall flagship stores for large brands, starting with 3C categories, according to 36Kr. JD runs a similar direct model through JD Worldwide for cross-border brands.
In practice this means brands with enough volume can now get closer to a direct platform relationship without a distributor sitting between them and the shelf. It does not remove the need for a partner on logistics, customer service, and marketing execution in Chinese. It shifts inventory risk and operational load back onto you, in exchange for keeping the margin a distributor would have taken.
Cross-border e-commerce (CBEC)
Here you ship products from your home market into China through an e-commerce platform. You do not need a Chinese business license or a warehouse in China. You can deliver through the postal service or through a bonded warehouse.
This is a good way to test the Chinese market and cut costs by removing intermediaries, physical shops, sales staff, and local inventory.
The infrastructure behind this model has grown fast. By the end of 2025, China counted more than 2,500 overseas warehouses across more than 100 countries, and about 70 percent of them are dedicated to cross-border e-commerce, according to 36Kr reporting on the sector. Delivery times and return handling keep improving as a result.
Rules are also tightening. The EU applies a fixed customs duty on cross-border parcels under 150 euros starting July 1, 2026. This pushes sellers away from cheap, unbranded, direct-to-consumer shipping and toward branded operations backed by local warehouses. The same shift is happening on China’s inbound CBEC side: bonded warehouses in free trade zones beat plain postal parcels once your volume passes a small pilot.
Read more about cross-border operations here. For a deeper look at the new CBEC rules, see our guide to the 2026 CBEC law.
How to vet a distributor before you sign anything
A wrong pick costs more than a bad quarter. Most sourcing and distribution failures in China trace back to the choice of partner, not to price or logistics. Check these points before you sign:
- Business scope: confirm their registered scope actually covers your product category. A general trading license is not enough for food, cosmetics, or medical devices.
- Current brand portfolio: ask what other brands they carry, and how many. A distributor handling 40 to 200 brands will not give yours much attention unless it already performs.
- Warehouse and cold chain capability: visit the facility if your product needs it. Photos sent by email are not proof.
- Sell-through data, not purchase orders: a distributor who buys a container once and never reorders is not distributing, they are stockpiling.
- References: ask for two brands they already carry and call them directly.
- Financial health: a local lawyer or sourcing agent can pull a basic credit report on a Chinese company for a modest fee.
- Regulatory capacity matched to real timelines: if your category needs GACC or NMPA registration, check the distributor understands that these timelines are set by Chinese authorities, not by either party in the contract.
Common contract pitfalls
We have reviewed enough distribution contracts to see the same mistakes repeat:
- Exclusivity granted too early: locking in one distributor for all of China before they have proven volume in even one region removes your negotiating power and your fallback option.
- Unrealistic regulatory timelines: contracts that promise a fixed number of months for GACC or NMPA approval set both sides up to fail, since that clock belongs to the regulator, not to you.
- No pricing transparency clause: without a clause covering retail pricing across channels, a distributor can undercut your own direct store and start a price war you did not choose.
- No joint sales target review: a contract without a scheduled review of targets lets underperformance run for a year before anyone raises it.
- One-sided termination clauses: check the exit terms protect you too, not only the distributor.
1688 as a sourcing and distribution discovery tool
Foreign buyers mostly know 1688, Alibaba’s domestic B2B platform, as a place to find factories. By 2026 it is also useful the other way: it shows you who already distributes products close to yours inside China, what price points and packaging actually move, and which regional wholesalers carry which categories. Treat it as a research tool before you ever talk to a distributor face to face.
Foreign buyers reach 1688 through three routes: a Taobao-style agent for small test orders, a professional sourcing agent once orders pass roughly 5,000 USD, or a registered Chinese entity once annual spend passes about 1 million USD.
One caution: 1688 was built for the domestic market, so intellectual property protection is weaker than on Alibaba.com, and counterfeit listings exist. Treat any distributor or supplier contact found there exactly as you would an offline one: check the business license, request samples, and confirm registration before sending a deposit.
Maximize your profits, and invest in your branding
Whether you go online or offline, keep in mind that each distributor may handle between 40 and 200 brands. They will not care much about yours in particular, especially if others are growing faster.
For e-commerce platforms it is even harder. Platforms such as Tmall Global receive thousands of applications every day. Cooperating with a distributor in China, online or offline, is never an easy task, and platform preference is shifting again: see our note on why some brands are moving from Tmall to Douyin in 2026.
A Chinese distributor gets interested in your product for a few reasons:
- Your product or company already has a name in China
- Your positioning fits a profitable target segment
- You have a strong online reputation
Here is how you build that reputation before you ever sit down with a distributor.
Work on your visibility
- Build a website in Chinese registered on a Chinese domain.
- Open an official account on Weibo: the Chinese Twitter, still one of the main platforms for KOL activity and useful to reach a broad audience.
Work on your reputation
- Baidu: a Chinese website is good, not enough. Chinese buyers check Baidu, their equivalent of Google, before buying anything from an unfamiliar brand. See our guide on Baidu marketing.
- WeChat: nearly everyone in China uses it. Its moments feature lets people share content and feedback with their network.
- Douyin: the short video leader, and by 2026 a real sales channel on its own, not just a discovery tool.
Once your branding and online reputation are in shape, you can approach distributors. Expect them to check your brand on Chinese platforms first. They will look at:
- Whether Chinese consumers already know and buy the product
- What people say about quality on forums and social platforms
- Your follower count on Weibo and WeChat
- What media coverage and search results turn up on Baidu
Packaging
Packaging needs work too. It should be:
- Attractive
- Good quality
- Matched to your positioning
- Adapted to the Chinese market, since successful brands here often build a specific product range for local consumers
To manage the relationship once a distributor is on board, keep these points in mind:
- Spend time with the distributor to study the market and understand their real capabilities
- Understand where margin goes, where cost sits, and where value gets created
- Keep pricing transparent across channels
- Set sales targets together and review them on a schedule
What distributors want
Distributing products in China is not simple, but it pays off when done right. What do distributors want, in short?
- The least effort for the most result
- Fast results, without a long ramp-up
Case study: fixing an exclusivity mistake
A mid-size European skincare brand we advised had signed an exclusive national contract with a Guangzhou distributor. The distributor promised three flagship counters within six months, in exchange for a 55 percent margin. Eighteen months later only one counter had opened, and the exclusivity clause blocked the brand from testing a direct Tmall store on the side.
We helped renegotiate the contract to remove the exclusivity clause and split volume across two regional distributors plus a direct Tmall store run by the brand. Within a year the direct channel alone outsold both distributors combined, and total China revenue for the brand grew by about 40 percent.
FAQ: distributing products in China (2026)
How many distributors should a foreign brand work with in China?
Most brands do better with two or three regional distributors than with one national exclusive partner. It keeps negotiating power on your side, covers more ground given China’s size, and protects you if one relationship underperforms. Add a direct e-commerce channel alongside them once you have enough volume to support it.
Is cross-border e-commerce better than direct distribution?
Neither is better on its own. CBEC is faster to start and needs no Chinese entity, which suits testing demand. Direct distribution or a flagship store builds a real local presence and better margins over time. Many brands start with CBEC, then move part of their volume to a distributor or a direct store once demand is proven.
Can I use 1688 to find a distributor directly?
You can use 1688 to research who already distributes similar products and at what price, but treat any contact you find there as a lead, not a vetted partner. Confirm their business license, ask for references, and verify their regulatory capacity before signing anything, the same way you would with a distributor found offline.
What should go into a distributor contract to avoid disputes?
Cover exclusivity scope and duration, realistic regulatory timelines, retail pricing transparency across channels, a schedule for reviewing sales targets, and termination terms that protect both sides. Avoid any clause that promises a fixed timeline for something controlled by a Chinese regulator, such as GACC or NMPA registration.
How long does it take to find a reliable distributor in China?
Budget three to six months for proper vetting, including reference calls, a facility visit, and contract negotiation. Rushing this step is the most common reason brands end up with a distributor who cannot deliver. Building your online reputation in parallel, on Baidu, WeChat, and Weibo, makes distributors take your outreach more seriously.
We are GMA, your partner for distribution in China
Need a distribution partner in China who tells you the truth about your options?
GMA has vetted distributors, set up direct Tmall and JD stores, and sourced through 1688 for foreign brands since 2012.
Talk to our team about your distribution strategy.
