"It's not the rivals that beat you, but the cross-border." Carrefour must have a deep understanding of this sentence, from the early hypermarket "lying to earn money", to later in the e-commerce and instant retail impact of frequent closure of stores, as a representative of foreign-funded super enterprises, Carrefour's 25 years in China has witnessed the changes in the retail industry.

In late June 2019, Suning proposed to acquire an 80% stake in Carrefour China for 4.8 billion, and three months later, the delivery procedures were completed, and Carrefour China officially became an important jigsaw puzzle of Suning's smart retail.

Now, Suning's transformation of Carrefour for a whole year, looking back at the changes in Carrefour this year, in the words of its CEO Tian Rui, "Carrefour is still the same eagle that can fly".

01

Reviewing Carrefour's year

In late June 2019, a heavy news detonated the industry: Carrefour and Suning reached an agreement for Suning International to acquire Carrefour China.

The reason for the buzz was the price; according to the announcement, Suning International proposed to acquire 80% of Carrefour China for $4.8 billion. In other words, the total value of Carrefour's China business is RMB 6 billion.

According to the information, Carrefour at that time had 210 hypermarkets and 24 convenience stores and 30 million members across the country. At this price, one can't help but think it's a bit cheap.

On the one hand, changes in user consumption habits have changed the retail industry

Since the rise of takeout in 2014, there have been voices saying that since food and beverages can be delivered instantly, then supermarkets, fresh food and other categories can also be sold through the form of offline delivery. 2016, after Jack Ma put forward the new retail, the new model of the front warehouse, the integration of the warehouse and other new modes of breeding.

The traditional hypermarkets are gradually not emphasized, replaced by the box horse, which can be shopped and delivered "online + offline combined" mode. According to statistics, at the retail channel end, the share of hypermarkets fell from 23.6% in 2014 to 20.2% in 2018.

In fact, in the face of user change, Carrefour has also made an attempt. Since 2016, Carrefour in China has begun to carry out a variety of attempts to build online shopping malls, the opening of the "easy to open" convenience stores, in Beijing, Shanghai and other places to test the water O2O life door to door, etc., but the heart is more than enough, only in 2018, Carrefour China closed 19 stores.

And then look back at the action of friends, RT-Mart sold to Ali for 22.4 billion, becoming Ali's bridgehead in the field of fast-consumption; Wumi access to the multi-point Dmall system; Walmart code in the end of 2016, 50 million U.S. dollars in the strategic shareholding of the Dada Group; see the old rivals one after another to get the "ticket" of the new retail era

On the other hand, Suning's full-scene retail needs more offline carriers

In Suning's view, Carrefour will enhance Suning's core competitiveness in four ways: it will help Suning accelerate the development of the company's large fast-moving consumer goods category; it will help Suning expand its consumer base, enrich its membership ecology, and enhance its user value; and it will help it establish a large national warehousing and supply chain infrastructure for its fast-moving consumer goods category; It helps Suning to acquire Carrefour's high-quality property resources and enhance the competitiveness of its offline stores.

Hou Enlong, president of Suning Tesco, also said that Suning's acquisition of Carrefour is based on the perfect layout of Suning's all-scene, all-category, globalization, and all-area logistics network claims.

On September 27, 2019, Suning Tesco released an announcement that Suning International's 4.8 billion yuan acquisition of 80% of Carrefour China's shares has completed the delivery procedures. Carrefour officially entered the "Suning era".

In Suning's retail planning, Carrefour as a hypermarket model, offline, to realize and Suning small store consumption scene complementary; in the ecological, to create "Carrefour big store + Suning small store + Suning Eshop APP" trinity of the whole scene of retail business.

The first thing to do is to combine the three channels.

In late October 2019, at Suning's "Double Eleven Carnival Conference", Suning put forward the "1 hour scene life circle", based on the offline layout that Suning has constructed, intending to solve the problem of all-around, three-dimensional, systematic solution within one hour. Users in shopping, services, content, socialization and other aspects of all the needs. This also means that Suning's many businesses will take the "1-hour scene life circle" as the core to play their respective advantages and synergies.

For the big store Carrefour, the assumption is to enhance the supply capacity, Carrefour in Nanjing, Shanghai, part of the store on-line "fulfillment center", which will not only access the Carrefour small program, but also access to the Suning small store APP and third-party platforms. Consumers who place orders through these online portals will be served by Carrefour's fulfillment center.

Suning relies on Carrefour's 210 store front warehouses and the layout of the city's core business districts to meet the needs of users within 3 kilometers of the home service. The enhancement is also reflected in the performance, in less than half a year after the integration of Suning, Carrefour China realized a turnaround in the fourth quarter of 2019, which is the first time in seven years that it realized a single-quarter profit.

Especially during the epidemic, Suning Eshopping APP on-line "Carrefour 1 hour delivery" service, the entire February-June, Carrefour home business sales increased by 710% year-on-year, orders increased by 468% year-on-year.

Secondly, upgrading the supply chain

After the completion of the acquisition, Suning built the original long-absent commodity management center within the Carrefour commodity system, and optimized SKUs according to Carrefour's sales, such as cleaning up more than 4,000 fast-moving consumer goods with low moving sales for more than three months in Q4 2019; department stores and textiles have higher gross margins but poor sales, so they have a good understanding of the SKU adjustment of homogenized goods, and actively transform to life home in the operation mode; increase the construction of fresh supply chain, improve the efficiency of the supply chain, and actively promote the integration of the big FMCG supply chain with Suning Group.

Finally, the supply chain access Suning small stores

As the two main subjects of Suning's offline services, the two are combined through the supply chain system. On the one hand, the access of Carrefour's supply chain expands the variety of SKUs in small stores and reduces the out-of-stock rate of small stores. On the other hand, the small store platform as Suning industry super entrance acts as a low-cost customer acquisition channel for Carrefour, bringing additional traffic and sales enhancement for Carrefour, superimposed on the community flow application.

In addition, Suning's original flow and logistics advantages can also be fully empowered for Carrefour, while Carrefour's FMCG high-frequency commodity attributes can further enhance Suning's flow pool and Suning's comprehensive competitiveness.

02

How to do next?

The data show that the MAU of fresh to home in the month after the Spring Festival is close to 70 million, compared with 44 million in the same period last year, and at the same time, the daily per capita number of times of use and length of time increased by more than 20%. To home business has also become the next point of contention for retail giants.

After nearly a year of integration, Carrefour has become a bridgehead for Suning's home delivery business, and from the internal email recently sent by CEO Tian Rui, we can also see Carrefour's next move.

First of all, the construction of small warehouses will be fully promoted to improve the coverage radius of the home service and delivery time

The home is essentially competing for efficiency, how to ship faster, how to deliver faster is the problem that the enterprise is constantly solving.

In terms of shipping, Suning's "fast picking warehouse system" can automatically plan the best picking route for the picker, but also according to the sales volume of different time periods, measuring and setting the corresponding replenishment demand, to protect the user's consumption experience.

In terms of distribution, Carrefour shortens the delivery time by increasing the coverage of front warehouses. At the "Double 11 Conference" last year, Gong Wenrui, vice president of merchandise of Carrefour China, said that 1,000 community fulfillment centers will be opened in 15 core cities in the next year.

At present, Carrefour's home business has formed a "1 hour + half-day + pre-sale pick-up" combination of various modes.

It is worth recalling that Tian Rui's statement this time is to promote the construction of "small warehouse", as mentioned earlier, in the past half a year, Carrefour, due to the advantages of location and area, has been used as a front warehouse.

With the increase in the cost of opening stores, large stores do not make money, the giant has opened a "small store mode", box mini has become the focus of this year's box goal, the Carrefour "small warehouse" is similar to the Daily Fresh only provide storage of the front of the warehouse or box mini. The "small warehouse" of Carrefour is similar to that of Daily Yufeng, which only provides storage in the front position, or the standard super small store of the box horse mini, which is also a point of expectation for the next retail market.

Second, increase the subsidy.

Any Internet economy can not avoid, rely on subsidies to cultivate user habits, to the home is the same.

In this regard, Carrefour said that during the 618 period, the launch of the home service 80% discount subsidies based on an additional 500 million yuan of commodity subsidies. At the same time, Tian Rui also said, "The subsidy is not on line, and there is no deadline, in the meat battle of the home service, Carrefour ammunition is very sufficient."

Finally, accelerate the integration of Suning small store, Suning Eshop APP

In the past six months, we obviously feel that Suning and Carrefour speed up the speed of the combination of the beginning of February, the Suning Eshop APP on-line Carrefour "1 hour to" home service; February 6, Carrefour stationed in the platform of the Suning small store; in the second half of February, Carrefour launched the Carrefour "1 hour to" home service; in the second half of February, Carrefour launched the Carrefour "1 hour to" home service.

For the next integration, Tian Rui mentioned in the letter, to use the supply chain capabilities, to provide more commodities for the small store, for the Ebay member stores to select better good goods.

At the end of the internal letter, Tian Rui wrote that the huge current of the times has passed, and then the solid rock will appear cracks, which is undoubtedly the best interpretation of the first 24 years of Carrefour; however, when each time the consumer field changes, it is also an opportunity for the enterprise to self-evolution, as an important part of Suning's large FMCG section, Carrefour on the one hand, can provide a better solution for the business of Suning to the home, and on the other hand, it can strengthen the Suning FMCG section. The company's FMCG business is also a major player in the FMCG market," said Mr. Wang.

In the second half of the retail market, "Carrefour+Suning Eshop+Suning small store" iron triangle combination can generate much energy? We'll have to wait and see.

Source / logistics finger news (ID: wuliuzhiwen)

Author / calendar