Traditional market share

Io said. Com, on July 1 day, Wal-Mart publicly showed the Dongguan South China Fresh Distribution Center to the media, including the fresh product inspection room, forklift charging room, cold storage area and transportation monitoring room. Its intelligence and overall scale are completely at the leading level in the industry, which is tantamount to showing Wal-Mart's determination and strength to enter the fresh food field.

It is understood that Wal-Mart has invested 700 million yuan to build a distribution center in South China, which is its largest single investment since it entered China. Judging from the amount of investment, we can see that Wal-Mart attaches great importance to fresh food projects.

However, Wal-Mart knows very well that it is not enough to increase the competitiveness of fresh products or other daily necessities in retail. The most important thing is to strengthen the management ability of the whole supply chain.

Therefore, while opening to the media, Ryan McDaniel, senior vice president of Wal-Mart's supply chain in China, introduced that Wal-Mart will invest 8 billion yuan to upgrade its logistics supply chain in the future, including building or upgrading more than 10 logistics distribution centers.

In fact, this is not the first time that Wal-Mart has made a major business strategy adjustment in the China market in recent years. In the early years, Wal-Mart acquired Store 1 and laid out its online business, seeking to stop the decline in performance. Then invest in JD.COM, reach deep strategic cooperation with JD.COM, and accelerate the integration of online and offline business; So far, Wal-Mart has made great efforts in fresh food business and supply chain restructuring, and strived to establish new competitive advantages.

From the frequent adjustments of Wal-Mart, we can feel that the life of Wal-Mart in China is not easy, and it has even become "passive". For example, Wal-Mart, which is good at hypermarkets, finally began to spend "blood" to open up online retail channels.

It is worth noting that it is nothing new for large-scale foreign retail enterprises represented by Wal-Mart to survive in the China market.

Half a month ago, Carrefour, the second largest retail chain group in the world after Wal-Mart, just sold its China market business to Suning. Previously, many well-known foreign retailers such as Tesco, Lotte Mart and Takashimaya also chose to sell their business to other domestic competitors. In other words, the era when foreign brands dominated the domestic retail market has passed.

Then, why are the foreign retail brands that once attracted the attention of many consumers in China suddenly collectively "dumb"?

Some people may say that acclimatization is the main reason for the closure of foreign retail brands. However, this reason is too simple. The time for foreign retail brands to enter China is not short. For more than 20 years, they have experienced a stage of rapid development in China, and now they have lost on a large scale in China. The reason is worth exploring.

Because there are many foreign brands, the author will choose Wal-Mart mentioned at the beginning as an analysis case.

Speaking of Wal-Mart, I believe most people are familiar with it. Its biggest operating feature is the hypermarket mode and low price every day. Not only are there a wide range of products, but they are also affordable, even cheaper than most competitors. These scenes are instilling in consumers Wal-Mart's business philosophy of "saving money for consumers and making them live a better life".

At present, Wal-Mart's business model seems normal, but for China, where the retail industry was just starting at that time, its business model has greatly attracted consumers.

Since 1995, the retail industry in China has gradually opened to the outside world. It was during this period that foreign retail brands such as Carrefour, Wal-Mart and Metro, which we are familiar with, also entered the China market.

1In August, 1996, Wal-Mart opened two new stores in Shenzhen, which soon set an amazing sales record: the average daily turnover of both stores exceeded 6,543,800 yuan, with the highest exceeding 2 million yuan.

Subsequently, Wal-Mart began to discover a pattern. As long as the store is opened in the bustling area of a big city, there will be two lively scenes: the store has not yet opened, and the door is already full of customers waiting for shopping; In the course of business, the cashier is always crowded with customers waiting to check out.

Under the influence of the money-making effect, Wal-Mart began to compete for territory. Before 2004, Wal-Mart only opened 27 stores. By 20 10, Wal-Mart had opened 2 19 stores, and then surpassed Carrefour China, which has always been the supermarket leader, in terms of the number of stores and sales. Correspondingly, the ranking of Wal-Mart in China supermarket chain jumped to the third place in the market.

However, the sudden change of consumption environment in China caught Wal-Mart, which is only good at traditional retail, off guard. With the rapid development of e-commerce industry in China, consumers' shopping consumption is no longer limited to physical retail. The convenience of e-commerce has also greatly expanded the online shopping consumer group, while the market share of traditional retail has been "eroded", especially the arrival of mobile Internet based on 4G, which has accelerated this trend.

It was also from 20 12 that the news of the closure of supermarkets and department stores began to spread, and both foreign and local chain brands were affected. According to statistics, as of 20 17, Wal-Mart closed 68 stores in China. This is highly consistent with the timeline of the rise of domestic e-commerce giants such as Ali and JD.COM.

The consumer market has changed not only the sales channels, but also the consumers.

In the past, consumers would be happy to spend their leisure time in traditional supermarkets by shopping, but now with the continuous improvement of income level, consumers' spiritual needs are also constantly improving, and they are more willing to go to a comprehensive shopping center that integrates leisure, shopping and entertainment. However, foreign retail brands are still based on solving the basic needs of life, and there is not much adjustment and innovation, so they are naturally unpopular with consumers.

The rise of consumer groups with the post-80s, post-90s and post-00s as the main body has brought shocks and new challenges to traditional hypermarkets such as Wal-Mart.

Influenced by multicultural and technological changes, the consumption patterns of these new groups are obviously different from those of the older generation. They emphasize personal experience and subjective feelings, and they are constantly changing, which means that Wal-Mart, which focuses on the traditional hypermarket model, may find it difficult to completely "keep up" with the younger generation of consumers.

In the process of Wal-Mart's constant "frustration", local retail chain brands in China are rising rapidly. In their early years, they were followers and imitators of foreign brands, but with the increasing strength, they are also looking for opportunities to break through foreign brands and create new competitive advantages. One of the most commendable brands is Yonghui Supermarket.

In 2007, Yonghui Supermarket was only a local chain supermarket brand in Fujian, and its sales income at that time was only one tenth of that of CR Vanguard, the boss of chain supermarkets. However, the business model of focusing on the sales of fresh agricultural products has made Yonghui an industry leader in modern supermarkets and fresh supermarkets.

The high consumption of fresh food has always been a headache for store and supermarket operators, but the difference is that fresh food management is Yonghui's biggest feature and competitive advantage.

It is understood that the fresh business area accounts for as much as 40% in the stores of Yonghui Supermarket, which also determines that Yonghui Supermarket can supply enough agricultural and sideline products to the greatest extent. In addition, the fresh consumption rate of Yonghui Supermarket is only a little over 2%, which is the lowest in the industry, while in reality some supermarkets can reach as high as 20%.

With the sales of fresh products, Yonghui has achieved a miracle of more than 50% sales, and the scale is getting bigger and bigger. By the end of 20 18, Yonghui Supermarket ranked 4th among the supermarket chains in China, only next to CR Vanguard, RT Mart and Wal-Mart, with sales equivalent to 75% of CR Vanguard.

So, how did Yonghui Supermarket do it? The secret is that Yonghui Supermarket holds the whole fresh food supply chain in its hands, including fresh food procurement, transportation, warehousing, distribution and other links, which also makes the fresh food it sells have a strong competitive advantage over other supermarket brands in price and freshness, and even makes money cheaper than Bazaar.

In contrast, most domestic supermarkets have not established a fresh omni-channel supply chain, mainly relying on wholesalers, including Wal-Mart before.

In fact, Yonghui Supermarket is only the epitome of the rise of local retail brands in China, and other emerging large supermarket brands include BBK and Eurasia Supermarket. Although they will encounter great changes in the market environment like foreign brands, due to rapid adjustment and response, they will not be in a downward stage in market competition.

However, no brand can always be in an invincible position, such as foreign retail brands that are frequently acquired. In order to truly maintain the competitive advantage, we must adapt to the changes in the consumption environment and make accurate adjustments in time, especially under the current consumption concept of advocating diversity, quality, experience and enjoyment.

Unlike Carrefour and Lotte Mart, which withdrew from the China market, Wal-Mart still exists in the market today, on the one hand, because its rich variety of goods and affordable prices can win the trust of consumers and it is in an advantageous position in the market competition; On the other hand, in recent years, Wal-Mart attaches great importance to the innovation of e-commerce and new retail to adapt to the changes in the consumption environment, and has achieved certain results.

Under the background that fresh food and new retail have become the theme of retail consumption, will Wal-Mart, which is constantly increasing its investment, finally stage the myth that foreign brands will rise again in China? We might as well wait and see.