There is a big difference between Chinese and Japanese convenience stores, which is also the improvement direction of convenience stores in China.
Editor’s note: This article is from WeChat public account “Liansheng Supermarket” (ID: chaoshirenzhijia), author Zhou Yong (Director of the Associate Advisory Group). Authorized to reprint.
This year, on the convenience store issue, I have had many exchanges with Japanese business professors and Chinese industry friends. I feel that there are big differences between Chinese and Japanese convenience stores, which is also the improvement direction of convenience stores in China. This article mainly combs seven aspects.
First, not the preferred breakfast
The Japanese will use the convenience store as the preferred store for breakfast, but the Chinese will not. The traditional breakfasts of Chinese people vary widely, and they are consumption habits formed under certain environmental conditions. Like the sea people like to eat rice, it is because of the time to go to work, soaking cold rice with boiling water, such breakfast is particularly fast. If you have leisure time, you will go buy big cakes and soy milk.
Nowadays consumption has been upgraded, and urban consumers are increasingly able to adapt: bread + milk, or quick breakfast with pancake + soy milk. Only some office workers will buy breakfast at convenience stores on their way to work. Consumers rarely use convenience stores as their preferred store for breakfast. This is related to the convenience of food in the convenience store, the poor taste, and more related to the roadside food and beverage outlets and dining habits. If the convenience store can be the first choice for breakfast, the performance will be greatly improved.
Second, own brand is relatively low
Convenience store’s own branded products are mainly concentrated in food. Most of the foods sold in Chinese convenience stores are provided by suppliers, and the products are not differentiated. Since the introduction of the 7-11 convenience store in 1970, Japan has been committed to research and development of food, established its own box factory, and later acquired the integrated supply chain, and the convenience store became a “self-made retail.”
80% of convenience companies in China have less than 10% of free brands, but Japanese convenience stores have 30-40% of their own brands. The gap comes from two aspects: first, lack of research and development; second, the scale of operation is not large, which is not conducive to the development of its own brand.
Zhang Wei, the vice president of Rosen China and the managing director of Shanghai Rosen, said to me: “The brand is MSG, the brand goods are salt, the proportion of salt and MSG is wrong. Sen’s own brand accounted for 35%, including box lunches, desserts, etc. This is an important means of reflecting the convenience of convenience stores.
Third, service project expansion is greatly challenged
The number of service items in Japanese convenience stores has been deeply felt by people who have been to Japan.. The ageing of Japan is very serious. The population over 65 years old accounts for more than a quarter of the country’s total population. Many retail companies have established a system of greetings for single elderly people. Some convenience stores have also set up a special area in the store that allows the elderly to meet. In order to facilitate the life of the elderly, convenience stores are allowed to enter the apartment complex to provide services such as cleaning the room and repairing home appliances for the elderly.
The Japanese convenience store has even added social public service projects, such as document handling and fairness. The service projects of convenience stores in China are still dominated by traditional projects. Most of these projects have been affected by e-commerce, but the new service projects have not been able to be implemented due to various policy restrictions and urban management restrictions.
If the elderly call a car service, convenience store placement defibrillator. Convenience store is a cross-border retail format. With the increase of new service projects, especially the trend of aging, and the development of mobile Internet, the traditional service projects of convenience stores are diverted and new service projects can be added. Transform the convenience store into a community life service station. Convenience stores will become “service stations” in the future, “endorsing” for a variety of service projects.
Four, franchise accounted for a relatively low number
The research report released by the China Chain Store & Franchise Association (CCFA) in 2018 shows that the proportion of franchise stores in Japan’s 7-111, the whole family and Rosen’s three convenience companies exceeds 95%, and the franchise stores in China’s convenience stores account for only It is 40% strong. In the sample enterprises, the proportion of companies joining more than 50% and those without development is roughly 30%.
In fact, many companies have been committed to the development of direct-operated stores at the beginning. When they are slightly larger, they are entrusted to join or franchise. After the uncontrollable phenomenon, they return to the direct chain. Changes in the chain model have also led to fluctuations in the scale of operations. Operating a convenience store, relying on the enthusiasm of the headquarters, there is no hope. The fundamental way out of the convenience store is to play the two enthusiasm of the headquarters and the store by joining, but the headquarters is not a “police bureau”, not a “tax bureau”, it should be a service provider. Institutions, only when the franchisees make money, the headquarters can make money. The relatively low franchise share also reflects the need for China’s convenience stores to improve their business model and standardized operation management.
V. The external environment restricts the performance of convenience stores
Three external environments in China have constrained the improvement of convenience store operations:
First, there are many food and beverage outlets, and various retail formats are increasing the business of “tang and takeaway”, which is very big for convenience stores characterized by “food in the food”. Diversion;
Second, online shopping sales still maintained rapid growth, which also constituted a diversion of convenience stores. In 2018, the online retail sales of physical goods in the country increased by 25.4% year-on-year, accounting for 18.4% of the total social zero, compared with the previous year. Increase by 3.5 during the same periodPercentage;
The third is that the couple shop is 60 times more convenient stores, the national chain convenience store is only 100,000, and the small couple grocery store has more than 6 million. Many small shops look a bit “disorderly”, but residents like it, use less work, less expenses, but it is profitable.
In Japan, there were many small stores in the past, but since the 1980s, convenience stores have grown rapidly. Not only have the couples shop become a franchise store for brand convenience stores, but even the convenience store suppliers have joined the brand convenience store. . In Taiwan, there were more than 300,000 couples in the original store, but after the development of the brand convenience store, most of the small couples shop disappeared. This situation may also occur in mainland China, but the change is gradual and the speed is slow.
Six, the development model is diversified
This mainly includes three aspects:
One is the diversification of business models. Nowadays, even the community fresh stores are also attributed to convenience stores. The models for developing convenience stores vary greatly. There are two types of typical convenience stores in the world: gas station convenience stores and city-type convenience stores, belonging to the petroleum and grocery stores. Japanese convenience stores should be urban convenience stores.
Second is the franchise mode, which is generally divided into two modes: direct franchise and regional authorization. For example, Rosen implemented regional authorization modes in Wuhan, Beijing, and Nanjing. China has a vast territory, and the potential market for convenience stores is large. The regional licensing model will become more and more mainstream in the future.
The third is the scale expansion model. The three convenience store companies in Japan have not only completed horizontal integration, but also the vertical supply chain integration. China’s convenience stores are still in a “regional separatist” pattern, and the leading national brand convenience companies in the future may implement more mergers and acquisitions.
VII. The operating performance gap is very large
Convenience stores in China are calculated according to 100,000 stores and annual sales of 190 billion yuan. The average daily sales of each store is only 5,200 yuan. Compared with Japan, the single store performance is 4 to 5 times. The convenience store sales of the company accounted for only 0.52%. In Shanghai, where convenience stores are more developed, the share of convenience store sales is only 1%. In Japan, convenience store sales in 2008 have exceeded department store sales across the industry. If calculated according to a convenience store of 2,000 people (Japanese standard), the expected total size of convenience stores in China is 700,000.
But from the current situation, even in the more developed convenience store in Shanghai, there are currently about 6,000 people in a convenience store. According to these two data, China’s convenience stores have great room for development regardless of performance improvement or scale expansion. However, many people in the industry are not optimistic about convenience stores, including Hou Yi, fresh and fresh.