**: Zinc Finance (ID: xincaijing) Author: Chen Yan.
Xuchang is located in central Henan, a fourth-tier city in China.
There is a considerable number of tourists, who have taken the high-speed train for four or five hours, dragging a suitcase, just to see the so-called "ceiling" of Chinese supermarkets. On New Year's Day this year, Xuchang received a total of 1.96 million tourists, of which 1 million people came and went to Fat East, and the original 5A-level scenic spot Cao Wei Ancient City only received 3180,000 people.
In the past few days after the opening of the New Year, the customer flow of each store has increased several times, and Fat Donglai had to issue an apology, saying that he would limit the flow management.
There are many red shops. Two days ago, some netizens broke the news that the employees of Fat Donglai Food City quietly squatted down to taste noodles and stirred in the pot with unwashed chopsticks. After the investigation, it was found that when the employees made the staff meals, they did not follow the standards. Fat Donglai immediately dismissed the employee, gave bonuses to the customers who broke the news, and sent gifts, which once again sparked heated discussions.
In fact, in the past year, Fat Donglai has been a frequent visitor on hot searches, such as "a down jacket only earns 3 cents", "sweeping snow on customers at the door" and so on. Its well-known welfare benefits are also regarded as "dream intelligence" by many workers: a monthly salary of seven or eight thousand, only 7 hours a day to work, employees take 140 days of leave every year, and leave is not allowed to be ...... without approval
It's just that Fat Donglai has not run out of Henan so far, and has only opened more than ten stores in Xuchang and Xinxiang. For more people, it's more of a distant business myth.
Provide "Haidilao-style" ultimate service
To a certain extent, Fat Donglai is like the "Haidilao" in the supermarket industry. In the matter of "winning people's hearts", Fat Donglai has his own set.
It has snowed heavily in Henan this year, and in order to make customers feel comfortable, Fat Donglai has specially arranged staff to help customers dust snow at the entrance of the supermarket. In the parking lot of Fat Donglai, there are also employees who use blowers to remove snow for cars and cover the trams with raincoats.
In the bathroom, which is claimed to have spent millions of dollars, the faucets are all Dyson wash-and-blow styles, and cotton swabs, hand cream, hairpins, small combs are placed on the washstand, and feminine products are also intimately prepared. There are many similar details, such as the peeler next to the orange, the magnifying glass next to the drink, soy sauce vinegar, cooked food and other products, the freezer with anti-low temperature silicone gloves, and the plastic bag with a hand wetter for easy access.
In contrast, even if supermarkets such as Yonghui and Carrefour have also entered the Chinese market for more than 20 years, they still can't do this. They still follow the logic of traditional supermarkets, and the main purpose of consumers coming to supermarkets is to buy things, and as for services, it is almost fine.
In fact, Fat Donglai's service operation is not complicated, and the reason why it is popular out of the circle is to catch up with the trend of new consumer trends. Nowadays, consumers go to the supermarket, not only to buy things, but also to enjoy the process of "shopping". Consumer demand has also changed from a single product function to a more diverse value demand.
Walking into Fat Donglai, you can feel a strong sense of contrast. The outside of the supermarket is just an ordinary fourth-tier city, and the inside is another world entirely. The staff are very enthusiastic and give emotional value, and the consumers who are in it feel the beautiful imagination of life.
If Sam's, who has been stationed in first- and second-tier cities for many years, relies on the way of "entering with a card" to make consumers feel treated differently, then Fat Donglai is a different way, finding its own positioning, giving consumers a sense of experience, and allowing a fourth-tier city to grow a supermarket with mid-to-high-end positioning.
At the end of the day, the logic of the retail industry is to keep consumers satisfied, to spend repeatedly, and then to make money. Many of Fat Donglai's seemingly anti-commercial business logics actually capture the hearts of consumers and maximize the brand power.
**Transparent system
It is worth mentioning that Fat Donglai has an almost naked "honesty", as if he is afraid that consumers will suffer a loss and be fooled.
Since the past two years, Fat Donglai has adjusted the price tag of some products, and some clothing, shoes, hats, fruits and other products have been marked with the purchase price. Some time ago, some netizens posted a down jacket from Fat Donglai with a price tag**, which clearly stated that the purchase price was 4987 yuan, the price is 499 yuan, and the profit of one piece is only 0$3. At that time, Fat Donglai responded, this is a ** profit-making commodity, and Fat Donglai has been making a lot of profits in terms of clothing.
As a supermarket, boldly disclosing the purchase price of goods, although it has been recognized by consumers, on the side of peers, it is almost a "wonderful" behavior that subverts cognition. Wouldn't it be a loss to say anything outside?
But in fact, Fat Dong has a set of logic in it, relying on those products with low gross profit margins to drain traffic, small profits but quick turnover, and then drive the purchase of goods with normal gross profit margins, so as to make money. On the whole, Fat Donglai's gross profit margin is not low in the industry. A former executive of Fat Donglai revealed in an interview with ** that in 2020, the average gross profit margin of Fat Donglai Supermarket will be about 30%, and in horizontal comparison, Yonghui's gross profit margin in the same period is only 2137%。
can be done like this, the secret of Fat Donglai lies in self-picking and self-management.
Self-picked goods generally avoid admission fees, display fees, ** fees, etc., and the gross profit margin under this model will be relatively high. According to reports, Fat Donglai has established its own self-mining system, accounting for about 80%. This has exceeded the self-procurement ratio of Wal-Mart, Carrefour, Yonghui and other head supermarkets.
For a long time, Fat Donglai has been constantly seeking efficiency from the back-end and tightening costs on the first chain. Fat Donglai has formed a business alliance with Xinyang West Asia, Nanyang Wandelong, and Luoyang Dazhang, three retail enterprises, with the model of "four-party joint mining", forming a group to reduce prices in the upstream procurement link, and when the purchase volume is large, it can decline by 30%-50% year-on-year.
In addition, Fat Donglai is also actively developing its own brands, such as Internet celebrity desserts such as popping cakes and Xue Meiniang, as well as daily necessities such as dish soap and sesame oil. According to reports, the number of self-operated products accounts for about one-fifth of supermarkets, and can account for about half of the profits.
Looking back, Fat Donglai has the confidence to mark the purchase price and profit margin on the trademark, precisely because he has mastered the core chain, which others can't do.
Therefore, even if it breaks the business convention, Fat Donglai is still a money-making business.
According to reports, in November last year, Yu Donglai, the founder of Fat Donglai, mentioned in the sharing of meeting minutes that in 2023, Fat Donglai is estimated to have a revenue of more than 100 billion, a year of tax revenue of 100 million, and a profit of 100 million. As a comparison, Yonghui Supermarket, the leading domestic supermarket, has more than 1,000 stores across the country, and its operating income in the first three quarters of 2023 is 6208.8 billion yuan, but the net profit attributable to the parent company is only 05.2 billion yuan.
You can't go out of Henan, and you can't go to Beijing, Shanghai and Guangzhou
It's just that the rumored fat Donglai who is so good just can't "drive to my door".
Since its establishment in 1995, Fat Donglai has always been stationed in the base camp of Xuchang, except for opening a store in Xinxiang in 2005, he has never set foot in other cities. In 2015, Fat Donglai even wanted to withdraw from Xinxiang for a while, but he finally stayed after the hard work of consumers and the presence of the competent unit.
Fat Donglai seems to have no plans to expand at all. The fundamental reason behind this is that Fat Donglai has atypical business advantages and cannot be replicated.
Take the ** chain as an example, now Fat Donglai can maintain such a strong bargaining power, thanks to the fact that it has been stationed in Xuchang for nearly 30 years, with huge sales volume and high turnover rate. This kind of deep binding relationship with the local area may not be able to continue in a new city.
In addition, the welfare treatment given by Fat Donglai is indeed attractive in Xuchang and Xinxiang, because Henan itself has a large number of laborers, and the local salary is relatively low, so it can hire people with high salaries to ensure the quality of supermarket services. But this logic may not be true in any first-tier city such as Beijing, Shanghai and Guangzhou.
After all, the comprehensive costs such as store costs and employee benefits in first-tier cities are much higher, and there are more opportunities to choose, and the salary given by Fat Donglai is not so competitive.
Yu Donglai once said, "Fat Donglai is to be an example, and then let more people refer to and learn." But this example may be an example that cannot be replicated for the time being.
The author of this article is Zinc Finance, authorized by entrepreneurs**. If you need to**, please contact WeChat***ID: xincaijing) for authorization, without authorization, **must be investigated. ］