Behind Wal Mart'S Denial Of Withdrawing From China: The Transformation Of Hypermarkets Is Imminent

The rumor that foreign retail giants withdraw has never stopped. This time, it is Wal Mart's turn.

With the departure of Carrefour and metro, the two senior vice presidents of Wal Mart in China, Chen Zhiyu and Wen Yubin, officially "resigned" on August 31, which was originally regarded as one of the most robust foreign retail companies. Wal Mart, the world's largest international retail giant, has also fallen into the rumor of selling big stores in China.

Prior to this, some market participants disclosed that Wal Mart did contact with strategic investors, which is still in the early stage, and is unlikely to be completed this year.

? ? "The rumor about Wal Mart selling hypermarkets is quite unexpected. In addition to Wal Mart, Carrefour, Metro, Tesco Tesco, B & Q, home depot, etc., before that, have been acquired by local retail enterprises or have withdrawn from the Chinese market. However, Wal Mart's advantages in the supply chain system and financial strength in the industry have been regarded as overseas The most competitive member of the team, the industry is generally surprised by the rumors. " A reporter from South China economic observer said.

In addition to the uproar, on September 2, Wal Mart issued a statement through its official channels to deny the sale rumors. 'we are aware of the rumor about the sale of China's hypermarket business' and solemnly states that Wal Mart has never commented on market rumors and has no plans to sell its Chinese business,' the statement said.

Whether or not to sell hypermarket business, in fact, for the traditional retail giants, how to rejuvenate the relatively old format of hypermarket is still a lasting and imminent challenge.

Speculation on the change of core executives

Wal Mart announced the change of China's internal management on August 31, 2020. This means that on the same day, two senior vice presidents of Wal Mart China, Chen Zhiyu and Wen Yubin, formally "left".

Both Chen Zhiyu and Wen Yubin "decided to leave the company for personal reasons". The former was fully responsible for the e-commerce development of Sam's club stores in China, including self operated app of Sam's club in China, Sam Jingdong flagship store business, Sam wechat business, etc.; the latter was responsible for Wal Mart's China community store and retail wholesale business.

On June 15, Chen Wenyuan officially resigned as president and CEO of Wal Mart China. Wal Mart China appointed Zhu Xiaojing, former president of New Zealand Fonterra group in Greater China, as its president and CEO. In fact, both Chen Wenyuan, Chen Zhiyu and Wen Yubin have made many attempts to lead Wal Mart on the road of digital transformation.

The news of the departure of several core executives has made the rumors of exit more popular in the market.

In the three years of managing Wal Mart in China, Chen Wenyuan led the business development of Wal Mart stores and Sam's club stores in China. At the same time, it promoted the cooperation between Wal Mart China and JD home. In 2018, Wal Mart China invested in dada Jingdong home and won a seat on the board of directors.

? ? The scale of online and offline sales of Omni channel has maintained a three-digit growth, with more than 50 million digital customers. The average monthly sales growth of o2o business of "Wal Mart home" has exceeded 60%. The passenger flow and sales of Wal Mart community stores are double-digit. Once the "excellent membership" of Sam's member store is launched, it has achieved 20% penetration rate in some cities, and the sales of the three private brand goods account for a steady proportion promote.

In January this year, Wal Mart China announced its latest quarterly financial report, namely the third quarter (as of October 31, 2019, the net sales growth in China was 6.3%, comparable growth was 3.7%). Chen Wenyuan once led Wal Mart to achieve the best performance in China in five years, and Wal Mart has become one of the largest Omni channel retailers in China.

At that time, Chen Wenyuan once told the 21st century economic reporter that "according to the latest financial quarter, that is, the third quarter, Wal Mart achieved the best performance in China in five years. Wal Mart is now one of the largest Omni channel retailers in China, and we are still accelerating the process of digitization and expanding our differentiation advantage. "

Chen Zhiyu's e-commerce business (including self operated app of China's Sam member store, Sam Jingdong flagship store business, Sam wechat business, etc.) has also made "breakthrough" progress.

In the past three years, Chen Zhiyu has made important contributions to Wal Mart supermarket and Sam's club, promoting digital and omni channel development, leading his team to seize the opportunity to promote o2o e-commerce business and cope with the fierce external market competition.

During his three and a half years of service for Wal Mart China, Wen Yubin has been responsible for the procurement and operation of Sam's club. In the past eight months, he has also led the Wal Mart community store team and built an integrated B2B team.

Big store dilemma

It has been 24 years since Wal Mart entered China. 24 years ago, as the world's largest international retail giant, Wal Mart expanded its business territory to China for the first time, bringing about the new business form of "hypermarket". This is a good opportunity to "reap the vast market". The first supermarket landing in Shenzhen became the trend of all parties.

In the Chinese market, Wal Mart mainly operates two business systems: Wal Mart hypermarket and Sam's member store.

"When the hypermarket model just entered Shenzhen, it brought more strong impact and competition to traditional state-owned department stores such as Tianhong." Said the industry observer to the 21st century economic reporter.

However, the good times are not long. Since 2010, e-commerce platforms have sprung up like bamboo shoots after a spring rain, and the era dividend of traditional retail has gradually disappeared. Several foreign traditional retail giants have to face new challenges and challenges. In addition, with the support of capital and technology, new retailing also needs to return to the origin of the offline market. As a traditional supermarket with high-quality offline stores, it naturally becomes the chips it needs.

In recent years, Wal Mart has closed 74 stores in China from 2016 to 2019. Taking into account the six closed stores this year, Wal Mart has closed 80 stores in less than four years. According to the data of China Chain Store Association, as of 2019, Wal Mart has 442 stores, and the total number of stores has hardly increased in six years. Most of these closed stores are hypermarkets, which have enjoyed "super national treatment" such as rent-free for many years.

"The reason why physical stores are difficult to compete with online stores at this stage is largely due to the lack of vitality and flexibility of physical stores. In Japan's silver hair economic retail, physical stores will make 52 big changes and 1000 small changes a year, bringing consumers new ideas and experiences involving fresh colors, flavors and different levels through supermarkets and stores. For example, in fresh products, the relationship between physical retail and e-commerce in the future is likely to be the same as the relationship between cinema and DVD 20 years ago. Although it was once thought that physical stores like cinemas are difficult to break through the encirclement and suppression, physical stores attract mainstream purchasing power through refined operation and break the deadlock of integration with new retail through scene operation. " Hu Chuncai, a retail expert and founder of Shanghai Shangyi consulting, analyzed the 21st century economic reporter.

Traditional retail has been seeking digital transformation for a long time. "Take RT mart, which has made great achievements in physical retail, as an example. It has tried to be the third pole by itself and carry out the new retail transformation independently, but it has failed in the end. From the characteristics of great Matthew effect in the traditional retail field. The physical cost of retail is high, so it is difficult for physical stores to enter e-commerce. And Internet e-commerce with strong capital strength has the ability of reverse entry. " Hu Chuncai said.

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