How Should Foreign Retailers Cope With Retail "New Normal"?

World department stores have a history of more than 160 years, and for a long time, Chinese department stores have been in the market for more than 110 years. At present, the department store format of "1000 stores and one side" has entered a recession period.

Low growth in retail industry " New normal goals Against this background, the "foreign department store" and "foreign supermarket" that once used to be "tall and big" lowered their noble heads. The main business in 2014 was released by the retail portal website. Retail enterprises Statistics show that in 2014, the main retail enterprises in China closed 201 stores, of which foreign capital accounted for 70%.

According to the experts interviewed, foreign-funded retail businesses in China are mostly self marketing, and the positioning of products is relatively high-end, homogenization is serious, and the decision-making chain is longer. In the face of challenges such as rising costs and the impact of electricity providers, they are not as successful as local enterprises.

According to the statistics of China Unicom, as of December 31, 2014, the main retail enterprises (department stores and supermarkets) closed 201 stores nationwide, an increase of 474.29% over the same period last year.

"At present, the overall retail industry is not in good condition, and has entered a new normal" low growth "," slight profit "or even negative growth." the expansion strategy of stores has naturally changed from original triumph to rational choice. " Wu Ruiling, Deputy Secretary General of China Chain Store Association, said.

In this round of "downsizing" of retail industry, the situation of foreign-funded enterprises is particularly not optimistic. According to the statistics of China Unicom, there were 141 foreign-funded retail outlets and 60 domestic retail outlets in 2014.

　　 Department store And the supermarket format has become the hardest hit area for foreign retailers. According to statistics, department stores closed 23 stores, of which Malaysia enterprises Baisheng department store closed 4, becoming the most department store in 2014. Supermarket stores closed 178, of which WAL-MART closed 16 stores. Foreign-funded retail businesses are mostly located in coastal areas.

The reporter interviewed found that foreign retail enterprises tend to attribute their results to strategic adjustment when responding to closed shop problems. For example, WAL-MART said that the 2015 plan will open 30 new stores, and will invest more than 370 million yuan for upgrading about 50 stores. Carrefour said it plans to enter more new cities and set up hypermarkets, and to build 6 modern distribution centers by the end of 2016. Lotte Mart plans to open about 5 NEW stores in 2015.

But in fact, the reason why foreign retail businesses are closed is not so easy as the enterprises described themselves as "open related".

Fu Longcheng, Deputy Secretary General of the China Federation of Commerce, believes that the control rights of foreign department stores are mostly attributable to the headquarters of multinational corporations, which leads to a relatively long chain of decisions. Once sales are not up to date, it will exacerbate the consequences of mistakes.

"Plus foreign department stores are mostly a separate commercial building with little room for maneuver, unlike Chinese department stores, many built in shopping centers and have enough space to spanform into innovative formats like social networking and experiential shopping malls, so in the face of the impact of online retailing and other commercial formats, they are often passively beaten until close down. Fu Long said.

Not all foreign retail spanformation is slow. For example, the B2C website, "flying bull net", which was invested by big RFA in 2013, is seen as a fast pace of spanformation. According to the introduction, the comprehensive retail shopping website, which locates itself, covers digital, household, food, clothing and other commodities. Apart from regular advertising, purchasing traffic and other means of promoting e-commerce, the big RT store will become a promotional channel for flying bull network, and will become a spanit station and self promotion point for express parcels in the future.

Experts suggest that the exploration of some ground gas in Chinese counterparts is worth considering. For example, this year, Tianhong will open 300 micro shops (that is, community convenience stores). The new marketing mode recently explored is that all employees of Tianhong are opening "micro stores", that is, all employees can be their own shopkeepers, and the goods are supplied and distributed by rainbow. Employees can also deduct their costs without cost, so it is easy to mobilize their enthusiasm for publicity. In addition, micro oh also provides door-to-door vegetable delivery services, the order is mainly through the WeChat public number.

Zhao Ping, deputy director of the Consumer Economics Research Institute of the Ministry of Commerce, said: "apart from department stores, the adjustment of other foreign retail formats from coastal to southwest, from one tier to three or four tier cities also reflects the problem of not being flexible enough to cope with market changes.

According to the insiders, foreign-funded department stores are mostly related to business models. The business models of traditional department stores are no longer suited to market demand. Shopping malls are coming back to the end of their business in the form of purchases and merchandise, and the majority of Chinese funded joint ventures are mostly foreign-owned. This is also one of the reasons for the closure of foreign capital stores.