Lianhua Supermarket Hua Guoping Talks About Management Innovation

< p > 2013, Lianhua supermarket sales amounted to 30 billion 380 million yuan, an increase of 4.8% over the same period last year.

The company has three major business formats including large supermarkets, supermarkets and convenience stores with a total number of stores of 4530.

However, compared to the previous years, Lianhua supermarket is trying to slow down its pace from the "attack the city" to the internal fine operation.

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< p > it is not difficult to understand that China's economy is entering a structural adjustment period, and consumers are spending more and more prudently, resulting in a weak retail sales.

Under such circumstances, the past growth mode is difficult to sustain, and the problems covered by rapid expansion in the past are gradually emerging.

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< p > including Lianhua, Chinese retail enterprises in the past mainly expanded outside the extension, low cost and extensive expansion to expand sales, but as the market was saturated, the cost of this expansion way was higher and higher, and even greatly affected the profit level.

In addition, the rise of new business models represented by e-commerce also has a huge impact on traditional retail businesses.

More and more young consumers in China have become accustomed to convenient services and low prices in online shopping.

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Under the circumstances of "P", the traditional retailing industry is facing "several pressures" dilemma.

Over the past year, Hua Guoping has been most thinking about how to adapt to the new business trend, adjust the business mode, and how to sustain growth under the environment of economic slowdown and maintain good pressure resistance. < /p >

In an interview with P, Hua Guoping shared his thoughts on traditional retail management innovation without reservation.

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< p > < strong > the difference of chain mode < /strong > < /p >

Reporter: in your opinion, what are the characteristics of the domestic "a href=" http://www.91se91.com/news/index_c.asp "chain supermarket" /a "industry" and what challenges are facing in terms of management? < /strong > /p > P, strong.

< p > Hua Guoping: domestic supermarket chains have their own characteristics, which sometimes deviate from the nature of chain.

First of all, the restrictions on opening stores in China are relatively small, and different stores can easily lead to vicious competition at close range. Under this trend of homogenization, we hope to play the initiative of the store manager as much as possible and highlight the "store ism".

Second, domestic suppliers will spend a lot of money in the retail channel when calculating the cost. If blindly "unified procurement", it will lead to a decline in the revenue of the stores. However, emphasizing the channel mode will weaken the competitiveness of commodities, so a balance between them is needed.

Third, generally speaking, the price and promotional activities of chain supermarkets are unified management, but in fact, different locations have different rents and local consumption habits.

Therefore, the moderate difference between the characteristic promotion and the price can achieve better results.

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< p > under normal circumstances, chain supermarkets must be standardized if they want to succeed.

But standardization is difficult to implement.

Unlike the industrial enterprises, the retail industry is less than one process, and the products can not be turned into finished products, but in the sales segment, if there is less than one business link, it can actually be sold to customers.

In this regard, some retail enterprises in foreign countries and in China's Taiwan region have many advantages in retailing technology, and the processes are very elaborate.

In the fierce competition, the advantages of this background management will emerge.

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< p > < strong > reporter: according to the characteristics of these industries, how do you improve the business mode and increase the efficiency? < /strong > < /p >

< p > Hua Guoping: the key is to grasp the positioning and format pformation and upgrading of our market. There are many contents in this respect. I still talk about several work we are doing from the perspective of retail technology.

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< p > first is to reduce the cost of commodity purchase.

When the supermarket reaches a certain level, the intermediate suppliers with relatively low annual sales will be gradually cleaned up, because these suppliers do not grasp the source of the commodities. If they add a profit in the middle, they will undoubtedly reduce the competitiveness of the commodity and the profitability of the supermarket.

Therefore, we will emphasize procurement at source and reduce supply.

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< p > at the same time, we propose volume purchase for some products.

For example, the retail giants in the electrical appliance industry can sometimes buy all the goods of a factory, although the factory can make profits, but the profit is relatively thin; but if the factory sells itself, the gross margin space will be larger, but the market cost will be bigger, and the production will not be good.

This way of buying and selling will encourage manufacturers to better technological innovation, reduce costs, increase product research and development, improve commodity competitiveness and create a win-win situation.

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< p > third is the mode of licensed processing, that is, supermarkets develop their own brands.

In this field, some supermarkets in Britain and Japan have done very well, and their sales of licensed commodities can reach 30%.

Of course, there is also a choice problem for licensed commodities. Generally, the effect is very good for commodities with high consumption frequency and low dependence on brands. The gross profit rate of licensed commodities is usually 30% higher than that of general merchandise.

If the gross profit of general merchandise is 20%, it can at least achieve more than 26%, and individual can be higher, but licensed goods give customers the same quality, lower price or more quantity.

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P: what do you mention in the field of licensed processing? Why do mainland retailers do not do well at the moment? < /p >

< p > Hua Guoping: first of all, if I look for famous manufacturers to help me make the licensed products, then I will sell the private brand goods together with the manufacturers.

If I look for other small and medium-sized factories to produce, in case of bad quality, what can I do? So, at present, China has the ability to make big suppliers of fixed brand, they do not work, some small and medium-sized suppliers are willing to do so, and we dare not let them do it.

This is why the space of licensed commodities is very large, but it can not be done.

At present, the sales volume of Lianhua's licensed commodities is 3.5%, which is far from 30% of some foreign supermarkets.

Suppose we try to make our own brand 15%, then the profit space will increase greatly.

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< p > < strong > > a > href= > http://www.91se91.com/news/index_c.asp > electricity supplier < /a > /strong > /p >

< p > < strong > reporter: in recent years, the impact of electricity providers on traditional retail has become increasingly significant.

For Lianhua, what changes have taken place in customer groups, commodities, sales, customer price and gross profit under the influence of the electricity supplier? < /strong > < /p >

< p > Hua Guoping: I want to interpret it from several dimensions.

First of all, more and more categories of commodities are suitable for sale through e-commerce channels, such as large appliances and books.

This will definitely affect the sales volume of traditional supermarkets.

Second, e-commerce has made it clearer to distinguish between online shoppers and traditional retail stores.

The customers who are shopping in supermarkets are obviously older, and most of them are young people.

That is to say, supermarkets are becoming more and more "aging", online shopping is becoming younger and younger, and as time goes on, the passenger flow in supermarkets will drop.

Third, judging from the current policies and regulations, this one is absolutely beneficial to the electricity supplier, which is very strict with the traditional supermarket, which also accelerates the development of the electricity supplier.

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< p > I think the biggest impact of the electricity supplier on the physical store is to change the way of people and goods contact.

In the past, this way of contact is one-way, mainly for people to go to shopping malls to contact goods, but now it has become completely two-way, that is, goods can also contact customers. It can be said that the air is permeated with commodities, and there is a saying that "goods are everywhere".

The change of this way of contact not only has a profound impact on Lianhua, but also on all offline supermarkets and department stores.

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Reporter: last year, Lianhua Supermarket's electronic business platform "Lianhua Yi Kai" was launched on P last year. < strong >

So far, Lianhua supermarket has made some attempts in the field of O2O, and what problems have it encountered? < /strong > /p >

< p > Hua Guoping: at present, we have made some attempts in the field of logistics, and there is a service called "net subscription store".

After buying the goods on our website, customers can choose to deliver them directly to the nearby fast passenger stores.

If it is second, then Lianhua's backstage will send the order information directly to the fast passenger store. If the store has goods, it will be directly matched with the goods. If it is out of stock, it will be pferred from other stores through express delivery.

There is also a service called "ordering shop to pay".

In fact, despite the fact that there are various electronic payment methods such as WeChat payment, many customers are still not at ease. They still want to pay directly to the supermarket store.

Therefore, customers can place orders online, and then go directly to nearby stores to pay and pick up the goods.

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< p > in the operation of O2O, a prominent problem we encounter is that there are more kinds of goods online than offline stores. This problem brings trouble to logistics and distribution.

For example, there are sixty thousand or seventy thousand single products in Lianhua's goods store, but it is not possible that there are so many single products in every store, especially the O2O shop.

In addition, there are great differences between different stores.

When consumers place orders online, we need to immediately dispatch which stores have such goods. It is very likely that the stores near the consumer do not have the goods they need, which requires us to pfer the goods from other stores.

At present, there are nearly twenty thousand products on our website, but in fact, there are no such stores in a store.

This is our great limitation in the operation of O2O.

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< p > strong > reporter: how do you balance the conflict between online and offline channels? < /strong > /p >

< p > > a href= "http://www.91se91.com/news/index_c.asp" > Hua Guo Ping < /a >: Lianhua Yi bought less than one hundred million sales last year, accounting for a small proportion of our Lianhua Supermarket's total sales.

First of all, we do not require the electricity suppliers to make very high sales. Second, encourage them to count sales in the store's performance.

For example, we launched the O2O, after the customer ordered the store near the distribution, the performance should be regarded as a physical store.

The original intention of Lianhua electric business is to support entity stores, as a supplementary way to store sales. Therefore, in e-commerce operation, we pay more attention to the linkage with entity stores, such as the relationship between the promotion activities of the entity store and e-commerce, the affiliate system of the entity store and the e-commerce, and the various kinds of information of the entity store and e-commerce.

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< p > besides the channel conflict, the development of e-commerce can bring some unexpected benefits to the physical store.

Because of the rise of electric business, some stores and small shops can not survive, so the situation of "one shop is hard to find" has changed, so the rent of some areas has declined.

In addition, the impact of e-commerce on the physical stores will also push physical stores to complete the pformation of commodities as soon as possible.

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< p > in the long run, physical stores and online stores will complement each other and compete with each other. There will never be a "two election". Therefore, there are indeed some commodities that are not out of the question in the physical stores, and the products such as fresh and processed have also been strengthened. Therefore, Lianhua e-commerce has also highlighted the advantages of fresh products.

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