Electricity Supplier Giant Ali, Jingdong, Suning Convenience Store Big Leap Forward

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To open 1000 stores a day, there will be a Jingdong convenience store every 300-500 meters. "

In April 12th, Liu Qiangdong's remarks on Jingdong convenience store in 2018 China's "Internet +" digital economic summit once again made "convenience store" the focus of discussion in the industry.

Last year, with the recovery of traditional retail, convenience stores became the hottest retail format.

Rosen was sold out when he was stationed in Nanjing. The family, 7-11 day Japanese chain convenience stores announced that they would accelerate the layout of China in 2018.

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Capital has also been admitted. In November of last year, Today (today) convenience store announced the completion of the 200 million yuan B round of financing. In March 9th this year, Xi'an's convenience store announced that it had won 200 million yuan investment in Chunxiao capital investment.

At the same time, the giants have announced the "big leap forward" plan of convenience stores. Liu Qiangdong said that in the next five years, Jingdong will open more than 100 000 Jingdong convenience stores in the country, half of which will be in the countryside.

Ali retail announced last year that it will cover 100 000 in 2018.

Small shop, Suning shop also announced plans to open 1500 stores nationwide in 2018.

"For convenience stores, this is a good news", and the general manager of a good neighborhood convenience store, Tao Yu, clearly feels that the spring of convenience stores is coming.

In October 24, 2017, the good neighbor convenience store acquired 84 million yuan of investment from China CVS, a joint venture co founded by fresh life, Andrew group and the Greentown service. It has a good neighborhood of over 300 stores in Beijing, becoming a convenience store star for a time, and also the first time that the veteran retail veteran experienced the feeling of standing at the draught.

With the same feeling, there is CEO Zhang Yichun, a Chinese businessman and Huimin.

The company that has ploughed B2B market has been doing the pformation of the traditional "wife and wife shop" business. In 2017, Zhang Yichun discovered that she suddenly had the same travellers, including the traditional dealers who were pforming, and the Jingdong and Ali, who were fighting for "wife and wife shop".

In China's convenience store market, there are two formats that complement each other and cannot replace each other.

One is chain convenience stores, including Japanese and regional chain convenience stores, the other is a huge number of "wife and wife shops".

In this wave of convenience stores, traditional retailers and investment institutions are more interested in chain convenience stores.

While Jingdong and Alibaba mainly compete for "wife and wife shop" to expand rapidly in the way of "wife and wife store", Suning chose to run a chain store conveniently.

Every move of the three giants is affecting the industry's nerves and deeply affects the development of China's convenience stores.

Electricity giant's convenience store big leap forward

From Ali retail and Jingdong to the traditional "wife and wife shop" and then to the crazy expansion of Suning Inn, this time, the giants have spared no effort to show their talents.

According to the world clothing and shoe net, in August 28, 2017, Lin Xiaohai, general manager of the retail business division of Ali, said that in 2018, retail sales will help pform 1 000 Tmall stores, including the selection of products, membership, marketing, store pformation, data and so on.

The main point is to build an intelligent distribution network through big data to connect brands and spouses and wives stores, so that stores can complete goods replenishment at home and lower the cost of goods purchase.

The Jingdong did exactly the same thing.

In the afternoon of April 10, 2017, Liu Qiangdong released the "million Jingdong convenience store plan" on his micro headlines, and also called for the traditional "wife and wife store" to be promoted through Jingdong's big data, logistics and financial technology.

From Jingdong and Ali's practice, they all adopt the "flop" mode to pform the "wife and wife shop".

It is mainly for stores to provide training, shop decoration guidance, authorized brands, access to online data systems and so on.

But both of them want to be suppliers of convenience stores instead of quality control.

Without touching management, Ho Chun, founder of Chunxiao capital, said, "this is very popular. On the one hand, shopkeepers are given full freedom. On the other hand, Ali and Jingdong's strong selection capabilities can help shopkeepers to save costs, increase profits and do a good job in retail upgrading."

According to the head of Jingdong's new channel, as of March 2018, the number of new stores opened by Jingdong convenience stores was 1000 to 1200 each week, and 50 thousand applications were received every day, and many of them wanted to return to their hometown through such a way.

From a few Jingdong convenience stores visited by all weather technology reporters, its operating efficiency has increased significantly compared with before. "For everyday consumer goods, for example, in the six months since the completion of the pformation, sales have increased by about 20% compared with the previous year."

A Jingdong convenience store owner told all-weather technology.

In the war for "wife and wife shop", Ali did not show any weakness.

"By the end of April this year, Ali retail has signed nearly 100 stores nationwide," Yun Tong, general manager of Ali retail marketing division, told weather technology. In August last year, this figure was only 500 thousand.

"Often in the process of promotion, we will encounter peers". Hao Yun, who is responsible for opening up the retail outlets of Ali retail outlets under the line, tells all weather technology. "Sometimes we just went to finish the presentation in the morning, and they went there in the afternoon". Although they all want to win the exclusive licensing, but in this competition for wife and wife, Ali and Jingdong can not ignore each other's existence. "In many cases, they are using two systems at the same time," the owner of a Tmall store expresses all weather technology.

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However, for this wave of wind and fire to pform the "wife and wife shop" trend, Suning did not take part in it. Bao Junwei, President of Suning small shop, once expressed doubts in the media interview about this mode: "we do not agree with the Jingdong" convenience store "this" flop "mode. Too much pursuit of speed will bring huge risks to commodity quality and service ability.

Suning began to layout its direct brand convenience store in 2015 - Suning shop.

Whether it is location, shop, business management or supply chain, logistics and distribution, Su Ningdu is the one hand. In these internet giants, Suning's model is the heaviest and the cost is the highest.

According to Bao Junwei, take Nanjing as an example, a store of 80 - 100 square meters will cost about 40 - 500 thousand.

Although the pattern is the heaviest, Suning has the highest control over small shops.

Most of the wife and wife shops pformed by Ali and Jingdong are daily consumer goods, and Suning's biggest feature is fresh and cooked food.

"In the community, mainly around the user's three meals a day, the main categories of fresh fruit, fruits and vegetables, cooked food and other categories, and in the core business district, crowded area, according to different user groups, to provide fruit, daily matching, hot drinks and so on," Suning small business President Bao Junwei said.

In the fresh life of CEO Xiao Xin, compared to Ali and Jingdong's flop mode, Suning small store model is obviously more competitive, "fresh food and raw gross profit rate is higher, consumption frequency is also very large, it is easy to maintain user stickiness, the future will have greater impact on Japanese convenience stores and regional chain convenience stores."

Up to now, Suning small stores have been laid out in 79 cities across the country. In 2018, their target was to open 1500 homes. According to the data given by Suning official, the number of sunning stores opened to 100 in April 29th.

Suning bought about 2 million 500 thousand members in Shanghai, and now has more than 300 outlets in Shanghai's main city. Every day, it is seeking cooperation with major property services providers. The expansion rate of Suning stores will be further accelerated.

Such a high-intensity layout of convenience stores is not the first time for several Internet giants. Since 2012, they have begun to cooperate with convenience stores through O2O pformation, but that attempt was not successful.

The last wave of failed convenience store pformation

The contact between giants and community convenience stores was first in the 2012 O2O era.

In September 2012, good neighbors and Jingdong began to cooperate with O2O. The main mode is that users purchase items on Jingdong pages and mention them in good neighborhood convenience stores, that is to say, convenience stores become the goods of Jingdong mall.

But this cooperation did not succeed. After more than a year, good neighbors and Jingdong broke up peacefully.

Cultivate and speak frankly, the two different thinking enterprises are working together, their demand points are different, and they are faced with the problems of increasing workload, settling equipment differences, self raising, and placing Express items.

However, Jingdong did not give up trying.

In November 18, 2013, Jingdong (JD.COM) formally launched a O2O project with Tang Jiu convenience store in Taiyuan.

Tang Jiu convenience store hopes to make use of the huge flow of Jingdong to facilitate the diversion of stores. Jingdong hopes to make use of the localization advantages of convenience stores to attract new customers and expand O2O business, and the two will hit it off.

Over the next few months, Jingdong started to cooperate with ten convenience stores, including fast passenger and good friends, in 15 cities. The pformation campaign of O2O community convenience store was launched.

This wave of cooperation, in addition to the continuation and good neighbor cooperation mode, that is, customers to the store to mention Jingdong purchase goods, added new services, customers can find nearby convenience stores on Jingdong, ordering convenience store goods, stores quickly deliver door-to-door.

But things are not going well.

In the past, consumers did not place their orders online, to the custom of convenience stores.

From the latter, the convenience store does not have its own logistics team, plus the low price of the convenience stores, the distribution of manpower and cost will be the burden of convenience stores.

Therefore, Jingdong's O2O convenience store cooperation has not been successful in a strict sense.

It is not just Jingdong, but Ali, who has long been in the business of convenience stores, is equally unsatisfactory.

In August 2016, Taobao officially launched the Taobao convenience store business. Through the cooperation with offline stores, it excavated the demand within 2 kilometers, and expanded the scope of the radiant capacity of the convenience store 500 meters. In short, customers found the convenience store entrance through the Taobao client, and the delivery door was delivered by distribution personnel after the order was placed.

Compared with the O2O mode of "selling traffic only", Taobao convenience store adopts the mode of "joining + controlling the supply chain", which is made up of 1688 retail outlets of the Ali group as the supply chain, Taobao's little delivery platform as the pportation platform, and the middlemen link erased. At the same time, Taobao claims to run the best business and control the quality.

But for this business Ali rarely voice inside, from the entry point of view, Taobao convenience store this business is also very deep, need to enter the three level page to see.

An Alibaba insider who is close to Taobao's convenience store business said to all weather technology that "Taobao's convenience store is basically a strategic business to be abandoned, and almost no one will push ahead".

It is understood that up to now, Taobao convenience stores have only entered a few cities in Hangzhou, Ningbo, Shanghai and so on, and the convenience stores are also very limited.

It is not only the big two, but also the start-up company, that has broken the tide in the O2O pformation convenience store.

The love of fresh bees is a typical example.

In June 15, 2014, the love wasp developed App for the convenience store users in the community. Users can find their own convenience stores by geographical location, and place orders on App, which are distributed by the nearest store staff. The fresh bees are the suppliers of the community convenience stores. During the peak period, the love bees have opened up more than ten cities nationwide, and the number of convenient stores has expanded by nearly 10000.

However, love bee CEO Zhang win and his team neglected that the core of convenience store is retail, supply chain and logistics.

In the process of replicating the whole country, because of the failure of supply chain management and logistics, AI has carried out large-scale layoffs and suspended foreign expansion.

For the crisis of love bees, Zhang Ying once pointed out that "the biggest problem is the recognition of the nature of business. O2O pformation of convenience stores is not about moving convenience stores to the Internet."

Internet is just a superficial phenomenon.

At first, we must control the cargo and touch the warehouse.

In Zhang Ying's view, the pformation of convenience stores through O2O mode is essentially a convenience store business, which means that the front store itself is pformed, and supply chain, logistics and store operation system can not be reduced, otherwise it can only fail.

"Cost and efficiency are the essence of business."

Zhang Ying emphasized, "there are many ways to get customers. If the service experience makes people unhappy, everything is zero."

However, from the practice of various giants and start-up companies at that time, almost no one could do that.

Looking back at the then experience, Jingdong and Alibaba changed the "wife and wife shop" and this is still the problem.

They adopted the "flop" mode, less involved in the operation and management of stores, which was once considered by Zhang Ying to be the reason for the failure of love bees, and now Ali and Jingdong are also facing the pformation of "wife and wife shop".

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A hard nut to crack shop

For the "wife and wife shop", the wave of pformation of Alibaba and Jingdong is an opportunity, because they are about to be eliminated by the times.

"We visit dozens of shops every day, and we can see that these wives and wives are really facing a difficult living dilemma." Hao Yun, a retail retail City stall, said to all weather technology, "the confusion of the selected products, the uneven quality level, the serious homogenization, and the low efficiency of the business" are the common problems faced by almost all the wives and wives in China. They are also the reasons why these shops are eager to be reformed. They hope to catch up with the wave of this wave of giant pformation and help themselves through the giant.

According to incomplete statistics, in China, the number of such shops is around 600 000, which permeates every capillaries of China's economy. This is an opportunity for Ali and Jingdong, but it is also a challenge.

"Good neighbors have done 15 years, the greatest achievement is to live.

Many opponents come and go, we are still alive. "

Tao said, "the biggest challenge for convenience stores is in itself. It is the most complex and the most difficult thing to do in all offline formats. This is not a simple" flip flop "or expansion.

Judging from the category, at present, except Suning small store, it cuts into the fresh and cooked food with high frequency and high Maori. In the wife and wife shop pformed by Jingdong or Ali, the products with high gross margin are few and far between. Most stores still maintain the shape of the original consumer goods.

Although the two countries claim to be "1000 shops and thousands of noodles", it is very difficult to make great difference in daily consumer goods.

"Everyday consumer goods are the most severely affected by the Internet. Simply covering such a category can not help small businesses achieve better profits in the long run."

Bao Junwei told all weather technology.

The more difficult problem is management.

First of all, Zhang Yichun, who has tried many years to reform the "wife and wife store", argues that how to persuade a small shop owner who has been relying on experience for a long time to establish cooperation is a difficult problem. "No matter whether it is to introduce goods, promote activities or help them do digital pformation, they are very often excluded, which is very troublesome."

Store control is also a big problem.

Ali and Jingdong adopted the "flop" mode, in addition to collecting margin to emphasize genuine goods, for other store management but not many interference.

Fresh life CEO Xiao Xin said, "the" flop "mode is more of a supply chain end of the perfect, unable to link these tens of thousands of wife and wife stores, to achieve the role of business coordination, without large-scale business synergy, it is difficult to fundamentally enhance the operation efficiency of the door shop, always can not do 'a game of chess',' a stock of goods'.

In comparison, Su Ning is self - operated, can control the operation of convenience store from all aspects, but the challenge is also not small, the heavy business model needs a large amount of investment in the early period, which makes the pressure of the short term profit in the Suning shop is very high.

Although suing's online retail experience is rich, "but the real business is quite different from the convenience store, and it is more complex in operation," said Tao.

In addition, fresh consumption as a major consumer category will be a huge challenge to Suning's entire supply chain and logistics efficiency.

It will meet with chain convenience stores.

In the case of Ali and Jingdong facing quality control challenges, Suning is facing a pressure of profit from its proprietary mode. What can not be ignored is that chain type convenience stores are expanding in a crazy way.

In addition to Suning shop facing the confrontation in the first tier cities and chain convenience stores, the wife and wife shops selected by Ali and Jingdong are mostly distributed in two or three cities and below cities. There are still some living spaces in these areas. But with the expansion of the Japanese convenience stores such as 7-11 and Rosen and the expansion of the regional chain convenience stores in China, the survival difficulty of the wife and wife stores is increasing.

In 2016, Rosen announced that it would speed up its opening up in China, and strive to quadruple the number of stores by 2020. From the current 750 to 3000, the family has announced that it will achieve the goal of opening 1 stores in 2024.

More chain convenience stores are expanding rapidly under capital support.

In the first half of last year, the attitude of capital to traditional convenience stores was: more attention and less effort.

"VC is not willing to invest in physical convenience stores. They grow too slowly to meet VC's high growth needs," Fang and capital founder partner Zhang Dai said on all-weather technology.

Starting from the second half of last year, many investment institutions including Sequoia, Chunxiao, and Zhong Zhong Li group began to enter convenience stores. Chunxiao capital invested in Xi'an every day and 131 convenience stores in 2018. Sequoia Capital also invested in Fu Fu and Today convenience stores.

Wang Hongtao, vice president of the China Chain Store Association, believes that the conceptual models of O2O, or B2B of the past two years and the popularity of last year's popular retail business, have finally failed to grasp the essence of business.

However, he said, for investment institutions, money is never going to invest in the spotted wives and wives store. "Because it is worthless, it can not form a linkage effect".

Without the capital attention, it is facing the impact of the chain store's urban channel sinking. For the "wife and wife store", it seems that it can only hope for the pformation of Ali and Jingdong.

Interestingly, in the current convenience store in China, there has not yet been a head enterprise with a nationwide influence, such as the supermarket's format, such as Tai Yun fat and Yonghui.

In the future, what are the results of the convenience store renovation actions of the giants such as Alibaba and Jingdong? How long will the interest in this pformation business last and whether it will be incorporated into the chain store is a matter of concern.

(should be interviewed, Hao Yun is a pseudonym)

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