On The Eve Of Fresh Food Battle, Ali'S Internal Horse Racing: Can RT Mart Break The Game?

High frequency, rigid demand and large market. The three key words of fresh e-commerce make this track full of gunpowder this year. As the consumption habit of online shopping has been strengthened, offline stores will inevitably go into a downturn.

On May 11, according to the annual report released by RT mart's parent company Gaoxin retail as of March 31, 2021, a number of data such as revenue, gross profit and same store sales were all declining. The company's sales revenue in 15 months was 120 billion yuan, a year-on-year decrease of 2.1 billion yuan, and the same store sales growth was - 1.8%.

This phenomenon is not isolated. Yonghui supermarket's first quarter report released on April 29 also showed that the company's operating income fell by 9.99% year-on-year, and the net profit attributable to shareholders of listed companies decreased by 98.51%. In addition, in the first quarter of 2021, the average gross profit rate of seven regions of Yonghui supermarket dropped by nearly 4%. The rapid rise of all kinds of fresh e-commerce and community group buying has formed a huge impact on offline stores. In this context, Alibaba's various sub businesses are also seeking variables, whether RT mart or HEMA Xiansheng, they must adjust their strategies.

"The model of China RT Mart has been established. Next, it will carry out high-density stores around the 50 km area around RT Mart. This year, China RT Mart aims to open 30-50 stores, focusing on younger customers. " Lin Xiaohai, CEO of Gaoxin retail, chairman and CEO of RT mart, revealed in an interview with 21st century economic reporter that he would not join the price war in the future, and it is not advisable to achieve performance growth by burning money.

In fact, as a new retail format, the positioning of RT Mart in medium-sized supermarkets is similar to that of HEMA Xiansheng, and the front-end warehouse of tmall supermarket also landed in Shanghai during May Day. Under the horse racing mechanism, which way will win?

According to industry sources, platforms such as dingdong shopping, multipoint dmall and meicai.com are already preparing for IPO. Although there is no exact process, for fresh e-commerce, capital reserve is undoubtedly a key variable.

Multiple stores in parallel

At the same time when Gaoxin retail released its financial report, it also announced that Lin Xiaohai would take over CEO, while Huang mingduan, the former founder of RT mart, retired. This was interpreted as Ali's overall takeover of RT Mart. Lin Xiaohai joined Alibaba Group in 2016 and served as vice president, responsible for the retail express business.

What is Lin Xiaohai's plan to do in the bottleneck period of the industry“ In the past year, the epidemic has accelerated the change of consumers' shopping habits, the original offline competition has become more intense, and the new business state has rapidly risen. In the past, the impact of e-commerce was on general merchandise and textile goods. This wave of community group buying affected fast-selling and fresh commodities. And the fresh category is the core attraction of the visitors. Especially in March and April, the whole industry is facing great challenges, and RT mart is not immune. " Lin Xiaohai explained that offline stores are still core assets and core competitiveness, and the performance has recovered since May.

In order to change the situation that the traditional business super format is out of date, RT Mart has also tried "RT Mart" and "RT Mart" with an area of no more than 5000 square meters and 500 square meters. According to Lin Xiaohai's plan, RT mart will eventually exist in one city at the same time, serving different customers.

According to the financial report, Gaoxin retail has 490 hypermarkets, 6 medium-sized supermarkets and 32 small supermarkets.

However, the loss of off-line retail users in hypermarkets has become a common dilemma for the industry, and it is particularly important to find online traffic. Gaoxin retail mentioned in the financial report that B2C performance increased by about 64% through taoxianda and tmall platforms, and the number of B2C customers increased by 60% year-on-year in the whole year, and the average daily sales volume of one hour reach business in the first quarter of 2021 was nearly 1100, an increase of more than 40% compared with the same period last year.

Encircling "fresh food"

Since this year, Alibaba's actions in fresh e-commerce have been frequent. On April 29, tmall supermarket launched Shanghai fresh food warehouse. According to Zhang Hefeng, head of fresh food purchasing at tmall supermarket, Shanghai fresh warehouse mainly purchases three kinds of commodities: beef and pork, which are basic kitchen ingredients, as well as some imported fruits and local fruits and vegetables. In terms of efficiency, it can be delivered home as soon as possible in an hour.

On October 14 of last year, tmall supermarket announced that its hour service has covered 483 cities in China. According to the above-mentioned relevant person in charge, the former hourly service covers 483 cities, but does not include fresh products. After the opening of Shanghai fresh warehouse, more categories can be delivered by Houda. In addition to Shanghai, fresh warehouses have also been built in Guangzhou, Beijing, Shenyang, Shenzhen and Zhengzhou.

At present, the one hour fresh food platform in Shanghai has already included dingdong shopping, daily excellent fresh food, HEMA fresh food and meituan shopping. The competition is becoming more and more intense. Generally speaking, the front-end warehouse belongs to the capital density type investment, and it is also a heavy asset mode. The performance cost from large warehouse to front position and the last kilometer is relatively high. In general, there are no offline stores in front of the warehouse and there is no flow entrance.

But if we want to compete with offline mode, we must strengthen the cost investment in cold chain logistics, warehousing, supply chain management and so on. What does Alibaba's numerous business layout mean to RT Mart? Competition or cooperation?

"RT Mart has strong cooperative relationship with Alibaba such as tmall supermarket, taoxianda and famo, and has settled in as a merchant. However, there is no obvious competition with HEMA. RT mart is positioned in the mass customer group, while HEMA Xiansheng is in the middle and high-end customer group. We provide this service by sharing inventory, which is the scope of B2B supply chain. " Lin Xiaohai revealed that even in Shanghai, where HEMA is the fastest growing city, RT mart's performance has not declined, basically flat, and has maintained a strong profitability.

At present, RT mart's online business accounts for 24%, and the annual Gmv is nearly 30 billion yuan, of which 50% comes from fresh products, which means that RT mart's annual fresh Gmv is nearly 15 billion yuan. However, this volume is still in a lower position compared with the community group buying which focuses on fresh food.

Abandon price war

After the Spring Festival, the group buying giants in various communities have set their goals for 2021: meituan will lock its annual Gmv at 200 billion yuan, and will impact a single volume of 50-60 million yuan / day; Buy more vegetables, and the Gmv target in 2021 is 150 billion; The optimal value of orange core is 100 billion, and that of prosperity is about 80 billion.

Community group buying has become a red sea track. After Lin Xiaohai left his post, Ali handed over this part of the business to Dai Shan, one of the partners, and established the MMC business group. Although the outside world interprets it as a new business form of Alibaba community group buying, Ali believes that there are essential differences between the two.

"The mainstream community group buying is a dumping mode and a blind box mode. Most players spend money to fill the flow and grab orders. They still stay on the basis of limited goods to purchase and sell. In fact, they still use the logic of low-cost dumping to go to the sewer of low-quality inventory. MMC is not the logic of selling goods, but to build a system to determine production by sales and to optimize production by sales, and is committed to customized production and order farming. " A person close to Alibaba told the 21st century economic reporter that the MMC model focuses on China's 6 million husband and wife stores, with special business premises and more professional commodity management capabilities, and its certainty is better than group buying.

Undoubtedly, the focus of Ali's new retail in 2021 is to develop a near-field, real-time e-commerce form. Lin Xiaohai also pointed out that the retail industry can't burn money for a long time and will not participate in the price war of community group buying. At present, RT mart's community group buying is divided into self operated "Feiniu jutuan", yifagou, and related business forms coordinated with Alibaba MMC.

It is worth noting that RT Mart has started to provide supply chain services for MMC business group, and HEMA market, a community group purchase business under HEMA Xiansheng, has been assigned to MMC business group.

"RT mart is indeed an important pawn for Alibaba to lay out its new retail business. After all, HEMA has been in a loss for so many years, while Gaoxin retail achieved a net profit of more than 2.8 billion in 2020. The development path between the two is completely different." In an interview with the 21st century economic report, a fresh e-commerce industry personage believed that even if Alibaba adopted the way of multiple business parallel, there was no competition between them. It was more about grabbing external market share.

The whole fresh e-commerce industry is in the capital scuffle. On May 12, Ding Dong, an e-commerce platform headquartered in Shanghai, announced that the company had completed the D + round financing of US $330 million. On April 6, Ding Dong has completed the d-round financing of $700 million. Up to now, the accumulated financing amount of Ding Dong's purchase of vegetables has reached 1.03 billion US dollars. According to industry news, platforms such as dingdong shopping, multipoint dmall and meicai.com are already preparing for IPO. Although there is no exact process, for fresh e-commerce, capital reserve is undoubtedly a key variable.

Therefore, it is an inevitable choice to seek self blood production in the future, and it is impossible to burn money for a long time. For Alibaba, reducing the loss of innovation business and returning to the nature of business will be one of the future goals.

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