This used to be a very prevalent channel. However this method is less common now especially within the last two years, and is not encouraged due to new government policies enacted by Premier Zhu Rongji. This is the least common of the three channels for distribution. Buyers Buyers determine what products a supermarket will put on the shelves. Larger chain supermarkets such as Yaohan have their own local buyers who choose products on the basis of appeal and cost.
Smaller supermarkets rely on their distributor's buyer.
Managers interviewed say that different distributors often charge different prices, indicating there are no fixed pricing standards for products. Payment Conditions Payment is one of the most important and challenging elements of doing business in China. Payment conditions must be well negotiated, understood and mutually acceptable between the retailer and the foreign company before any trade transaction occur. There are three methods of payment available with retail outlets in China. Unless the retailer can be convinced a product will immediately sell in volume, consignment is the preferred and only method of payment with retail outlets for foreign companies who are in the local market for the first time.