In the past two years, major e-commerce platforms have opened chain supermarkets. Jingdong convenience stores, Suning stores, Tmall stores and other mini stores have opened near the communities in China.
In addition, the layout of small shops in the community is not a small number of retail enterprises. New mini store, such as Yonghui mini, RT Mart mini and HEMA mini, are also opening large-scale stores in the neighborhood of various communities and have a tendency to copy to the whole country.
Jack Ma once said: the era of pure e-commerce will soon end. In the next 10 or 20 years, there will be no e-commerce, only new retail.
And this prediction is coming true, and the cost advantage of e-commerce on physical stores is gradually disappearing. Both Alibaba and Jingdong are in a bottleneck period.
With the growth of online traffic slowing down and gradually touching the ceiling, e-commerce giants have begun to lay out the offline market. Jingdong convenience store, Suning store, Fresh Hema and so on emerged as the times require, competing on the way of new retail.
The irreplaceability of community shops
With the further acceleration of people's life rhythm, as well as the continuous change of marketing means and consumption structure, the consumption habits of urban people are also gradually changing in China.
Although the traditional shopping station layout is not as time-consuming as the traditional supermarket, it is not so popular as before.
Nowadays, small shops with small size and daily fresh food as the leading factor, with a radius of 1.5 km, have gradually become the mainstream of the retail industry. The store is opened to the nearest community gate to make up for the blank area hard to reach in the store.
It is understood that 30% - 40% of the consumption expenditure of Chinese urban residents is concentrated within 1 km around the community, and this proportion is still rising.
Although the rapid development of e-commerce has a great impact on physical stores, the timeliness of community commerce is beyond the reach of e-commerce, which makes it more stable development.
For Chinese community residents, community business is the daily life, which cannot be left for a moment. From catering and convenience stores that meet the basic needs of life, to beauty salons and other shops closely related to life, the business types of community bottom merchants are extremely diverse, and their commercial value is becoming more and more prominent.
Although online shopping has become a new consumption habit, there is still a last mile problem to be solved when we arrive at the C terminal. From this point of view, the retail stores closest to consumers are obviously more advantageous. In the communities of various cities, retail stores are more like a kind of vitality. Over time, residents in the community will have a sense of dependence on it.
However, in the continuous upgrading of residents' consumption, most of the retail stores did not follow the consumer's demand. Now they are facing challenges from new retail.
Different ways of Ali and Jingdong
For the major e-commerce platforms, the regional saturated online market forces them to demand the offline incremental market one after another.
Both Ali, Suning and Jingdong have invested a lot of manpower and material resources to extend their territory to the second and fifth tier cities. While helping the channel sink, it also makes the e-commerce more and more strong offline.
Although they all want to let the e-commerce channel backward, there are still differences in the ways of all parties of China.
Ali maintains the consistent style, provides the service, completes the platform. Jingdong is a self-supporting mode, and its own logistics system has become a strong guarantee for this business, and supplies goods directly across distributors.
For the tradition shop which has been operating in a community for more than ten or twenty years, its advantages lie not in hardware and management, nor in technology, but in the most rare human relationship. Compared with Tmall stores and Suning stores, the biggest advantage of traditional family stores is this. New community convenience store is more the core of a small circle of acquaintances in the community, rather than a place for commodity sales.
The management of community convenience stores depends on acquaintances ultimately. Without acquaintances, business will not be good. However, acquaintances need time to operate. On this point, the competitive advantages of traditional family shops still exist in the community.
At present, the Chinese commodity prices of many new retail convenience stores such as Tmall shops are more expensive than those of traditional stores, and they are not popular among middle-aged and elderly people.
The advantages of Tmall stores and Suning stores lie in technology and concept, while the advantages of traditional convenience stores lie in the owners themselves. Therefore, in order to explore the terminal market more smoothly, Jingdong has been purchasing the traditional stores in recent years.
In addition, affected by this year's epidemic, many family shops are facing the choice of transformation. But its own supply chain is not perfect, lack of corresponding technology and e-commerce concept, so it needs to rely on the power of e-commerce giants to complete self-improvement.
In this way, Jingdong just launched the transformation and upgrading plan for the community family shop, which may also be aimed at this time.
If we can solve the pproblem of traditional family shop, then itwill become a powerful scene for its omni-channel development and become the vanguard of Jingdong in developing new channels.
The attempt of retail giants
Any entrance with the nature of community will be the track of new retail in the future.
Many community convenience stores are open 24 hours a day. Its convenience and response speed to customer service are incomparable to any e-commerce.
E-commerce needs a high cost to deliver within one hour, while the distance between convenience stores and consumers can be as high as 30 minutes or even 10 minutes, either delivered or picked up by consumers.
However, convenience stores also have their drawbacks. One is that the goods sold in convenience stores are not chea; the other is that the quantity and category of products are limited, which sometimes cannot meet the shopping needs of consumers.
Digitalization has a stronger attraction to the traditional retail innovation of new retail.
This model simplifies the primary, secondary and tertiary wholesale markets that commodities need to go through when they are in the hands of consumers, thus eliminating the exploitation of middlemen at different levels. It can not only strive for price advantage, but also ensure the quality of products to a certain extent. Both consumers and businesses can make profits.
For suppliers, the retail stores purchase goods through the platform, so the labour cost and logistics cost of single brand service can be thinned by multiple brands, which can save a lot of idle resources.
Based on these reasons, community new retail has become a hot resource for all parties. At the same time, the direction of community new retail has become a new problem.
At present of China, the main modes of community new retail are mini store and front warehouse.
The mini store is represented by Yonghui mini, Suning store and Hema mini, and its advantage lies in its self-generating capacity. Take the Hema Mini store as an example. The store is located at the door of the user's home. It can be seen and touched every day. The cost of getting customers is very low. The flow of natural resources saves a lot of promotion costs.
The prepositional warehouse model is mainly represented by Missfresh. Its advantage is that the cost of opening a store is low, but it relies heavily on cold chain and diversion. The logistics cost invested in drainage and apportionment accounts for 35% - 50% of the turnover, which requires higher requirements to achieve balance of revenue and expenditure.
At present, the mini store model is more profitable than the prepositional warehouse model. The more profitable Mini store model may be a shortcut for new retail in the community, but the premise is that it is recognized by the majority of consumers.
Community new retail is a new battlefield of competition among various platforms. According to statistics, the scale of China's community retail industry will reach 2158.3 billion yuan in 2020.
At the same time, because many large Chinese retail enterprises are facing huge cost pressure, including labour costs and store rents, convenience stores have become a relatively more promising community business model.
Although the prospect of community business is bright, opportunities and challenges always coexist. In the pursuit of business opportunities, to meet the diverse needs of consumers at the same time, the operation ability of all parties will also usher in a new test.
Ref: E-commerce retail observation (ID: dslgc)