The opening of the second Hema X membership store located in the Dawang Road business district in Beijing is underway. A reporter from the China Times recently learned during a visit that the sign of the "Hema X Membership Store" has been printed. In front of the store entrance, Hema has set up a blue tent, and staff are warmly recruiting customers to join the membership, with relevant gifts being given. For more than ten years before 2023, this store located at the bottom of Wanda Plaza belongs to Wal Mart.
Times have changed, and the retail industry is also undergoing dramatic changes. The reporter learned from his recent visit that many traditional supermarkets in Beijing, such as Carrefour and Wal Mart, have been replaced by Hema and Qixian. More than 20 years ago, when foreign supermarkets represented by Carrefour and Wal Mart entered China, how beautiful they were, and their operation mode became the object of imitation and learning for local retail supermarkets. However, times have changed, and in the era of the Internet, the entire traditional retail industry is facing a huge impact from online e-commerce. The traditional supermarket, which has been expanding significantly for many years, has started a path of contraction in the past two years. In sharp contrast, new retail supermarkets represented by Hema are restarting the old ways of traditional supermarkets.
The alternation of new and old forces
Our reporter learned that the second Hema X club store in Beijing will be officially opened on October 20 in Jianguo Road, Beijing. At present, the staff have started the promotion activities. The store is located in the Dawang Road business circle. Previously, it was Wal Mart Supermarket. It is understood that due to the expiration of the lease agreement, it was announced to cease operations from March 7th, ending its 16 year operation here.
The "handover" between Wal Mart and Hema in the Wanda Plaza Business District on Dawang Road is not an exception. Our reporter learned during the visit that Carrefour, which was originally located on the bottom floor of CapitaMall Plaza (Grand Canyon), moved out at the end of February this year. Instead of it, Qixian, an omni channel fresh food supermarket under JD, is currently being renovated. Our reporter learned from the security office that Qixian will open in another month or two. In addition, the second floor of Sunshine New Life Plaza (Jiukeshu) will welcome Hema Xiansheng, which will be opened at the end of December. This location originally belonged to Carrefour.
The wave of business format changes is surging, and the traditional supermarkets that used to be supermarkets are gradually declining. Inside the third floor of Siyuanqiao Shopping Mall of Suning E-shop, Carrefour, which was closed for a short time, has reopened some areas, but it is still not optimistic. It is understood that Carrefour Siyuanqiao Store is its last offline store in Beijing. On October 13, a reporter from the Huaxia Times found that the store only opened a manual checkout channel, and several scalpers who bought Carrefour shopping cards stood next to the salesperson. At present, the store has not all goods, many shelves are empty, and the ground is not clean and tidy, Only a few people are purchasing goods in the entire mall. The entire scene presents a decadent scene.
In addition, the reporter learned from a scalper that consumers who come here to purchase goods are all eager to spend the amount on the shopping card as soon as possible.
In the past two years, the traditional supermarkets represented by Carrefour have had a hard time. According to the annual report data of ST E-shop (i.e. Suning E-shop), from 2020 to 2022, the number of self operated stores of Carrefour Supermarket in China was 228, 205 and 147, respectively. By the end of the first half of 2023, the number of stores had again decreased by 106 to 41.
As for the reasons for closing the store, Suning E-shop replied to our reporter on October 17 that under the influence of multiple factors such as industry development, changes in consumption habits, and diversification of competitive channels, Carrefour's retail industry and hypermarket model are constantly changing, and Carrefour is also actively transforming and upgrading for this reason; In the first half of the year, Carrefour slimmed down according to the established strategy, focused on the core advantage cities to carry out store operations, accelerated the adjustment of store closure, and accelerated the process in the second quarter.
In addition, from the perspective of the number of Wal Mart's retail formats in China, by the end of 2020 to the end of 2022, the figures were 403, 361 and 322 respectively. According to Wal Mart's annual report, Wal Mart International is mainly divided into two types of businesses: retail and wholesale, including super centers, supermarkets, hypermarkets, storage clubs (including Sam's Club), etc. However, as for store data, Wal Mart China's relevant staff told the Huaxia Times on October 16 that it has opened about 400 stores in more than 100 cities across the country, maintaining the speed of opening about 6 new stores every year.
Among traditional supermarkets in China, Yonghui Supermarket has seen a decrease in the number of stores in its supermarket format since 2022. In the first half of 2023, it closed another 29 supermarket stores. As of the end of the period, the number of opened stores was 1008; In the fiscal year 2023 (the year ending March 31, 2023), the parent company of RT-Mart, Gaoxin Retail, also saw a decline in its hypermarkets. As of March 31, 2023, its number of hypermarkets was 486, a decrease of 4 compared to the previous fiscal year; The number of stores in Hunan Shangchao Bugao has been decreasing since 2021, and then continued to decrease in various formats in the first half of 2022 and 2023. As of the end of the first half of 2023, the number of stores in various formats was 181.
From Glory to Desolation
The current declining traditional supermarkets also had their own highlights. In 1995, Carrefour opened its first store in China, which was one of the earliest foreign-funded retail enterprises to carry out business in China. As the pioneer of the hypermarket format, Carrefour once had a unique reputation. It was the target for retail supermarkets to emulate and learn from. At the same time, its managers were also the target of competition in the retail industry. Therefore, Carrefour is also known as the "Whampoa Military Academy" in the retail industry.
After entering 2015, Carrefour China's performance was poor. In June 2019, Suning E-go's subsidiary purchased 80% of Carrefour China's equity at a consideration of 4.8 billion yuan. But it still failed to turn the tide.
As for the future development plan of Carrefour in China, on October 17, Suning E-shop replied to our reporter that Carrefour is constantly exploring new store development model models through offline channels; On line channels, Carrefour continues to explore the near field retail model and promote the development of online models such as live broadcast and community. And he continued to say, "Carrefour's communication with consumers is not limited to the physical space of primary and secondary market stores. In addition to the C-end users, we will continue to explore solutions to export lifestyles for the government enterprise B-end market and the vast sinking market, and continue to improve and optimize the supply chain construction."
Domestic retail supermarkets also had a glorious period of about decades before, during which they launched large-scale attacks and expanded. According to the annual report, in 2012, Yonghui Supermarket had a total of 152 stores in various formats such as hypermarkets, stores, and community stores. After years of rapid development, its number of stores reached its peak in 2021, with 1057 stores in the supermarket format; As of the end of 2012, Gaoxin Retail had only 273 comprehensive hypermarkets in China. After six years of rapid development, the number of comprehensive hypermarkets reached 484 at the end of 2018. Although the expansion rate slowed down, the overall growth was still slow. As of March 31, 2021, the number of its hypermarket stores was 490, which remained unchanged in the fiscal year 2022 and decreased to 486 in the fiscal year 2023. Bu Bu Gao's fate is similar, expanding from 266 in 2016 to 420 in 2020, and then starting to shrink.
The current challenge facing the entire traditional retail industry is closely related to the rise of online e-commerce in the Internet era. Retail expert Hu Chuncai stated in an interview with reporters in May this year that the overall market competitiveness of hypermarkets is declining due to the pressure of more convenient and affordable e-commerce. On October 16, Hu Chuncai once again analyzed the reporter and thought that the demands of Carrefour's supermarkets for customers were more about the variety, completeness and cheapness of its products, which were vulnerable to online e-commerce.
Bubugao also stated in its 2023 semi annual report that with the development of major online and offline platforms, consumers' contact points and channels in the consumption process have become more dispersed, making it more difficult for retail brands to win customers and cultivate customer loyalty. The oversupply and structural risks faced by the entire retail industry are still urgent issues to be addressed.
Behind the expansion of Hemas
In stark contrast to the traditional retail industry, new retail platforms represented by Hema are constantly expanding. According to the official website, in January 2016, the "Hema Fresh" Shanghai Jinqiao store officially opened, pioneering the "store warehouse integration" model. Fresh products arrive in 30 minutes, and currently Hema has over 300 stores; In March of this year, there was news in the market that Hema was launched for listing.
Compared to Hema, Qixian was established relatively late. In April 2017, Qixian was officially established as the leader of JD omnichannel retail. According to the official website, the current layout of Qixian Supermarket is mainly in the Beijing Tianjin Hebei and Pearl River Delta, with a total of 47 stores, including 24 in Beijing.
Hu Chuncai told our reporter that Hema Fresh and Qixian Supermarkets highlight fresh products and competitiveness, and convey a new way of life to customers, which is very attractive to the middle class.
In Hu Chuncai's view, the main reason why Hema and Qixian are able to expand significantly at present is that they both have e-commerce platforms behind them, which can achieve integrated online and offline operations. With their online advantages, Hema seeks new development space through offline penetration. Even though Hema's profitability is not enough at present, its market competitiveness is very strong, and its future development prospects are still very good.
Bao Yuezhong, a new retail expert, believes that Hema's expansion may be directly related to its secondary market, and overall, its current operating mode is basically mature; Bao Yuezhong expressed a different view on Qixian. He believed that Qixian is not better than traditional supermarkets, even worse than Carrefour in some aspects, and Jingdong does not regard it as a development focus at present.