Focus On Retail, Zhang Jindong Defines Suning In The New Decade

On December 26, at Suning's "30th anniversary celebration ceremony for public welfare", Suning Group Chairman Zhang Jindong summarized and reviewed the enterprise's 30-year entrepreneurship and innovation development process, and released Suning's development strategy for the new decade, in which "focus" and "service" became the key words.

Facing the fourth decade, Zhang Jindong said: under the new era background, Suning will "focus on the main retail business, enable the development of the industry and serve the social entrepreneurship, which is not only Suning's business model, but also Suning's social responsibility".

Zhang Jindong said that focusing on retail is to focus on goods and users. "We must learn to subtract. As long as we are not in the retail track, we should make bold adjustments. We should cut down and turn around."

At present, Suning's e-commerce business development has achieved remarkable results. With Suning's attempts and breakthroughs in Carrefour, retail cloud and other sectors, Suning has been sticking to the essence of retail industry - service and consumer satisfaction for 30 years. At the same time, in the face of the ever-changing retail battlefield, Suning made use of its advantages of online and offline integration for many years to upgrade to a retail service provider, and formally transformed into a new 3.0 development stage.

Carrefour's year

After the Spring Festival in 2019, Suning e-buy officially acquired all 37 department stores under Wanda Department Store Co., Ltd., and then completed the delivery of 80% equity of Carrefour in China with RMB 4.8 billion on September 27, 2019, and incorporated this large-scale supermarket leader under its command, which led to the continuous expansion of Suning's retail territory.

At present, Suning online has Suning e-buy, offline Suning appliances, Carrefour, Suning e-buy Plaza, Suning red children, etc.

After Suning acquired Carrefour for more than a year, has it met the expectation? What is the future orientation of Carrefour?

Gong Zhenyu, senior vice president of Suning e-buy group and President of FMCG, introduced, "since Carrefour was incorporated into Suning on September 27 last year, with the full entry of the electrical sector and the regional linkage of operation, we saw the positive cash flow and the rapid improvement of Carrefour's business performance. At the beginning of this year, Carrefour was affected by the epidemic at the beginning of this year, but we made rapid adjustments and developed Carrefour's home business. Carrefour's performance in the first three quarters of this year was basically consistent with our expectations. "

According to the data, Carrefour achieved a single quarter profit in seven years for the first time in the fourth quarter of 2019.

"Suning has constructed the whole scene of online and offline, and a very important scene carrier is Carrefour. In the future, we think it is necessary to make corresponding iteration for Carrefour's existing commodity categories and scenarios."

Gong Zhenyu mentioned, "now, there are professional stores for electrical appliances, professional stores for mothers and babies, and even sports shops are trying to operate on the track of Suning's whole category. With the establishment of supply cooperation relationship with head brands (Maotai and Wuliangye), we can see that the online liquor penetration rate is less than 10%. For beverage sales, the greater proportion of the whole track is offline, so we are also trying to use the form of exclusive stores to undertake Carrefour's offline beverage sector. "

According to the reporter, in December this year, Suning e-buy and Carrefour launched 790000 bottles of 500ml Feitian Maotai liquor to speed up the layout of the liquor and water track.

In addition, Gong Zhenyu also mentioned the need for scene iteration. "Carrefour used to focus on fresh food for diversion. This store shelf display sales mode should be gradually iterated out in the future. We need to arrange more inside scenes to attract users to the store."

Suning retail cloud with 8000 stores

In addition to Carrefour, the retail cloud stores focusing on the sinking market of counties and towns are undoubtedly another important part of Suning's retail map.

From January to September this year, Suning retail cloud opened 2432 new stores, and the cumulative number of service users of Suning retail cloud in county and town markets has exceeded 200 million; as of December 30, it has built more than 8000 smart stores, directly radiating tens of thousands of villages and towns, serving more than 250 million double line users, and assisting more than 1800 brand businesses to sink.

Liu Huaili, assistant president of Suning retail cloud group, introduced the development process of the retail cloud team. "We opened our first store in July 2017, because the whole business is in the preliminary trial period, and we only did business scale of more than 30 million yuan that year. 2018 is the initial development period of the whole business. The total number of stores in China has reached more than 2000, ushering in a small development outbreak period. At the end of 2019, the number of stores in China reached 4586, and the business scale of that year was 10.3 billion yuan, nearly three times higher than that of 3.7 billion yuan in 2018. "

Looking back on this year's retail cloud business, Liu Huaili said, "on February 9, this year, we held the first teleconference to check the epidemic prevention and control measures in each place, to see if we can get out of the village, out of the town, if the license plate is not available, and whether the highway is blocked. At that time, we took advantage of the advantages of e-commerce infrastructure and supply chain as well as the advantages of stores in the local area. In the first stage, we quickly launched the business of masks and disinfection products, which can provide convenience to consumers in the first time. "

"In the second stage, primary and secondary schools all over the country started the home teaching mode. We provide consumers with some home office learning products through stores, mainly tablets, computers, printers, which are particularly popular. In the first ten days of March this year, we took advantage of the characteristics of consumers working at home, and quickly entered the business state, and grafted on the platform of retail cloud. Compared with traditional husband and wife stores and exclusive stores, we still have relatively large advantages. " Liu Huaili said.

"By the middle of March this year, entering China's traditional air-conditioning peak season, Suning retail cloud officially launched the air-conditioning business, withstanding the test of the market. In the first quarter of 2020, this part of the business achieved a year-on-year growth of 33% Liu Huaili also mentioned, "from April to June this year, there were 1100 new retail cloud stores nationwide. What is this concept? Before the outbreak, we had about 2000 stores a year, about 150 a month, equivalent to the number of our stores doubled year-on-year before and after the epidemic. "

In Liu Huaili's view, Suning retail cloud mainly does two things: "sharing of e-commerce retail infrastructure" and "helping stores to enable B2C tools", including POS tools, cloud shelves, live broadcasting, community operation, and the assistance of social push tools.

Talking about the development plan of Suning retail cloud, Liu Huaili said that in the future, he hoped that the retail cloud would become a one-stop shopping scene focusing on the concept of home in the county and town markets, so as to build a moat and realize differentiated competition.

Suning's "new story" in the new decade

"At present, the dawn of physical retail embracing the Internet is coming, and Suning smart retail is ushering in a new opportunity of vigorous development. As long as we stick to the original intention of serving users and firmly focus on the core retail capabilities such as supply chain optimization, logistics services, scene formats and operation technology, we can stand the test of any market competition. " Zhang Jindong said, "retail is a marathon with no end. Suning's consistent style is to play steadily and step by step. Suning should unswervingly follow its own path, cultivate competitive endurance and enhance development toughness."

Suning is still writing her own "story.". Especially in the key turning point year of the retail industry, Suning's next step is to look at retail service providers. Zhang Jindong said during 818, "Suning's positioning has been upgraded from a retailer to a retail service provider driven by technology and with the core competitiveness of supply chain, logistics and scenario solutions." "We need to do a good job with altruism, bring more convenient service experience to users, provide partners with higher business efficiency, and open more abundant policies and resources."

On November 30 this year, Suning e-buy announced that its yunwang WanDian Technology Co., Ltd. has completed a round of financing, and Shenzhen Venture Capital has led the investment with a financing amount of 6 billion yuan. The introduction of strategic investors, in addition to Shenzhen Venture Capital, there are Shenzhen Luohu guidance fund and Shangtang.

The newly established cloud network WanDian mainly has two major businesses: one is to provide users and merchants with full scene integrated transaction services such as e-commerce and local Internet; the other is to provide retail cloud services of supply chain, logistics, after-sales and various formats for retailers and suppliers. In addition, according to Suning's plan, its self operated supply chain business of various categories and Suning logistics will be the cornerstone partners of cloud WanDian, and all kinds of self operated stores will also be settled in.

With the development of cloud WanDian business, for the retail infrastructure built by Suning e-buy's supply chain and logistics for a long time, with the continuous expansion of front-end transaction scale, supply chain output and logistics operation will usher in the highlight of scale effect.

The market point of view points out that the business integration of cloud WanDian will not only help Suning improve its retail business, but also promote Suning's transformation from "smart retailer" to "smart retail service provider". This transformation and upgrading mode is obviously more in line with the current development trend of the retail industry, and it is worth Suning to pay more patience.

In the speech of Zhang Jindong's "30th anniversary celebration", Suning's appearance in the next ten years is more and more clear. In the fourth decade of Suning, we should not only focus on the retail industry, but also focus on services in four areas: service for the upgrading of industrial intelligent manufacturing, service for rural revitalization, service for small and micro enterprises, and service for dual cycle development.

According to the data, in 2019, the sales scale of the top 100 domestic retail enterprises was 8.6 trillion yuan, with a year-on-year growth of 17.3%. Under the influence of this year's epidemic situation, the rate of top enterprises in the retail industry recovered ahead of the industry, and even showed signs of accelerating the industry concentration. Under the trend of strengthening the concentration of the industry, Suning is still moving towards the deep-water area of the retail industry.

In the next ten years, can Suning tell the story of retail? We'll see.

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