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The Three-Year Epidemic Has Led To The Adjustment Of Business Pattern In The Turmoil And The Further Refinement Of The Market

2022/4/20 13:39:00 0

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If we say that the epidemic is a war on life, some people are infected and some people lose their lives. If the whole city is closed and the public transportation is closed, the whole city will be closed. Because this is a war on the survival and death of human beings. Different from the passive lying down and universal immunization in foreign countries, we put the people in the first place. We have taken dynamic measures to clean up, take the initiative to prevent and control, and actively treat them, so as to achieve better control results.

For business, the epidemic is more like a devastating nuclear weapon. It can bring the society to a standstill and enter into a state of viral struggle, national alert and combat in all aspects. The busy streets with traffic flow became empty, the bustling shopping malls became cold and clear, brand merchants lost cash flow and died of blood loss because of no sales, and shopping malls died of leaving the market because of no passenger flow.

Like a nuclear war, epidemics are destroying commerce, and viruses are changing business logic.

Changes in consumption logic caused by epidemic situation

First, the increase in home time has greatly reduced the frequency of activities and consumption.

Because of the need for epidemic prevention and control, isolation and closure have become the main means. Most people can only stay at home or in hotels and have little opportunity to go out. So when the frequency of going out is greatly reduced, a lot of consumption can't be realized. Basically, the consumption is mainly based on family demand, and the consumption contraction is obvious.

II. Lower income expectation leads to lower consumption.

At present, China is in the period of economic transformation and upgrading, with real estate regulation, Sino US economic friction, and epidemic situation and other factors. At present, the economic growth is relatively weak, the survival pressure of enterprises is increasing, the social employment pressure is increasing, and the unemployment rate is increasing. Everyone's expectation of future income is also decreasing.

With lower income expectations, under the circumstances of the epidemic, the uncertain macroeconomic situation and the increasing survival pressure of micro enterprises, we will certainly reduce expenditure and consumption.

Third, the proportion of online consumption and entertainment increased.

Because of epidemic control and other factors, most people have to block in the community, centralized home isolation, only do nucleic acid testing will go downstairs. Occasionally, you can go to the supermarket to buy daily necessities, and there is less opportunity to go out. Therefore, a large amount of time is at home. In limited space and for a long time, most residents will choose to realize consumption and entertainment online. According to the relevant data statistics, in 2021, the average daily use of mobile phone market in China is 3.3 hours, and the use time during the epidemic period is longer, some even reach 8 hours.

During the epidemic period, the best way to isolate is to stay at home. Playing with mobile phones has naturally become the main means for people across the country to spare time and kill boredom.

Online office, online conference and online class are also network tools that many people have to rely on for remote office and learning. Moreover, the domestic network conditions are good, and online apps are relatively rich, so we can realize self entertainment and online social networking in various ways.

Changes in business logic caused by the epidemic

The new coronavirus has lasted three years since 2019. From the new coronavirus to last year's Delta to this year's Omicron, the virus is constantly upgrading and mutating. Wang Chen, vice president of the Chinese Academy of engineering and an expert in respiratory and critical care medicine, said in an interview with CCTV on February 19 this year that the new coronavirus may exist for a long time.

The three-year anti epidemic practice of the new crown tells us a very cruel reality, that is, the new coronavirus can not be eliminated, it will coexist with human beings for a long time, and it is likely to replace influenza and become the main force of virus in the coming decades.

In particular, under the recent three years, it has become a normal situation for us to accept the virus attack. Under the uncertainty of the new crown, the logic of business has begun to change.

First, business logic changes, the combination of online and offline.

Under the epidemic situation, brand management is difficult. Under the policy of segregation, passenger flow and sales decreased sharply, and enterprises suffered serious losses. What's more serious is to close the store directly and stop operation. A large amount of operating costs cannot be apportioned, and the staff's wages and rents have to be turned in.

Keep the cash flow and let the enterprise live. Is the idea of most brand owners. In the case of simultaneous decline of market gross profit and sales, business can only be balanced in two months, at least relative to half a year; If it takes more than three months, it may be a useless year.

Relying on offline stores may be affected by the closure of stores due to the epidemic, resulting in the inability of physical stores to operate, resulting in huge losses or investment failure. Therefore, physical stores start to walk on both offline and online legs, do a good job in offline stores, actively develop online business at the same time, and increase their ability to resist risks.

Second, the logic of opening stores has changed, and stores are more cautious and conservative.

Because the epidemic situation began to change, Haidilao went against the trend to open stores and paid the price of closing stores. In the past, the logic of opening a brand store was an investment model formed by considering the basic elements of population, consumption and competition. When the investment amount and investment payback period reach the decision-making expectation, the store can be opened. Now we have to consider the epidemic factors and cash flow situation and so on. Affected by this year's epidemic, many catering enterprises' cash flow has been affected. They have suspended their plans to open stores in the first half of the year. Whether to start a store or not needs to be determined according to the market after the epidemic is over.

On the other hand, what is different from before is that in terms of store opening decision, some people thought that they could open stores with 80% confidence in the project, but now they tend to be more conservative. Projects with more than 5% risk may give up shop opening.

Third, the logic of investment has changed, from focusing on assets to neglecting assets.

In the case of fierce business competition, the return on investment of the industry is also declining. Now more and more brands have turned from heavy to light and began to take the asset light development mode. Since Wanda put forward the development strategy of light assets, Yinli, Longhu, Aegean, Xincheng Wuyue and Baolong have followed suit.

After many times of communication with brands, most brands expressed the following three points:

　　1. To survive has become the common mission of enterprises in 2022.

　　2. It has become the consensus of brands to open stores cautiously or not.

　　3. In case of need to open a shop, there are higher requirements on the quality of the store.

Brand stores have also begun to shift from heavy to light, from self investment to asset development. There are more partners, more open joint stores, more flexible development. There are several considerations. The first is to reduce investment and reduce investment risk; The second is to integrate the most favorable channel resources to achieve a win-win situation between brand and channel; The third is to develop rapidly and occupy the market fastest.

4. Great changes have taken place in the business logic of shopping malls.

From the perspective of shopping mall management, in the post epidemic era, consumption will shrink and market expectations will weaken, and the demand for investment and store opening will drop, which will bring great pressure on the business promotion and operation of shopping malls.

First, under the epidemic situation, shopping malls have become a disaster area: empty shops in shopping malls and even died of blood loss.

The experience and entertainment formats bear the brunt of the closure, followed by the catering formats. The passenger flow dropped sharply, and even the store was closed under the strong control of the epidemic situation. It is difficult to collect the brand rent, even delayed payment and arrears. A large number of brands and businesses have closed down, resulting in a large number of empty shops in shopping malls, and investment promotion cannot be completed in a short time.

For three consecutive years, the epidemic situation has increased the pressure on shopping malls, especially for the enterprises and projects in the middle and rear areas, which are characterized by the increase of empty shops, the difficulty of re investment, the decline of rent, and the continuous decline of passenger flow and sales;

On the other hand, business has entered a period of high integration. The industry is in a turbulent adjustment period. Projects and enterprises with poor position, poor operation and poor operation ability are in a disadvantageous state of the market and may gradually withdraw from the market. Including a part of commercial enterprises highly dependent on real estate cash flow, because of the real estate market down, because of financial difficulties, it is also possible to gradually withdraw from the market.

Moreover, the focus of market discourse power has shifted. It has been transferred from Party A to brand side and consumers, and consumers and brand side can put forward more relevant demands on business.

Finally, there are two levels of differentiation in commercial works. The upward part is to do urban benchmarking works and personalized works, such as Ruihong Tiandi Sun Palace, Chongqing Guanghuan shopping park of Hongkong land, Youshan, etc., while the lower part covers and extends the scale of offline cities, such as the general commercial projects of light asset cooperation, such as Wanda Plaza and Longhu Tianjie in the fourth and fifth tier cities.

Write it at the end

In addition to competitors, consumers, brands and even policies, the biggest natural enemy of life centers is epidemic. Since the epidemic has become the new normal, business people have to accept and face it, and have a deep understanding of the changes in business logic resulting from the changes, so as to find new opportunities for survival of the fittest.