Sinopec's first "Ease of Use" tavern is unveiled in Hangzhou

Sinopec's first "Ease of Use" tavern is unveiled in Hangzhou, and Sinopec announced that the "tavern" built on the basis of Ease of Use convenience stores in gas stations has been put into operation in Hangzhou. Sinopec announced the opening of its "Tavern" in Hangzhou, which is built on the basis of gas stations and convenience stores. For the combination of these two seemingly opposite scenes, some industry insiders expressed optimism. Sinopec's first "EasyJet" tavern was unveiled in Hangzhou.

Sinopec's first "EasyJet" flagship store was unveiled in Hangzhou1

Recently, the country's first "EasyJet" flagship store was unveiled at the Qiutao Road gas station in Hangzhou, Zhejiang Province. At the unveiling ceremony, Sinopec EasyJet announced that it would utilize 27,800 convenience stores nationwide to open "EasyJet Wine Shop" according to local conditions. It is reported that the location of the tavern will be flexibly adjusted according to the actual situation of each gas station.

What is Sinopec's intention with this move?

"This tavern is not a tavern."

Although called a tavern, it is not the same as a tavern such as Helen's, but in essence, it is a chain of liquor stores.

The reporter was informed that the categories of EJJ's liquor store include famous liquor, domestic and foreign wines, beers and foreign wines, and other brands. In addition, its goal is to create a consumer platform that integrates merchandise display, wine tasting and cultural dissemination. According to the relevant person in charge of Sinopec EasyJet, the core concept of EasyJet ZhenJiuHuan is to make fine quality, price and product variety.

In addition, the micro-wine reporter also learned that EasyJet Selection Wine Hall will operate boutique wines in various price bands, introduce commemorative wines and rare wines, and increase the segmentation of goods on sale.

It is worth noting that the micro-brewery reporter learned from the staff of the EasyJet Zhenjiu Hall that, according to the project plan, Sinopec EasyJet will complete more than 200 EasyJet Zhenjiu Halls by the end of August this year.

3 months to lay 200 + stores, this speed can be said to be smashing. The reporter noted that on the day of the unveiling of the first EasyJet wine shop, which was also the official launch of the first "Wine Festival" of Sinopec EasyJet, Sinopec EasyJet announced that it would launch promotional activities for alcoholic beverages in 100+ cities across the country, synchronizing with the tens of thousands of EasyJet stores and the "EasyJet Fueling" APP platform. The company also announced that it would synchronize its promotional activities with tens of thousands of EasyJet convenience stores and the EasyJet Fuel APP platform in 100+ cities across China, realizing the linkage between online and offline, as well as millions of stores in 100 cities.

Why did Sinopec open a liquor chain?

The original reason for Sinopec's layout of the liquor chain starts with "EasyJet".

It is reported that EasyJet is the service brand of Sinopec to carry out non-oil business, with 27,800 convenience stores across the country, has developed into the largest chain of convenience store network in China. In accordance with the four-in-one development idea of "brand + capital + commodity + service", it has made great efforts to create its own brands such as Jomo Spring, Changbaishan Tianquan, Laimao, Oulu Paper, and Guoqi Tianxiang, etc. On May 9, 2021, it will be the first time for Sinopec to launch its own brand in China. In the "China Brand Value Evaluation Information" released on May 9, 2021, the brand value of Sinopec EasyJet is as high as 18.461 billion yuan, and the brand value has been growing rapidly for four consecutive years.

From this, it is easy to see that the network of 27,800 convenience stores across the country is the backbone for EasyJet to open liquor chain stores.

In addition, the micro-wine reporter interviewed the staff of EasyJet and learned that Sinopec's non-oil business sales revenue accounted for only 3% of the total revenue, while the reference ratio in Europe and other countries is 30%-40%, with a huge room for growth. As one of the carrier platforms for non-oil business revenue, EasyJet's convenience stores have maintained a high growth rate year-round under the auspices of digitization.

It is understood that the EasyJet convenience store contains liquor sales business before, and the liquor brands on sale include Moutai, Luzhou Laojiao, Lai Mao, and Three People Dazzling. Although there is no specific liquor sales data, but relying on the huge traffic resources, it is estimated that its performance is more substantial.

To summarize, the micro-wine reporter speculated that Sinopec opened a liquor chain for two reasons:

One is to focus on the huge development space of the non-oil business, and to seek new growth poles;

The second is to rely on the huge network of convenience stores, and its existing experience in liquor sales.

Sinopec's entry into the liquor chain, what are the prospects?

As the basis of Sinopec's entry into the liquor chain, EJI has been working in the liquor industry for a long time. Microbrew reporter combed through and found that, as early as 2014, easy to brand with Maotai *** with investment in the formation of Guizhou Laimao Liquor Industry Co.

Some industry sources analyze that the reason why Lai Mao can become another billion-dollar big single product under Moutai shares, and the convenience store resources on the side of EasyJet are highly relevant. Some data show that in 2018 alone, the sales amount of Lai Mao in EasyJet terminal pos is as high as 69% of the total sales, which is undoubtedly a sample case of industry channel construction. It is undeniable that Sinopec EasyJet has indeed driven the overall development pattern of key regions in terms of Lai Mao's market layout.

In December 2020, Sinopec Henan opened a strategic cooperation with Henan Hanliangwang Wine Industry. It is reported that Hanliang King Liquor Industry has specially customized a product for Sinopec, named Yuke Royal Liquor. This product will become the exclusive product of Henan Sinopec system.

In addition, last year, EJI and Luzhou Laojiao **** with the launch of the "three people dazzle" series of wine, as an Internet liquor brand, its heat is not low.

All of these things have gradually strengthened the determination of EJI to open a liquor chain.

But on the future development of EJI Zhenjiuzhang, micro-wine reporter threw a wait-and-see attitude.

First of all, this track of liquor chain has been very competitive in the past two years. According to the annual report of a number of circulation enterprises, as of the end of 2021, marking up the chain business has become an important part of its strategy. Among them, the number of customers of Huazhi Liquor retail outlets has reached more than 30,000, with a cumulative total of 273 new chain stores; 1919 liquor chain stores *** counting 2,137; wine convenience in the country to add 22 stores.

Secondly, the supply chain construction needs time to precipitate. From the concept of "quality assurance, price assurance", its requirements for the supply chain are not low. As we all know, a mature supply chain system takes time and effort to build, compared to other mature liquor chain enterprises, EJJ must spend more effort on the supply chain.

Finally, consumers are no longer satisfied with the traditional chain model, and "differentiation" has become a necessity. In recent years, the liquor chain in addition to online and offline grasp, offline store mode is also gradually innovative upgrade. "Health", "culture", "immersive experience" and other labels gradually become popular in the chain stores, relying only on the gas station convenience stores, EJZ should also demand a breakthrough.

But it is undeniable that channel resources as an important part of the liquor chain, EJY is still considered to be "winning at the starting line", and its large-scale laying will also inject fresh blood into the liquor chain track.

Sinopec's first "EasyJet" liquor store was unveiled in Hangzhou2

The liquor industry has attracted "big brothers" from outside the industry to cross the border.

A few days ago, the Nandu Bay Finance Society - liquor new consumer index group reporter noted that Sinopec and China Tobacco Group are to cross-border liquor retail business. Among them, Sinopec announced that relying on gas stations EasyJet convenience store construction "tavern" in Hangzhou landing. No coincidence, Zhejiang China Tobacco Holdings, a listed company Xiangyi Rongtong is an investor activity in early June, said the company's main financial leasing, pawning, guarantee, investment and other businesses, (at present) to try to carry out liquor retailing, but the scale is very small.

Sinopec EasyJet Tavern (Source: company website)

Although, Sinopec and China Tobacco into the liquor sales is just the beginning or test water, but from the point of view of pure sales network, Sinopec EasyJet's retail outlets are huge, according to data on the company's website, the total number of easy-access convenience stores nationwide reached 27,800. And Xiangyi Rongtong, its offline stores only for Hangzhou, an offline pawn store.

From the current performance of cross-border alcohol sales, Sinopec EasyJet's layout performance, advantages, progress and flexibility is significantly higher than that of China Tobacco, which, in addition to the specificity of the tobacco system itself, also depends on the Sinopec side of the layout of non-oil products strategy, according to the company's planning, it will rely on EasyJet's outlets before the end of August to open about 200 in the country." According to the company's plan, it will open about 200 taverns nationwide by the end of August, relying on Etsy outlets, and hope that the "combination of wine and oil" will boost sales.

After joining the ranks of "selling alcohol", Sinopec EasyJet is bound to compete directly with supermarkets, tobacco stores, convenience stores and professional liquor retailers, and in terms of revenue, how much revenue can the liquor retail business bring to Sinopec EasyJet?

To professional liquor business, for example, Nandu Bay Finance reporter to liquor distribution and retail listed company Huazhi liquor line to measure, its offline chain of customers (stores) is more than 30,000 (2021 financial report data), the number is slightly higher than Sinopec EasyJet offline stores, according to the company's annual financial report shows that the sale of alcohol brought 7.365 billion yuan, the gross profit margin of 20.6%;

The other 1919 with 2,000 offline stores, the company's 2021 revenue was 4.609 billion yuan. It can be seen that the scale of revenue generated by liquor sales is more attractive to Sinopec EasyJet.

For the combination of the two seemingly opposing scenarios of "driving gas" and "selling alcohol", some industry insiders are optimistic.

"For the future survival space, development space and operating costs and other considerations, Sinopec to maintain the original advantage as well as to protect the right to speak in the market, the non-oil business operation is a very important direction, therefore, before they cross the border to sell coffee to now sell wine, is to increase the business scope of the non-oil business as well as the ability to earn. "

China's food industry analyst Zhu Danpeng told Nandu Bay Finance reporter, for some of the second and third-tier brands or first-tier brands in the second line of alcoholic beverages products, in the case of its relative lack of brand power, Sinopec EasyJet, such as a gas station convenience store with a high degree of exposure, is a more ideal space for the product to be displayed, and the product may be due to the cost-effective and more likely to complete the transaction.

Although, Sinopec EasyJet is still in a pilot stage for liquor sales, for wine companies and distributors, the emergence of new sales terminals may help to deplete the channel inventory of products.

According to a previous report by Nanduwan Caixun reporter, although the first quarter of this year, listed liquor companies achieved high growth, but the channel and terminal de-inventorying speed is much lower than the growth of enterprises. It is understood that, because of the liquor companies to take "first payment after the goods", therefore, most of the performance of the liquor companies from the dealer's pressure on the goods.

However, due to the recurrence of the new crown epidemic since April, in addition to some of the first-line products, most of the white wine products face terminal marketing ability is poor, dealers and other channels under pressure and other dilemmas. According to the Nandu Bay Finance reporter, before the Dragon Boat Festival holiday was a small peak in liquor sales in previous years, but in this year there is a terminal marketing is not as good as in previous years, such as Henan, Shandong and Hebei and other places of the dealers, there has been a big pressure on the inventory situation.

Of course, the channel inventory is high, the price inversion is inevitable. For example, in recent years, the performance of the liquor, early June this year, was exposed to its high-end products, "internal" retail price, distribution price is far lower than the factory price of the situation.

So, the gas station convenience stores to join, can become a new choice of liquor to inventory?

"For liquor companies, the gas station convenience store channel can indeed bring greater value to the brand promotion of the liquor company itself, product market introduction and key market entry, etc., on the enterprise (including distributors) to go to the inventory is a certain help, but it is important to note that now, like the Sinopec EasyJet, this is still in the channel construction stage, has not reached the The stage of system operation."

Cai Xuefei, an analyst in the liquor industry, told Nanduwan Caixin reporter that the new channel to solve the inventory and pull sales is only a staged means to really solve the channel inventory problem still depends on the benign sales of the product, the need for liquor companies to carry out the relevant work around the brand's operations.

The industry believes that, compared with other channels, gas station convenience stores are still in their infancy, but in the Sinopec "tree" endorsement, even if the wine companies and distributors are included in the supplier, even if they can quickly go to inventory, but can get a profit space is not large, "because this is the first time in the history of the industry. The first Sinopec company to be listed as a supplier, even if it can quickly go to stock, but there is not much room for profit, "because this convenience store on the liquor products, many times almost to the factory price promotions.

Sinopec's first "EasyJet Zhen wine hall" was unveiled in Hangzhou3

"cross-border addiction" ` Sinopec cross-border again, this time to open a specialty store in the gas station to sell wine.

On May 28, Sinopec relied on the construction of gas stations in the EasyJet convenience store liquor store "EasyJet ZhenJu Pavilion" in Hangzhou, Zhejiang Province, Qiutao Road gas station inaugurated. At the same time, Sinopec EasyJet announced that it would utilize 27,800 convenience stores across the country to open "EasyJet Zhenju Hall" according to local conditions.

Founded 8 years ago, EasyJet backed by Sinopec channel advantage, has become a convenience store industry dark horse. But the establishment of liquor stores is a bigger step than ever before, can consumers get used to this way of shopping? Will consumers be able to get used to this way of shopping? Can alcohol and oil be safely "****ed"? These are the problems that "EJJ Zhen liquor store" will have to face.

Oil big brother of the sale of wine

Before the establishment of liquor stores, Sinopec play cross-border play very slippery, do the bottled water, functional drinks, but also open a coffee shop ...... and every time through the huge contrast with the main business between the The company has become a hot topic of discussion. This time, the community is more doubtful: selling oil can really sell good wine?

In fact, Sinopec has a lot of experience in selling wine, and has already tasted the sweetness.

As early as 2008, the producer and importer of French Duke of France wine cooperated with Sinopec Henan Petroleum Branch to sell it in Sinopec's gas station convenience stores in Henan.

In 2010, Sinopec signed a strategic cooperation agreement with Guizhou Moutai to sell Moutai wines exclusively in more than 15,000 Sinopec gas stations across the country. At the same time, Great Wall wine counters were also opened in Sinopec gas stations, and these Great Wall dry red wines were also marked with the logos of Sinopec and EasyJet.

In the following years, there was a continuous cooperation between alcohol brands and Sinopec EasyJet, and the variety of wines on the shelves of EasyJet convenience stores became more and more diversified. This also allowed Sinopec to see new business opportunities, no longer satisfied with just helping others yell, but directly down the runway running.

In 2014, Sinopec EasyJet and Moutai*** invested together to form Guizhou Lai Mao Liquor Industry Co. After six years of cooperation, Lai Mao has gradually grown into a single product with sales of 1 billion. Public data shows that in 2020, Lai Mao achieved five million sales in 57 cities and ten million sales in 22 cities through Sinopec E-Jet's channels. In 2018 alone, the sales amount of Lai Mao in the EasyJet terminal accounted for 69% of the total sales.

The in-depth cooperation with Moutai has allowed Sinopec to see again the rich dividends of the liquor market and the easy-to-use convenience stores as a "good" channel for selling liquor. Subsequently, Sinopec and Luzhou Laojiao jointly launched a liquor brand, hoping to replicate the success of "Lai Mao".

Generally speaking, the profit margin of wine is about 10%. The profit margin of Moutai is about 30%, and the profit margin of wine is about 15%, but compared to the situation, the profit margin of refined oil is only 6%, and the wine is worth more than the oil.

Selling wine is a good business

Why set up a wine store that specializes in selling wine when the convenience store itself is a good retail channel for wine?

An industry insider interviewed by China Wine News believes that the establishment of the "EasyJet Zhenjiu Pavilion" is equivalent to the original belonging to the end of the self-picked liquor centralized to the headquarters of the unified planning, the flow of cash space is huge. Sinopec EasyJet as a flow platform, closed to the fixed customer concentration and huge, so the channel advantage is also more obvious.

A report in the Southern Metropolis Daily also mentioned that some of the second, third and fourth tier brands or first tier brands in the second tier of alcoholic beverages products, in the case of its lack of brand influence in Sinopec's EasyJet convenience stores have an inherently high exposure, in addition to providing a greater flow of products, and the products may be due to the cost-effective and easier to complete the transaction.

It would be good to see how much money Huazhi Wine & Spirits, an A-share-listed alcohol seller, has made in the past two years. Last year, Huazhi Wine & Spirits had a net profit of 675 million yuan, up 81.03 percent year-on-year. In the first quarter of this year, Huazhi Liquor Company's net profit was 249 million yuan, an increase of 30.39 percent year-on-year. Huazhi liquor since last year, revenue and profit soared, mainly from several aspects: outlets spread more, boutique wine sold more.

The most lucrative business of Huazhi Liquor Company comes from the agency of Moutai (Taiwan) Wuguangliquid and other high-grade liquor, especially Moutai, which is the "bearer" of Huazhi Liquor Company's revenue. And easy to cooperate with Maotai experience is familiar, and outlets are also many, against the Huazhi liquor to see, open liquor stores this way through.

Some analysts believe that "EasyJet" may become a low-priced channel for the volume of inventory. After all, in the gas station scenario, the wine is not filled with shopping bags but the trunk of the car. In addition, car owners have the habit of filling up the gas tank before the holidays, and purchasing holiday wine at the gas station is also in line with consumer habits.

In addition, in recent years, the performance of EasyJet convenience stores in terms of revenue is mediocre, which may also be a motive for Sinopec to set up the "EasyJet Wine Shop" in the hope of the emergence of a second growth point.

According to public data, in 2018, the average single-store annual revenue of EasyJet convenience stores is about 2.2 million yuan, while in 2017, the single-store annual revenue of Family Convenience Stores was about 3.68 million yuan. The gap between EasyJet and head convenience stores such as 7-11 and Rosen is even greater.

In 2020, the average ping efficiency value of the top 20% of domestic convenience store revenue ranked by the head enterprises reached 76 yuan/square meter/day, and EasyJet was 63 yuan/square meter/day. In the case of a certain gap with peers, how to increase profits and realize part of the bend, it is particularly important.

A survey article in China Youth Daily shows that although liquor only accounts for about 10% of the sales of gas station convenience stores, it is an important profit growth point. Therefore, increasing the scale of sales of high-margin liquor can significantly increase profits and effectively improve single-store earnings.

Although still in the pilot stage, can already see Sinopec for the "EasyJet ZhenJin" ambition. According to the project plan, Sinopec will complete more than 200 EasyJet pubs by the end of August this year, and has prepared a series of opening promotions.

The basic law of selling wine is also important

EasyJet has a lot of experience in the operation of single products, and it has contributed a lot to the marketing of Laimao wine. But there are still challenges in terms of operating a vertical liquor store.

First, the requirements for customer traffic are different, and the difficulty of supply chain management is different.

Setting up shelves to sell wine in an EasyJet convenience store and opening an EasyJet wine shop to sell wine are very different in terms of cost, and the requirements for customer traffic and customer unit price are also very different.

The gas station is not close to the core area of life due to its large area, and it is even far away from the densely trafficked commercial places, but the social and entertainment attributes of alcohol are destined to be sold in places with large flow of people to make better sales. The company's goal is to provide the best possible service to its customers," he said.

According to past experience, the gas station to sell liquor more rely on gift coupons and points redemption, based on this, the gas station to sell liquor need to have a shopping guide, in different gas station convenience stores to generate liquor sales is very big difference.

In addition, the sale of alcohol at gas stations is not something that consumers are willing to pay for unless it is exclusive or priced slightly lower than other channels. This, too, has been the experience of EasyJet's own alcohol sales in the past. There are many types of liquor in the "YiJieZhenJinWuHang", do they all have separate discounts? This is also something that needs to be convinced to the user.

"EasyJet ZhenJinWuHuan" greatly increased SKU, the supply chain requirements than before, compared to other mature liquor chain enterprises, "EasyJet ZhenJinWuHuan" in the supply chain management ability to keep up with the decision of end-user experience, and single-store cost.

The most important thing is that you have to be able to manage your own supply chain.

Secondly, there is the issue of channel conflicts and the safety of alcohol and oil.

In terms of the liquor sales system, the liquor culture is different in different places, so the focus of the sale of liquor products is also different, the vertical management system of the gas station convenience stores are also prone to conflict with the local liquor sales channels, easy to convenience stores in the past, most of the sales of the "co-branding" of the brand.

"EasyJet ZhenJinHuan" with the amount of liquor companies to launch their own brands, the different drinking habits of consumers around the world will affect the sales of their own brands, but also need to put a question mark. Of course, according to foreign experience, some of the wine only appeared in the gas station self-management channel, but also a marketing point, such as "limited sales, 5 gas station best quality Napa Valley wine" and other articles, often appear in the United States, California, local magazines.

Lastly, and most fundamentally, the combination of wine and fuel is often dangerous. Although the security authorities do not currently require that gas stations cannot open liquor stores, but simply keep them away from fueling equipment, the large number of wines stocked in the EJJ Wine Shop is still subject to safety uncertainties.