Distribution: The Chinese puzzle

Following the adoption of the open door policy in the retail sector in 1992, China is now considering to make the same move in the country's wholesale sector. This policy will further dismantle the traditional distribution system created in the planned economy and attract more foreign investors to enter the vast Chinese market, State-owned wholesale companies have long played a key role in China's distribution system. Though today some state-owned wholesalers are criticized as being inefficient and unable to respond to changing market needs, the central,government would like to consolidate their dominant role in various marketing channels by giving them more preferential treatments. Based an interviews with government officials and business executives from mainland China, this article reviews the reforms in the wholesale highlights the prominent features of China's wholesale distribution channels, and identifies the trends of the wholesale reform, it also discusses a number of unresolved marketing and management issues that foreign traders must take into account when formulating their entry and distribution strategies for the China market. (C) 1998 Elsevier Science Ltd. All rights reserved.