Suning Shop To Buy Guangzhou OK Convenience Store, Smart Retailer And Speed Up The Whole Scene

On August 6th, Suning store and Feng's retail deal reached an agreement on the transfer of shares in Leah Southern China, and acquired more than 60 OK convenience stores in Guangzhou area under the operation of Leah, Southern China. After the completion of the acquisition, Suning small store holding the franchise of OK convenience store brand Leah Southern China Guangzhou all stores, which will become an important part of Suning's intelligent retail scene.

As for the reasons for the acquisition, Bian Nong, President of Suning group, said Suning was interested in the Leah Southern China team operating OK convenience stores and its resources and experience in many aspects such as products, supply chain, operation and regional layout. It will strengthen the layout of Suning Inn in Guangzhou, and help to expand the Suning shop in Southern China.

According to the media, the mainland OK convenience store is owned by Leah retail in Hongkong. The OK convenience store in Guangzhou was put into service in the form of joint venture in November 2002. The fresh food products sold in the store are all developed and designed by the internal team. The "good taste" "Hot & In" brand has launched a series of exclusive refined food and beverage series, including fresh bread, cold and hot drinks (such as fresh soybean milk, corn juice, port type milk tea, coffee), snacks, sandwiches, and refreshments.

Therefore, the OK convenience store which has 17 years of operation experience in Guangzhou has a more comprehensive grasp of the local consumers' preferences and needs, and the core demand data of users is the urgent need for Suning inn to open Southern China area. Because unlike the traditional convenience stores, Suning stores carry thousands of stores and provide diversified products according to their core needs.

In addition, according to the media, Suning store mainly adopts the O2O mode of "offline convenience store +APP", and provides fast delivery service. Within 3 kilometre area, it promises to deliver goods within half an hour. The current layout area of OK convenience store is located in the core area of Guangzhou traditional commercial district. Therefore, this acquisition can better complement the supply chain capabilities of Suning stores in Guangzhou, and can also give greater play to the advantages of Suning's "O2O".

The media noted that Suning stores entered the 2019 to speed up the pace of the layout of community life, continue to accelerate the layout around the community market, and launch products such as "Suning post office", "Xiaodian Yun Chao", "Xiaodian group", "Suning vegetable farm" and "small store pre-sale". In addition, it has also launched 3 Suning stores, including catering, shopping, entertainment and convenience services.

At the end of last year, Suning launched the strategy of smart retail development, "expanding Internet stores to 2 000 businesses in the next three years and landing about 20000000 Square commercial entities." As an important part of Suning's intellectual retail, Suning stores also started explosive growth. According to suning.com's first half 2019 earnings report, 1626 new stores (including Diya daily) were newly opened in the reporting period, and 435 sunning stores (including Diya daily) were adjusted and closed. According to the latest news, the number of Suning stores has exceeded 6000.

However, the rapid expansion will inevitably bring about "rising prices" of operating costs, such as store rental costs, store development costs and labor costs. In addition, the "profit" of fresh electricity providers has always been an industry problem, and Suning shop is no exception. According to the data released by Suning, Suning small business realized revenues of 143 million yuan from 1 to July in 2018, with a net profit of -2.96 billion yuan, and the losses continued to expand. In the first half of 2019, financial reports showed that Suning shop is still in a stage of loss.

The media also noted that Premier Li Keqiang chaired the executive meeting of the State Council in July 31st, and confirmed that it encouraged the use of big data and other technologies to promote the development of new business models such as customized consumption and smart consumption. We encourage traditional shopping malls and old factory areas to be transformed into multi-functional, comprehensive new consumption carriers. We should encourage community health care, pension, household management and other living facilities to be included in the transformation of old residential areas, and give financial and tax support to create a convenient consumption circle.

This means that Suning's smart retailing will have a favorable policy, but on the other hand, it will usher in more competition for community integration services. At present, the box horse backed by Ali giant relies on the continuous layout of the "box area housing" surrounding life services. Since the beginning of this year, the platform has expanded the scope of sales from eating to whole life in order to realize the vision of providing a one-stop solution to "community life service".

To sum up, under the situation that the new retail war is becoming more and more anxious on the Internet, the number of retailers positioned in the community scene is just like a river. The Suning shop should strengthen the meticulous management based on the overall development strategy, pay attention to the quality control and efficiency optimization, and timely adjust some stores that have some operational problems.