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Ali VS Tencent: Ten Years of New Retail

via:博客园     time:2018/4/16 18:03:12     readed:716


Wen/Xu Rongcong

Source: 42 chapters

Note: This article was compiled according to Xu Rongcon, chief analyst of China Merchants Securities, in the 42nd chapter of the online “Sharon's new retail game” statement.

As we mentioned in the previous article, the major focus of the article in the 42nd chapter of this year will be on the "big war". Today, this theme is a stepping stone.

From a macro perspective, the background of new retail development is the bottoming out of the online flow of dividends.

Jingdong’s new customer acquisition cost was RMB 82 in 2014, it was RMB 148 in 2016, and it nearly doubled in two years. At the same time, however, the marginal customer acquisition cost under the line has remained relatively flat (not considering rent) in recent years, and the loyalty of users will be higher.

So the value of offline retail channels is getting a revaluation.

After speaking macroscopically, from the meso level, I have three main lines. One is a vertical view, and the other is the layout of giants in new retail sales. Second, horizontally, how the two giants compete in various fields across the board, and finally refines them. Their differences in thinking.


Alibaba Tencent's new retail layout

This picture is the overall layout of Alibaba Tencent in the new retail. After the new retail strategy was put forward, the layout of Alibaba’s retail sector was significantly accelerated; Tencent also established a specialized smart retail sector, and Jingdong and Yonghui were the two leaders.

From a horizontal perspective, the existing pattern of Ali and Tencent are all launched in various fields.

The first is an innovative supermarket. In fact, the impact of fresh electricity in this area is still relatively small, because it has a high proportion of logistics costs in the cost structure. Therefore, in the case of relatively low customer bills, it is difficult to support such a high cost. This gives off-line services. The entity retailing fresh food companies provides a survival opportunity.

Yonghui has done a very good job in this area, but at the same time there are some new business forms. Like box horses fresh, super species, backgammon fresh food romance, RTD fresh and so on. In summary, these formats may have several things in common: one is to pay more attention to online, and the other is that the ratio of fresh ones is very high, and it is a layout that is more liberalized.

The second block is the community-based fresh food supermarkets. The representative business format includes Yonghui Life and Qian Dongma, who has invested in JD.com this year. There are also fresh legends that have recently received more attention from the primary market capital, and are typical community fresh supermarkets.

The third block is the B2B field of grocery stores. This is also a trillion-dollar market. Like JD.com and Alibaba have proposed the "Millions of Stores" plan. Its essence is to use SaaS system and data to empower small stores, but there are also many difficulties, such as the small store owner's cultural level is low, the degree of acceptance is also low.

The fourth block is an experiential professional chain. This block of Suning, Jingdong and Xiaomi have already entered the market. They are still mainly home appliance companies. They do not sell goods as their main purpose, but enhance user experience and enhance brand identity. Drainage to online channels.

The fifth block is the hot unmanned retail format, like the angel orange in the self-service vending machine; but unattended convenience stores may have some unresolved issues on top of technology or policies; the unmanned shelf is essentially A traffic business.

This piece of competition is quite fierce, especially with fresh daily freshmen. Basically, these players have strong capital support, but because the profit model has not yet been opened, it is still in a relatively burning stage.

Finally, talk about the layout ideas of Ali and Tencent in the new retail.

Ali is still playing the core, and the layout is also more in-depth, on the one hand to carry out the accumulation of retail resources, on the other hand, in various modes, all forms of business are trying to self-employed, through continuous trial and error iterations to run through the methodology. The "self-employed" approach is because Ali likes to control himself, and its own retail resources and supply chain resources are also abundant.


Ari new retail layout ideas map

This is a map of Alibaba's new retail layout. I set up two coordinates, one is incremental or stock, and the other is self-operated or platform. For example, the box horse belongs to a self-employed, incremental innovation; and Alibaba retail + is a self-employed, platform-based build; that Yintai is a self-operated, stock-based transformation.

After Intime was acquired by Ali, this transformation was actually more difficult. In particular, there were factors in the department store sector, so progress was relatively slow. That is the transformation of the stock of the platform, that is, Alibaba's retail channel, for the store to empower such a situation.

Tencent, on the other hand, is using retailers' strong tentacles to realize a realization and quality improvement of its own traffic. If we say that Ali is the leader of her own transformation, it is a centralized system that is suitable for retailers with weak self-consciousness. That Tencent is the retailer as the transformation leader, is a decentralized system, more suitable for self-conscious retailers.

At the meso-level level, we made two in-depth case studies at the micro level. One is a box horse, one is a super species. Finally, we also talked about some of Ali's other exploration projects.

Look at box horses first. In terms of store layout, the fresh area of ​​box horse fresh produce accounts for a very large proportion, and is mainly based on mid- to high-end categories. At the same time, the restaurant area is increased to support current purchases.

From the layout of the entire site, it is free to move. What does it mean? Take a look at the two hand-drawings I finished on site.



Figure 1 is the line diagram of the box of Ma Xiansheng Shanghai Xuhui, and Figure 2 is the line diagram of Carrefour, next to the box horse Xuhui shop. It can be clearly seen that box horses are more free in the layout of the entire field, and entrances and exits are actually some high-frequency consumer goods, and customer choice will be more open and free. But Carrefour is not. If you want to buy a bottle of water, especially if it is urgently needed, it will be very troublesome.

At the level of goods, we also investigated the structure of commodities. Judging from the results of the survey, the price advantage of Boxma’s flagship products, such as lobster and king crab, is very obvious. However, other commodities have a premium over traditional supermarkets, which is on average 9.5% more expensive. Of course, this is a design. Such a commodity structure can naturally filter customers with low price sensitivity and strong purchasing power.

In the customer group positioning, we did a sample survey at the store. The unit price of a box horse can reach around 160 yuan. For other fresh supermarkets, the average unit price is 60 yuan. In terms of customer base, customers from 18 to 35 can account for half.

With respect to the distribution of boxes and horses, stores as pre-positioned warehouses can make delivery more effective than fresh electricity providers. In addition, the boxer horse's own distribution team costs about 7.5 yuan per delivery. The average online customer price is more than 70 pieces, which can cover distribution costs.


Boxma fresh business logic

The above picture is a box horse business logic diagram, may be a bit complicated, I do some instructions.

In fact, we refined a few keywords: customer base, user experience, catering business, fresh ratio, logistics and distribution, and its positioning. All of these keywords are in fact logical and can form a closed-loop business.

For example, adding catering business at the retail end, as a consumer who has a higher frequency than fresh, can attract customers more offline. Moreover, the box horse first actually did not use Ali's flow, so it must lead to online drainage through the free flow of the line.

For another example, it uses the store as a pre-position warehouse, which can facilitate logistics and distribution and save costs. It is understood that boxma's mature stores can already break even, this is very important, because to create such a strong user experience cost is bound to be high, so we must find a more reasonable cost and income structure.

From the perspective of business results, the box horse drove offline traffic to the line through strong offline experiences, store endorsements, and payment guidance, which broke through the traditional restrictions on floor efficiency.

We understand that in fact, the leveling effect of hippos is at 30,000 yuan/square meter, which is significantly higher than that of traditional enterprises. Judging from the various reports of listed companies' annual reports, traditional enterprises are probably around 10,000 yuan/square meter. At the same time, from the point of view of rent, because the rent of supermarkets is relatively low, taking such stores in core locations as pre-position warehouses can also significantly reduce costs while ensuring timeliness.


(Box Ma Xiansheng's profit formula map)

From the profit formula, net profit is operating income multiplied by gross profit minus operating expenses. The special thing about that box of horses is that the proportion of online games is relatively high, and it can reach 50%, and the traffic volume under the line is also quite good. Overall, although the box horse is still not profitable, but if you deduct system development costs, I think this model can still go through.

For the future development path of box horses, we can see that in fact, they have been gradually iterating, and have also been expanding throughout the country. We see that in Shanghai, there are already similar convenience stores like the box horse F2. Continue to explore new stores such as convenience stores and even unmanned stores.

Then compare a difference between the box horse and the super species.


Box Horse Map of Fresh Life and Super Species in Shanghai

We can see from the distribution map of box horse fresh and super species stores that the box horse covers the dining table economy of the community. It opens up the concept of whole fresh food, food and table economy, and also realizes a one-stop way from the source to the table. deliver. The super species, mainly distributed in the periphery of the city, is a business district economy that revolves around floating populations.

The super species is still more like a box horse in positioning. It is also aimed at young people. The unit price is more than one hundred yuan. However, it is based on eight workshops that are hatched independently, and it will be different for a specific business community. ; Species & rdquo; Combinations. Of course, its storefront area will be relatively small, generally not more than one thousand square meters, while the box horse stores have areas ranging from a few thousand to 10,000 square meters.

We previously said that the hippopotamus is going offline to divert traffic, which is a very good O2O case. The super species has established multiple entrances to offline services. For example, Yonghui Life, WeChat applets, and hungry food delivery platforms can enter the purchase portal, but its proportion of online orders is lower than that of box horses.

In the iterative business segment, we said that the box-horse trade iteration is very fast, with the exception of convenience stores, unattended stores, and joint ventures with Xingli and Sanjiang Group. The iteration of the super species in the format is mainly self-incubation of the partner system. It continues the management model of Yonghui Supermarket. Six people, each of whom is a partner, then selects a team leader to share the excess profits.

This is actually equivalent to an internal entrepreneurial platform. Everyone is also relatively an entrepreneur. We see Yonghui's rapid growth in performance over the past few years. This has a lot to do with its partnership system.

If we make a conjecture about box horse fresh produce and super species strategically, I think box horses have three main lines:

The first is the transformation of joint ventures to export the box-and-horse model: Exploring and transforming Sanjiang Shopping, Xinhuadu and Gaoxin Retail with the methodology of Boxma.

The second is sharing of strategic resources: The use of strategic shares and the cooperation of Sanjiang and RT-Mart, sharing supply chain and member resources.

The third is to insist on iterating: Try to use Alibaba's abundant capital to try and endorse and try the new format under the new retail model.

The super species will still focus on its own development. The super species is an innovative project that is hatched under the Yonghui system. Ultimately, it should hope that it can contribute to the listed companies. In this scenario, since the super species positioning is more advanced than Yonghui's large stores, it certainly hopes to use it as a starting point to link the global supply chain. In the end, the super species may be a typical case of Tencent's "Smart Retail" landing to assume Tencent's "Smart Retail" task of docking and trying.

In the end, I would also like to talk about other exploration projects of Alibaba in the new retail in addition to Boxma. Because box horses are incremental innovations with their own strength, the difficulty is the lowest, and therefore the fastest running. But other projects are difficult.

For example, Alibaba has become a controlling shareholder of the Intime project. We know that offline department stores are actually more difficult to digitize, and they are all joint ventures. Compared with self-employed, the difficulty of innovation is considerable.

Currently, Yintai’s joint ventures account for more than 80% of the total. In terms of trends, Yintai has done online dataization in the past few years and has also reduced the proportion of joint ventures. In the field of new business development and exploration, we also realized the on-site incubation of ONMINE snack shops, smart home stores, and unmanned service shops, and we also made Ningbo Yintai such a holistic transformation and upgrading. In the future, it may also be possible to carry out some technical management outputs with other retailers, as you can see later.

But on the whole, Yintai still walks in the "from -1 to 0&rdquoquo; road to the transformation of the old city.

That Ali retail outlet is also a very big market. Currently, there are nearly 100,000 convenience stores, with annual sales of more than 100 billion yuan. The couple has 6.6 million grocery stores and annual sales of trillions of dollars. They are mainly distributed in the fourth and fifth-tier cities and villages.

However, reforming the existing dealer system has a long way to go.

On the one hand, the performance of the existing dealer system has been precipitated for many years and a solid network has been formed. On the other hand, couples grocery stores are relatively low-educated and it is difficult to accept new things. Future competition in this area will be very fierce, but Ali has a huge advantage, that is, it is very strong in the push.

In the short term, the Internet giant is still the protagonist of new retail. In the long run, new retail may cause a big change in our lives in the coming decade, and the new retail war will continue for a long time.

For everyone to see a financial data. In the previous fiscal year, Alibaba and Tencent’s operating net cash flow was more than double the sum of the A-share major retailers (excluding negative values).


Net operating income of top ten retail companies in internet giants and A shares (billion yuan, annual report for the previous year)

Therefore, giants will remain the protagonists of new retail sales regardless of financial pressure, company efficiency, or flow advantage.

Judging from the current front, the new retail reform in the supermarket sector has basically been completed, because the high frequency of consumer spending, so give priority to the layout, but department stores are still in the process of transformation.

The core of new retail in the future I think is a piece of data innovation. This is because traditional retailing is actually doing poorly in digitizing this piece. Like Yonghui, 2 million people can come to buy something every day, but the amount of data that can actually be retained is relatively small, and after the user leaves the store, the supermarket Or companies can hardly make connections with users. But in the future, Ali and Tencent will provide some tools to offline companies to facilitate their marketing.

How do you think about the ten years of new retail? I think we can compare the ten years of Alibaba Cloud.

Alibaba Cloud actually started in 2008 and it has been doing exactly 10 years. So, now, the new retail may be an area where Ali has just begun to lay out, just like Alibaba Cloud ten years ago.

In the future, the competition between Ali and Tencent will become more and more intense, because this market space is too big, and there are still 78% of the transaction volume under the line, which is much larger than the space of the cloud. Therefore, the future new retail competition game, the war between Ali and Tencent, may have just begun, in the future there will be more and more new business emerge, more and more capital comes in.

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