Agents, who once held a substantial say in the mother and baby channel, begin to face the difficulties of business directly — Economic downturn, consumer downgrading, disappearance of the population dividend, weak market demand. The rising operation costs further compress profit margins. The challenge of channel transformation, acceleration of offline reshuffling, intensification of online competition. Brand index pressure, stockpiling, difficulty in fund turnover. The industry consolidation weakens their say, putting them at a disadvantage in market negotiations.
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Only by becoming stronger is there a possibility to find a way out. Therefore, seeking a way out has also become the core demand of this group.
01. Manage Accounts Receivable Well
For agents, accounts receivable is a normal part of day-to-day operations. When the industry is vibrant and stores are doing well, the setting of accounts receivable is relatively positive for agents: it helps expand sales, strengthens competitiveness, reduces inventory, and lowers inventory risks.
But today, the wave of store closures and consolidations indicates a large operating pressure on stores. This also means that accounts receivable could likely become bad debts or even lead to a break in an agent’s capital chain, resulting in the possibility of bankruptcy.
Therefore, managing accounts receivable should be a top priority for agents.
02. Focus on Niche Brands
Many agents today must face the reality of major brand profits being penetrated, as well as bear the pressure of brand stockpiling and the burden of heavy performance targets.
For agents, it might be wise to pay attention to some niche brands and get regional protection as regional agents.
Niche brands usually need agents to develop the market. Thus, in negotiations with these brands, agents have a higher bargaining power and can obtain higher profits. Also, niche brands usually have better control over their regions, inventories, and pricing, which also provides some survival space for agents.
03. Value Teams with Strong Sales Capability
In today’s high-pressure business environment, stores and agents are in a state of profit negotiation. In front of the real profits, the advantages of teams with strong sales capabilities are becoming more apparent.
When an agent’s team has strong sales capability, it means they can sell new or non-mainstream products. Similarly, an agent’s selling ability is also a key factor that brands consider during negotiations, and with this ability, agents can occupy a certain initiative.
04. Pay Attention to New Tracks, New Trends
When agents expand their product categories, certain categories deserve attention.
For example, feminine intimate care. Data shows that from 2016 to 2023, the market size of China’s feminine intimate care products grew from 13.04 billion yuan to 34.65 billion yuan, with a strong Compound Annual Growth Rate (CAGR). By 2026, the market size is expected to be close to 45 billion yuan, showing immense market potential and growth space.
Tech for hair loss, as a niche track, is also rising quickly. Data show that in 2023, the market size for hair growth devices on the Tmall and Taobao platforms reached 360 million yuan, with a yearly growth of 98.9%; the market size for hair growth combs is 270 million yuan, with a yearly growth rate of 110.4%.
Additionally, in the paper product market, moisturizing tissues, as an emerging category, are undergoing rapid growth. Analysis by “Mirror AI” shows that on the Taobao ecosystem, sales of moisturizing tissues/cream tissues/cloud soft tissues are growing fast, with sales reaching 54.45 million yuan in July 2024, up 149.4% year-on-year.
Then there’s household cleaning products. According to data from Frost & Sullivan, China’s household care market was approximately 133.4 billion yuan in 2022 and is expected to reach 167.7 billion yuan by 2024, with a five-year CAGR of 8.7%, which will continue to maintain high growth in the coming years. The household cleaning products not only match the demographic of mother and baby stores but also heavily depend on offline channels.
Some agents have told us that when you used to earn a clean profit of 10 or even 15 points, and today you can only manage 3 points with more effort than before, that’s when it’s the toughest.
“The market doesn’t not need agents; it’s only when you become stronger that there will be a way out.”
