China distribution partner success comes down to four things the lasting partnerships share. The partner already sells your category to the shops you want. A named team works your brand. Sell-out and stock data reach you every month. And the contract has a way out that both sides wrote down before the first order shipped.
Filings and court records quoted here checked November 13, 2026.
Start with the base rate. Two listed Chinese food and drink brands with thousands of distributors each replaced about a fifth of them in a recent year.
Anjoy Foods ended 2025 with 2,290 distributors after adding 691 and removing 418. The distributors it removed had brought in 706.51 million RMB of revenue in 2024. Source: Anjoy Foods (安井食品), 2025 annual report, March 2026. https://static.cninfo.com.cn/finalpage/2026-03-31/1225063456.PDF
That’s 418 out of 2,017, or 20.7%. Dongpeng Beverage, the energy drink maker, ran at the same pace.
Dongpeng started 2023 with 2,779 distributors, added 771, removed 569 and ended the year with 2,981. Source: Dongpeng Beverage (东鹏饮料), 2023 annual report, April 2024. https://stockn.xueqiu.com/SH605499/20240414374325.pdf
Those are Chinese brands with sales teams on the ground. A foreign brand with one partner and no team in China has even less room for a bad match.
The table puts each factor next to what the public record shows when it held, or when it was missing.
| Factor | When it holds | When it’s missing, on the record | Check before you sign |
|---|---|---|---|
| Category fit | a2 Milk’s distribution partner since 2013 reaches about 30,000 mother and baby stores | Nike ends Topsports’ online sales of Nike from 2027, about 22% of Topsports’ revenue; stores stay | Three brands it sells in your category, and the stores |
| A named team | Dongpeng’s managers visit distributors on a schedule; a separate audit team spot checks them | Without a staff roster and 12 or more people on a Douyin operating team, an agency can’t qualify as a Douyin service provider | Named people and their hours in a contract annex |
| Shared sell-out data | Treasury Wine reports Penfolds China depletions up 34.7% by value and inventory cover down 0.2m cases | About 80% of sampled distributors came out with negative running stock in one exchange on-site check | A monthly sell-out and stock report from month one |
| A way out | A Tmall Global authorization letter carries a dated end, no earlier than the end of the calendar year | A distributor claimed 900,000 RMB after a brand broke its exclusivity and got 10,000 RMB | Targets and a review date, with exit terms in writing |
Sources: The a2 Milk Company, Beijing Business Today via CCTV.com, Dongpeng Beverage, Douyin E-commerce, Treasury Wine Estates, Shanghai Stock Exchange via Sina Finance, Tmall Global, Changchun Lvyuan District People’s Court. Full citations in the sections below.
Category fit: the partner already sells your shelf
A partner that already moves your category knows the buyers and has a payment history with them. A partner still learning your category learns it on your stock, and on your calendar.
The longest foreign example on the public record is in infant formula.
China State Farm Agribusiness (CSFA) has been a2 Milk’s strategic distribution partner in China since 2013. It is the exclusive import agent and master distributor for a2’s China label products, with more than 100 active distributors serving about 30,000 mother and baby stores and major online platforms. Source: The a2 Milk Company, NZX announcement, November 9, 2025. https://www.nzx.com/announcements/462298
a2 Milk’s agreement with CSFA runs five years from October 1, 2022, on top of a longer-term strategic cooperation agreement. Source: The a2 Milk Company, 2026 annual report, August 2026. https://announcements.asx.com.au/asxpdf/20260817/pdf/072t0sgxsfz4mf.pdf
Look at where the partner sells. Formula moves through mother and baby stores in China, and that’s where CSFA’s network grew. Even so, the network under the master distributor keeps changing.
a2 Milk counted 107 active infant formula distributors under CSFA in its 2025 annual report, and 99 in its 2026 report. Source: The a2 Milk Company, 2025 annual report, August 2025, and 2026 annual report, August 2026. https://assets-au-01.kc-usercontent.com/bca3e5d5-83bd-02bf-1c27-acb036630e5b/9b9ad6ab-d7b8-4d15-8e57-6e9964f4d9d6/FY25%20Annual%20Report.pdf https://announcements.asx.com.au/asxpdf/20260817/pdf/072t0sgxsfz4mf.pdf
Nike shows the same logic from the other side. It is ending Topsports’ online sales of Nike in mainland China from January 1, 2027, while Topsports, a sportswear retailer, keeps selling Nike in its stores.
Topsports said online sales of Nike made up about 22% of group revenue in the year to February 28, 2026, and that it would work to keep close cooperation with Nike on offline sales. Source: Beijing Business Today (北京商报), via CCTV.com (央视网), July 2026. https://finance.cctv.com/2026/07/23/ARTIYIQhdDU0ATsI4UwVa0Oq260723.shtml
The check. Ask a candidate for three brands it sells in your category today and where they sit, store by store or platform by platform. Ask how long it has carried each one. Then visit two of those stores. The guide to finding a distributor in China walks through how a category match is tested before the first meeting.
A named team works your brand, by name
Every partner says it has a team. Ask for names in the contract and see how fast the answer changes.
The brands that run big distributor networks in China don’t take it on trust. Dongpeng describes the people it assigns to its distributors in its annual report.
Dongpeng’s service-office managers and sales team leaders visit distributors on a regular schedule. A separate internal audit team spot checks distributors in person, and a sales support team phones them about sales and stock. Source: Dongpeng Beverage (东鹏饮料), 2023 annual report, April 2024. https://stockn.xueqiu.com/SH605499/20240414374325.pdf
That’s the brand’s own side. On the partner’s side, Douyin, China’s short-video and livestream shopping app, writes the team into its rules for the agencies that run brand shops.
A Douyin operating service provider needs a team of 20 or more, with 12 or more on its Douyin e-commerce operating team. Its application includes a stamped org chart, a staff roster and proof of social insurance payments. Source: Douyin E-commerce (抖音电商), Operating Service Provider Cooperation Rules, page dated October 2026 (in force since February 2024). https://school.jinritemai.com/doudian/web/article/aJ2D2SbD5GWe
If the platform asks for a roster, so can you. Put the account lead’s name in an annex, with the share of their week spent on your brand. Then add what happens when one of them leaves (notice and a handover, plus your right to approve the replacement). A partner that won’t name people now is unlikely to find them in October, when the festival orders land.
The same test applies to a Tmall Partner (TP) running a Tmall Global store. The guide to finding a Tmall Partner in China covers what the team behind a store should look like, and the guide to finding a Douyin Partner in China does the same for a Douyin shop.
Shared sell-out data: you see what the shopper bought
Sell-in is what you ship to the partner. Sell-out is what the partner sells on. A partnership run on sell-in alone can look healthy for a year while stock piles up in a warehouse in Shanghai.
Treasury Wine, the Penfolds owner, publishes the second number for China.
Penfolds depletions in China rose 34.7% by value in fiscal 2026. About half of that growth came from volumes once parallel imported that moved into Treasury Wine’s authorized channels. China inventory cover fell by 0.2 million cases. Source: Treasury Wine Estates, fiscal 2026 results presentation, August 2026. https://announcements.asx.com.au/asxpdf/20260813/pdf/072q1glzt0w00r.pdf
Depletions are the distributor’s sales to its own customers. A brand can print that figure, and the stock sitting in the channel, only when the channel reports it.
Where nobody checks, the numbers drift. Exchange staff found it in one IPO.
In on-site supervision of one STAR Market IPO project, Shanghai Stock Exchange staff worked out running stock from the issuer’s sales to distributors and the distributors’ own sales and closing stock. About 80% of the sampled distributors came out negative, and the sponsor could not explain it. Source: Shanghai Stock Exchange (上海证券交易所), IPO review bulletin 2025 No. 3, via Sina Finance (新浪财经), June 2025. https://finance.sina.com.cn/roll/2025-06-05/doc-ineyykxk9666950.shtml
Negative stock is impossible on a shelf. On paper it means the numbers on file don’t match what was sold.
The foreign example is Bubs Australia, an infant formula maker, in 2023.
Bubs said ex-factory sales under its exclusive China distribution arrangements were below expectations, and that more than five years of its Bubs Supreme formula was held in the trade at the current rate of sale. It expected fiscal 2023 China net revenue at the low end of A$13.5 million to A$13.8 million, against A$53.6 million a year earlier. Source: just-food, June 30, 2023. https://www.just-food.com/news/bubs-share-price-plummets-as-china-overstock-scale-revealed/
Bubs blamed sales channels that didn’t deliver. Our read is simpler: five years of stock in the channel is visible early to a brand that gets sell-out and stock data every month, and late to one that counts only its own shipments.
So make a monthly report part of the contract, from the first month: sell-out by channel and stock by warehouse, with weeks of cover worked out. Our eight-line China distributor scorecard shows how to score a partner on those numbers once the report arrives.
A contract with a way out, written before the first order
Partnerships that last tend to be the ones that could have ended cleanly. Odd as it sounds, a dated term with a review gives both sides a reason to keep earning the renewal.
Tmall Global, Alibaba’s cross-border marketplace, builds the date in.
When the company opening a Tmall Global flagship store doesn’t own the trademark, it needs the trademark holder’s exclusive authorization letter. The letter must state a specific end date, no earlier than the end of the current calendar year. Source: Tmall Global (天猫国际), merchant qualification rules, in force March 2025. https://rule.tmall.hk/?type=detail&ruleId=9223&cId=624#/rule/detail?ruleId=9223&cId=624
A distribution contract has no such floor unless the brand writes one in. When an exclusive deal without clear exit terms breaks down, a court has to price the damage, and the result can sit far from either side’s number.
A food company gave a distributor exclusive rights, with a 1 million RMB first-year order target, then sold the same product through its own livestream shop and cut supply. The company said two thirds of the target was still unfilled. The court found the company in breach, ended the agreement and awarded the distributor 10,000 RMB of the 900,000 RMB it claimed. Source: Changchun Lvyuan District People’s Court (长春市绿园区人民法院), via The Paper (澎湃新闻), December 2023. https://www.thepaper.cn/newsDetail_forward_25520892
Wording matters even when the brand wins. In Shanghai’s Fengxian court, a cosmetics brand won a model case in June 2025 against a distributor that sold outside its agreed channels. Fourteen similar cases, involving more than 6 million RMB, then closed by mediation or withdrawal with that judgment as the reference. The judge still named the contract’s unclear wording on diversion as one cause of the whole series, and the brand rewrote its standard contract.
The contract limited the distributor to specific offline stores, with a 200,000 RMB penalty for cross-channel sales. The court found that buying the brand’s goods from other channels and selling them online met the contract’s definition of diversion. Source: People’s Court Daily (人民法院报), via the Supreme People’s Court (最高人民法院), August 2026. https://www.court.gov.cn/zixun/xiangqing/507751.html
Bubs ran into the other problem. It started over in China in July 2023.
Bubs announced a “China Reset” with a multi-channel route to market, new leadership and new trade partners. Source: Bubs Australia, Strategic Review Outcome, July 6, 2023. https://announcements.asx.com.au/asxpdf/20230706/pdf/05rckx70l6vhsz.pdf
Arbitration against two of its old Chinese distributors began the same month and ran for nearly two years. Winning didn’t mean getting paid.
Bubs’ subsidiary, The Infant Food Co., won arbitration awards of A$22.9 million and A$2.6 million against two former customers on April 28, 2025. Bubs said the prospect of further recoveries was uncertain. Source: Bubs Australia, fiscal 2025 Appendix 4E, August 2025. https://announcements.asx.com.au/asxpdf/20250829/pdf/06nkpggrwwfgkr.pdf
A written exit (a target per region and channel, a review date, a notice period, who keeps the stock) is cheaper to agree before the first order than to argue over after the last one.
The check. Before signing, write down what happens in year two if the target is missed by half. If neither side has an answer, the contract needs another draft.
China distribution partner success when the partner stays
The four factors don’t only apply to a new partner. They’re also how a partnership in trouble gets fixed without changing names.
Langnese, Germany’s leading honey brand, had stable distribution in China and falling sales.
“Sales kept dropping month after month despite stable distribution.” Brand and distributor then agreed on nine growth pillars that became the operating plan for the next phase, and the brand opened regional channels where it had none. From our published Langnese case, /work/langnese.
The distributor stayed. What changed was the plan the two sides shared and the channels it covered. A new partner means rebuilding store listings and buyer relationships from scratch, so fixing the factors with the partner you have is the first move to try.
If that fails, the search starts again, and the record checks with it.
A typical Compass shortlist runs three to five names. From Compass, November 2026.
Compass is where we keep fifteen years of meetings with China distributors, Tmall Partners and Douyin Partners, so a shortlist starts from partners that already run your category.
Questions buyers ask
How long does a China distribution partnership usually last? There’s no public average for foreign brands. Two listed Chinese food and drink brands replaced about a fifth of their distributors in a recent year (Anjoy 20.7% in 2025, Dongpeng 20.5% in 2023). At the long end, a2 Milk has had the same distribution partner in China since 2013.
What is the earliest sign a China distributor relationship is failing? Stock that builds while shipments still look fine. Bubs said more than five years of one formula line sat in the China trade at the rate it was selling in 2023, the year it reset its China channel. A brand that gets sell-out and stock data every month sees a gap like that while there is still time to change the plan.
Should I give a Chinese distributor exclusivity? Only with a target per region and channel and a review date, plus exit terms in writing. Without them, a court decides what the exclusivity was worth. In one Changchun case a distributor claimed 900,000 RMB and was awarded 10,000 RMB.
Can I fix a struggling partnership instead of replacing the partner? Often, yes. In our published Langnese case, sales were falling despite stable distribution. Brand and distributor agreed on nine growth pillars and opened new regional channels, and the distributor stayed.
How many candidates should I compare before choosing a partner? Three to five is enough when each one already sells your category. That’s the size of a typical Compass shortlist, and it usually takes two to three weeks from the brief. Every extra name adds another round of meetings.
Get a Compass shortlist of China partners that already sell your category
Updated November 14, 2026
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