In this online game of retail, perhaps Metro is just a pawn.
Editor’s note: This article is from “Zinc Finance” by Zhou Xiongfei.
The case of Metro’s “selling” case, which lasted for a year, finally settled today.
According to Zinc Finance, on the evening of October 10, 2019, Metro Group, Wumart Group and Dodge Dmall jointly announced that Wumart had signed a definitive agreement with Metro Group for the acquisition of Metro China. After the transaction is completed, Wumart Group will hold 80% of the shares in the joint venture established, and Metro will continue to hold 20% of the shares.
The parties did not disclose the amount of the transaction. However, according to Reuters’ previous reports, Metro China’s valuation in this transaction has reached 1.9 billion euros (equivalent to about RMB 14.9 billion). Perhaps because of this valuation, Metro China has become the “toon” that many domestic giant players are vying for.
Although the current battle for Metro has been defeated, but through this incident, many people have seen the larger battlefields of the giants for the layout of offline retail.
Perhaps, this “war” will continue.
Metro has “highly opened and lowered” in China
In 1995, when Metro entered China, it won the opportunity to cooperate with Shanghai Jinjiang Group. It should be noted that this is the first joint venture to obtain government approval to establish chain stores in various cities in China. In this regard, Metro began a journey of “starting a business” in China.
With the support of the local Chinese government, in the second year, Metro opened the first hypermarket next to the Putuo Central Ring Road in Shanghai. at that timeSince the “supermarket” shopping format has just been born in China, Carrefour and Wal-Mart have just entered China, so domestic consumers are both strange and curious about such a hypermarket.
Metro Long Image from the network
But after a while, many people found that Metro showed an “unfriendly” attitude towards customers. For example, you must have a membership card to buy something.
Although because of this, many people don’t have a good first impression of Metro, but it does not hinder its development in the Chinese market.
Because it serves B-end customers such as catering companies, small and medium-sized retailers and institutional groups in a way that is self-sufficient and self-funding, this allows customers to get goods faster than traditional wholesalers. And it is not limited by time, so it has won the favor of many users. According to the financial report, in 1999, Metro had 6 stores with sales of 2.6 billion yuan.
In the same year, the China Chain Store & Franchise Association released the “Top 100 Chinese Chain Chains in 1999” list. In the list, you can see that Lianhua Supermarket has a stable annual sales of 7.3 billion. Metro has just entered China for 4 years. The sixth in the list, and Carrefour and Wal-Mart, which entered China before and after Metro, did not even appear on the list.
For a foreign company, this is a good result, and this is its most brilliant moment, because it will gradually become bleak.
Between 2000 and 2013, during the past ten years, Metro has grown steadily and expanded, and the number of stores has grown from the initial six to 75. But it cannot be ignored that in the process of Metro’s rapid growth, its opponents also grew together.
According to Zebra’s consumption statistics, in the golden decade of Chinese supermarket chains, the number of Wal-Mart and Carrefour stores that were once behind by Metro was 441 and 302, respectively, with sales reaching 80.5 billion yuan and 47.5 billion yuan respectively.
At the same time, due to the rise of domestic Internet e-commerce and the constrained membership consumption model, many ordinary consumers have been blocked to a certain extent. In addition, with the major adjustments made by Metro China during the past year, the operational strategy has undergone tremendous changes.
E-commerce Image from the web
Industry pressures, changes in domestic market conditions and group-level issues have caused Metro China’s performance to decline year after year.
According to the Fortune 500 data, Metro’s revenue has been declining since 2009. In 2008, Metro’s revenue reached a record high of 1,012.17 billion euros, and then declined year by year. In 2015, revenue was 71.266 billion euros, and by 2018 it was 43.467 billion euros. The Asian market has a low proportion of the entire Metro’s layout. In 2018, Metro’s Asian stores numbered 140, accounting for 18.2% of its global stores, with revenue accounting for only 14.5%.
Metro Group Performance and World Rankings for the past 10 years Image from the Internet
In response, Metro has had to start a series of divestment adjustments. In 2015, Metro first sold the local Kaufhof department store (Kaufhof); in 2017, Satum and Mediamarkt, which sells electronic products and appliances, were spun off to prepare for independent listing; in 2018, it was announced that it would be sold. Its supermarket business Real.
After doing this, perhaps it is not possible to save Metro’s decline in the Chinese market. And a message at the end of last year made this speculation a reality.
According to the media released a message at the end of October last year, the news said that Metro is negotiating with the bank to find a partner for its Chinese business. In a month, Metro Group Chairman and CEO Olaf Koch said in an interview with the media: “At present, not only will not sell Metro China business, but also to become a better supplier of goods, but also to add Great efforts to develop China’s business.”
But after another month, another news revealed that Metro is negotiating cooperation with Tencent. The specific news will be announced soon.
In this regard, Metro’s news of the sale of China’s business is surging.
“Quidic” dispute
From now on, there should be no oneForeign-funded retailers, like Metro, can provoke the desire of many giant sellers such as Alibaba, Tencent, Vanke, Suning and Wumart.
Since last November, after the news that Metro was communicating with Tencent, the news that the former will be acquired will start a “blowout”. In March 2019, after the news that Metro China was about to be acquired by Alibaba, Metro said it would not respond.
Next, in May of this year, according to media reports, at least eight bidders are preparing to join the second round of bidding for the majority stake in Metro China. It is expected that the entire bidding process is likely to be in 2019. The end of the month.
According to Zinc Finance, the participants in this round of bidding in May include not only giants such as Ali, Tencent and Vanke, but also a consortium of Yonghui Supermarket and Gaochun Capital, and Houpu Investment and Fresh Food. Most of the Chinese retail industry players, such as the consortium of mobile e-commerce platform Meishang.com, Suning Tesco, Wal-Mart Stores and supermarket operator Wumei Group.
Suning Tesco Image from the network
From this scale, it is really the most expensive bidding case in history.
After the news, some media contacted Alibaba Group and Tencent Group for the first time, but both parties indicated that they would not comment. In addition, the consortium formed by Yonghui Supermarket and Gaochun Capital, and the consortium of Houpu Investment and Meicai.com, which participated in the bidding, also said that they would not comment.
Before, Yonghui Supermarket had issued a notice saying that although it had already made preliminary communication on the acquisition in Metro China, it did not conduct substantive negotiations and did not reach any documents of consensus.
Metro has also said very frankly that its goal is simply to establish a business partnership and maximize the growth of China’s business. In addition, it was confirmed by the media that Metro was narrowing the list of bidders through evaluation, but declined to comment on its progress.
In this regard, the bidding case that is already in the mystery is in more fog.
There are many speculations about the final bid winners. For example, many people speculate that Ali should finally win this battle. After all, as early as 2015, Metro has entered Tmall International and is in the merchandise supply chain with Alibaba. In-depth cooperation between cross-border e-commerce and big data has completed the opening of online and offline data.
In addition, it is because of the previous Yonghui SupermarketI have had contact and communication with Metro, and many people are also optimistic about Yonghui Supermarket.
On July 9, 2019, the bidding case made great progress. According to foreign media reports, Wumei and Yonghui were short-listed for the final round of the China business of Metro, Ali, Tencent and Suning have all withdrawn, but for the end who can win, people are still guessing.
Until the 10th of this month, the “boots” that have been hanging for a year have finally landed. Metro Group, Wumart Group and Dodge Dmall jointly announced that Wumart has signed a definitive agreement with Metro Group for the acquisition of Metro China.
物美 Image from the network
After the completion of the acquisition of Metro, Wumart also completed the layout of the offline full-service scene of “Shangchao+Department+ Hypermarket+Convenience Store”; for Metro, it has finally struggled in the Chinese market for many years. Selling a good job and selling a good price may be a good deal.
At this point, the one-year-old Metro bidding case was settled. Although the bidding case was over, many people also saw the giants robbing the battlefield of the offline retail layout.
The offline retail disputes of the giants
In fact, for this successful acquisition of Metro, many people only saw that this will help the future expansion of Wumart, but did not see Wumart’s ambition for offline retail business B2B.
Remember that in the past few years, under the impact of the “Internet +” wave, through the impact of online and offline, many people think that online will be the ultimate form of retail and fast-moving industry, many people even shouted The argument that “e-commerce has been promoted and retail has died out”.
But according to the statistics of the National Bureau of Statistics, in the whole year of 2018, the total retail sales of social consumer goods totaled 38 trillion yuan, and the online retail sales amounted to about 9 trillion yuan, accounting for only 23.6%. The offline transaction is still the main consumption. battlefield. At the same time, the growth rate of online shopping has continued to decline since 2014, and it has gradually stabilized in 2018. The era of online triumph is indeed ending.
Offline retail image from the network
And this beauty has probably already been detected. According to media reports, Wumart has been working on the offline retail B2B business since last year, and the business that carries this business is an Internet supply chain platform called Chain Business. Wumart’s B2B business mainly starts with fresh and surrounding categories, and serves the distribution of ingredients for corporate procurement, government office canteens and large customers’ catering needs.
As this business matures, the product category will be converted from fresh food to non-food, and the whole category will be covered.
And for merchandise distribution, it is obviously Metro’s strength. It can be seen from the financial report that Metro’s food distribution business has been growing at a rate of more than 10% for three consecutive years, increasing by 10.5% in 2017, 11.4% in 2018, and 17% in 2019, and will continue to maintain 20 in the next few years. %-25% growth.
At the same time, Wumart can maximize the distribution of Metro’s 95 stores in China and Wumei supermarkets and convenience stores across the country. In addition, Metro’s accumulated members will also become a wealth of good things. Through these blessings, it will become a powerful “weapon” for Wumart to respond to the retailing of the giants.
According to Zinc Finance, on June 23 this year, Suning Tesco bought 80% of Carrefour China for 4.8 billion yuan. In the past two years, Ali and Tencent have launched an offline line. The acquisition war, from shopping centers, supermarkets to hypermarkets, almost divided the majority of offline retail giants on the market.
Cao Lei, director of the E-Commerce Research Center, told the media that “the diversification of stores, the refinement of merchandise, and the full-fledged digital capabilities are the common directions that the Chinese retail industry has explored in the past two years. In addition to the easy-to-buy, Alibaba, Tencent, Jingdong and other enabling platforms, as well as traditional chain retailers, have launched online digital exploration based on people, goods and scenes.The integration of online and offline is being done in an irreversible manner.
Therefore, although Wumei has great support from Metro, it is still unclear whether it can withstand the pressure of these giants’ online retail layout.
However, it is certain that the offline retail war will be even more smoky.