The Fudi Club is stuck in a cycle of both want and want .

Text|Retail, business, finance, and business.

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In the second half of 2023, in order to adapt to market changes and improve overall competitiveness, Hema made a strategic turn of "bidding farewell to the paid membership system and fully shifting to inclusive discount reform" in order to adapt to market changes and improve overall competitiveness. At the beginning of 2024, Yonghui opened a membership store in Yunnan that does not charge membership fees according to local conditions.

A fact that cannot be ignored is that the retailers and super-enterprises that have been exploring warehouse-style paid membership supermarkets have not yet run through the profit model, which also means that from 2020 onwards, the "imported products" that were originally sought after by the domestic retail industry seem to have hit the south wall after more than three years of localization.

Among them, Fudi, as a "newcomer" in the member warehousing track, has its own Internet celebrity attributes since its birth, and has moved closer to the community at the level of operation logic and tried its best to please young people.

Essentially, the core of a warehouse membership store is goods and services. However, from the current point of view, Fudi still has the problem of "new wine in old bottles", especially the parent company's business has crossed from the boutique fresh supermarket "Vegetable Fresh Fruit Beauty" to the warehouse membership store model, and it is necessary to realize the iterative upgrade from front-end customer positioning to back-end ** chain system. Otherwise, it's just an Internet celebrity brand with a "warehouse membership store" brand.

01 Lowering the thresholdWhen Fudi opened its first warehouse membership store in 2021, it accelerated the expansion of stores in Beijing. At present, Fudi has opened 4 warehouse membership stores outside the suburbs of Beijing, and 2 FUDI+ community selected supermarkets in the urban area.

It is understood that in 2024, Fudi will open more warehouse membership stores in Beijing, and is expected to leave Beijing in 2025.

Different from the membership categories of warehouse member supermarkets such as Sam's and Costco, in terms of membership system design, Fudi tries to enhance brand awareness by lowering the membership threshold.

In 2021, Fudi launched a 7-day 0 yuan experience membership card for warehouse member stores, which can be applied for twice per person. Although this move avoids the "difficult decision-making" of consumers when paying for membership cards, according to the industry's leading revelations about "one month of opening, Fudi's daily sales are less than 150,000", it can be seen that the experience membership card is just a helpless move by Fudi to deal with the sparse customer flow of the first store and the lack of members.

In other words, through an "experience" similar to tasting, you can increase the engagement and acceptance of non-members, thereby increasing the conversion of potential users.

In August last year, Fudi also launched a 188-yuan annual ordinary membership with only consumer rights. Obviously, Fudi is trying to capture the Beijing customer base with a relatively close to the people**.

Graphics: Retail Business Finance Dry Bank.

In addition to deliberately lowering the threshold of member experience in membership fees, fudi*** has also played a "difference card".

For example, a fudi membership store only needs to present its membership card at checkout, rather than verifying membership at the time of entry, which means that any consumer can enter the store as a non-member for almost the entire journey.

Regardless of the fact that some consumers have begun to cross the payment threshold by sharing membership cards, ** and other channels after the "trial period" of major brands, Fudi has created no threshold for consumers, but it only provides users with more possibilities to "skip" the membership fee.

The core competitiveness of member stores is product differentiation, cost performance and turnover rate, and the winning point of chain retail is still scale effect.

Retail Business Finance believes that the local paid membership stores represented by Fudi have fallen into a strange circle of "both want and want", and want to balance the cost by charging membership fees during the immature development period of their own business, but they have to reduce and "soft abandon" membership fees in exchange for brand awareness. In the short term, Fudi can gain traffic and popularity, but in the end, it hurts long-term customer loyalty, not to mention the renewal rate.

Source: Internet.

The main reason why users are willing to pay membership fees is the uniqueness and cost performance of the membership store's products, followed by the membership system to create value-for-money value for consumers, and these soft power requires long-term accumulation and in-depth insight into consumer demand.

02 Boutique supermarkets and membership stores should not be confused The founders of Fudi are Wang Xingshui, Wang Xingyu and Wang Xinghai, who have been working in the fresh food industry for more than 20 years. In 2014, the three brothers of the Wang family established Beijing Yaodi Agriculture, officially started the supermarket business, and opened the first Caixian Guomei community boutique supermarket. Up to now, Caixian Guomei has more than 10 stores in Beijing.

Fudi and Cai Xian Guo Mei "one mother and sibling", which is not difficult to explain why consumers can see the shadow of Cai Xian Guo Mei in Fudi member stores.

It is understood that through the establishment of planting bases in Beijing, Shandong, Shaanxi, Jiangxi and other regions, Caixian Guomei provides users with vegetables, fruits, grains, poultry eggs and other products, as well as agricultural product banquets, health lectures, farm visits and picking activities and other services.

As a new player in the retail industry, Yaodi Agriculture is trying to use Fudi warehouse member supermarket as its second growth curve. After all, the brand reputation established by the parent company provides a high starting point for Fudi, and also helps to enhance consumers' trust and recognition of the Fudi brand.

Source: Internet.

However, the overall expansion speed of Fudi stores is relatively slow, and a total of 6 new stores have been opened in Beijing in the past three years (4 warehouse membership stores and 2 FUDI+ selected supermarkets).

Yaodi agriculture began to differentiate the positioning of fudi, mainly for young consumers, but this kind of consumer group is also the most picky consumers, love beauty, hunting, the pursuit of fashion at the same time, the "purse" is not too bulging, how to make young people like fudi will be a challenge. As a result, Fudi has made great strides on the road of creating an "Internet celebrity personality".

First of all, pay attention to the "good looks" of store design and decoration style.

Abandoning the strong red and blue color combination of traditional supermarkets, Fudi+ Select Supermarket instead adopts fresh and bright pistachio green as the main tone, showing a simple and modern aesthetic concept. The storefront is unique in terms of space planning, with extensive use of glass materials and smooth line elements to create a bright and transparent shopping space, thus creating a relaxed and pleasant consumption atmosphere. Through its mastery of spatial aesthetics and design strategies to strengthen emotional connections, Fudi Supermarket has effectively sparked enthusiastic attention and check-in craze among young people.

Pictured: Fudi+ Select Supermarket.

Secondly, pay attention to the effectiveness of the product selection strategy.

The fresh category is both a love and a hate for almost all fresh retailers. High-frequency rigid demand is its good side, high loss and low value are its bad side, and few retailers can do a good job in this category. Fudi supermarket dares to focus on "freshness", focusing on fresh and cooked food to meet the needs of family life, with only about 4,000 SKUs, and fresh products account for more than 50%. The reason behind it is that it relies on the self-operated source farm of Yaodi Agriculture, and through the base direct procurement model, it escorts the supply of such products.

In addition to fresh products such as fruits, vegetables, fish and meat, Fudi has also invested heavily in baking and pre-made dishes to build its own factories. For young consumers, we have launched a variety of popular products such as German knot lye bread, fudi cake rolls, cheese cinnamon rolls, Japanese sausage plum meat, and fried shrimp in typhoon shelters. With the blessing of these 3R products, it also continuously strengthens consumers' perception of its "freshness".

Finally, a very "provocative" pricing strategy.

As a new entrant to local club stores, Fudi is the first in the industry to disclose a commitment to a comprehensive gross profit margin of "no more than 10%". You know, Costco's gross profit margin is the lowest in the industry, and it is only stable at about 11%.

Fudi tries to exchange "low prices" for user loyalty, thus bringing "repeat purchases". However, according to industry sources, Fudi's gross profit margin seems to be very low, but in fact, the cost performance is not high at all.

Relying on the first-class chain system of fresh and fruity vegetables, although Fudi can directly enjoy the resource synergy effect within the parent company in terms of commodity procurement, logistics and distribution, etc., reduce costs and ensure product quality.

But after all, membership stores are different from boutique supermarkets, and the two are different from the front-end customer positioning to the back-end ** chain system, which cannot be mixed, so how to achieve "no more than 10% gross profit margin" under the condition that the membership fee threshold is extremely low?

03 Three major directions of progress According to Fudi's own disclosure, with the running of the two models of warehousing membership stores and fudi+ selected supermarkets, it plans to add 5 fudi warehouse membership stores and 10 fudi+ selected supermarkets in 2024, plus the 4 member stores that have been opened, the overall scale will be close to 10, and its scale will be comparable to the Hema X membership store that once shouted "be Chinese's own membership store".

The author believes that for the future development of Fudi, there may be the following three directions.

1. Expand the area to open stores, so that more consumers can enter Fudi consumption.

In addition to Beijing, Fudi can further increase its nationwide layout, or it can start from the Beijing-Tianjin-Hebei region, from local retail enterprises to regional retail enterprises, so as to form its own regional retail ecology that serves members.

2. Launch more effective products for target consumer groups.

Fudi needs to better grasp the shopping habits and needs of young Chinese consumers, and provide high-quality products that meet local tastes. For example, we pay attention to differentiated selection of fresh food, cooked food and daily consumer goods, and introduce more products that are in line with Chinese food culture and lifestyle.

3. Strengthen consumer experience services.

In addition to marketing methods such as "1 yuan ice cream" to attract young consumer groups, it is also necessary to create a shopping environment with a unique sense of experience, and design the store into a multi-functional space integrating shopping, leisure and socialization. Organize various interactive activities and tasting experiences to attract young families and middle-class consumers, and further increase their social and word-of-mouth communication.

In general, in the face of strong competitors such as Costco and Sam's, Fudi still has the anxiety of understanding the "skin" of the format, and if it wants to find its own space for survival and development, and move towards a farther future, it is necessary to truly understand the essence of the format and temper its internal skills.