Foreign retail giants are blocked by China, can Metro succeed in countering the trend?

There is a saying in China that "the first is the best". In the field of supermarkets, Wal-Mart, which entered China in 1996, has opened 370 stores in 140 cities, and Carrefour, which entered China in 1995, has opened More than 200 stores have completed a comprehensive layout in the Chinese market. As the largest retail and wholesale supermarket group in Germany, the second in Europe, and the third in the world, Metro's expansion in the Chinese market is slower than that of other giants. In 2011, with a sales volume of 13.8 billion yuan, Metro ranked 38th among the top 100 Chinese chain stores according to the China Chain Store & Franchise Association, and ranked 10th among foreign-funded chain enterprises in China.

But according to a report in the November issue of "CEConline" "Metro Accelerates in China", Metro has decided to accelerate its business in China. In 2012, Metro's number of stores opened rapidly, reaching 9, accounting for one-sixth of the total number of stores opened in the past 16 years. Metro Group seems to be very optimistic about its development in the Chinese market.

Despite Metro's optimism, the market environment does not favor foreign supermarket chains. It was rumored that Carrefour's business in China was going to be sold to China Resources Group, a local company in China, and Wal-Mart's executives in China frequently vibrated in 2012. So why can Metro expand against the trend in China? On this issue, the "CEConline" community had a lively discussion.

Metro can't escape the "acclimatization" of foreign capital?

Viewpoint: Compared with other foreign companies, Metro has nothing to attract attention. Its defeat is doomed from the beginning!

User "Duanyu" clearly expressed his pessimism about Metro's prospects in China. He believes that "the pattern of China's retail industry is extremely complex, and the competition is extremely fierce. There are strangulations from foreign retail enterprises, the penetration of large domestic enterprise chains, and local retail chains. The fierce competition will directly lead to the operating costs of foreign enterprises in the local area. Increase". His remarks undoubtedly hit the key point that the development of foreign retail giants in China was hindered. Gao Fulan, President of Walmart China, said frankly that changes in the economic environment and the rise of e-commerce have affected the performance of brick-and-mortar supermarkets in 2012.

"Break the knife and break the jade" accordingly believes, "In today's homogenization of global retail terminals, Metro does not have any differentiation or something that can attract people's attention compared with other foreign companies or local companies, so Metro The defeat of METRO is doomed from the beginning!" This conclusion may seem extreme, but it does raise a question - what unique advantages does Metro have to support its contrarian expansion? After all, the business performance of the three multinational giants Wal-Mart, Carrefour and Tesco in China has been disappointing.

Can unique models support contrarian expansion?

Opinion: Metro's average bill is 8-10 times larger than theirs (Walmart and Carrefour)!

Metro is of course "unique". The cash-and-carry warehouse stores target customers on professional customers such as industrial and commercial operators, and implements a membership system, so that they and other ordinary supermarket stores Separately, this has also become the key to Metro's advantage. The user "Farewell, Wei An" commented: "The warehouse-style supermarket integrates the supermarket and the warehouse, which saves many intermediate links, greatly saves manpower and capital, and ensures the low-cost and efficient operation of the supermarket." User "Jeffie Fish" used a very intuitive comparison to illustrate Metro's low cost and high efficiency: "If there are these three supermarkets in a city, the customer orders of Wal-Mart and Carrefour are often 6-7 times that of Metro, but the average of Metro's The bill is 8-10 times theirs.”

But the focus on specialized market segments also limits Metro's expansion in emerging markets, especially China. It entered China almost at the same time as Wal-Mart and Carrefour, but as of 2011, Metro had only 55 stores, far less than other giants. However, when we lost our horses, we knew it was not a blessing. "Although Carrefour and Wal-Mart have more stores, their expenses are relatively higher, which will cause a problem. In the case of a downturn in the market, your input will be greater than your output, resulting in Debt, the resulting turnover of personnel gradually affects customers", user "violet506" analyzed. The development of the past two years fully confirmed his judgment.

Metro's cost advantage is not only reflected in the terminal link, but also in the supply chain, Metro is also "unique". "The main joint suppliers of Carrefour and Wal-Mart are local suppliers, which makes the management and control of suppliers relatively complicated and increases the cost of intermediate links. However, most products of Metro's national chains are only supplied to the whole country by one supplier. This reduces a lot of circulation costs", "violet506" continued her analysis, she believes that "giving 1/5 of this part of the cost to customers will greatly increase terminal sales and better ensure profitability."

Metro's competitors in the Chinese market are actually wholesale markets all over China. In the past, because restaurants, canteens, etc. have long been used to the convenience of wholesale markets, and the quality requirements are not so high, Metro's proud membership-based group purchases have limited appeal to them. However, as food safety has attracted more and more attention from the public, Metro's quality advantages have become more prominent. Users are full of confidence in the quality competitiveness of Metro's products because they are "precise rather than more". "In recent years, there have been a lot of false, fake, rotten, and deceitful behaviors in supermarkets, and compared with Metro's quality-oriented integrity behavior, there is not much competition. Power."

Can Metro succeed in trying a "mom and pop shop"?

Opinion: His ideas are ahead of their time. But his client management should be improved.

In an interview with "CEConline", He Zhewei, President of Metro China, believed that Metro is now focusing on China because they have found the correct model for expansion: in the past, they purchased land and built their own stores to open up stores. New stores, now trying to lease properties; replicating the Polish "mom and pop shop" model, targeting the multi-million Chinese grocery market, etc.

But rapid expansion can also pose problems. Users who are "happy to cooperate &" worry about "rapid expansion or a decline in service quality. For Chinese consumers, the current requirements for service quality are rising." Not only the quality of service, but also whether the supply chain can guarantee the safety and quality, whether the fixed cost investment will be too large, and whether the personnel training can keep up with the rapid expansion of the scale will appear.

Finally, although most of the members of the "CEConline" community participating in the discussion are optimistic about Metro's prospects in China, they are worried about whether Metro's unique warehouse-style supermarket model can be widely recognized by Chinese consumers. . "Rain He Xiaoxiao" just said that Metro is like "a lofty gentleman who wears a suit and is reluctant to contact the masses. In today's China, I think it is unrealistic to make a lot of money in the short term, and only some consumers can get the money." Chin Lai. I think in China, being a supermarket is like robbing money.” "Hydraulic Coal" also believes that "his philosophy is ahead of its time. But his customer management should be improved."