With the changes of consumer demand and market environment, new consumption formats emerge one after another. Looking for new volume has become the focus of traditional retail enterprises. China's retail industry has gradually developed from a single format to diversification. At present, some large retail enterprises have tested the water, discount stores and other formats.
According to a number of media reports, Suning.Com Co.Ltd(002024) 's discount supermarket opened recently. It announced that it would join after the Spring Festival holiday, focus on Maanshan, develop the Jiangsu, Zhejiang and Shanghai markets simultaneously, and plan to open 100 stores in 2022. The reporter of China Business Daily found that in addition to Suning, enterprises including Jiajiayue Group Co.Ltd(603708) , Huaguan, Renrenle Commercial Group Co.Ltd(002336) , HEMA and so on have also arranged the format of discount stores.
In this regard, Liu Hui, chief consultant of Beijing Zhaoyi Retail Management Consulting Co., Ltd., said that in recent years, in addition to convenience stores and warehouse membership stores, discount stores have also become one of the development directions of retail enterprises, which also reflects the process of diversified development of the retail industry.
Wen Zhihong, general manager of Hehong consulting and chain operation expert of Hejun consulting, believes that "with the development of economy and market, consumers' consumption concept will be differentiated, and some will flock to the middle and high-end, but the demand for low-end and low price still exists. Discount stores meet the demand of consumers for sex price ratio, which also means that the format of discount stores has its development space." But he also stressed that "discount stores are not the only direction for retail enterprises, but to find their own transformation path."
layout behind the discount store
It is no accident that a number of large retail enterprises layout the field of discount stores, which is related to multiple factors. From a macro perspective, with the rapid development of the national economy, the increasing diversification of consumer demand, the birth of more emerging channels and emerging brands, the retail market has gradually shifted from the incremental market to the stock market, and the market pattern of traditional supermarkets has changed.
According to the analysis of Hu Chuncai, a retail management expert, "In recent years, e-commerce platforms have developed rapidly and further expanded in scale. Compared with physical stores, e-commerce platforms have obvious price advantages, and they are also full of tricks in service experience and marketing means, crowding out the share of some traditional supermarkets. In addition, the sustainable development of community group buying and fresh E-commerce platforms in recent years has also diverted some customers of the original traditional supermarkets. Multiple factors The superposition makes the performance growth of traditional supermarkets in the past two years weak. "
Therefore, retail enterprises urgently need to seek new increment. In fact, retail enterprises have made continuous efforts for transformation and development. Since 2021, Carrefour and HEMA have actively arranged warehouse membership stores. For example, Carrefour plans to expand 100 paid membership stores in the next three years. In addition, enterprises are also constantly investing in fine operation and digital transformation.
According to Hu Chuncai's observation, "Traditional supermarkets are developing in two directions. One is to upgrade the store experience, such as pangdonglai and Yongwang, and attract customers to offline stores with good services. However, for many enterprises, the management of supermarkets that focus on experience is relatively difficult. The other is to develop towards warehouse member stores. Standardized replication is relatively easy, but if the entrants become more and more popular More, the competition will become fierce, and the market share may be diluted. "
"With the weakening competitiveness of hypermarkets, discount stores can become one of the ways out of the transformation, especially some enterprises facing the middle and low-end customer base are also trying to transform in this direction. At least 60% or 70% of the original customer base of hypermarkets is consistent with the customer base of discount stores." Hu Chuncai said.
In addition, the layout of discount stores by many retailers is also related to the good prospect of the business. According to the report on in-depth market research and investment strategy prediction of China's discount store industry from 2022 to 2027 issued by Academia Sinica Puhua Research Institute, discount stores will be the fastest-growing business in the next 10 years, with a compound growth rate of 5.6%, higher than 2.5% of hypermarkets and 5.5% of convenience stores. At the same time, discount stores are also favored by capital. Tianyancha shows that since 2021, many brands, including prosperity market, little elephant life and ottle, have obtained financing one after another. Among them, the head brand good sale has obtained five rounds of financing so far.
Potential opportunities in discount store format
Many respondents believe that the good momentum in the field of discount stores provides development opportunities for large retail enterprises. On the contrary, the participation of large retail enterprises is also good for the upstream and downstream of the industry. Wen Zhihong said that all suppliers and retailers will have the demand for destocking, which also gave birth to the emergence of all kinds of discount stores. At the same time, the entry of large retail enterprises may promote the benign development of the discount store industry.
Specifically, the situation in the field of discount stores is good, which is reflected in the increase of terminal retail stores on the one hand, and the return of upstream small and medium-sized manufacturers and brands offline on the other hand. Today, the traffic fee of e-commerce platform is becoming more and more expensive. According to the report of Tech planet, a media company of 36 krypton, "if you want to maintain high growth, even if the input-output ratio of a brand has reached the top level in the industry, the traffic fee should be maintained at more than 50% of the expenditure." Small and medium-sized brands may give up online channels and return to physical stores because they can't afford high traffic fees and promotion fees.
"The return of small and medium-sized brands has enriched the product categories of discount stores, and the ex factory price is low." Liu Hui said, "in addition, in the context of the epidemic, the export of some factories is limited. Large retail enterprises use their capital flow advantages to quickly flow these products into their discount stores, helping enterprises improve cash flow and stimulating the internal circulation of the economy."
As we all know, the impact and impact of e-commerce industry on physical retail industry are becoming stronger. According to the reporter, there is a saying in the discount store circle that "if the price of the physical store is lower than that of the Internet, you can pull the customers previously robbed by the Internet back to the physical store". It can be seen that if the low price is realized, it may provide the possibility for traditional retailers to obtain more consumers. An insider told reporters that the price of discount stores is 20% ~ 30% lower than that of traditional supermarkets, and some, such as bigoffs, are lower than that of e-commerce platforms.
Liu Hui told reporters, "at present, discount enterprises have certain capital and strength. What they want to compete for is actually the customer base of small stores in Taobao and pinduoduo platforms. Through large-scale procurement, they can realize lower prices and transfer these benefits to consumers."
Large scale purchasing also means that discount stores need to streamline SKUs. According to Bao Yuezhong, a new retail expert, discount stores get very low purchase prices by streamlining SKUs, so as to reduce operating costs. For example, there are more than 10000 SKUs in general supermarkets, while the number of SKUs in discount stores is generally about 4500.
"Large retail enterprises have advantages in entering the field of discount stores, which are reflected in the improvement of supply chain, strong brand bargaining power and rich operation experience. They have obvious price advantages." Wen Zhihong said.
However, according to Hu Chuncai, in fact, the gross profit margin of discount stores is not high, which is generally 5 points lower than that of traditional merchants. Why does the low gross profit margin attract the layout of giants? Liu Hui said, "on the one hand, some enterprises still have profit space by taking the road of small profits and quick turnover. In addition, they can also increase their income by collecting membership fees; on the other hand, the transformation of traditional supermarkets into discount stores actually makes up for the gap in the previous business model." He further explained, "the business models of traditional supermarkets and discount stores are different. In short, traditional supermarkets have a wide range of goods to meet the needs of consumers for one-time shopping, while discount stores have few goods to meet the needs of consumers for discounts.
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China discount model still needs to be polished
As an imported product, the discount store model is still in the exploratory stage in China. Although foreign brands have been relatively mature, the development of dia Tiantian and biyide in China has still encountered "acclimatization". Due to the differences in supply chain and commodity structure outside China, there may not be much experience in replicability.
Bao Yuezhong said that there are great differences between the foreign market and the Chinese market because of their own customer characteristics and communities. Different business soils are suitable for different development models. The discount store model is still in the preliminary development stage in China. It remains to be seen whether a business model truly suitable for China can be explored in the future.
According to the reporter's observation, the traditional supermarket entry discount stores do not simply discount goods, but integrate the warehousing membership model with discounts, such as Jiajiayue Group Co.Ltd(603708) , Huaguan, Renrenle Commercial Group Co.Ltd(002336) adopt the warehousing discount model, reduce costs and increase efficiency through direct purchase of origin, warehousing display, optimization of logistics, etc. According to the Changjiang Securities Company Limited(000783) report, under this model, the commodity pricing of Jiajiayue Group Co.Ltd(603708) discount stores is about 10% ~ 15% lower than that of Jiajiayue Group Co.Ltd(603708) ordinary supermarket stores.
Suning did not disclose much information, but only publicized that the discount supermarket is a comprehensive supermarket focusing on discount goods. It is understood that Carrefour previously acquired by Suning once briefly tested the water of discount stores in 2017. The previous experience of Carrefour may also provide reference for the development of discount supermarkets. However, now the retail environment is complex, superimposed with high rent and labor costs, and the competitive pressure is not small. In this regard, the reporter sent an interview letter to Suning to ask for solutions. As of the press release, no reply has been received.
With regard to the future development of discount stores of large traditional supermarkets, Hu Chuncai stressed, "enterprises should have their own brands like Wal Mart and Costco, and they should be unique and popular products, or the product quality is better than the market, or focus on standard products. Compared with e-commerce, the price advantage is not obvious, so it is difficult to achieve long-term development."
Liu Hui suggested that if these large retail enterprises want to enter the field of discount stores, they should first accurately locate, develop in combination with China's trend, and find a road suitable for their own development.
