Shang Tai Group China Director Zhou Meng: Heavy Assets Of Retailers And Developers

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Retailers complain about increasing labor costs and rental costs. They always sigh that profits have been eaten by owners and become a "job" situation for owners. They are also at risk of being kicked out by owners at any time. While developers are in bad condition, they simply organize their own teams, operate their own property, and the roles of retailers and developers are becoming more and more integrated, and the boundaries become increasingly blurred.

How to weigh the advantages and disadvantages? In the ninth annual meeting of China Federation of purchasing, Zhou Meng, the managing director of China's Thai group, released his own view.

The first family was founded in 1956.

Expanding to the downstream commercial real estate penetration seems to have become a magic weapon for fashion department stores.

Seize the opportunity, make the best of the situation and create a comprehensive advantage, and finally form a comprehensive and diversified enterprise that crosses different circulation chains. This seems to be the ultimate dream of department stores to enter commercial real estate.

On the way to realize this dream, and listen to the forerunner.

Reporter: Shang Tai Group is Thailand's largest business.

Zhou Meng: early business started from a small bookstore in Bangkok, Thailand, and gradually began to do department stores, and gradually made shopping centers.

The reason why we did the shopping center was very similar to our current domestic operation, that is to say, the department store should be tailored.

Considering the layout of the shopping mall, traffic similarities, design, rents and other factors, we feel that if the two sides communicate well, they can still cooperate, but the overall situation is still troublesome, so we start to make our own shopping center.

Slowly, a larger company developed at the top of the industrial chain, that is, our commercial real estate company is called CPN.

At present, we have 15 shopping centers in Thailand, and another 10 will be opened in the next three years.

Reporter: Shang Tai Group is a successful company integrating retail and real estate. What do you think retailers need to pay attention to in the process?

Zhou Meng: from our experience, I feel that

First, the pition from retailers to commercial real estate, because retail enterprises have the advantage of retailing, of course, when designing for your shopping center, on the one hand, they are tailored for your retail format; on the other hand, retailers' own formats can create a very good business atmosphere for your real estate project.

Only in this way can complementary advantages be fully reflected.

Therefore, if the retailer's business format and foundation are relatively solid, when you do the shopping center, it can serve as a very good tenant, laying a good foundation for the operation of the shopping center.

Second, your shopping center must be an independent company when it is doing it. It must be separated from retail companies, that is, you can not make it a mere pave for retail sales, or a company that makes sacrifices. It also has to be a real estate developer, and it is very important to survive in the commercial real estate sector in a completely independent and fully competitive mode.

Third, you must find the financing channels of commercial real estate, rather than relying on some profits of retail enterprises.

Of course, you may need to rely on the profits of commercial enterprises in the early stage, but you can not drag on the cash flow of commercial enterprises, because once the cash flow of real estate is out of the question, it is likely to drag down business enterprises.

In Thailand, our commercial real estate company is doing the financial mode, making REITs and listing, that is to say, the capital flow problem of commercial real estate should be solved by itself.

The two companies operate independently, though they support each other, but do not interfere with each other.

Fourth, commercial real estate is for its own retail format; but you must have a world-class vision to see the trend of the world, business changes, including changes in commercial real estate, rather than that I have my own services, almost.

This is not the case. The whole design you create is in line with the world trend, according to the standards of the world, according to the standards that commercial real estate companies should do.

Reporter: professional people do professional things, even if retailers and the real estate industry have the trend of integration, but in the specific operation process, still have division of labor?

Zhou Meng: Yes, what I have just said can be briefly summed up as three points:

First, make joint efforts.

The integration of retail and commercial real estate within a group should play a role.

Commercial developers build space for retailers, retailers also contribute to the prosperity of business. This combination is very important, and is also the key to the final goal of the whole role conversion. If this is not done, the two roles may be out of order.

Second, the advantages of division of labor.

Once you are doing commercial real estate and doing retailers, the division of labor must be clear.

Because of their division of labor, they will have the ability to concentrate. Commercial real estate will continue to be the best commercial real estate, and retailers will be the best retailers.

Third, independent competition.

Although retailers can do commercial real estate, the two can complement each other or help each other, but when commercial real estate companies face other commercial real estate companies, retailers face independent competition in their respective fields in the face of other retail businesses.

Reporter: retailers are involved in real estate and real estate developers are exploring retail business. Which one do you think is easier?

Zhou Meng: I personally feel that the role of a real estate agent as a retailer is more difficult than that of a retailer.

Why do I say so? In recent years, China's real estate industry has relatively better return on profits. Many people say that developers earn money by making a sack and a sack, while retailers earn a profit of two points and five cents.

So when a real estate agent turns into a retailer, he will find that the money is painful.

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And the biggest challenge for retailers to turn to developers is money.

Even a retail companies with an annual sales volume of tens of billions of dollars, its profit is hundreds of millions of dollars.

You have to invest in a large commercial real estate project, and then bear a very high risk of assets.

When retailers turn to real estate developers, they will suffer huge cash flow pressure in the early stage, which is very challenging.

However, retailers are turning to real estate developers because they have always been cautious in their business models and are less likely to fail. But the possibility of a real estate retailer turning to a retailer is more likely to fail.

Extended reading:

Shang Tai Group, founded in Thailand by Zheng's Chinese family, has become the largest commercial retail group in Thailand and the most successful retail group in Southeast Asia.

It has 15 large commercial shopping centers, about 36 department stores, more than 600 retail outlets, dozens of five star hotels and resorts, as well as more than 120 brands of business agents. It operates 13 main formats, with an annual sales volume of about 2 billion 800 million dollars.

Thanks to its outstanding performance in the commercial field, it has won the golden badge badge of Thailand.

The success of Shang Tai is to make a comprehensive coverage of retail formats vertically and horizontally.

From the perspective of department stores, Shang Tai has developed three brands on the basis of market positioning: the high-end department store brand, Central, and the department store brand Robinson (Robinson), mainly for the community, and the three is the young fashion department Zen.

On the basis of subdivision of department stores, Shang Tai also carried out horizontal multi industry coverage.

Among the supermarkets, Central and FoodHall are high-end food supermarkets. In 2008, they were rated as one of the top five supermarkets in the world.

In addition, Martha's department store in Thailand is also represented by Shang Tai.

After a certain period of development, Shang Tai Group began to extend the industrial chain. On the one hand, it penetrated downstream commercial real estate, on the other hand, it began to extend to the upper reaches.

Shang Tai's shopping center is divided into three formats: one is the Shang Tai world, which is located in the downtown area of Bangkok. It is the largest shopping center in Bangkok. The second is the Shang Tai Plaza, which is a community shopping center. The three is the Shang Tai world. It belongs to the vacation type, or the shopping center with entertainment and entertainment as the theme.

Another manifestation of the extension to the industrial chain is that Shang Tai established the Shang Tai marketing group. At present, it has managed more than 120 brands, and has created its own brand, which is also a major feature of its success.