Competition In The Retail Market Intensifies, Integration, Scale And Resistance.

Intensified competition in the retail market

As one of the earliest open industries in China, many problems in the process of development are not yet cold.

Lai Yang, Secretary General of Beijing Institute of business economics, believes that China's retail industry has achieved the development history of developed countries in a short span of 30 years.

On the one hand, domestic commercial real estate has developed rapidly in recent years. Due to the identical location of shopping malls, business resources are limited, the degree of homogenization of businesses is getting higher and higher, and vicious competition has brought high cost to the development of the whole industry.

As Uchida Tetsu, director of design of Japan and Bridge organization, said, most of the department stores in China "can't see the difference" when they remove the signs.

In the eyes of overseas employees, Chinese businessmen have invested too much in environmental decoration, but they have ignored the brand's strategic positioning and brand combination. This is also a collective embarrassment faced by domestic department stores practitioners.

In addition, the price push up and down everywhere reflects the fierce competition and disorderly competition in department stores.

On the other hand, there is no single way of operation that does not match the rapidly increasing number of shopping malls.

At present, almost all department stores are adopting the joint venture mode. Although the joint mode can help ensure the revenue of department stores and reduce operational risks, it also weakens the ability of department stores to control the operation of commodity resources.

With a large number of foreign retail giants taking root in China and relying too much on the joint mode and relatively backward management techniques and levels, how the domestic department stores compete with the international giants to seize the market has become an obstacle to the further development of the department stores.

At the same time, the huge increase in commercial real estate supply and the diversion of new retail channels such as e-commerce, shopping centers and so on with low gross profit for a large number of sales leads to intensified competition in the retail market.

Sales of Chinese department stores rank second.

The quarterly report of friendship released third quarter shows that the cumulative net profit attributable to major shareholders in 1-9 fell by 2.71% compared with the same period last year.

In the quarterly reports of listed department stores that have been released, more than 50% of the companies showed net profit year-on-year decline, with the highest drop of 30%.

According to flush statistics, in the 38 listed companies that have released three quarterly reports in the Shenyang world's department store, 11 companies' revenue in the third quarter decreased compared with the same period last year, accounting for nearly 30%.

Net profit fell 16 year-on-year, accounting for more than 40%.

In the first three quarters, the gross sales rate of the 38 department stores was between 13.3%~34.21%, of which 7 companies were selling gross profit margins down compared with the same period last year, and 19 of them lost their sales net interest rate year-on-year, accounting for 50%.

Before, the National Bureau of Statistics announced that the total retail sales of consumer goods in September increased by 14.2% over the same period last year, and the increase was better than expected. However, the key commercial enterprises in the retail industry monitored by the Ministry of Commerce in September increased by 8%, down from August.

Some analysts believe that the reason for the data discrepancy is the poor performance of department stores.

The Ministry of Commerce monitoring of the distribution of key distribution enterprises data show that department store sales growth in September was 8.1%, down 3.8 percentage points compared with August.

Integration scale resistance impact

Fierce competition is the driving force for the development of department stores. The profit and marketing methods of traditional department stores must be further improved.

Against this background, the integration of department stores is accelerating.

Lv Kexiong, general manager of Shanghai Friendship Group Inc, believes that the merger and acquisition of the retail industry will be the trend in the future. At present, the Japanese department store concentration is 57%, the United States 59% and South Korea 90%, while our country has only 10%.

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At this stage, the development of China's department stores has provided the necessary conditions for industrial integration. The curtain of industrial integration has been opened, and the stage of industrial integration has already begun to see.

In July 2011, with the opening ceremony of the Limited by Share Ltd of Beijing first business group held in Beijing, following the Beijing capital agricultural group and the capital liquor group, another "head first" enterprise aircraft carrier was proclaimed.

Beijing Xidan shopping malls and new Lufthansa group announced the completion of the reorganization of the two sides. The Xidan shopping center of the listed company was also renamed the "Beijing first group Limited by Share Ltd", and the securities were changed to "the first business shares" for short.

The completion of renaming has become the end of the integration of the large state-owned commercial enterprises and the starting point for the new commercial aircraft carrier to test the business of Beijing.

The launch of the "Xidan first brigade" commercial aircraft carrier also means that the new Yansha Holdings has become a part of the Xidan shopping mall.

It is not just Xidan shopping malls that have benefited from the restructuring, because Xidan shopping mall owns many valuable properties in Xidan and other regions, which means that the reality of "Yansha"'s lack of commercial property will end.

After reorganization, Beijing Xidan shopping malls and new Yansha group will share in commercial property and capital resources.

In the future positioning, "to do their best" to achieve their own advantages has reached the goal of achieving mutual promotion of brand value without competition.

In order to achieve the scale effect, the general merchandise industry should carry out industrial integration, make the enterprises bigger and stronger, take the road of scale operation, and form several leading enterprises in the industry.

At present, the regional pattern of China's department stores is obvious, forming a situation like "Golden Eagle" of Jiangsu, Beijing Wangfujing, Zhejiang Yintai, northeast big business and Shanghai Bailian.

At present, regional leaders are breaking through the bottleneck of development and making efforts to expand outward. In the future, a national retail enterprise will be formed. M & A is an inevitable choice to deal with e-commerce.

Today, the Chinese retail market has entered the era of diversified demand and market segmentation. The department store, which has been the backbone of the retail market, has been constantly adjusting its marketing mode, and constantly exploring the business mode that can not only give full play to the inherent advantages of the enterprise, but also cater for the new consumption ideas and adapt to the new consumption needs.

Today's industrial integration is no longer a simple way to restructure state-owned enterprises, nor is it a means for private enterprises to achieve rapid expansion. It is no longer just a shortcut for foreign capital to enter the Chinese market quickly.

Today, industrial integration is based on the integration of industrial value chain, and it is the magic weapon to achieve optimal allocation of industrial resources.

The direct effect of industrial integration is the re effective allocation of resources, avoiding excessive competition's harm to the profitability of enterprises, improving the profitability of the whole industry and enhancing the competitiveness of the industry.

"Extensive development" to "fine service"

Recently, at the China department store summit held in Tianjin, experts and scholars and retail giants at home and abroad thought that they needed to shift from "mass market" to "target market".

In this regard, Ioka Yorichi, executive director of the Japanese department store association, said that Japanese department stores have made significant adjustments in service in recent years, and began to attach importance to providing professional services from the perspective of customers.

Ioka Yorichi said that the lack of smiling faces and the lack of smiling service are the drawbacks of the development of department stores, because it is difficult for customers to experience comfort and trust in their consumption.

In Japan, the department stores are winning by "smiling" service, which is the gap between the development of China's department stores and Japanese department stores.

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In fact, many shopping malls in Beijing, such as Yansha friendship mall, contemporary shopping mall and Wangfujing department store, have begun to pform from "extensive development" to "fine service".

"All activities of Yansha are not for promotion purposes, but to create a better way of life and bring better customer experience as the starting point, to create a high quality living platform, according to the different needs of customers to provide value service.

From the initial attention to the grades and commodity combinations of commodities, and to the combination of commodity brands and famous brand products, to the concerns of customers and the recognition of customers, Yansha has realized the pformation from "commodity centered" to "customer centered".

Yansha friendship mall chief economist and Yang introduction.

With the entry of large quantities of foreign capital, the department stores are facing more and more pressure.

Although the department store industry has encountered severe challenges from other formats, it does not mean that there is no future for the department stores.

The rise and fall of all kinds of liquids in a business is not static. The key lies in how the operators respond to the recession.

Expert opinion

China's department stores should actively implement differentiated development strategy and create new business models to break through the shackles of homogenization competition.

The domestic retail industry is gradually forming a pattern of high market concentration and large scale expansion. The national retail group and the regional large scale comprehensive retail enterprise can take the dominant position in the fierce market competition.

At this stage, China's market is in the golden period, and a series of consumer policies and measures promulgated by the state are gradually improving and consuming.

Speed up the consumption structure and optimize the retail market from survival to development and enjoyment.

However, the development of department stores is not mature at present, forming a nationwide chain expansion and development. There is still some difficulty in capital and operation.

The stores of local department stores are mainly distributed in the province and the surrounding cities. Although they have certain monopolistic advantages in the regional market, they still need to upgrade in opening up territory, expanding the provinces and cities, and expanding the horizontal penetration type.

If the department store industry wants to get rid of the situation of homogenization competition, it is bound to take the path of developing its own brand, such as buyout strategy, exclusive sale, and running its own brand.

Only by relying on the pformation of self owned brands can the department store industry grow stronger and stronger in the long run.

This also determines that the industry will further increase its thirst for capital in the future, and the demand for funds to make up for the shortage of funds through the capital market will become more intense. The listed companies are also "able to live in", so the "survival of the fittest" in the future industry will be normal.

In today's economic globalization and world integration, international competition is becoming increasingly fierce. Developing large enterprises is a strategic measure for all countries to participate in international competition.

We should firmly foster the development of a number of world-class companies, take this as a strategic direction, and strive to cultivate strong and competitive large enterprises and enterprise groups.

Retail is king and terminal is king. There is a view that mastering the economic lifeline of a country by mastering the retail industry of a country is radical but not unreasonable.

The department store industry is an important industry related to the national economy and the people's livelihood. The problems arising from the development of the department store industry should be viewed from the perspective of development and solved by the development method. Industrial integration is the inherent requirement of the development of the industry. It is the solution to the problem and an irresistible trend of development.

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With the development of pportation and the enhancement of consumer demand, the gap between regions will no longer be obvious, and the survival of the fittest among department stores is inevitable.

In 1997, there were 109 shops in South Korea, and by 2009, there were 26, only 83.

The rapid development of Korean department stores in recent years is due to the pformation from "mass market" to "target market".

Before 2005, Korean department stores mainly used various reward activities, such as gift giving, discounts, and big sale.

With the increase of consumption level, the change of global lifestyle and the change of consumption preferences, Korean department stores opened the target market through CRM, namely customer relationship management after 2005, and marketing for specific customer groups and VIP customers.

The traditional department stores want to seek development, we must achieve the following four points.

First, the structure of commodities should be rationalized, and the richness of commodities should be improved. In addition, the two must be combined with each other.

Second, to avoid the problem of homogenization of commodities, we should stagger competition and complement each other in the business circle.

Third, traditional department stores should have their own characteristics and understand where your customers are.

Fourth, traditional department stores should improve their shopping environment.

We can see that the traditional department stores are no longer the traditional department stores two or thirty years ago.

It has developed many new formats to form the "1+N" model.

For example, the combination of department stores and supermarkets, combination of department stores and exclusive stores are all new developments in traditional department stores.

Through advanced technological change, the traditional department store can continue its vitality.

We can see that many department stores are doing well now.

For example, Wangfujing group and Cai Bai jewelry, they are developed through new formats such as chain stores and specialty stores.

There is no traditional department store format, only traditional technology.

Traditional department stores must be clear about their positioning before they can face fierce competition in the future.

Commercial real estate developers have gradually joined the competition in the retail industry. The current chain retailers are gradually upgrading their assets and vertical integration, and professional retailers are gradually expanding their boundaries. The integrated large retailers will be born in the process of the recombination of industries and the process of regional expansion and merger.

But this process will be a more painful process for the retail companies in it.

In the next 3 years, the department store industry will enter the stage of industry integration, and the industry concentration will be improved. However, due to the promotion of sales force and the expansion of new stores, gross profit margins will continue to decline, while at the same time, the cost of rental and artificial hydropower will remain rigid, which will directly squeeze the profit margins of the industry.

The department store industry, as the most beneficial form of consumption upgrading, has a longer life cycle in China and is the mainstream retail format.

The department stores nationwide and some regional leaders, represented by Wangfujing and DAC, have a fairly high standard in terms of management and management. Frequent integration targets with excellent assets but low operational efficiency have made integration and efficiency the biggest highlight of recent years.