** Bohufn
Author |Chen Ping'an.
After the Spring Festival, Hema started a new job:
New measures have been implemented in the three pilot cities, and the price reduction of Hema products has been generally reduced, covering almost all categories such as seafood and aquatic products, meat, poultry and eggs, vegetables and fruits, baking, snack foods, and alcohol. At the same time, the free shipping threshold in the three places has been adjusted to 99 yuan. This is also a new attempt by Hema after implementing a new procurement model and abandoning the membership model.
In 2023, the discount format has become the most drastic change in the retail industry.
The change first happened in the snack track. When the collective of the leading snack brands is cold, and giants such as BESTORE are mired in the quagmire of increasing income but not increasing profits, a large number of capital pours into the mass snack track, and the snack is very busy, I want to come, Zhao Yiming snacks and other mass snack chain brands accelerate the pace of store opening and financing.
Not only a single vertical category, but more and more traditional supermarket players have also begun to explore discount formats. In 2023, not only the well-known Freshippo, but also regional supermarkets such as Yonghui, Xinhuadu, Jiajiayue, Zhongbai Warehousing, and Fat Donglai have launched discounted transformations in different ways.
In the past, when we mentioned discounting, we would unconsciously associate it with consumption downgrade. The previous soft discount model represented by the early good sale, which achieved ultra-low ** through the sale of expiring products and tail goods, is indeed the verification of the former to a certain extent.
However, the essence of the discount format is not simply the pursuit of low prices, but the pursuit of good goods and good prices of the "quality-price ratio".
Even if consumers are shouting on social networks "It's not that xx can't afford it, but Duoduo is more cost-effective", the opening of Sam's Club because of queuing up for the last news is obviously the best footnote to the change in consumption trends. After all, the rise of Duoduo is only due to refunds.
Spring River Plumbing Duck Prophet.
In 2023, Ping Replacement has become a popular word among Internet natives, and there are more than 2 million notes related to "Ping Ti" on Xiaohongshu, many of which are about ways to find "Ping Ti". Some people teach "online shopping to replace keywords", such as replacing "Chinese sofa" with "teahouse booth", replacing "vase" with "jar", and replacing "beauty egg storage" with "egg box".
In the consumer market, Luckin defeated Starbucks to become the first in China, and since then only nine yuan and nine coffees have been drunk; Heytea and Nai Xue bid farewell to the ** position of 30 yuan, and turned to lean over into the arms of parity; Even the cats and dogs as a platform had to fight a ** battle.
Behind the rise of replacement is the return of consumer rationality and the rapid growth of cost-effective channels. According to the latest data released by Euromonitor International, the top three retail formats in China with a compound annual growth rate from 2020 to 2022 are 30 percent of channel warehousing member stores4% and 22% of offline discount stores9% and 11 for e-commerce9%。In comparison, the global retail format data is 162%, 94% and 4% for offline discount stores0%。
Under the change of channel, the direction of the tide began to change.
Five years ago, there were more than 60,000 hypermarkets in China, but now there are only 20,000, according to Retail Circle. Among the 8 supermarket listed companies that have released three quarterly reports this year, 75% of their revenue has declined year-on-year, of which 5 companies have suffered losses, accounting for more than 60%.
At the same time, offline discount retail, which focuses on high cost performance, is on the rise.
Outlets, which are mainly based on soft discounts and direct sales models, are growing rapidly. According to the latest data released by Ole, in 2023, the growth level of China's outlet industry will be higher than 20% year-on-year in 2022, the average level of Outlet Lingxiu Development Index will be nearly 25%, and the overall scale of the outlet industry is expected to exceed 160 billion yuan.
Leisure snacks with low chain threshold, low difficulty in category application and impulse consumption attributes have also become beneficiaries. As of the end of November 23, the number of mass snack stores nationwide exceeded 220,000, and at the end of '22 the number was only 130,000.
In the past two years, almost all discount stores in China are doing discounts for the poor, just doing discounts in the sinking market, which is hopeless. Chen Liping, Executive Institute of Consumer Big Data Research Institute of Capital University of Economics, said.
Previously, the domestic discount retail form was still dominated by soft discounts. What is a soft discount? It is to sell temporary goods, tail goods, defective products, etc. at low prices. Domestic outlets and early good deals belong to this category.
Corresponding to the hard discount model, this model originated from ALDI in Germany, by streamlining the selection of products, compressing the first link, and finally achieving low gross profit and high turnover at the sales terminal.
In the face of changes in the consumption environment, retail players are also making attempts, and the most radical is Freshippo.
Since its establishment, Hema has tried more than 10 formats, including the membership model of Hema x Membership Store, Hema Fresh, and discount retail Hema Outlet. Previously, Hou Yi, CEO of Freshippo, also said: "I will not pre-envisage the future state of Freshippo, but make changes while doing it, change it if it doesn't work, and see it again after it changes." ”
In July last year, in order to be tough with Sam, Hema finally reduced the durian mille-feuille cake ** to 79 yuan by pressing down step by step, and finally reduced it to 79 yuan, and had to force Sam to follow it down to 85 yuan, with a price difference of only 6 yuan, which directly made the sales of Hema durian mille-feuille cake increase by 11 times month-on-month, and the Hema app Zhou DAU increased by 13 during the Mountain Moving War3%。
Subsequently, in October, Hema officially launched the "discount" reform, and the number of fresh SKUs of Hema was reduced from 5,000+ to 2,000+. At the same time, Hema will also eliminate about half of the products and achieve a dynamic balance of 2000-3000 SKUs by introducing 800+ new products. After the Spring Festival in 2024, more than 80 stores in Beijing, Nanjing, and Changsha will start to reduce prices, with the same price online and offline, with a reduction of up to 20%.
In order to better achieve discounting, Freshippo's internal product procurement system has been redivided into finished products department and fresh product department. The former are mostly industrially produced goods, such as food, pre-made dishes, etc., while the latter are meat and poultry orders, vegetables, fruits, etc. According to the plan, for the standard products of the finished product department, Hema will use the method of source procurement and factory customization to do it, and reduce the quality of the product in the procurement process; For the fresh product department, the method of direct procurement from the base is adopted to optimize the ** chain.
For example, Hema has also cooperated with dairy companies such as Mengniu, Yili, Guangming and New Hope to launch products exclusively for Hema channels.
In the three cities of the Hema pilot, 800g of imported raw cut eye steak dropped from 119 yuan to 699 yuan, Hema workshop pepper pork belly chicken from 599 yuan to 499 yuan, strawberry box cake from 88 yuan to 59 yuan, 1kg of chilled three loess chicken from 42$9 will come to 299 yuan, a pound of fresh sea bass from 199 yuan to 12$9 and so on.
It's not just Hema that is turning.
In June 2023, Jiajiayue, a leading FMCG chain in Shandong, opened a new format "Haohuixing Discount Store", which mainly sells well-known brands + private label goods.
In December 2023, ALDI China also officially announced its strategic adjustment, changing its previous positioning as a "community boutique supermarket" and placing more emphasis on "high quality and low quality" to launch about 100 ALDI "value-for-money" series products at the same time.
Yonghui supermarket has opened a shop-in-shop in many stores across the country, and the first Yunnan supermarket was officially opened in Kunming Century Jinyuan Shopping Center before the Spring Festival, focusing on "parity" through chain optimization and refined management.
Hubei's Zhongbai Group has opened a first-class discount store, and its model is a shop-in-shop, that is, a discount area is set up in the existing store. In addition, traditional department stores and supermarkets such as Wumart and Renrenle are testing the waters to deploy discount retail.
Retail is an ancient and slow-growing industry, in the past few decades, the traditional retail industry in China is mostly the KA model, the essence is to "rent" a place to sell things to the first business, and then charge channel fees and brand fees. According to industry insiders, in the procurement process, the first-level merchants of many commodities may only account for 50-60% of the final retail sales.
Just as the essence of e-commerce is to improve efficiency, the essence of hard discounts is to find the most streamlined SKUs on the supply side to meet the main needs of consumers, and start from the first chain to create competitive barriers through the improvement of efficiency, and provide consumers with products with high quality-price ratio.
But it's not an easy task.
On the one hand, this requires a lot of investment in the ** chain.
As of May 23, Hema has built 185 Hema villages across the country, and through cooperation with 2495 domestic ** merchants and 550+ direct procurement bases, it has opened up the upstream and downstream ** chain to achieve low-cost procurement; In terms of logistics construction, we have built 5 major hub centers, 9 first-chain operation centers, and 100+ origin warehouses and sales warehouses across the country.
Jiajiayue's Haohuixing discount store relies on its own factory and logistics system of its own brand "Yue Kee" to integrate the whole process of production and distribution. According to reports, Jiajiayue has set up 7 room temperature logistics distribution centers, 8 fresh logistics centers, and established stable cooperative relations with 2500+ manufacturers.
On the other hand, the form of discount retail is still being explored.
In October last year, after the full implementation of the discount reform, Hou Yi, CEO of Hema posted in the Circle of Friends that due to the sale of a certain milk product at a discount and low price, Hema has been "networked" by the dairy company
The recent practice of raising the free shipping threshold while reducing the price of Hema has also caused many people to be puzzled, and some consumers said that they are paying for the same price of Hema online and offline.
Lao Weiling, director of the E-commerce Research Center of Shanghai University of Finance and Economics and a distinguished researcher at the Institute of Chinese Modernization, believes that the discount combination needs to be used at the same time before and after the whole chain.
On the surface, adjusting the freight threshold is that merchants are increasing the unit price of customers, but from the table to the inside, it is also merchants optimizing transportation capacity resources and improving the economy of commodity distribution. More importantly, through the coordination of the table and the inside, the cost subsidy originally spent on transportation capacity resources will be transferred to the commodity subsidy that can benefit consumers more, which is more in line with the current consumption environment, in line with the demands of all parties in the consumer market, and also contributes to the win-win situation of all parties on the chain. ”
At present, retail companies including Sam's Express, ALDI, Pupu and other retail companies are also adjusting the free shipping threshold to optimize capacity resources.
Reference**: New distribution: The snack discount format on the tuyere is the prelude to the opening of the wave of discount retail in China.
The copyright of the first image and accompanying pictures on the cover of the article belongs to the copyright owner. If the copyright owner believes that his work is not suitable for everyone to browse or should not be used for free, please contact us in time, and the platform will correct it immediately.