Urgently seeking China's retail industry development situation and countermeasures analysis ?

[Abstract] Retail format is retail enterprises to adapt to the increasingly fierce competition in the market economy product, China's retail industry has been diversified development trend, how the industry to win in the competition, business strategy positioning, focus on market shifts, retail innovation, change the profit model, etc., will become the key to maintain the competitiveness of the retail industry.

[Keywords] retail format, demand, profit model, innovation, retail format is a retail enterprise to meet different consumer demand for the corresponding combination of elements and the formation of different business forms. China's retail format can be divided into grocery stores, convenience stores, discount stores, supermarkets, hypermarkets, warehousing membership stores, department stores, specialty stores, specialty stores, home building materials stores, shopping malls, manufacturers' direct sales centers, television shopping, postal service, online stores, vending kiosks, telephone shopping and so on 17 kinds. Retail format is a product of retail enterprises to adapt to the increasingly fierce competition in the market economy, is a race of its kind, the survival of the fittest in the field of commodity circulation performance. How is the development status quo of China's retail industry? How to develop? This article will make a specific analysis.

One, the development of China's retail industry status analysis

1. Retail traditional industry --- department stores have lost the first industry position from the mid-1990s, department stores sales performance has declined significantly, from the business model, 2004, the end of the department store industrial activity units. At the end of 2004, the number of industrial activity units of department stores in the comprehensive retail industry was only 29.4%. In stark contrast, new types of businesses have begun to appear in large numbers and occupy an increasingly important position in the retail market. The situation that department stores dominated the retail market in China no longer exists. At the same time, the proportion of department stores in the retail industry shows the trend of high in the west and low in the east, indicating that in the economically backward regions, department stores still occupy a dominant position, and the development of the industry is relatively lagging behind, and the process of diversification of the industry is relatively slow. The decline of department stores is mainly due to: (1) supermarkets and hypermarkets have plundered the fast moving consumer goods with little service content in general department stores. Supermarkets and hypermarkets are close to people's lives, with large sales volume and low cost, which are especially suitable for fast moving consumer goods with low selectivity and little service content. For this reason, customers originally buy soap, toothpaste, shampoo, etc. in the comprehensive department stores, but to supermarkets, hypermarkets to buy. (2) large-scale specialized stores crowded out the comprehensive department store many hard department store goods. Professional hypermarkets operating furniture, decorative materials, lamps, household appliances, medicines, etc., due to the operation of professional, complete varieties, larger quantities, cheaper, easier to choose, and attracted a large number of customers. Comprehensive department stores for this reason, reducing the operation of many hard department stores. (3) Specialized stores, specialty stores have affected the comprehensive department store more soft department store goods. Specialty stores, specialty stores opened a large number of customers to attract the purchase of clothing, shoes, hats, bags, etc., snatched away from the comprehensive department store in some of the soft department store market. 2. to chain the development of the supermarket format to become the main industry Over the past decade, supermarkets have been maintained at more than 30% increase in the development. Such as the international "Wal-Mart", "Carrefour" and other supermarket chain enterprises and the domestic Shanghai "Hualian" and "Lianhua "Supermarket Group enterprises, its sales and profits are realized by other business enterprises can not be compared. If we look at the overall development of the industry, both domestic and foreign supermarket chains have the highest sales growth. Some data show that in comprehensive retailing, the sales of supermarkets (including hypermarkets and warehousing membership stores) occupy a considerable market share, the number of stores grows faster, and the sales scale of a single store continues to improve. in 2004, there were 17,000 units of supermarket industrial activities, accounting for 17.1% of comprehensive retailing; the number of employees was 791,000, accounting for 33.7%; and the sales volume of 262.1 billion yuan, accounting for 40.3%. At the same time, supermarkets are also developing into multiple forms (such as hypermarkets, large supermarkets, specialized supermarkets, community supermarkets, convenience supermarkets, etc.), which also make the retail industry more colorful. 3. Convenience stores, discount stores in China have more room for development Convenience store development trend Convenience store is to meet the youth, office workers, single families and other consumer-oriented retail formats, convenience stores are generally about 100 square meters in area, the main business of convenience foods, such as bread, instant noodles, newspapers, popular magazines, etc., the radiation surface of 300 m to 500 m. The convenience store is the first of its kind in the world, and it is the first of its kind in the world. The functional positioning of convenience stores is to meet the requirements of customers for immediate consumption, mainly dealing with fast-moving consumer goods. According to the statistics of China Chain Store Association, among the top 30 retail chain enterprises in 2004, the sales volume and the number of stores of convenience stores increased by 41.6% and 18.2% compared with the previous year, mainly due to the following reasons: (1) Industrialization has made the urban population denser and denser. Consumer consumption habits have changed, and consumer demand for personalized and convenient services has gradually arisen. (2) Economic development. According to international practice and practical experience, per capita GDP of 3,000 U.S. dollars is the birth of the convenience store soil. Many of China's major cities per capita GDP has exceeded 3,000 U.S. dollars, people's consumption patterns and awareness of changes in the nightlife began to be rich, and a part of the people are not too sensitive to the price of the convenience is very important. So the convenience store came into being. Its most distinctive feature is convenience. Discount stores are cheap or discount sales of household goods, clothing and other industrial supplies and take the way of self-service retail business, these two business can cater to the convenience of our consumers & thrifty consumer psychology, "suitable for China's consumption level," at the same time to meet the consumer pursuit of good quality and low price, spend less money to buy a brand-name! Consumption habits, and China's market conditions are properly connected to the industry. 4. The emergence of large-scale shopping centers and hypermarkets means that the retail industry has appeared integrated, combined development trend Large-scale shopping centers are a set of shopping, catering, entertainment, leisure, tourism, social and business functions in one to provide consumers with one-stop service integrated service body, is a regional commercial center. Now large shopping centers have become the mainstream business in Europe and the United States and developed regions. In China, many areas now have the factors needed for the survival of this type of business. Mainly include:

First, economic factors. China's GDP annual growth rate of more than 10%, such as the Pearl River Delta region's per capita GDP has reached 4,000 U.S. dollars, the amount of national savings deposits of residents amounted to more than 10 trillion yuan, with the improvement of the level of consumption of residents, leisure and shopping combined with the "one-stop" consumer demand is bound to grow rapidly. Consumers in the purchase of goods is no longer simply shopping, but need more entertainment and other factors together in the consumption pattern. Consumers began to pursue high-grade high-level high enjoyment. Therefore, it increases the demand for large-scale shopping center consumption mode and lifestyle. Second, the improvement of transportation and urbanization level. At present, in some more developed cities, the transportation system is more developed, the urbanization process is accelerated, urban residents to the suburbs to extend the level of urbanization in some areas of China has reached 72.4%, catering to large shopping centers in the location of the requirements. At the same time, with the improvement of people's living standards, the increase in private cars, for the development of suburban MALL provides an important prerequisite, data show that, from 2003 to 2006 is China's private car expansion of the period, the people's radius will reach 60 kilometers to 130 kilometers. The private car has become the transportation tool of a considerable number of people, making it possible for people to go to the suburbs for shopping, entertainment and leisure one-stop consumption. Third, the introduction of urban planning concepts. China introduced the concept of "use zoning control" from abroad, dividing land use into commercial, residential, and industrial zones, and then regulating the types of buildings to be used in each of these zones, which led to the emergence of large-scale commercial spaces (e.g., department stores, shopping malls). and shopping centers) began to appear. Fourth, retail accordion theory embodies. In the retail accordion theory, it is believed that in the process of retail development, there exists a variety of goods from the integrated to specialization and then to the integrated cycle of the process, each cycle is not a repetition of the past, but to give a new connotation, so as to appear in different retail formats. According to this theory, the development of retail formats in the United States can be seen as: grocery stores (integrated) - specialty stores (specialized) - department stores (integrated) - convenience stores ( Specialization) - shopping centers (integrated). China's retail format development history also presents the development trend of retail accordion theory. 5. Store-less retail mode has quietly entered the daily life of urbanites Store-less retail mode refers to the retail mode in which goods are not sold through stores and are directly delivered to consumers by manufacturers or merchants. China's current major shopless retailing modes are TV shopping, mail order, online stores, vending kiosks and telephone shopping. The current shopless retail mode has the ability to challenge the traditional business model. According to some information, one of the largest online retailers in China, Dangdang.com, had total sales of RMB 120 million in 2005, of which online sales accounted for RMB 80 million, with a gross profit margin of 25% for the business as a whole. in the first half of 2006, the company's total sales exceeded RMB 100 million, 1.8 times that of the same period last year, and could realize RMB 240 million for the whole year. For the whole year, it can realize a sales target of 240 million yuan. According to Shao Yibo, Chairman and CEO of eBay, there are currently 3 million people shopping on eBay every day, with 35,000 items traded. According to statistics, sellers on eBay sell a Chinese painting every 5 minutes, a brand-name lighter every 4 minutes, a watch every 3 minutes, a stamp collection every 1 minute, a cell phone every 1 minute, a pair of sneakers every 30 seconds, a piece of jewelry every 30 seconds, and a T-shirt every 10 seconds. The development of shopless retail business has certain inherent advantages, which are manifested in: (1) the location is not constrained. Relative to the traditional tangible stores, for the store site selection, location, commercial network resources are not restricted. (2) Saving of operating costs. With the increasing development of network technology, no store retailing is usually first order and then purchase, can save from production to sales process of many links in the transaction costs, bringing a win-win situation for consumers and merchants. (3) Less risky. For individuals, online stores and other non-store retail formats have relatively low barriers to entry, more flexible operation, and even if they encounter risks, they have the advantage of a small boat with a good turnaround. (4) Adapting to the demand for convenient shopping in the Internet era. Beijing released the nineteenth "China Internet Development Statistics Report" shows that by the end of 2006, the number of Chinese Internet users has reached 137 million, accounting for 10.5% of the total population. This data also shows that for the first time, the number of Chinese Internet users exceeded 10% of the total population. In addition, the report also pointed out that the number of Chinese Internet users accessing the Internet through cell phones has reached 17 million. The number of Internet users and the number of broadband Internet users ranked second in the world, second only to the U.S., mainly young people, willing to try a variety of new shopping methods, and hope to get more convenient and faster shopping. (5) The development of online payment means facilitates people's shopping and payment. (6) There is another great feature of shopless sales - products can be introduced in great detail. Whether it is television or the Internet, a product can be a detailed introduction from multiple perspectives, which is the store these traditional channels can not do. But at the same time, no store sales model still exists fatal flaws: (1) the constraints of logistics development, the development of China's logistics industry is lagging behind, no store sales require high logistics and distribution functions. (2) Online payment problems can not be effectively resolved, cash transactions and postal remittances are more, the application of electronic money and its security needs to be improved. (3) Lack of commercial credit. Many enterprises and individuals seek short-term interests, no business ethics, lack of credit. (4) Consumers are influenced by traditional consumption habits and consumption psychology, and most of them still believe that seeing is believing, especially when selecting large items, they like to compare goods with others, and they have certain concerns about the quality of goods and the reliability of payment for goods sold without stores. China Internet Network Information Center released the "14th China Internet Development Statistics Report" shows that 16.7% of Internet users often visit shopping sites; 32.5% of Internet users sometimes visit shopping sites; 37.8% of Internet users in the last year have had the experience of online shopping. The main reasons for Internet users to choose online shopping are to save time, save money, easy to operate and to find rare goods. The top commodities in online shopping are books and magazines, computers and related products, audio-visual equipments and products, daily life, household products and services, and communication products. In terms of means of payment, 24.4% used cash on delivery; 37.9% used online payment; 18.9% used post office remittance; and 18.1% used bank remittance. This information also fully demonstrates the good status and potential development prospect of shopless sales. The development of shopless can adopt new technology to reduce transaction costs and have price advantages to promote the win-win situation between merchants and consumers; provide personalized goods and services, even customized, to attract customers to buy; increase the information to reduce the information asymmetry between merchants and customers; and improve the credit of merchants through the supervision of third-party enterprises and individuals, and so on.

6. The entry of foreign-funded retail enterprises has intensified the competition in the retail industry. The pace of foreign-funded entry into the domestic retail market has accelerated. According to the census data, by the end of 2004, the number of foreign-invested retail legal entities in China had grown to 1,669, accounting for 0.5% of all retail legal entities. Among the foreign-invested retail enterprises, Hong Kong, Macao and Taiwan-invested retail enterprises accounted for 40.4%, while foreign-invested enterprises accounted for 59.6%. There were 6,312 foreign-funded industrial activity units, of which Hong Kong, Macao and Taiwan invested retail enterprises accounted for 42.3% and foreign-invested enterprises accounted for 57.7%. According to statistics, by the end of 2004, Wal-Mart has set up more than 40 large chain stores in China, and has also set up an Asian international distribution center in Shenzhen; Carrefour has set up more than 50 chain stores in China, and is now expanding to the western region and southern China. The world's top 50 retailers in Metro, Ito-Yokado, Auchan, B&Q, Daiyong, Marks & Spencer and other dozens of retail giants have entered China, and most of the entrants have spent the recognized 5 years or so of the teething problems, and have entered into a rapid expansion stage. International retail giants have pioneered and developed supermarkets, shopping malls, warehouse stores, discount stores, convenience stores and neighborhood stores, etc., and continue to improve and innovate their existing formats according to changes in consumer demand. It can be seen that China's retail industry has been presented as the main industry, multi-industry co-existence, mutual penetration and integration of the diversified development trend. The information of the first national economic census shows that at the end of 2004, China's retail industry*** had 353,000 legal person enterprises, of which 99.5% were domestic-funded enterprises and 0.5% were foreign-funded enterprises. From the point of view of operating modes, in comprehensive retailing, department stores accounted for 39.3%, supermarkets accounted for 14.8%, and other comprehensive retailing accounted for 45.9%, which completely changed the situation of the past relatively single mode of operation, and formed a new pattern of multi-level, open-format competition and development of modes of operation. The main reasons are: (1) the business activities of retail enterprises are subject to the constraints of various factors in the limited business circle, even if it is a competitive business is also difficult to exclude the existence of other business, which is due to the non-mainstream business more or less has its own competitive advantages decided. (2) China's vast territory, large population, unbalanced economic development, residents' consumption habits are very different, the stratification of consumer groups, the diversity of preferences, consumer behavior of the diversified characteristics of China's retail business diversification trend will exist for a long time. (3) Supermarkets, specialty stores, convenience stores and other retail formats have been developed rapidly, and the variety of retail formats has been gradually enriched. With the further development of China's market economy and the emergence and popularization of new science and technology, new retail formats will continue to emerge. With the diversified development of retail business, the competition of various retail business will be intensified, how the retail enterprises can obtain the competitive advantage and good benefits in the competitive environment, and choose the strategy which is suitable for the development of each retail enterprise is the key.

Two, China's retail format of the future development strategy analysis

1. Retail enterprises should be strategic vision of the choice of format Today's retail industry in the market is facing the final consumer, to provide high quality goods and satisfactory service to obtain consumer loyalty. In the face of many consumers, the diversification and complexity of their consumer needs, such as people's requirements for shopping choices in various formats, such as shopping for important items to choose a large department store, shopping malls, hypermarkets, and general items to focus on the convenience of shopping. It has been difficult for retailers to meet consumers' needs with all lines. Successful retail enterprises should be to choose an effective breakthrough direction, that is, a certain target consumer group as a service object, to meet their needs with the corresponding goods and services. That is, retail enterprises should do a good job of market research (analysis of the retail environment, including industry conditions, competitive conditions, market opportunities, consumer demand, cultural practices, etc.), market segmentation, determine the target market, market positioning of the strategic marketing work, to determine their own position in the market. Choose which target customer groups and business positioning, will determine the retail business and how to operate. Around this strategy can carry out other elements of planning and design, including geographic positioning, commodity organization planning, pricing strategy, service policy and technical support.

2. The development of retail enterprises should be transferred from urban commercial centers to urban communities or suburbs, and from the primary market of large cities to the secondary and tertiary markets of small and medium-sized cities. With the intense competition and saturation of retail business in large urban commercial centers, the market opportunities have been gradually reduced, while urban communities or suburbs and small and medium-sized cities still have large market opportunities. In order to obtain more reasonable profits, retail enterprises should accelerate the development of new markets, choose different formats from the urban commercial center to the community transfer, from the big city primary market to small and medium-sized cities, the transfer of secondary and tertiary markets.

3. Retail enterprises should increase the innovation of commodity retailing In order to more accurately meet the needs of the target market, retail enterprises should constantly adapt to market changes, adjust the commodity structure accordingly, form the focus of commodity business and characteristics, pay attention to the application of modern science and technology, and increase the innovation of retailing in order to better attract consumers.

(1)Adjustment of commodity structure to form the characteristics of commodity business, establish the main commodity, will form a new profit growth point. Such as supermarkets have changed the focus of business, such as "fresh to strengthen the type of" supermarkets, "food to strengthen the type of" supermarkets and so on. (2) The modern retail industry should be characterized by high technology to improve its quality and core competitiveness of enterprises. It should adopt high-tech technology and management means to improve its internal resource allocation and external links, facilitate the calculation of management indicators, sensitively detect market changes, and improve the retail industry's ability to adapt to and expand the market. 4. Transformation of the profit model of retail enterprises Retail enterprises should actively change their profit model from "asking manufacturers for profits" to "optimizing the supply chain and enhancing the brand to earn a premium". With the expansion of retail enterprises from primary market to secondary and tertiary markets, the development from regional to national, the globalization of procurement, the establishment of a perfect high-level, high-efficiency distribution system, the control of logistics costs will become a new profit growth point for enterprises. Retail enterprises should explore the supply chain system and distribution model suitable for their own, such as self-built, using the upstream enterprises with the supply chain or other partners *** with the construction of distribution centers, renting third-party logistics and distribution facilities, or simply outsourcing all the enterprise's distribution business to strategic partners, etc., optimize the distribution of inventory among manufacturers, suppliers, and sellers in time, space, and variety of structures to speed up and quickly seize the control of the logistics link. Optimizing the distribution of inventory in time, space, and variety structure among manufacturers, suppliers, and sellers, and accelerating and rapidly seizing the commanding heights of the logistics link will be the key to the sustainable development of retail enterprises and the conversion of their profit models. At the same time, retail enterprises should have brand awareness, improve the credibility of the enterprise to create a commercial enterprise brand to drive the sales of goods, improve the added value of goods, and enhance the attractiveness of the target customers.

In summary, China's retail industry has been diversified development trend, the healthy and harmonious development of the retail industry will depend on the retail enterprise's strategic awareness and the choice of the correct competitive strategy.

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