Pangdonglai, who was praised by Lei Jun as "the god like existence of China's retail industry", has been a bit busy recently.
After starting targeted assistance to * ST Bugao (002251. SZ) in December last year, Pangdonglai recently launched another effort to help Yonghui Supermarket (601933. SZ), the leader of fresh food supermarket.
On May 8, the founder of Pangdonglai visited the Zhengzhou store of Yonghui Supermarket. As soon as the news came out, Yonghui Supermarket immediately received a ceiling, increasing its market value by 2.2 billion yuan.
But in fact, Pangdonglai, who ignited the secondary market, is only a regional retailer in Henan, whose revenue will just exceed 10 billion in 2023; However, Yonghui Supermarket is the top two leader in the industry, with a revenue volume of nearly 80 billion in 2023.
Previously, Pangdonglai had significantly improved the Changsha store of * ST Bugao. The average daily sales increased from about 150000 yuan to 1.5 million yuan, and even reached a maximum of 2.4 million yuan during the May Day holiday, a 16 fold increase.
The secondary market's expectation for Yonghui Supermarket is not only to catch up with the traffic from Fat Dong, but also to get rid of the mud of declining performance year after year by virtue of the opportunity of transformation, and to "replicate" Fat Dong in more stores.
But it's not easy.
On the one hand, in recent years, the competitors of Yonghui Supermarkets have increased rather than decreased, and all channels such as e-commerce channels, fresh food e-commerce, community group buying and offline discount stores continue to squeeze the living space of traditional KA.
On the other hand, Pangdonglai, known as "Haidilao in the retail industry", only has more than 10 stores, all of which are located in Xuchang and Xinxiang, Henan Province. The stores of Yonghui Supermarket in different regions may mean that experience is not reused, and there are totally different procurement, operation and management problems.
In the final analysis, just as Haidilao has made its peers "unable to learn", similar situations may be repeated in Pangdonglai.
Yonghui's efforts
Since 2012, the nearly unlimited shelves in online channels have made offline hypermarkets "scattered", and the community group buying after the epidemic has caught Yonghui Supermarket, which mainly sells fresh food, off guard.
From 2021 to 2023, the performance of Yonghui Supermarket has declined for three consecutive years, with its revenue shrinking from 91.062 billion yuan to 78.642 billion yuan, and its net profit has lost 90 small goals in three years.
Yonghui Supermarket also launched a series of self-help before asking Pangdong for help. Only from the results, Yonghui's efforts are less effective.
In 2017, taking advantage of the trend of consumption upgrading, Ali's Hema entered the hinterland of Yonghui Supermarket in a large scale, selling king crabs and bolons.
Since then, Yonghui Supermarket has begun to catch up with the pace of "new retail".
In the same year that Hema appeared, Yonghui attracted Tencent's 4.6 billion yuan war investment, opened 26 "super species" for Hema, and shouted the slogan of opening 100 stores a year.
But the reality is cruel. The reality of a total loss of 1.2 billion from 2017 to 2018 finally calmed him down and stripped the super species at the end of 2018.
In 2021, super species began to close stores intensively. Zhang Xuansong, chairman of Yonghui Supermarket, explained that "Yonghui will return to the origin of Minsheng Supermarket".
According to the data of narrow door restaurant, there are only 7 stores of super species in Shanghai and Fujian at present.
In June 2019, the first Hema mini store located in the suburbs and towns opened in Shanghai. In the same year, Yonghui also began to lay out Yonghui mini stores located in community stores.
At the shareholders' exchange meeting that year, Zhang Xuansong set a radical goal of opening 1000 Yonghui mini stores throughout the year, but only 573 stores were finally opened.
Under the pressure of the epidemic, the number of stores in Yonghui Mini is gradually decreasing instead of increasing. By the end of 2021, there are only more than 70 stores in Yonghui Mini, which is close to "no such person".
Since then, in 2021 and 2023, Yonghui Supermarket has tried to store membership stores, discount stores and other businesses. However, under the operation of Yitong, its non net profit deduction will still be 2 billion yuan in 2023, and it will not be improved in the first quarter of 2024. Its revenue and net profit will decline year-on-year.
Yonghui can't be blamed for not working hard. After all, both "new retail" and "old retail" are on the ebb.
Cai Chongxin made it clear that "it is reasonable for Ali to withdraw from the traditional entity retail business", but at the same time, he was reported to sell Hema and RT Mart parent company Gaoxin Retail (6808. HK); Jingdong, which has invested in Yonghui for 9 years, also began to reduce its holdings.
Cats and dogs exit offline retail or aim to focus on core e-commerce business to cope with the competition of Pinduoduo and Tiaoyin.
The left Yonghui people looked around and turned their eyes to the current retail "online celebrity".
Online celebrities come from the east
In 2017, when Hema was in the ascendant, Lei Jun went to Pangdonglai Times Square in Xuchang to "make a pilgrimage and study", and praised Pangdonglai as "a god of Chinese retail industry".
In 1995, Yu Donglai borrowed 10000 yuan and four other employees raised 60000 yuan to establish the "Moon Watching Tower Fat Shop", which sells tobacco, alcohol and food. Later, in 2002, Yu Donglai began to enter the supermarket business, and opened a 23000 square meter Fat Donglai Life Plaza in Xuchang, becoming the largest comprehensive supermarket in Xuchang at that time.
So far, Pangdonglai has 13 stores and 2 logistics industrial parks in Xuchang and Xinxiang.
The most intuitive feeling of the outside world about Pangdonglai is its good service, which is even called "Haidilao in the retail industry".
The good service is not only reflected in the return of half of the melons bought in Pangdong, but also the return of half of the ticket price if you are dissatisfied with the movie; It even provides different toilets for children of different ages.
Another label of Pangdonglai is "all goods".
At present, the number of SKUs from Fat East is between 10000 and 15000, slightly less than 20000 of the traditional supermarket Yonghui, but far more than 4000 of the warehouse membership stores.
According to public reports, there are as many as 30 toothpaste brands that Pangdonglai provides customers with choices, and each brand has many different series.
If a consumer finds that something he wants has not arrived yet, he can fill in the "Shortage Registration Form" to request purchase. Yu Donglai even went so far as to transport a single item by air.
Under such "pet powder", the average gross profit rate of Pangdonglai Supermarket can reach 30%.
As a comparison, the gross profit rate of Yonghui Supermarket in 2023 will be 21.24%, and that of member warehouse operator COSTCO. NASDAQ will be less than 13%.
The secret of Pangdonglai's profit was written long before the opening of the first Pangdonglai Supermarket.
In 2001, on the eve of the opening of Xuchang Fat Dong Lai Life Plaza, Yu Dong Lai formed an alliance with three other local retail enterprises in Henan, agreeing not to invade each other's market, and at the same time, reached an agreement of "four parties joint purchase", which means that four single small retailers formed a scale effect through joint purchase to lower prices to upstream suppliers, The purchase price of some products from Pangdonglai has thus been reduced by 30% - 50%.
With all kinds of goods and good services, Pangdonglai has even become a tourist destination for outsiders, and is even nicknamed "6A level scenic spot" in Henan.
According to Henan Radio Station, the daily average passenger traffic volume of Zhengzhou Xuzhou Line is about 80000 person times, and more than 85% of the passengers are destined for Pangdong. On New Year's Day, seven stores in Xuchang Pangdong received 318000 person times of tourists, of which 75% are tourists from other places.
Local people said that Xuchang was not stuck in traffic only on Tuesday, "because Pangdong was not open that day".
In the end, Pangdonglai, who has become a top online celebrity, earned 140 million yuan in tears last year while its revenue exceeded 10 billion yuan, a sevenfold increase over the expected target of 20 million yuan.
In the case that the last learning object, Hema, was unable to survive on his own, it is not difficult to understand that Yonghui would like to place his hope on Pangdonglai. However, "Haidilao in the retail industry" may not be so easy to copy.
Copy Pangdonglai
Before Yonghui, Pangdong came to Hunan's leading chain store supermarket * ST Bugao for help.
In April this year, Pang Donglai began to help * ST Bugao. Before that, Wang Tuan, the chairman of * ST Bugao, asked Yu Donglai to go out of the mountain.
As a result, Yu Donglai started the experiment of copying Fat Donglai in Hunan.
Take Babugao Meixi Supermarket selected for transformation as an example. First of all, the most intuitive change is to follow the standard of "fat from the east" in management - shorten the business hours, increase the salary of employees, and after the salary increase, increase the salary of employees in the store step by step by 30% - 60% higher than the local average.
Secondly, the third and fourth tier brands with high gross profit but difficult to drive sales will be taken off the shelves, and more first tier brands and cost-effective products will be put on the shelves.
Finally, Pang Donglai stepped down in person and sold his own online celebrity products such as "online celebrity" mooncakes and Pang Donglai rice noodles in the Bubugao store.
After a series of operations, Pangdonglai has achieved remarkable transformation effects on Bubugao stores. The average daily sales increased from about 150000 yuan to 1.5 million yuan, and even reached a maximum of 2.4 million yuan during the May Day holiday, a 16 fold increase.
It seems that Yu Donglai's process of replicating Fat Donglai outside the province is smooth, and it is relatively easy to realize the path of a store's customer flow and sales volume soaring, but whether it can be replicated to thousands of stores is another matter.
The challenge starts with supply chain procurement.
Yonghui's strength lies in fresh products. According to the data of Wu Jincao, an analyst of Soochow Securities, Yonghui conducts large-scale direct mining at the source to reduce costs, with the proportion of direct mining at about 70%. Fat Donglai is no different.
However, in the field of standard products such as daily chemical Jiaqing, there are significant differences in the operation mode of traditional KA such as Pangdonglai and Yonghui.
Traditional KA generally earns profits by collecting barcode fees, entrance fees and other fees from suppliers; While Pangdonglai learned the essence of warehouse member stores such as opening customers. Most of the standard products are private brands, and retailers control the pricing power. Therefore, these products generally have higher gross margins, and can also give more profits to consumers, forming a cost performance ratio.
According to the media, the employees of Pangdonglai Supermarket said that most of Pangdonglai's goods were self purchased, accounting for about 80%.
As a comparison, Yonghui Supermarket will achieve a sales volume of 3.54 billion yuan for its own brand in 2023, accounting for only 5% of the revenue.
As the gross profit rate of fresh food of Yonghui in 2023 is only 13.16%, the overall gross profit rate will reach 21.24% thanks to the standard products with a gross profit rate of 18.89% and the warehousing service fees with a gross profit rate of more than 90% (the proportion of revenue in 23 years is about 6.3%).
In other words, the main force making money for Yonghui is not the fresh food with a high proportion of self procurement, but the standard products with only 5% of self operated products.
From the perspective of the goal of the commodity structure of Changsha Bubugao store after being helped to reach 90% of Pangdonglai, if the shelves of Pangdonglai are completely repeated one by one, Yonghui, which has less proportion of self operated and self purchased products, is afraid to realize the high profit margin of 30% of the former.
Yu Donglai also said bluntly at the high step by step adjustment mobilization meeting: "(help the store) at least for half a year, there may be profits in the second half of the year, and it will take at least three years to mature".
However, the question is, does Yonghui, whose asset liability ratio has increased by nearly 90% year by year and has suffered losses for three years, have patience to wait for the three-year "maturity period" of nearly 1000 stores, and can the traffic increase from Pangdonglai be the reason for consumers to return offline?
All this depends on reality to verify.
