Metro accelerates in China

Metro China President Uwe Hoelzer has visited 55 Chinese cities within nine months since he took office last October. These 55 cities do not have a high degree of overlap with the 39 cities that have opened Metro malls. They are marked together on the map of China on the wall of He Zhewei's office. The blue pushpins indicate the areas where Metro stores have opened, and the red pushpins are the areas where stores are planned to be opened. "If all the places Metro wants to go are marked, there will be more red on the map." He Zhewei said.

Metro is opening stores in China at an unprecedented expansion rate. It is said that Metro will open 10 new shopping malls in 2012, which is the fastest in its history in China. . At the same time, Metro launched a professional business-to-business online store in May this year, and piloted a retailer support program in China for the first time. After entering China for 17 years, Metro, which has been questioned by the outside world for its slow development, seems to have found the feeling of doing business in China.

Expansion is "just in time"

As the largest retail and wholesale supermarket group in Germany, the second in Europe, and the third in the world, Metro, with a sales scale of 13.8 billion yuan in 2011, was listed in the China Chain Store & Franchise Association statistics. It ranked 38th among the top 100 and the 10th among foreign-funded chain enterprises in China. In fact, foreign-owned chain enterprises generally have chest tightness in China. Since last year, the head of China has been constantly adjusted. Some time ago, it was even rumored that Carrefour's China business was going to be sold to China Resources Group, a local Chinese company. Regardless of whether the rumors are true or false, investing in Chinese business is still regarded as a long-term strategy by many foreign companies. To learn to do business in such a vast market, it is inevitable to spend money on tuition fees. In contrast, Metro has developed rapidly in China recently, and in order to accelerate the pace of development in the Chinese market, it expects to increase investment and expansion in China in the future.

He Zhewei admits that compared with the number of fast-growing Chinese cities, Metro's current number of 55 shopping malls is far from enough, and expansion is inevitable. As for the reason why Metro did not expand rapidly before, he explained: "We need to find a successful business model. Calculate our own costs and benefits, this is the basic business operation that every company has to do. We spent a long time, We have established 55 shopping malls in China in 16 years, and we are a company with relatively good profits.” In 2007, after entering China for 12 years, Metro finally made a profit. However, He Zhewei does not agree with the view that "Metro is a little late to expand now", but believes that "second- and third-tier cities have huge economic potential, but some areas may be too early for others, and we are at the right time."

"Actually, we also need to observe very well." For example, Metro's delivery sales business is very good, accounting for nearly 30% of the overall business. "This is a work done in the middle of the night. For example, in the canteen industry, we have to deliver the goods to the customer's canteen in the early morning, which does not require a lot of space. We are currently conducting an experiment in Shanghai, which is to build a shopping mall with our An integrated delivery platform, we want to observe how this delivery platform can better serve customers in Shanghai. If this model works well, it can be replicated in the Beijing market in the future."

But what Metro needs to measure more is that delivery The business is so good, is it really necessary to open a lot of brick-and-mortar stores to expand the business? China's e-commerce is developing rapidly. Will Metro set up more physical stores in the future, or will it build more central delivery platforms to cooperate with fewer physical stores to deliver goods to users? What Metro's management needs to think about is how to best meet customer needs. He Zhewei said with a smile: "Maybe 20 years from now, I will be able to tell you which is the best way."

However, Metro in China has begun to use flexible ways to meet the needs of fast store openings. In the past, Metro's uniqueness was that it opened new stores in the model of buying land and building its own stores, which is also the model it is used to everywhere in the world. However, in China, there are fewer and fewer plots for Metro to build its own shopping malls. Metro has begun to experiment with leasing properties. This model was adopted in its first shopping mall opened in Yangzhou in February this year.

Understand the needs of customers

He Zhewei served as President of Metro Vietnam, President of Makro (another cash and carry brand of Metro Group) Poland, and CEO of Real (Metro Group's chain retail store brand) International CEO , to China, the huge market and diverse regional differences still surprised him. "Every region has its own local specialties, and the local characteristics are different every few hundred kilometers. I need to understand the different needs of customers and the operation of different markets." However, Metro's "centralized procurement" method in the past did not work. Meet the needs of customers in different regions of China. He Zhewei admits: "In fact, it took us a long time to realize that we need to really understand the needs of customers, and then really develop services that meet their needs."

The catering industry is one of Metro's core customer groups. He Zhewei is not satisfied with the development of this business, "We are not a real market leader yet". In his view, the catering industry is not only sensitive to price, but also attaches great importance to service; Metro is actually relatively easy to meet the needs of the former, but more difficult to meet the latter. "For such a customer group, we need to make more improvements in various fields to meet their needs. For example, we want to shorten the distance between new shopping malls and customers in the catering industry, so we opened a new store on Huaihai Road, the central city of Shanghai. A store in the city; however, in practice we found that just shortening the physical distance is not enough. Customers will think that it is so hot, I just need to make a phone call and the goods they need can be delivered to the kitchen. Therefore, Metro still needs Provide better service to shorten the distance between yourself and the customer's kitchen, which is to provide better delivery service."

Metro China officially launched its online store in May this year. "We need to deliver the right product at the right price to the right person at the right time." He Zhewei is well aware that many traditional retailers have failed in e-commerce. But the online mall is only a tool for Metro to provide a package of services to customers. "What we really need is to find the right products and the right categories, and to serve customers the best." He took meat as an example. Metro's Mazda guarantees the quality and safety of commodities. The barcode-based traceability system can trace the production source of commodities at any time. Metro's direct procurement and self-transportation systems not only ensure the freshness of commodities, but also ensure the freshness of commodities. Reduced intermediate circulation costs; customers can not only use online or non-online purchasing tools and channels, but also defer payment for three months with credit lines... In addition, unlike retail stores such as Wal-Mart and Carrefour, Metro's business-to-business wholesale business The model requires it to provide customers with professional customized services. For example, Metro's sales staff will go directly to the customer's kitchen and formulate corresponding methods to reduce the customer's procurement cost and improve the cleanliness of the kitchen; Provide corresponding solutions together with suppliers... "Only when services such as this are done can we serve customers well. Only in this way can we attract customers with our own charm." He Zhewei took the trouble to emphasize.

"We are not the real cost leader in the industry because we pay more attention to quality." Higher quality and better service mean Metro's own operating costs are also high. "So, we need to expand our scale in China. Although our profits are relatively good, scale is everything in China." He Zhewei said jokingly, maybe there will be one or two hundred shopping malls in the future, so that we can better balance costs.

Looking at the "mom and wife shop"

Meanwhile, He Zhewei is also conducting a larger experiment in China - a pilot retailer support program, providing customized service tools for small and medium-sized individual retailers, The business extends from professional customers to mom-and-pop shops scattered in every corner. This is a business that he successfully advanced as President of Makro Poland, where Metro now has more than 1 million such customers.

According to conservative estimates, there are more than two million small and medium-sized individual retail stores and grocery stores in China. After several months of systematic research, He Zhewei was surprised to find that China's grocery market is not much different from Poland's. “In Poland, our first priority is to gain the trust of these individual retailers, and only if they think that we are not just selling, but helping them grow their business, trust will be built. It takes a little more time, They may have experienced some franchises before, where they sign contracts to ask how much profit and share they get, but our approach is completely different."

"For example, we will teach them to calculate the cost of products and teach them to distinguish specific needs in its sales area.” In fact, what a Metro retailer account manager needs to do includes, but is not limited to, the following: Provide a competitive environment analysis for small and medium-sized individual retailers to understand the customers in their operating coverage area. type, assist it in researching and selecting target customers; give professional advice on its product range and pricing; provide targeted marketing and communication activities for its store layout, equipment, product display, signage inside and outside the store, promotions and POP, etc. Unique solutions; through professional visual design, enhance the store image and convey the professional image of the retailer with high quality and high standards.

However, Metro fully respects the operational independence of these shop owners and provides a completely flexible menu service. He Zhewei emphasized: "Only after we help them find the best business model, can they trust us. They will also find their own needs and see if they need to purchase from us, and we do need to Sell to them."

For small and medium retailers, ie, grocery store owners, whoever can offer the lowest price will buy from whomever can buy, and there is not much loyalty to speak of. He Zhewei said that some retailers in Poland would spend half a day driving to each supplier to negotiate prices and find the lowest price in the market. In this regard, what is impressive about Metro is that it will say to these retailers, "Instead of spending half a day negotiating prices, it is better to spend this time in the store, to take care of your customers, to get more business, and we can Offers you a best price guarantee so you can use your time more efficiently.”

He Zhewei further emphasized that what Metro needs to do is to establish a good relationship and trust with individual retailers, and what the latter really needs to change is the mode of behavior and thinking. Of course, such a change will take time to implement. At present, Metro has launched a pilot program of retailer support in Wuxi, with 29 grocery stores participating. Moreover, what made He Zhewei happy at the beginning was that the government supported the plan.