Undoubtedly, Fat Donglai has become a unique presence in China's retail industry. Many people think that Fat Donglai is good to employees, giving employees benefits that greatly exceed the average water in the industry, so as to stimulate the real enthusiasm and intentions of employees, and the supermarket business will be overcrowded, but in fact this is only the tip of the iceberg of the Fat Donglai model.
Culture is the sum total of the behaviors of all people within an organization, which shapes the culture, and which in turn profoundly influences the collective behavior of the organization. Why has Fat Donglai become a unique existence in the retail industry, why does Fat Donglai share business dividends with employees, and why does Fat Donglai hold customers in the palm of his hand and how to hold them in the palm of his hand?
Since April, almost all large and small media have begun to pay attention to Fat Donglai, which originated from Fat Donglai's action to help Hunan's backgammon and Yonghui supermarket. Compared with the objects they help, this is completely an unequal scale of "inversion", Fat Donglai is just a local enterprise in Henan, and BBK and Yonghui are both listed companies.
According to insiders, Fat Donglai's help is completely "public welfare action", which does not involve any costs, and even Fat Donglai employees travel to the store to help, and the travel is borne by Fat Donglai's side, which may be the most vivid Fat Donglai culture.
The fundamental problem is that the bosses, the helmsmen of the enterprise, need to "adjust" in terms of concept and consciousness, or think that the deep culture of business management needs to be adjusted.
1. Henan's specialty fat comes from the east
In many short videos, Yu Donglai's image always has short hair, a round head, and a crewneck shirt. Some of the video content is sitting and laughing with everyone on the street, and some are "pulling peanuts" in the field. Some netizens jokingly said that this person is the most famous "street slipper" in Henan.
In 1995, with the help of his brother, Yu Donglai opened a small shop in Wangyuelou, Xuchang - Wangyuelou Fat Shop (the predecessor of Fat Donglai), which is mainly engaged in tobacco, alcohol and non-staple food. At that time, fakes were rampant, and there were many tobacco, alcohol, and grocery stores like Donglai.
Yu Donglai put forward the promise of "exchanging genuine products with sincerity", not selling fakes, and treating customers and employees sincerely. Soon, the business of the fat shop was booming, and the fame was also played in Xuchang, and people from the surrounding cities and counties often went to the fat shop to buy.
Until today, Fat Donglai has become a specialty of Henan and a business card.
Southern Weekly reported in 2021 that on any Saturday afternoon, the entrance to Fat Donglai Times Square on Qiyi Road in Xuchang City was already congested, and a 300-meter-long convoy was waiting to enter. Another Fat Donglai comprehensive supermarket a kilometer away is also playing the same scene.
Many netizens said that the only drawback of Fat Donglai is that "he didn't open one in his own city". And many Xuchang people are deeply happy, and their picky shopping habits are "used to it" by Fat Donglai.
Fat Donglai is known as the "Haidilao" of the retail industry, but in fact, Fat Donglai's refinement and strictness in the three dimensions of the entire commodity supply chain management, on-site operation management and after-sales service management may be a hundred times more complex than Haidilao.
Some Zhengzhou people who drove from other places to Fat Donglai to purchase said that the first thing is "good goods" and good products, followed by good on-site service and good after-sales service. "Strict selection of good goods" is the core of the Fat Donglai model.
For service, Fat Donglai is the "gods" who spoil it infinitely. According to reports, Fat Donglai is very tolerant of "no reason to return", if the melon you buy is not sweet after eating half of it, you can also return it. According to the after-sales staff of Fat Donglai Times Square Supermarket, consumers returned a lot of goods in the early years, and now young consumers are becoming more and more targeted in shopping, and the quality is constantly improving, and the return rate and complaint rate are less than before. No-reason returns and exchanges have greatly enhanced consumer trust.
2. The core strategy of adjustment and reform from "product to service".
Founded nearly 30 years ago, Fat Donglai has never gone out of Henan, only from Xuchang to Xinxiang in 2005. So far, Fat Donglai has set up a total of 12 stores in Xuchang City and Xinxiang City, Henan Province, of which 10 are in Xuchang, the base camp.
Fat Donglai is so successful, why can't it be replicated across the country, and why can't it realize the "opening a store in your own city" claimed by netizens? Whether Yu Donglai himself doesn't want to, or the fat Donglai model cannot be replicated, this can even become a "heavenly question" that has been hotly discussed but has no exact solution in the entire Chinese retail industry.
In a video, Yu Donglai himself responded to this question, saying, "The fundamental purpose of doing business is happiness and joy, not the pursuit of how rich and how big the scale is." We believe that this is the real business philosophy projected by Yu Donglai's outlook on life, but this answer still does not give a technical solution.
A professor at Zhengzhou University believes that "Fat Donglai's business methods cannot be replicated, and the corporate culture will be diluted due to the expansion of scale." This view may be of great accuracy.
The Fat Donglai model, back to the ultimate source, is "can all employees and consumers be worthy of 100% trust and 100% reliable"? In other words, if you give employees the best benefits and give customers the best products and services, will they treat the company with the same kindness. This fundamental question, back to the concept of management, is, is human nature inherently good or evil?
Therefore, for Yu Donglai, Fat Donglai is a "school", doing his best to help others and change others, but what can be changed in the end depends on their own nature and acceptance.
On April 7 this year, BBK said on the official public account that the Fat Donglai help team has arrived in Changsha one after another, and BBK Meixi Xintiandi Supermarket (hereinafter referred to as "Meixi Store"), as the first store of adjustment, will be adjusted from various aspects such as employee salary, policy mechanism, store layout, commodity reorganization, and price optimization.
The adjustment and reform began with the improvement of employee welfare: 17 stores, including the BBK Meixi store, shortened their business hours, from the original 8:00-22:00 to 9:30-21:30, shortening the business hours by 2 hours. In addition, the wages of employees have been raised, and the salaries of sales clerks and cashiers have doubled from the original 2,000-3,000 yuan to 4,000-5,000 yuan.
Coincidentally, Lianshang.com, a Chinese retail portal that works closely with Fat Donglai, has raised all employees by 70% since the end of last year. Seeing that many netizens are not calm, they have asked Yu Donglai to "become friends" with his boss.
It is understood that since the end of April, Fat Donglai plans to use 2-3 months to transform 2-3 BBK supermarket stores. The rest of the BBK stores will also refer to the sample stores, and the follow-up will be led by the BBK team for comprehensive transformation. The stock price of BBK has also continued to rise and fall because of this news.
On May 31, Fat Donglai started to adjust and reform Yonghui Supermarket. According to Lianshang.com, Zhang Xuansong, chairman of Yonghui, said in his mobilization speech that from today onwards, Yonghui will follow Donglai brother to pursue light, quality, and love.
Yonghui's share price took the lead in resurrection, with a daily limit, and a cumulative increase of 20% for three consecutive trading days since the day before the adjustment (May 30, 2024), which shows the great influence of Fat Donglai's charm.
The Yonghui Zhengzhou Xinwan Plaza store will eliminate 70% of the products off the shelves, and then reorganize them according to the commodity structure of Fat Donglai, and the commodity structure will reach more than 90% of Fat Donglai, and the quality of goods will be improved to the greatest extent.
Fat Donglai has continuously adjusted BBK and Yonghui, and it can be found from the information disclosed by various media that it is mainly focused on improving employee treatment and adjusting the commodity structure. Improving employee well-being is understandably in order to provide better service to employees. So, in terms of adjusting the commodity structure, how does Fat Donglai give the changed stores a new commodity system?
According to the disclosure of Southern People Weekly, the biggest difference between Fat Donglai and other supermarkets is the high self-procurement and self-management strategy, so as to achieve high gross profits, implement high salaries for employees to form a corporate culture, encourage them to serve customers to the extreme, and then achieve a closed loop of high revenue.
The adjustment of the commodity system of the store lies in the fact that Fat Donglai will copy its own popular products (most of which are Fat Dong's own brands) into the store. Take the renovated BBK Changsha Meixi Lake store as an example, by the end of April, the store's product structure had reached 90% of Fat Donglai.
Service can be learned, but the construction of the supply chain of goods is not an overnight effort, Fat Donglai's goods are trustworthy because of the "hot style" formed by its own brand, and these popular models are the "inner kung fu" that Fat East can't see. Personnel in the industry said that from the source, strict control of quality, excellent quality, and in terms of price, because there is no middleman to make the difference, its own brand also has a considerable cost advantage. For the same product, once the scale is up, the cost of supermarkets choosing their own brands will be reduced by 20%-30% compared with external suppliers.
3. Return to the "rational person hypothesis" and "traditional Chinese culture"
Recently, China Entrepreneur Magazine published an article entitled ""Silly Villain" Yu Donglai", in which he wrote that he once wanted to make money frantically, and was driven by this idea to take risks, and finally fell into huge debts; He said that he was small-minded and had two suicidal thoughts; He had seen extreme evil, but he had also felt great good, and from this he received philosophical revelations about life. And he thinks, "These things that are not your own, your ability and wisdom belong to this society."
Yu Donglai's wisdom and the concept of "pursuing beauty and happiness" in business management are the result of his "too many detours and too many humiliations". And this kind of wisdom has gone beyond the norm to a great extent.
The basic laws of the operation of the market economy are based on the "rational man hypothesis" proposed by Adam Smith - that everyone makes decisions in order to maximize their own interests. However, in the seventies of the last century, Nobel laureate Daniel Kahneman found through a large number of studies that people's decision-making is not the "most rational" in many cases, on the contrary, many decisions are influenced by their own inherent cognition, thinking patterns and values, so Kahneman created "behavioral economics".
If Fat Donglai's business model is applied to Kahneman's behavioral economics theory, it just proves that Yu Donglai himself is not pursuing "self-interest maximization" - that is, he has broken away from the "economic man hypothesis", and all his decisions are based on his own "conscience" and values. He distributed more dividends that should have belonged to him to employees and consumers, which is the most attractive part of Fat Donglai's attraction.
On the other hand, it is quite practical that in recent years, many enterprises have advocated traditional culture internally, especially the popularity of "learning from Confucianism to govern enterprises". In October last year, Tsinghua Management Review conducted a special study on this topic, and one of the articles wrote:
Self-cultivation is virtue, that is, sincerity and righteousness, and its visual standard is a gentleman. The gentleman is the ideal personality image of Confucianism and has noble morals. A gentleman has the characteristics of "open-mindedness", "quick to act", "not instrumental", "harmonious and different", "Thai but not arrogant", etc., and can "cultivate to reach people" and "cultivate oneself to reassure the people". The goal of self-cultivation is to realize Wang Yangming's "conscience". As the helmsman of the enterprise, the words and deeds of the entrepreneur imperceptibly affect the employees and the society, so it is more necessary to restrain and cultivate themselves with the standard of a gentleman, which is also the foundation for achieving the higher goals of the enterprise.
Now that I think about it, from Yu Donglai's personal values to Fat Donglai's business philosophy, isn't it just the essence of the teachings of traditional Chinese culture to a large extent - the gentleman is righteous, the adult achieves himself, the poor are good and his body is good to the world, and so on.
Yes, as netizens said, Fat Donglai can't learn, what he can't learn is his philosophy and culture.