Huarun'S Integration Of Tesco Scheme Has Been Postponed. Can Two People Still Get Together?

According to the previous integration plan, Huarun Wan's plan lasted two years and completed the overall integration of Tesco in three phases.

The goal of the first stage is to complete docking and switching of personnel, assets and retail background management systems by the end of November 2014. The goal of the second stage is to improve the performance of Tesco stores before the end of March 2015; the third stage is the integration period, and all stores of Tesco complete the logo replacement and new business opening before the end of March 2016.

But the interface reporter has been confirmed from Huarun's interior. The integration plan has been postponed indefinitely.

The system switch between Shenzhen and Guangzhou has been postponed to November 1st, and Tianjin is set to be December 1st.

According to the original plan, system switching and integration should be completed according to the order of Southern China, North China, East China, Suguo, northeast and Shanghai before November 30th.

But at present, docking and handover work has only been completed in Southern China and North China, and has obviously been postponed.

At present, the new management has taken over Tesco China. Tesco only has 2 seats in the 10 board seats of the joint venture, and the remaining 8 seats belong to Huarun.

However, at present, the store level does not see any new initiatives taken by the new management led by Huarun.

The shop assistant at the shopping mall on the six road in Zhongshan, Guangzhou, said that there was no change in salary and management, and the exchange policy had not changed.

In September 23rd, the employees of Tesco China received notice from Huarun Wanjia, saying that the theme cultural promotion of pformation, pformation and fusion nationwide began on the 24 day in Tesco.

The takeover news has been confirmed for nearly half a year, and all the cultural promotion has just started.

This is probably the lesson that Huarun learned from the integration of Wanjia department more than 10 years ago: there were differences between the two sides in the concept culture and business mode, and the integration of haste led to the intensification of contradictions, and the performance also shifted from profit to loss, which led to the collective departure of the original Wanjia department store headed by Chairman Xu Gang.

Huarun will not only face greater cultural differences, but also need to deal with a series of thorny problems, and the first thing to bear is losses. In 2013, Tesco lost nearly 1 billion yuan in China.

This is also the main reason for its commitment to Huachang.

The high cost is an important factor affecting the profit of Tesco.

Take the member's manual as an example, all the manuals sent to 250 thousand members annually by Tesco China are printed by the British headquarters, which only cost 10 million yuan, far exceeding the cost of production in China.

But reducing costs obviously requires more action, and closing one of the most inefficient stores is one.

According to media reports, Huarun Wanjia will close less than 10% of Tesco's stores in China.

Some of its hopeless Tesco outlets have been shut down.

Manpower cost is another starting point.

In 2013, Huachang reported that the group needed to "actively and comprehensively control the operating costs and continue to sort out the jobs", because the minimum wage standards and the normal salary increase in the local areas have put a lot of pressure on the business profits of the group's retail business.

However, Huarun has already made a statement that Tesco's 25 thousand employees will not be laid off because of mergers and acquisitions.

But these employees have been prepared for the shrinking wage.

Tesco, as a foreign-funded enterprise before China, has a salary of 3 times as many as its Huarun employees, but the combined salary is expected to match Huarun 10000.

Tesco, a Chinese employee, said, "the 10 thousand piece of the original Tesco sale is 10 thousand wages. It is very likely that you will get 10 thousand yuan later, but like many other state-owned enterprises, it contains a lot of subsidies, which is equivalent to the dilution of basic wages."

Switching and merging of two different systems also need adaptation time.

Huarun's Cherry system is more emphasis on accountability than Tesco Tea system.

For example, assets are also lost. Under the Tea system, the responsible person is not required to pay compensation. Under the Cherry system, the responsible person must compensate.

An exclusive asset and LOGO convergence plan released by an interface reporter in May 2014 showed that Tesco would switch to Huarun's Cherry system.

But according to Huarun CFO Li Ruxiong's speech at the mid term performance conference, "Tesco system is superior, Huachang will gradually turn the system to Tesco."

This 180 degree turn will inevitably bring confusion to employees.

No matter what kind of background retail management system is adopted, the two companies must be united in order to play a synergistic effect in retail purchase order, inventory management and distribution management.

Of course, it takes time to digest the quality resources acquired by Tesco.

Nearly half of Tesco's cheaper brand has appeared in Huarun's Wanjia supermarket. By the end of the year, Huarun plans to introduce more than 700 Tesco products.

Tesco is the third largest retailer in the world. It has strong global sourcing channels, digital commerce and excellent online sales capabilities.

Li Ruxiong has said that cooperation with Tesco is not just for its more than 100 big stores, but for its core competitiveness in the industry, including logistics capabilities, private brands, computer systems, and its e-commerce.

Tesco's 2014 financial results as of February of this year show that Tesco's sales in the UK's home food grocery network in the financial year amounted to 25 billion pounds (235 billion yuan), leading the industry.

Although Tesco China only provides online shopping and distribution services within the Shanghai inner ring road only, but for Huarun Wan, which has not yet touched the net, Tesco's online retail business and experience remain its assets that can be leveraged by all channels.

If the integration is successful, the two sides still hope to further improve the supply chain, reduce procurement links, and establish energy-efficient logistics.

We should give full play to complementary advantages and scale effects after resource integration and promote growth.

Besides, Tesco is hard to digest in China.

It is also possible to turn into a future growth point of performance.

Tesco owns many commercial real estate in China's three or four tier cities, including the Ledu Hui shopping center project. However, due to the embarrassment of location selection, confusion in positioning, lack of characteristics and so on, it is mostly a loss.

But with the help of Huarun's strong real estate development capabilities and management skills, these assets are expected to turn a profit in the future.

At present, there are about 3000 stores in the mainland and Hongkong, with a turnover of about HK $95 billion 200 million in 2013 (about 75 billion 300 million yuan), and the sales volume of the newly established joint venture is expected to reach about 10 billion pounds (about 95 billion yuan).

If it can be realized, the new Huarun will replace Gao Xin retail group, which is made up of big fat and Auchan, and become China's largest FMCG retailer.

But before that, Huachang must bear the short-term adverse effects of Tesco's acquisition.

In 2014, Huarun started to report that in the half year of the year, Huarun's net business profit in the first half of the year dropped by about 30%.