Hangzhou Europe Shopping Mall Losses Serious, Cross Border Retail Industry Will Fail

Zong Qinghou's cross-border business retail The first test will fail. In June 5th, the China real estate newspaper reporter was informed exclusively that Wahaha's first commercial real estate project in Qianjiang new town of Hangzhou, Hangzhou, was seriously unable to sustain its losses in the shopping mall, and Wahaha had already defaulted for half a year, and intended to cancel the contract departure.

"Wahaha has unilaterally lifted the lease contract last month. If it is formally terminated, Wahaha will have to pay a penalty fee of about 18 million yuan." Zhejiang Zhejiang European Real Estate Co., Ltd. (hereinafter referred to as "Zhejiang European real estate") responsible person told reporters that the property of Hangzhou Europe shopping mall is the Jamo building of Zhejiang European real estate.

In June 2012, Wahaha The group announced its entry into commercial real estate in a high-profile manner. In November of that year, it opened the first shopping mall in Hangzhou, Jamo building, Qianjiang new town. Wahaha defined the day as "a very important day in the history of enterprise development".

At the beginning, for the introduction of Wahaha Group, Zhejiang European real estate also gave a rent lower than the market price of 70%, and the lease term was 16 years. However, a reporter survey found that since the opening of a year and a half, the shopping mall in Hangzhou has been running poorly and continuously losing money, and has gradually become the abandoned son of Wahaha Group.

In fact, as early as this year's national two sessions, Zong Qinghou has publicly said that he is not optimistic about Hangzhou's commercial real estate. "Before Hangzhou, commercial real estate was underdeveloped, but now we have a lot to build, and we dare not do it." Zong Qinghou said.

The reporter noted that since April this year, Hangzhou's European shopping mall has begun a major adjustment. The main part of the shopping mall has been transformed into "Wahaha future city education center", which is mainly engaged in children's education consultation and education services. Wahaha also announced its formal entry into the education industry. Behind this seemingly modest change is another step in Wahaha's chaotic path.

"There are too many deficiencies in the Hangzhou project. Failure is expected." Durbin, director of RET Rui Yi De shop department, pointed out that the location of the shopping mall is not related to the main business of Wahaha Group, and Wahaha lacks the experience of retail and real estate and talent reserves. If there is no significant improvement, the future Wahaha cross-border commercial road will be more and more dangerous.

Serious losses will be abandoned

At the intersection of Fuchun road and the public street of Qianjiang New Town, Hangzhou, the two high-rise office buildings of the Jamo building stand towering, and the shopping mall in Hangzhou quietly opens at the corner of the bottom of the building. From the "Wah ha handsome" of the Wahaha business to the "poor Cock wire" of the cold and cheerless ending, the time span is only one and a half years.

In the first half of 2012, Wahaha joined some dealers in two provinces of Zhejiang and Hunan, and established Wahaha commercial Limited by Share Ltd (hereinafter referred to as "Wahaha commercial company") through the fund-raising equity participation. The first phase invested 1 billion 700 million yuan and mainly invested in shopping mall in Europe, with the goal of "listing commercial companies within 5 years".

In November 29th of that year, Wahaha Group, in order to speed up the landing of the first project, quickly rented 35 thousand square meters of property in Qianjiang New Town and opened the first shopping mall in Europe. At that time, Mr Zong said that Wahaha would take the way of renting property and set up 3~5 mall, and planned to build 100 shopping malls or complexes in 5 years, and the average annual speed of 20 seats would be comparable to Wanda Plaza.

Words are still in the ears, but Zong Qinghou's beautiful blueprint is grey in the first step. Reporters at the scene saw that Qianjiang shopping malls in Qianjiang New Town in Hangzhou are now deserted, and the salesmen rely on the entrance of the shop. A staff member told reporters that the market was undergoing internal adjustment because of its gloomy business and heavy losses.

"At the end of 2012, when the contract was signed, Wahaha agreed to pay a deposit of 70 million yuan at a time. Now Wahaha feels that the margin is too high. It proposes to deduct the arrears of rent from the initial payment guarantee. After being rejected, we sent a letter of cancellation to us at the end of May this year." The above-mentioned Zhejiang European real estate official said that the Wahaha business company, which was responsible for the operation of the shopping mall independently, began to default on the rent from December last year, amounting to tens of millions of yuan. "Because of the gloomy business, it is a bit of a discredit for us to ask for a cancellation."

"It's like a baby who has just died on the ground, and the landlord is losing his wife and the soldier." Zhang Huifang, general manager of Hangzhou win win institution, said that the rental of the shopping mall in Europe is only 2 yuan / square meter / day, far below the level of the rental housing in Qianjiang New Town, and the lease period is 16 years. Under such favourable conditions, Hangzhou's Europe shopping mall has not yet passed through the first three years of the paving period, so its vitality is fragile.

In fact, the Wahaha Group's attitude towards Hangzhou's first project has always been very subtle. In April last year, when Hangzhou wa Europe shopping mall first reported bad news, a Wahaha commercial company deputy chief told the China real estate Daily reporter: "Hangzhou project operation is indeed difficult, image positioning, product lines and other problems. Wahaha has no experience of shopping camps. Entering this area is a normal thing to pay tuition fees."

More Wahaha Group insiders revealed that Wahaha commercial company is experiencing a turmoil of personnel. Apart from the general manager, vice president and other leading personnel are removed from the company, and the original team members are also facing the dissolution. Reporters learned that Wahaha business is still in the state of constantly changing management team.

Hidden secrets in transformational Education

Baby Europe shopping mall can not turn, diverted to do children's Education City, this is in Hangzhou The commercial real estate sector is no longer a secret. In April 27th this year, at the awarding ceremony of a writing contest, which was exclusively supported by Wahaha Group, Zong Qinghou announced that part of the shopping mall in Jamo building was adjusted to "Wahaha future city". This also meant that the first National Mall in the country began to transform formally.

In March this year, Wahaha commercial Limited by Share Ltd and Shanghai three Czech Investment Group Limited (hereinafter referred to as "Shanghai three Jie") jointly funded the establishment of Hangzhou Wahaha three Jie Investment Limited (hereinafter referred to as "Wahaha three Jie company"), responsible for running Wahaha future city. Industrial and commercial information shows that Wahaha three companies, Wahaha commercial Limited by Share Ltd invested 3 million yuan, the shareholding ratio was 15%; Shanghai three Investment Group Co., Ltd. contributed 17 million yuan, holding 85%. The business scope approved by the industry and commerce includes "industrial investment and educational information consultation", and the legal representative is Du Jianying.

Reporters also noted that due to project transformation for the education industry, there has been a lot of changes inside the shopping mall in Hangzhou: in the corner of the furniture decoration area, staff members come and go to make the final arrangement for the upcoming exhibition, the original European luxury on the two floor. Clothes & Accessories The store has been quietly empty, is redecorating, and specially set out a region as the "Wahaha future city" project advisory zone and experience area. It is reported that this project has completed the enrollment plan for this autumn semester in 4~5 this month.

In this way, Wahaha, the original school run factory, started an education and training business in the first shopping mall. It is worth noting that after the establishment of Wahaha three Czech company, its shareholders were frequently active in the capital market, which once triggered Wahaha's questioning of listing money.

Recently, with the opening of IPO floodgates and the pre disclosure of prospectus, the three Shanghai Czech Republic, the head of Wahaha and the party secretary of the original Wahaha Group, invested in the holding of the company, through the participation of PE, appeared in the list of indirect shareholders of IPO enterprise Taizhou new century optoelectronics. In the indirect shareholders list, Shanghai's three Czech figure also appeared in the list of Shen run's shares.

"Wahaha commercial company was initially set up by dealers to raise funds, and the money paid for it would be rewarded. The way of shopping malls could not get through. It might be a good choice to enter the capital market by way of education." A senior developer from a local developer in Hangzhou told reporters that Du Jianying, one of the closest people to Zong Qinghou, is closely related to the three Shanghai holding company and Wahaha commercial company.

Up to now, Wahaha has extended the tentacles of commercial real estate to Zhejiang, Fuyang, Yuhang, Henan Nanyang, Hunan Zhuzhou, Changsha and other cities. But in addition to Hangzhou Europe shopping mall, there is no landing project, and the dream of "100 complexes in 3~5" is still far away.

Pluralistic development or dilemma

"Wahaha crossover from shopping malls to education is from mistakes to mistakes. Now Wahaha has nothing but money." A Hangzhou commercial real estate insider said that Wahaha's cross-border commercial real estate has been following the logic of "no strategy is strategy, market opportunity is opportunity", and the failure of Hangzhou shopping mall is only the beginning of an attempt.

As a "new man" in the retail business, Wahaha's commercial development is not optimistic for the industry. Jiang Yijun, director of the Zhejiang Institute of business economics, pointed out that Wahaha has already entered the retail business and even commercial real estate. It is already too late. "Every enterprise has its own growth gene, similar to HUAWEI, Wanxiang and other enterprises. In the early years, it has accumulated solid experience of diversification. But the Wahaha gene has only fast food products, and it lacks the genes of real estate operation and investment. Now it is a huge challenge to enter the complex field of commercial real estate."

The above Hangzhou commercial real estate insiders also pointed out that one of the problems exposed by this shopping mall is Zong Qinghou's monopoly power. It is reported that since the formal registration and establishment of the company in 1989, Wahaha Group is still like a company of one person: No deputy has been set up.

Looking at the development process of Hangzhou's Europe shopping mall, it is easy to see that the positioning of the project is always changing because of Zong Qinghou's own thinking. At the end of July last year, the "2013 Wahaha international fine show", Zong Qinghou also announced the abolition of the name of "Europe shopping mall", renamed the "Wahaha international boutique shopping mall", and will adjust the details of the commercial real estate investment mode. It turned out that this adjustment did not work, so the shopping mall began to transform the education industry.

To abandon Hangzhou and go out of Zhejiang, Wahaha's cross-border road is still a long way to go. In the face of doubts about Wahaha's diversity, Zong Qinghou once admitted that there are certain problems in the location of shopping mall in Hangzhou, but Wahaha's retail strategy will not change.

"Wahaha needs to open 100 stores in the next 5 years. The key to success lies in talents and teams. Although commercial real estate is very tempting, if the enterprise fails to establish a professional investment, planning and operation team, only by relying on the original people to do it, the probability of failure will be very high. Durbin said Wahaha has some advantages in understanding the way of retailing and the way of innovation, but under all kinds of challenges, Wahaha's future success is still very difficult.