Chongqing Department Store Has A Long Way To Go.

Chongqing department store spanformation meets two "stumbling block"

In order to cope with changes in the industry, Chongqing department store has adjusted its network in recent two years and adjusted its format accordingly. According to statistics, Chongqing department stores opened stores in 2013, adding 20 new outlets, including 4 general merchandise stores, 14 supermarkets and 2 electrical appliances, with an additional business area of 188 thousand square meters. In the first half of 2014, 1 new supermarkets and 4 electrical appliance stores were opened, and Chongqing department store cross-border Mall Sunshine Century Shopping Center opened in September.

For He Qian, who is the chairman of the Chongqing department store for nearly a year, he did two things in 2014: "one is to lead Consumer Finance Companies, the other is to go to cross-border electricity providers." However, it has been faced with some obstacles by the optimistic spanformation of the outside world.

Some confusion of Chongqing department store on the spanformation road is also reflected in the "report card". In January 15th, Chongqing department store's performance forecast showed that the company's net profit in 2014 was expected to decline by 40%.

"It will take one or two years for the retail industry to change. Now we can only build up the framework of spanformation, but it is not effective yet. Turning to the difficulty of spanformation, Yin Xiangdong, a Chongqing department store secretaries, told the daily economic news recently that "we haven't found a definite direction yet, but we can't move any more. Everyone else is moving." Another person familiar with the company bluntly said, "the spanformation of department stores is crossing the river by feeling the stones."

Intensive adjustment network

In January 15th, Chongqing department store issued a forecast that "in 2014, the company achieved operating income of 30 billion 266 million yuan, down 3.54% compared to the same period last year, and realized a total profit of 590 million yuan, down 39.01% compared with the same period last year."

Profits fell by nearly 40% compared with the same period last year, which surprised investors. Speaking of this matter, He Qian's attitude was calm. There are three main reasons for the decline in performance. He told the daily economic news reporter that "the environment is not good, the electricity supplier is diverted, and the focus is on opening stores in the early stage. The incubation period is long and the cost of integration is high, which has raised the cost."

In 2014, macroeconomic growth slowed down. Retail industry The diversion of electricity providers continued to intensify. "The drop in retail sales and the surge in operating pressure" have become the norm of traditional retailers. In addition, the cost of labor and rentals continues to grow, and the days of department stores are even more sad.

In order to cope with changes in the industry, Chongqing department store has adjusted its network in recent two years and adjusted its format accordingly. According to statistics, Chongqing department stores opened stores in 2013, adding 20 new outlets, including 4 general merchandise stores, 14 supermarkets and 2 electrical appliances, with an additional business area of 188 thousand square meters. In the first half of 2014, 1 new supermarkets and 4 electrical appliance stores were opened, and Chongqing department store cross-border Mall Sunshine Century Shopping Center opened in September.

"In the past two or three years, it has been developing and cultivating new stores. This is a process." He Qian said frankly, "this year I am afraid it will be more difficult, but the incubation period in 3~5 is normal, and it is not a problem."

It is worth mentioning that the Chongqing department store Kerry merchants were closed in October 27, 2014. The main store had a strong earning power, contributed 124 million yuan in 2013, and contributed 54 million 671 thousand and 200 yuan in the first half of 2014. It is expected that the business will be closed for two months, resulting in a profit loss of around 40 million yuan. In addition, the reporter learned from insiders that in order to counteract the "double eleven" Shopping Festival, Chongqing department stores increased sales promotion in the fourth quarter of 2014, and the promotional expenses increased by more than 240 million yuan, accounting for 50% of the annual promotional expenses.

In 2014, the gross profit margin of Chongqing department store increased, showing that the integration of the old and the hundred with the new century has produced an effect. He Qian said that the two department stores had gradually broken the past state in culture, but unified the new listed companies.

Transformation meets two "stumbling block"

In the past year, in order to make up for the main business downturn, Chongqing department stores are also moving in other fields. In He Qian's words, he did two things in 2014. "First, Chongqing department store led the establishment of Consumer Finance Companies, and the other one was Chongqing department store testing the cross border electricity supplier."

In July 16, 2014, Chongqing general merchandise department announced the company as the main sponsor, and jointly initiated seven enterprises with Chongqing bank and Southwest Securities to set up Chongqing instant consumer financial Limited by Share Ltd. In January 4, 2015, it was approved by the CBRC, which is also the first Consumer Finance Companies led by an enterprise.

In addition, in the six months after the preparation, the first century SHOW bonded shop of Chongqing department store also opened in October 2014. According to He Qian's idea, "after the integration of the future supply chain, it will strengthen the online and offline interaction."

To finance, cross-border Online retailers New business expansion has become the biggest attraction of Chongqing department store spanformation. The outside world also believes that the company has found a correct path of spanformation. However, according to reporters, these two roads have encountered some obstacles respectively, and the management of Chongqing department stores is also "dejected".

"The biggest obstacle facing Consumer Finance Companies is the establishment of credit information system." Yin Xiangdong told the daily economic news reporter, "this is also a difficult problem for the company to tackle this year." According to the reporter, the target group targeted by Consumer Finance Companies is the target that the bank credit card can not cover, and will be released in the form of Internet financial products. "Similar to Jingdong IOUs, minor consumer loans." One insider explained.

Because of this, personal credit reporting has become an urgent problem for Consumer Finance Companies. "The credit rating platform has invested heavily." Yin Xiangdong said. Because data can not be shared, credit assessment can only be completed by Consumer Finance Companies itself. In addition to potential bad debt losses, consumer finance still faces the problem of "high cost of debt collection". "For example, the amount of loans originally was three thousand five thousand, and the cost of a ticket was already Qi Ping." The insiders said.

At the same time, the cross-border electricity supplier, which has been calling for thousands of times, has encountered a threshold: the location is not clear and the goods are single. "The biggest problem of cross-border electricity providers is the shortage of goods." The insider said, "there is nothing in the huge warehouse."

In fact, inadequate supply of goods is also a common problem faced by cross border electricity suppliers in China. According to the reporter, Chongqing department store in cross-border electric business procurement, is used to cooperate with foreign large enterprises, borrow the other party's purchasing channels, and then gradually open up the supply chain. "The most realistic problem is empowerment," the insider told reporters. "Once we get the source of goods through the upstream channel, we will touch the interests of domestic agents and thus be boycotted."

　　 Transformation Where is the direction?

At present, funds invested in the century shopping platform of Chongqing department store have exceeded 20 million yuan. "I always believe that the electronic business platform is only a supplement to the entity channel." He Qian told reporters, "only the current electricity supplier environmental business is not fair, but also causes the company temporarily unable to achieve this supplement."

This wait-and-see mood of the electronic business platform also reflects the "pain point" in the spanformation of the whole department store industry: the decline of the industry has forced the reform of department stores, but it can not see clearly the direction of spanformation, nor can it help to turn the tide by itself.

"The whole retail industry will have to wait one or two years before the change will take place." Yin Xiangdong said, "now all department stores are slowing down, starting to spanform, but they just put up shelves, many investments have not yet worked."

In fact, the slogan of "self guided" leading China's department stores to go out of trouble has been heard for a long time. Wangfujing, Nanjing Xin Bai and other enterprises have proposed to buy the water test system, gradually self mining. Self-support 。 However, the actual situation is not optimistic. The current circulation system determines that suppliers and department stores do not have enough courage and ability to do their own business. The two sides must realize the situation of risk sharing and sharing of interests in the future, so that they can truly move towards self employment.

"The idea of spanformation of the national department stores is almost the same. It's just a matter of progress." The insider told reporters, "the question is, where is the direction of spanformation? What should we do with the department stores? Will the electricity supplier become the main channel?"

Another reporter has learned that the reform of the system and mechanism has become an important driving factor for the spanformation of department stores, and is restricted by the status of local state-owned enterprises.