China's retail boss has been replaced|A new starting point for retail (1)

Zebra consumption

2024-06-18 06:34Posted on the official account of Hubei Zebra Consumption

Zebra consumption Xu Ji

The retail boss eventually changed hands, from Suning Tesco to Walmart. In the 40 years of chain retail in China, foreign-funded enterprises have reached the top for the first time.

Suning, which represents the traditional format, why is it declining? Carrefour can tell you the answer. Why did Walmart break through against the trend? This recipe is provided by Sam's Club.

What is the future of chain retail in China? Hema in the top 100 chain list, Meiyijia, Fat Donglai, as well as Mingming is very busy, Baiguoyuan, and pot rings, can inspire you.

40 years of chaining

China's chain rivers and lakes have changed in the past 40 years.

In 1981, Guangzhou Friendship Store self-selected supermarket opened; Three years later, Li Ka-shing's Hong Kong-owned PARKnSHOP began to open stores in the mainland; It was also in this year that China Resources Supermarket was established in Hong Kong, and later it merged with Vanke's Wanjia chain and changed its name to China Resources Vanguard.

In 1987, Huang Guangyu opened the first Gome (00493. HK）； In the same year, KFC entered the Chinese market, and its first restaurant opened at the front door not far away.

After several years of brewing, the chain atmosphere of the Chinese market has gradually formed.

In 1990, Zhang Jindong brothers founded Suning (002024. SZ）； Humen Town, Dongguan, Guangdong Province, gave birth to the first supermarket in the mainland, Meijia Supermarket. The following year, Lianhua Supermarket was established in Shanghai.

In just a few years, the major chain formats have blossomed in the Chinese market. However, the most lively of them is the supermarket chain. After all, home appliances and home furnishings are nodal consumption, and supermarkets are daily life.

Around 1995, it finally ushered in the first climax of China's chain rivers and lakes.

The year before, Zhang Wenzhong, a doctor of systematics, returned from studying abroad and opened a model supermarket in order to promote the cash register system he designed. Unexpectedly, Wumart's business was so good that Dr. Zhang entered the chain retail industry by mistake.

At the time, Fortune magazine likened Wumart to the "Walmart of China": "If you want to see the future of retail, then you can save the time of visiting Walmart from afar and buy yourself a plane ticket to Beijing to see Wumart." ”

In 1995, after years of preparation, Carrefour opened its first Chinese store in Beijing. Li Binlan left the Wanjia chain and founded a new Wanjia in Shenzhen. The first Jiajiayue (603708. SH) opened in Weihai, Shandong; Zhang Xuansong, who did not graduate from high school, served as a soldier and worked as a beer agent, founded Yonghui Supermarket in Fuzhou; Food salesman Wang Fill opened the first backgammon (002251. SZ), which later became private representatives in Chinese supermarket chains.

Then came the golden age of China's chain industry for more than ten years, with foreign giants such as Wal-Mart and Metro vying to enter, state-owned assets Lianhua, Bailian, Zhongbai (000759. SZ) and other companies have taken advantage of local advantages, and private giants have jumped rapidly by relying on their operational advantages.

If you want to understand the development of China's chain industry, just take a look at the "Top 100 Chinese Chain Stores" released by the China Chain Store & Franchise Association every year.

In 2001, this list revealed a strong reckless atmosphere, which was the initial stage of the top 100 chain companies. Supermarkets occupy most of the list, and many people find it hard to imagine that among the top 100 chains of that era, there are several "X Kelong". In that year, Lianhua Supermarket (00980. HK), Beijing Hualian, Shanghai Agricultural and Industrial Supermarket, three super lists.

With China's accession to the WTO, foreign investment has accelerated its layout in the Chinese market, catching up with the rise of China's consumer market. By 2011, RT-Mart, Carrefour, Yum China, and Wal-Mart also entered the TOP10 of the top 100 chain lists, and the top positions also changed hands to Bailian, Suning, and Gome.

In the following 10 years, the supermarket industry declined as a whole, but private players sprung up; Vertical chain players Gome and Suning have completed the nationalization of the home appliance retail market and formed a north-south confrontation, and then relayed to be king. Since then, there have been few new stories on the chain list.

Retail boss substitution

Today, the biggest change in the top 100 chains in China in more than 20 years has occurred.

Recently, the "2023 China Top 100 Chains" was released, and Walmart became the boss. This is the first time since the release of the top 100 retail list that a foreign-funded enterprise has won the award.

After entering the Chinese market in 1996, Wal-Mart has been pressed by RT-Mart and Carrefour, both foreign investors. It wasn't until a lot of acquisitions that Walmart was upgraded. In recent years, with the stagnation of Yonghui, RT-Mart, and China Resources Vanguard, Wal-Mart has been pushed to the throne of supermarket boss.

In fact, Wal-Mart supermarket's business is not very good, and in recent years, there has been news of store closures at every turn, and even rumors that the store will be sold to Wumart. Fortunately, Walmart has already incubated a new format, Sam's Club.

Sam's began to lay out the Chinese market in the 90s of the last century. Before 2018, it was the only supermarket in the Chinese market that adhered to a paid membership system.

In recent years, with the rise of membership-based consumption in China's supermarket chain industry, Sam's has stepped up its efforts to expand stores, and has now opened at least 37 stores in first- and second-tier cities such as Beijing, Shanghai, and Shenzhen, and has even formed a Sam's lifestyle.

It can be seen from the list of the top 100 chains over the years that Walmart as a whole has also shown a trend of store contraction in recent years, with a peak of 442 stores in 2019 and only 365 stores now, but the sales revenue in the past two years has increased from 80 billion yuan to 120 billion yuan. Sam's Club's replacement of Walmart is very obvious.

Squeezed out of the throne by Wal-Mart is Suning, which has dominated the list for 8 consecutive years and has won the chain retail boss more than ten times - and this is not a simple Suning, but a super giant that merged with another top 10 chain Carrefour.

From a small shop on Ninghai Road in Nanjing, Suning has developed into the region's leading home appliance chain giant in just a few years. After entering the new century, Gome and Suning launched a home appliance chain merger and acquisition war, and the more ferocious Gome led the way for several years; It wasn't until Huang Guangyu was in prison that Suning surpassed him.

In its heyday, Suning had tens of thousands of stores, including home appliances 3C, mother and child, supermarket, department store, fresh food, etc., becoming the largest all-retail giant.

At the same time, Suning has invested in Nubia Mobile Phone, Suning Consumer Finance, 8 Days Online, Tiantian Express, Hot Mabang, Wanda Commercial, etc., and also acquired the control of Carrefour China in 2019.

However, Suning's stubborn problem of not being able to achieve business profitability has not been resolved. The acquisition of the behemoth Carrefour accelerated the exposure of the problem, which eventually led to a liquidity crisis.

Although, under the mediation of Jiangsu state-owned assets and Alibaba, Suning has passed the most difficult time, and the business is slowly recovering, and it has to accept the end of a sharp contraction in scale.

According to the top 100 chain list, there will be 12,027 Suning stores in 2023, a slight increase, but the sales scale will be 94.09 billion yuan, a year-on-year decrease of 15.5%, and it will fall directly from the top to the third.

The other local brands behind Suning are not much better. Yonghui Supermarket, RT-Mart, Wumart, and China Resources Vanguard are still at the top of the list, but the decline in scale and performance pressure have not been lifted. What's even more lonely is the past TOP players Gome, Red Star Macalline (601828. SH), backgammon, etc., has completely disappeared from the top 100 list.

Innovation will have light

The root cause of all business pressures lies in the business model itself.

The fundamental reason for the lack of model innovation is that the local chain head brands are almost 10,000 together, and many giants have disappeared directly on the spot, and for the first time in 40 years, the boss throne has been handed over to foreign brands. Whether it is a supermarket chain, or a home furnishing, home appliance or pharmaceutical chain, most of them still follow the business model of thirty or forty years ago.

As a result, the capital market's confidence in traditional retail has dropped to a freezing point. Taking Yonghui, the boss of the local supermarket, as an example, the total amount of monetary funds + wealth management products on the account exceeded 10 billion yuan, with an operating income of 21.665 billion yuan and a net profit of 736 million yuan in the first quarter of this year, and it has been exploring new businesses, and the latest market value is only more than 25 billion yuan.

On the other hand, foreign brands are gradually stepping out of tradition and making leaps in two levels: either the ultimate products and services, such as Sam's Club and Costco; or extreme efficiency, just like the convenience stores that have performed well in the top 100 chain lists in recent years, Lawson, 711, and FamilyMart.

They have also experienced the darkest moments of China's retail chains. It's just that they go through the trough first, and they also go through the cycle first.

The road to breaking the situation in China's chain industry is also hidden in this list of the top 100 chains that have undergone great changes this year.

In 2023, the number of stores will be close to 34,000, a year-on-year increase of 12.8%, and the sales scale will be 54.19 billion yuan, a year-on-year increase of 20.1%, entering the TOP10 of the top 100 chains for the first time.

Meiyijia is not an idle person, but was born from the first supermarket in the mainland, Meijia Supermarket. Today, after several rounds of iterations, this old supermarket is no longer an inconspicuous street store, but has developed a variety of formats such as fresh food convenience stores, which can be called "the honey snow ice city of convenience stores".

What's more worth mentioning is Fat Donglai, who was on the list for the first time and has his own halo. Last year, there were only 13 stores, with sales exceeding 10 billion yuan. The founder Yu Donglai once revealed that in 2023, Fat Donglai will make a profit of 3 or 4 billion.

Fat Donglai has become the "Chinese version of Costco", and there is no secret to speak of. Regional, ultimate service, supply chain, price advantage, employee co-construction mechanism. But that's easier said than done.

Today, Fat Donglai is helping BBK and Yonghui Supermarket (601933. HK), and replicate the essence of its model and supply chain. In the past few years, the founder of BBK, Wang Cao, could not have imagined that he would have to rely on "Brother Donglai" to pull him.

In addition, the rise of various professional chains, mass sales of snacks, hot pot ingredients, fruit chains and other formats are all grabbing jobs in supermarkets and department stores. Ming Ming is very busy, pot rings, hundred fruit orchards, fresh fruits, etc., all occupy a place in the list of the top 100 chains.

They are like beams of light, illuminating the long night of China's chain retail.

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