New Retail Ali Growth Engine Box, Horse Speed, Private Brand Layout

A few days ago, at the conference of the escalation of its own brand strategy, Zhao Jiayu, general manager of the national standard product procurement of box horse, said that the proportion of "box and horse" brand merchandise has exceeded 10%, and will speed up the whole effort in the future.

Zhao Jiayu said that in addition to emphasizing cost performance on quality basis, the box horse also followed the idea of creating demand. "In the era of material enrichment, meeting demand is only a basic form, and mining and creating demand in life scenes can bring about changes." In the face of the threat of Costco, box Ma believes that foreign partners have played a very important role in price performance. If they want to overtake the curve, they must have a new way of playing.

And retail is based on commodities, and products that meet customers' needs can have core competitiveness. Nowadays, no matter entity retailers or electric providers, they are constantly accelerating the pace of developing their own brand goods. In fact, the box horse has been far sighted since 2016 to launch its own brand - box horse brand Wuchang rice.

In 2017, the box horse launched the "box Mari day fresh" brand, which gradually covered many dishes such as meat, eggs, milk and meat. In August 2018, Hou Yi told the supplier conference that he hoped to achieve more than 50% of its own brand within three years.

This year, the box horse is speeding up the layout of the "box brand". In August 8, 2019, it launched a new private brand, "Gaoshan" series, and plans to build 50 high mountain direct mining bases in Sichuan. At present, the box horse has its own brand, such as "RI Tian Xian", "emperor fresh" and "box horse flavor".

With the maturity of China's e-commerce, new retail is expected to become a new route for the next blue ocean. Looking at the data analysis published by ali over the years, we can see that although Alibaba continued to maintain its MAU operating index growth, it was 755 million in the previous quarter, an increase of +19.1% over the same period last year. However, the mobile GMV of each MAU is basically flat, up less than 1% compared to the same period. Obviously, this is the key signal of the mature electricity supplier market.

In addition, since the third quarter of fiscal 2017, activity / MAU / active buyers have been stagnant, rising from about 50% in the second quarter of fiscal 2014 to the peak of 111% in the third quarter of fiscal 2017. Since its peak, the index has been maintained between 110% and 113%, indicating that consumer participation has reached its peak.

In view of the steady operation of MAU and participation, I believe new retail will be the next battleground of Alibaba. As of September 2019, Alibaba has 171 box horse fresh shops in 22 cities in China, and provides services for about 20 million active buyers, with a retention rate of about 60%.

To invest in its own brand to increase profits is very important for box horse to maintain its competitive advantage. Because the advantage of private brand is to save marketing and channel costs, and to improve profits. At the same time, its low cost is also reflected in the price, which can attract consumers who focus on "cost performance".

When the gap is accumulated to a certain scale, the box can be directly modeled as a brand with awareness, so as to bring the brand effect into play and attract more consumers. The promotion of sales volume will be easy. In contrast, the time cost of obtaining high-quality products will be further reduced.

In general, new retail is the next blue ocean, and its own brand obviously has potential to become a value depression. And compared with the United States, China's private brand penetration is still relatively low. The box horse can create a brand similar to Costco's Kirkland brand, so as to gain greater attraction.