When Hema Fresh was born, the new business form of hema “fresh supermarket + catering” began to grow wanton in the industry. Now, two years later, it is interesting and surprising to look back at the fact that none of hema’s categories claim to be profitable, with the exception of 13 existing hema stores, which hema announced in July 2017 to be scale profitable. Even more interesting, talk of profitability died out after Hema grew to more than 40 stores.
Obviously, Ali as the “fresh supermarket + catering” new retail business pioneer once tasted sweet. But imitate hema kind hema people but the least bit of meat did not touch. In this way, the players who followed the hema craze into the game seemed to have made a big joke. Why is that? To answer this question, let’s first look at the people in the Hema Bureau.
After ali hema fresh life, the kind of hema mushroomed like crazy
Alibaba Chairman Jack Ma, CEO Daniel Zhang and others taste fresh seafood at Hema In July last year. Hema, which had been quietly planned within Alibaba for more than two years, was thrust into the spotlight with Mr. Ma’s visits to the store. At that time, all the major media reports on Hema Xiansheng were overwhelming. At this point, Hema xiansheng became a new species in the retail industry to enter the recognition of everyone.
At the end of the same year, Yonghui Supermarket launched “Super Species”. It is understood that Yonghui Super Species opened five stores in Xiamen, Fuzhou, Chengdu, Shanghai and other cities last year. As of June this year, Super Species has 19 new stores, most of which are in the form of “store within store” in Yonghui Supermarket. Superspecies plans to open 100 stores in the future.
In addition to Hema Fresh and super species, there are numerous enterprises following the hema style of “fresh supermarket + catering” business format. For example, xinhuadu Seafood Club, BBK’s Fresh Food Romance, Rainbow’s sp@ce, Bailian RISO, RT-Mart’s Rt-Mart’s Youxian, Lianhua’s Select Future store, Wumart’s Hangzhou Near river store, jingdong 7FRESH, Suning Su Fresh, Meituan’s baby elephant fresh and so on.
Under the leadership of Ali Hema and Tencent Super Species, the new retail format of “fresh supermarket + catering” is mushrooming. Especially after hema announced to achieve profitability, the relevant enterprises are more enthusiastic about hema new retail. As a result, the hemas appear in a bright image. So, after two years of market testing, what happened to hemas?
With high cost and thin profit, it is difficult to make profits in the market
To see what happened to the hemaequins, take a look at two sets of data.
In July this year, Yonghui supermarket released a half-year performance express, yonghui achieved operating revenue of 34.397 billion yuan in the first half of 2018, revenue growth of 21.47%, but the operating profit decreased 22.65%, the net profit of shareholders of listed companies decreased 10.67%. In the same year, new Huadu released the “Performance Express for the first half of 2018” estimated that in the first half of this year, the net profit of attributable shareholders was 5.5 million yuan to 10 million yuan, down 77.09% to 86.85% year on year. In fact, not only yonghui and Xinhuadu profit lower, into the game category hema fresh supermarket players did not make money.
According to relevant data, in the first two quarters of 2018, the revenue of Yonghui and Xinhuadu basically increased year on year, but the net interest rate decreased year on year. Although the statistics of other supermarkets are not included, we can have a look at the current state of them. After two years of market testing, hemas have high costs and thin profits, and the profitability of the two listed companies represented by Yonghui and Xinhuadu has declined to varying degrees. Because of the difficulty in making profits, Hema has not made ends meet and thus entered the labor pains period of new retail transformation.
For Yonghui, entering the throes of new retail transformation with declining profits is because total expenses increased in the same period compared with the same period last year. On the one hand, the company continues to introduce high-end management, technology, business talents and increased compensation costs, and recently raised 358 million yuan of equity incentive fees; The other side is to continue to expand the super Species store network to increase the number of stores, resulting in increased expenses year over year. It is understood that super Species plans to open 100 stores in 2018, which means yonghui will continue to accelerate the pace of store opening.
For the new Huadu, there are two reasons for entering the transition period. On the one hand, the competition in the retail market is becoming increasingly fierce, and the performance of traditional offline retail business has not reached expectations. On the other hand, there is great uncertainty in the location of new stores, opening time and incubation period. It is reported that 31 supermarkets of Xinhuadu in Fujian province have been fully connected to Taoxianda for the new retail transformation of online and offline integration.
Obviously, Yonghui launched super species, Xinhuadu launched seafood, these new formats can not help it avoid the transition pain, but reduce the time of profit rate acceleration pain. In addition, the reasons for the transition pains are large investment in new business and distorted forecast of return period. The so-called new business format is hema style “fresh supermarket + catering” new retail.
In fact, except for Yonghui Super Species and Xinhuadu Marine Society, other hema categories did not realize profits. The initial large capital investment after more than two years of fermentation did not achieve the results that hemaemon expected. As a result, the invested capital cannot flow, and the new retail transformation of hemas has entered a painful period.
Operating costs are too large, class hemas are difficult to make a profit
So why are none of the hemas profitable? There are several reasons why it is hard to make money.
First, the profit of general catering business is thin. If you want to achieve high profit in catering industry, you need to develop high-end catering with many additional services, because customers are willing to pay more money for services other than food, while Hema can’t do high-end catering. Additional services in high-end catering include dining environment, food style, waiter service and so on.
However, it is hard for them to do high-end services. On the one hand, this is determined by hema’s “fresh supermarket + catering” business model. That is to say, catering is just a kind of hema additional service, since it is additional nature is difficult to do better. On the other hand, there are many high-end restaurants at present. Even if Hema focuses on high-end catering, it may not be able to break the original pattern of high-end catering.
For the romance of better Life fresh food, the first store in Changsha Meixi Xintiandi in June last year, the popularity of the shopping center jumped to the star project. But in catering, the romance of fresh food is still unable to add high-end service experience. From the point of view of food products, the categories of fresh Food mainly include international food, local food, seafood experience hall, street food, fruit and drinking bar, etc. The categories are rich, but due to the limited space, the dining environment is noisy, which is completely different from the elegant dining environment of high-end catering.
In fact, the problem with the romance of fresh food is that it is common among hemmas. Since we can’t develop high-end catering, we have to face the thin profits of catering business. It can also be said that there are some chicken ribs in the mode of “fresh supermarket + catering”. Customers may go to experience it, but few people will choose to have dinner in the supermarket.
Second, physical retail does catering in stores, which costs too much to operate. High operating costs are the main reason why hemas are struggling to make a profit. Its main performance lies in the early human and material resources and financial input, especially in order to increase the passenger flow of various opening discount activities. It is especially expensive for hemas, which specialise in high-end ingredients such as seafood.
Take Meituan Baby Elephant, for example. Meituan Baby Elephant Fresh opened in Beijing in May last year. At the time of its opening, Meituan Elephant bought a Boston lobster for $59. Remember that Hema has no such price under the guarantee of global fresh supply from overseas direct procurement.
So consumers are simply taking advantage of the opening of new species like Meituan baby Elephants and eating as much as they can while the opening is on sale. As a result, hema stores are crowded in the first few days of opening and business is booming, and even the record of innovative industry sales in a single day. But before the opening, the price rises hemas will be reduced substantially.
In addition, the cost of store transformation, operation cost of performance, ping efficiency and human efficiency cost and other costs, hemas can not make ends meet. So, after a period of positive store openings, hemas earned word of mouth but not money.
At this time, some people will say that after the word of mouth users will not worry about money, but the fact is not so. There are so many kinds of hema business that everyone wants a piece of it. In the process of fighting for users inevitably caused by the burning war. At that time, most classification hema format and Ali, Tencent and other capital giants hard to contend. By the end of the capital race, most of the horsemen will probably die before they get started.
The path to survival for the hemhorses
Low profit and high operating costs make it difficult for hemas to achieve profitability. So, is this the kind of hemhorses to go to the wall there is no way back? Not so, I think. There are two ways in which hemihorses can survive and thrive.
On the one hand, we should face up to the “huge pit” under ali Hema’s bright appearance. In the past few years, due to the impact of macro factors such as the slowdown in the growth of consumer goods retail and the impact of e-commerce, the survival status of traditional supermarkets has deteriorated. Offline prices can not compete with online prices, customer flow is reduced, the store is unable to attract investment, can only close the store to stop losses.
At this time Jack Ma threw out the “new retail”. Therefore, in this dark period, “new retail” is regarded as a lifeline by many traditional enterprises. In addition, fresh, catering and other categories of drainage capacity itself is strong, and increased year by year. So the first shell of the new retail “Hema Fresh Sheng” came out of the sky and everyone followed suit. However, we only saw the surface, but did not see the fact that Hema has no profit news after 40 stores, and did not see the fact that Hema is still spending money to cultivate customer habits. So, facing hema’s shortcomings is the first thing hema people have to learn.
On the other hand, we should tailor our clothes according to our own conditions and walk out of the hema format with our own characteristics. For example, RT-Mart Youku itself relies on the customer flow of RT-Mart to realize its new Hema retail vision. Therefore, RT-Mart Should always keep in mind its original intention, make good use of the advantages of supermarket customer flow, and focus on “fresh supermarket” instead of spending too much on “catering”.
In general, the “new retail” catalyzed the emergence of hemas. However, it is not easy for the hemas to find a way out of their own way under the giant pit of Hemas. In the future, I hope that the kind of horse can be eight immortals across the sea, each show his powers.
Article/Liu Kuang public account, ID: Liukuang110