It Is Not Easy To Make Money In Foreign Retail Business.

From Paris The Buddha Department stores entered Beijing in the early 90s of last century, but because of poor operation, they withdrew from the Chinese market in a few years. Back to Beijing this time, it is said that the high-end customers are still targeting. In the face of the dilemma of city department stores, what can Buddha bring to Beijing? People still expect.

In the period of deep adjustment of foreign-funded retail enterprises, some of them are ready to enter in large numbers, but others have already closed down. In June 1st, 5 years of Shenyang's retail market, Yi ddan department store officially announced that the store was closed.

When Chinese tourists' enthusiasm for overseas shopping is not diminished, and the enthusiasm of the world famous consumer goods group to the Chinese market is rising, Chinese cities are ushering in a new group of overseas retailers. From supermarket stores to high-end consumer goods, foreign retail businesses are adjusting their layout and making steady progress. They are optimistic about the future of China's market.

　　 Chinese market shows deep attraction

A few days ago, the department store in Hongkong announced that its flagship store in the mainland will open in Shanghai in September. Prior to this, Lian Crawford entered the Shanghai market in 2000, but due to poor performance, the store closed in 2006. The French Lafayette department store, which withdrew from the Chinese market in 1998, will return to China in late September and officially open the Beijing store in Xidan North Street, Beijing.

The two well-known foreign retailers who lost the Chinese market a few years ago are coming back to China, which is optimistic about China's huge consumer groups and rising consumer demand. "The main reason for leaving China at that time is that the market is not yet ready." Laurent Chemla, general manager of Asia Pacific region, Department of general merchandise, said. He believes that the choice of return to Beijing at this time is due to the maturity of the time to return to the store. The world's top luxury brands such as LV, GUCCI and LOEWE are no longer strange to Chinese people. Beijing has rapidly grown into the most active luxury goods consumer in the Asia Pacific region, and the Xidan business circle is also the mainstream high-end retail consumption place in Beijing. This time, Lord Buddha returned to China and planned to open 15 chain department stores in China in 5 years.

In the same year, Lafayette and old Buddha lost the Beijing Shanghai market respectively. The main reason was that the market conditions were not ripe. In addition, the business models of franchising and agency operation of the two enterprises also laid hidden dangers for the operation, causing enterprises to "not accept the acclimatization". The two retailers learned and learned this lesson.

In order to reduce market risk, the French Department of Lafayette department store invested 50% in 2010 to establish a joint venture with Hongkong I.T. With the help of the latter's 5 years of experience in the Chinese market, the company opened up its business in mainland China. Lane Crawford Then set up "Lian Ke Fu Department Store Commerce (Shanghai) Limited company" to run Shanghai store. According to the old Buddha, the flagship store in Xidan will also import some new brands from Europe, the United States and other Asian countries in accordance with Chinese aesthetic standards. In order to adapt to the mainland market, Lian Crawford increased the catering format. Its online store will provide a week of new products, bilingual content introduction and modeling experts and customer service in three languages. It will be able to arrive in Beijing, Shanghai and Hongkong on the same day and provide online order picking and return services in Shanghai Times Square shop.

Foreign retail giants have made a comeback, but local retailers do not have a sense of crisis when foreign retailers rush into China.

　　 It is no longer easy to make money in the adjustment period.

"Today's Chinese retail enterprises have matured." Guo Geping, President of China Chain Store Association, said. When we joined WTO in the foreign retail trade, we felt that it was "wolf coming". But after more than ten years of development, the domestic retail enterprises have taken a firm foothold and are developing steadily. Now that the situation is reversed, the advantages of foreign-funded retail enterprises are not as obvious as they were at the beginning. Instead, they need to be closer to the Chinese market, adjust their business models and other aspects to better satisfy Chinese consumers.

Guo Geping believes that the reasons for the adjustment of foreign-funded retail enterprises, on the one hand, are facing increasingly fierce competition and high cost as domestic enterprises. On the other hand, with the rapid development of domestic retail enterprises and the narrowing of the gap between foreign capital and foreign capital in terms of management mode, management concept and commodity structure, the attractiveness of the large and one-stop shopping modes of foreign-funded enterprises is gradually declining for Chinese consumers.

In February this year, following the footsteps of best buy in America, the city of metro, Europe's largest electrical chain group, announced that it would withdraw from China. Prior to 2012, the French retail store Carrefour, the US retail store WAL-MART, the British retail giant Tesco closed several stores in the Chinese market.

Zhong Sheng, an expert member of the China Federation of Commerce consortium, believes that in recent years, while the cost of retail industry remains high, investment is difficult to continue and revenues have fallen sharply, dividends from foreign retailers in terms of Taxation, local policies and business resources have gradually disappeared. The pressure of "three high" problems (labor costs, energy costs and high commercial rents) has also become increasingly prominent. According to a survey conducted by China Chain Store Association, the average rent of China's top 100 chain enterprises with large retail enterprises in 2012 increased by 21% over the previous year, labor costs rose by 20.5%, and water and electricity charges rose by 16%.

After 30 years of rapid development, China's retail market segmentation has been very obvious, from high-end department stores, supermarkets, to hypermarkets, convenience stores, and so on, the market competition has been very full. Now, even if there are more new retail brands coming into the market, it will be hard to reappear when the first day of business is opened to customers.

It is understood that after entering the Chinese market, as well as best buy, Wan De city insists on its original business mode, including emphasizing experience and buying products. But the price war of China's home appliance retailers has been very brutal, so that the space for foreign capital enterprises to move is limited. The professional market of electronic consumer products and the rapid development of electricity suppliers have also made many foreign enterprises have no advantage in category and price. Some consumers even regard Wan de Cheng store as an "experience center", identify the models, and go to the appliance market or online to buy cheaper products.

He Yangqing, vice president of Gome, has said that China's home appliance chain has formed its own advantages and characteristics. Including 20 years of cooperation with local manufacturing enterprises, the relationship is very reliable; local stores to implement low price strategy, high consumer loyalty. In addition, since 2004, the scarce city stores resources have been occupied by local household appliance chains. The one or two tier market is very saturated, and foreign stores will find it difficult to find good properties. With the establishment of production bases of many international brands in China, the advantage of foreign brands in international brands is no longer obvious.

　　 Still has the advantage of developing faster than the average level of the industry.

With the decreasing trend of foreign retail trade, domestic retail enterprises are accelerating expansion. Last year, there were 82 new stores in Huarun million stores, with a total number of 782 stores. Yonghui supermarket [-5.04% Fund Research Report] opened 47 stores last year, and 13 new stores in the first half of this year. It is estimated that the net profit attributable to shareholders of Listed Companies in the first half is 192 million yuan, an increase of 100% over the same period last year. Following the fall of Beijing, Yonghui supermarket will also enter Shanghai and Guangzhou in the second half of the year. At that time, Yonghui supermarket will realize the basic coverage of the first tier market.

"In spite of the fact that individual foreign enterprises are withdrawing from the Chinese market, we must soberly observe that Foreign retail enterprises The growth rate is still faster than the industry average. " Guo Geping told reporters. For example, relatively concentrated formats, most foreign-funded enterprises focus on a certain format, in a professional field intensive cultivation, large supermarket formats, regardless of the number of shops or sales scale has shown certain advantages. In addition, the single store efficiency of foreign retail enterprises is high, and the sales of single stores in large supermarkets are around 300 million yuan, still higher than the single store sales level of domestic funded enterprises.

It is reported that foreign retail businesses such as metro and Auchan are still stepping up their expansion. The number of shops has increased from 4 in 2011 to 5 in 12 and 10 respectively. In the long road of recovery of the world economy, foreign retail enterprises have been optimistic about emerging markets. It is predicted that foreign retailers will reach 200-500 in China in 3-5 years.

It is worth noting that foreign retailers are paying more attention to the profitability of emerging market stores while expanding their scale. At the same time, we should pay more attention to strategic layout. WAL-MART, Carrefour, Metro and so on began to infiltrate part of the three or four line cities. Carrefour opened a store in Mengcheng, Anhui last year. WAL-MART will also choose the supermarket to open to Hunan, Yongzhou, Daoxian County, and test the four line of water. At the same time, the foreign retail industry also pays attention to the implementation of the regional advantage strategy, that is to set up stores in a certain area, and to have advantages in logistics and headquarters functions, and then expand outward.

"Foreign retail enterprises still have many advantages, and domestic enterprises have also formed their own competitiveness." Guo Geping said. The mutual learning and reference of foreign capital and domestic retail industry in competition will promote the prosperity of China's consumer market and better meet the needs of Chinese consumers. Both domestic and foreign retail businesses face new problems such as the increasingly fierce competition between the electricity supplier and the traditional formats, the wider use of mobile Internet technology and so on.