This article**: People**Overseas Edition.
Reporter of this newspaper Kong Dechen.
People** Overseas Edition (2024-01-02 11th Edition).
The original 650ml craft beer sold for 49 yuan was reduced to 13 for a 1-liter bottle9 yuan, 950ml of fresh milk from the previous 15 yuan to 99 yuan, toast ** as low as 6$9 ......Many consumers have found that some retailers in large and medium-sized cities are starting a round of commodity price reductions, and many supermarkets operating online and offline at the same time such as Hema have many products offline or even lower than online.
Since last year, some large supermarkets have experienced operational difficulties, and a large number of stores have been closed or transferred. At the same time, many supermarkets have started a new round of reform around discounts. Can "discounting" create new advantages for brick-and-mortar stores?How to ensure that the quality is not downgraded?
Mid-to-high-end supermarkets push for discounts.
"Moving Mountain Price" and "Tug-of-War Price" - When it comes to the recent new round of price reductions in supermarkets such as Hema and other supermarkets, many consumers feel that "they have earned it".
I love durian very much, and since Hema began to launch the 'Moving Mountain Price', I once bought durian cakes that I felt 'painful' and became more accessible to the people. From 88 yuan to less than 40 yuan a piece, the discount is really big. Jia Xiyuan, who lives in Shanghai, told reporters, "I heard that the price of beef will also be reduced, and I am looking forward to it." ”
There are many products covered by the "moving mountain price". The reporter saw in Hema that from the brand food that is available in various supermarkets, to homemade specialty foods such as Swiss rolls, fresh meat shortbread, to daily necessities such as face towels, and medium and high-end ingredients such as imported beef, thousands of commodities have joined the "army" of price reductions, and the price reduction is more than 30%.
The market also gives the most direct feedback. Taking craft beer as an example, after a significant price cut, in October last year, the sales volume of Freshippo's "1-liter box Mad German wheat white craft beer" increased by 110% year-on-year.
In the past two years, the supermarket industry has been fiercely competitive. Online stores divert a large number of consumers, and various offline formats such as convenience stores, large supermarkets, membership stores, and expiring merchandise stores compete for consumers. In this context, the mid-to-high-end supermarkets that focused on "high quality and high price" in the past few years are facing new challenges.
Chen Liping, executive dean of the Institute of Consumer Big Data of Capital University of Economics, told reporters that from a global perspective, the consumption of middle-income groups has become more rational, emphasizing "high buyers" - consumers are willing to pay for the quality and function of goods, but are not willing to pay for the concept of bells and whistles and brand premium. In this case, the high quality-price ratio has become a key factor in consumption, and it has also created new business opportunities.
In the past two years, the rapid growth of European and American brand membership stores such as Sam's, Costco and METRO shows that middle-income groups in China's big cities have a large demand for high-quality, healthy and high-quality-price food. Chen Liping said that in addition to the regular mass food, these consumers also hope to buy special foods from all over the country, such as Jiangnan "Water Eight Immortals" in Beijing, Yunnan seasonal wild vegetables, and also have a high interest in global cuisine, such as Thailand's coconut green, Australia's beef, etc. This means that there is huge room for development of comprehensive food discount stores for middle-income groups, and China's supermarket industry is also ushering in new opportunities, and it is necessary to promote product differentiation and vertical integration of the first chain to meet new needs.
Vertical chains reduce costs.
Due to the high cost of rent, utilities and other costs in offline stores, offline stores should be more expensive than online" - this is the inherent view of many consumers. However, the advent of offline exclusive discount prices has changed this "tradition": at Hema Fresh offline stores, the offline exclusive price of a 350ml bottle of Thai Cocoa Mai coconut water is 39 yuan, 5 on the app$9 ......In the exclusive discount area of the store, there are many other categories of products, including some imported brand products such as Lion King toothpaste, Red Bull drink, Thai elephant brand soda, etc., as well as Hema private brand hot pot base and other products, which are cheaper offline than online.
How is this done?"The main thing we 'cut' down is the online cost. The relevant person in charge of Hema told reporters, "The high cost of online is that the goods are placed in the warehouse, and all aspects of display, picking, packaging, tallying, and distribution all require money. ”
The person in charge told reporters that taking Lion King toothpaste as an example, due to the small number of sales, Hema needed to share the container with other retailers, and there were trading companies as middlemen to make the difference, and there was no LCL link under **, which saved this cost. "The difference between the offline discount price and the price is actually these costs. We turn this part of the cost into a reduced **, saving this money to consumers. At present, Hema has started a comprehensive discount, covering more than 5,000 categories, and in the future, Hema will reduce the product categories and explore a more efficient way of discounting. The person in charge said.
Exclusive discount prices are launched offline, and online products** are also maximized in step-by-step exploration.
Initially our beer was 650ml sold for 49 yuan, Hema Purchasing approached us and offered to sell a liter bottle, 19$9 ......At the time, I thought, how is this possible?Cao Hui, chairman of the board of directors of *business company Tesla, recalled, "Two years ago, Hema used '38 1L tinplate cans' in craft brewing, which is a type of cans that no one has used in the beer industry. Today, this once-little-known Hema craft beer has become a hit with a monthly sales of nearly one million cans, and this can type has also been widely used by the industry. ”
Behind the reduced selling price is the cost of picking out little by little. "Reducing the cost of craft brewing is a hard bone to gnaw, and good craft brewing must use the best raw materials, and the cost of raw materials will not be saved. Cao Hui introduced that in order to further optimize the cost, Tesra decided to build a vertical ** chain of craft beer with Freshippo.
The first is logistics. "We did the logistics company thing all over again. Cao Hui introduced that in the case of the continuous expansion of the cooperation volume and the increasing certainty of the order volume, the company began to establish long-term cooperation directly with the cold chain fleet, gradually breaking through the geographical restrictions of cold chain logistics, and expanding the distribution scope from East China to the whole country. Secondly, packaging materials are also a large part of the cost of craft beer, due to the increase in order volume and the optimization of the procurement mechanism, the cost of packaging materials for Hema craft beer has been reduced by 207%。
Create a higher quality-price ratio.
What is the impact of supermarket discounts on ** merchants?
The discount transformation will not affect the profits of the merchants, and the construction of the vertical chain is not to maximize the interests of Hema at the expense of the interests of one end. Zhang Yu, purchasing director of the finished product department of Freshippo, said that behind this is the further cost reduction brought about by scale and digitalization and the ultimate benefits brought by the vertical ** chain, which is also a win-win situation for both sides of the retail supply team.
Focusing on improving the competitiveness of the company, Hema will start to launch the "Yishan Price" at the end of July 2023, and promote the discount reform from mid-October. "I went to Poland, England, Italy, and Spain to understand the situation. Hou Yi, CEO of Freshippo, told reporters that he found that discounted operation has become a global retail trend, and it has also become a road of reform that Chinese retail must undergo.
China's retail market is vast, and discount supermarkets for middle-income groups are a huge blue ocean market. Hou Yi believes that compared with foreign markets, the online service of China's retail market is a major feature: the "30-minute delivery" service for online APP orders pioneered by Hema has raised the threshold of China's retail services, and it also means that China's retail is facing comprehensive and Internet-based competition, including online and offline.
In Hou Yi's view, it is not comprehensive to understand discounting as doing low prices and fighting the best war. "Let good goods not be expensive, and the best products and high-end products are the best things. Transformation discounting is by no means a cheap route, and Hema will not give up quality. Hou Yi said.
In the face of this discount change, many first-class merchants are optimistic and actively cooperate with Freshippo. At present, the second batch of 19 cooperative enterprises that have cooperated with Hema for more than 3 years and a scale of more than 100 million yuan have been awarded the title of "Box Brand". At the same time, a number of enterprises such as Yunling Xiansheng, New Hope, Kashi Dairy, and Jinmailang have reached a strategic cooperation of nearly 10 billion yuan with Freshippo. "Big brands have advantages in scale, technology and food safety, and they are still very important partners of Freshippo, with the goal of allowing consumers to obtain a higher quality-price ratio and conform to consumption trends. Hou Yi said.