On October 24th, the "China Retail Circle Conference and 2021 Fresh Retail Development Forum" hosted by the Circulation Industry Promotion Center of the Ministry of Commerce and the Retail Circle was successfully concluded at the Baima Agricultural International Expo Center in Nanjing, Jiangsu Province.
At this conference, many big coffee in the industry combined their own new retail practice experience, jointly made a discussion and research on the digital transformation and future development of the fresh retail industry, Sun Peng, general manager of the big fresh business department of Baiguoyuan Group, in the speech entitled "Baiguoyuan New Retail Road", took Baiguoyuan to see the industry, to the industry to see the market, from the new retail practice of Baiguoyuan in the past five years, to explore a corner of the strategic transformation of the fresh retail industry.
The following is the full text of the speech:
Good morning, friends! I am Sun Peng from Baiguoyuan and am currently in charge of the new retail and fresh food business of Baiguoyuan. Today, I am particularly honored to have the opportunity to come to the scene and share with you the practice and cognition of Baiguoyuan in new retail in recent years.
Baiguoyuan was established in 2001, opened its first store in 2002, and began to do e-commerce business in 2008, which was still B2C business at that time, which was the earliest e-commerce exploration. In 2016, Baiguoyuan and fresh e-commerce 1-meter fresh strategic merger began to explore new retail. This year is exactly the twenty years of Baiguoyuan's entrepreneurship, but also the fifth year of Baiguoyuan's new retail, in these five years, in fact, we have carried out a lot of attempts and explorations, and today we also share with you.
Briefly introduce Baiguoyuan, Baiguoyuan has covered more than 90 cities as a whole, has more than 5,000 stores, and established 28 warehouse distribution centers to serve the business covering these cities. There are more than 200 special supply bases around the world, and we will participate in the whole process of ordering to production in key bases. In 2020, the sales of baiguoyuan omni-channel terminal exceeded 10 billion yuan. In terms of membership, we have been fully developing the membership business since 2016, and the number of members this year has exceeded 80 million, the self-operated MAU has exceeded 10 million in 2021, and there are currently 1.1 million+ paid members, building the core membership system of Baiguoyuan.
A brief introduction to the industrial strategic thinking of Baiguoyuan: two carriages and three pillars.
The two carriages are channel brands and category brands, channel brands are to Baiguoyuan this brand as the core of the community store and online and offline integration of business, category brand is to spend twenty years to plan to create 100 fruit category brands, there are currently about 10 category brands, most of these categories of brands by Baiguoyuan to provide planting technology system, or after years of testing, the quality has been stable categories. In the past, there were relatively few fruit brands, and fruits that really wanted to make category brands must work on the upstream end. For example, like Jiapei, the stability of quality and supply chain stability are very strong.
The three pillars, from financial capital, information technology to research and development, agriculture from upstream planting guidance to supply chain to store to terminal retail, all have a set of financial system to support to promote faster development. Information technology, Baiguoyuan began to build its own technology team in 2006, which is very important, we believe that the bottom of new retail is the most important or the development and accumulation of information technology, which is the foundation of all new retail. At the R&D level, we have invested more energy and funds in research and development, mainly in planting technical support, post-harvest treatment, etc.
We believe that the so-called new retail and digitalization must be the industrial Internet model, must not be simply in the consumer end, that is, the understanding of C-end e-commerce, this may only be part of new retail or digitalization.
In fact, the overall new retail of Baiguoyuan includes from standardized planting guidance to the financial system, industrial trading platform, supply chain warehouse distribution system, sales and then to digital construction, these six systems constitute the industrial Internet and new retail system of Baiguoyuan, so we say that the industrial Internet must be through information technology, digitalization, and intelligence to open up the great synergy of production, supply and marketing at the sales end and the production end. Especially for the fresh industry, the core of fresh food is industrial collaboration, and the ultimate test of this industrial collaboration is efficiency, and efficiency determines the final benefit. Therefore, in fact, we are from the planting end to the C end of the entire information data through, so as to truly improve the efficiency of our industry.
In 2016, Baiguoyuan pioneered the standard grading system for all categories of fruits in the industry, if you can see to the Baiguoyuan store, all the fruits of Baiguoyuan are graded, there are rare, signboard, A-grade, B-grade, C-level, behind the grading system is the control of fruit quality, including the vegetables we are doing now and many products, in fact, the use of the grading system to do, which is a stable quality for the presentation of the customer side. Tiered sales pricing, also known as transparent pricing. In the past, there was no standard for fresh food, consumers did not know how to choose, we hope that through such a grading system, good products can be sold at a good price.
At this stage, we believe that the online and offline integrated store model is the best sales model. In recent years, Baiguoyuan has mainly been in the layout of omni-channel on the C-end, and it can be seen that we not only provide consumers with fruit instant delivery services, but also the business of next-day delivery of fresh products, relying on the stores of Baiguoyuan, and also the store-to-store business.
This year, the B2C national delivery business has also been newly added, which on the one hand is to meet the needs of consumers in different categories in different scenarios, and at the same time, through the services of these scenarios, to expand the business coverage radius of the store, because the retail business of offline stores basically covers community users 1 km around the store. Through the online instant delivery business, the coverage radius of Baiguoyuan stores has been extended to about 3 kilometers of service.
Through such demand, we have a good increase in the overall penetration rate among consumers. Through the next-day delivery service of all fresh categories, the penetration of stores is further enhanced. Baiguoyuan is a small shop format, we have no way to be like a supermarket, there are so many SKUs, there are so many choices. We are through the online order, next-day self-pickup mode, my community stores for a high degree of reuse and functional expansion. Because fruit is only one of the categories of fresh food, we provide vegetables, meat, poultry, eggs and milk through the next-day delivery service of all categories of fresh food, etc., to meet the needs of consumers for one-stop fresh shopping. After several years of new retail exploration and practice, Baiguoyuan's stores have far surpassed the single function of offline retail in the past.
We also believe that community consumption is actually a standard and non-standard product, which involves a community format that includes fruit shops, fresh stores, convenience stores, pharmacies and many other categories. The competition for standard products is in the last 1 km, how to provide consumers with more convenient services, such as convenience stores. The key to non-standard products is not in the last 1 km, but in the first 1 km, at the origin end, in the upstream, in the commodity force side can not have a good control. Most of the standard categories reflect the price, and the non-standard products reflect more value, not simply price-oriented. I believe that people will not choose the cheapest one when buying vegetables and fruits, but standard products, like Coca-Cola, are essentially no different and will be price-oriented. Fresh food must be value-oriented, the standard test is the capital ability, the non-standard test is the professional operation. Baiguoyuan still pursues more specialization in the field of vegetables and fruits.
Why is online and offline integration the best model? Because the experience value and brand value of the store itself are not available in the pure online business, the offline traffic value has also been very large in the past two years. Why are many Internet giants laying out offline? Because of the value of offline traffic, everyone has a new understanding of it.
At the same time, we also have Baiguo Box services in the community, in the past, no one retail everyone would say that the economic model, economic cost is difficult to run. This business of Baiguoyuan is based on the high-density small shop format of Baiguoyuan, which provides closer services to consumers in the surrounding communities, and this supply chain is based on our stores, which is relatively less difficult and costly to manage. At the same time, we are also using such a service to bring us closer to consumers.
Before communicating with a friend of a traditional supermarket, he also mentioned that the pressure of supermarket competition is also very large, why? It is not easy to say that consumers can insist on walking to the supermarket empty-handed. There are fresh shops, unmanned retail cabinets, hundred fruit orchards, and Aunt Qian around the community, and there may be many medium-sized sales stores that may go forward, and there may be large supermarkets in the further step, so it is also necessary to innovate through further exploration.
The core support of new retail is the strength of science and technology and organizational strength, which is also some of the harvests obtained in the exploration of Baiguoyuan in recent years. First of all, in the entire IT system, more than 95% of the systems in Baiguoyuan are self-developed, because the industry is more complex, each enterprise has its own characteristics and business logic, and it is difficult to completely solve it by relying on a set of standardized systems. Therefore, under the premise that fresh retail enterprises have the ability, we must increase investment in science and technology, although the investment is very large, but it must be a long-term competitiveness, and it is the core that can really improve the operational efficiency of enterprises.
Baiguoyuan's investment in the whole science and technology is also very large, and this is what we have to continue to do. For example, a very simple example, such as consumer portraits, Baiguoyuan through the analysis of the frequency of consumers to buy fruit and fruit to judge consumer preferences, we can analyze that there are some heavy durian enthusiasts, or heavy cherry lovers, wait until this fruit is listed we will recommend some related products for this part of the member exclusively, in fact, more marketing is to meet his needs, lies in precision, so behind the precision must be data, your data can support your precision marketing.
In the past two years, we have proposed that fresh retail must change from simply operating commodities to operating customers, and we believe that this is also a major trend in the development of new retail, because on the commodity side, commodity power must be the core of retail, which will never change. However, in terms of commodity differentiation, especially in the head enterprises, relatively speaking, driven by innovation, the difference may be relatively narrow. Therefore, the core must be to operate customers on the basis of goods and provide better services for customers.
The design of the entire membership system of Baiguoyuan is also through several large plates, including membership life cycle management, paid membership system, and point system, and our paid membership system is based on the existing formats, members and stores of Baiguoyuan to launch. Of course, for the small shop format, it may not be very suitable for this kind of member store model, but we must also continue to explore and innovate in this regard.
Finally, the growth of the private domain is the core of the continuous operation of new retail, and we are based on the traffic exploration of the public domain and private domain under the WeChat ecosystem, based on all the tools of the WeChat ecosystem, and the global system we have developed ourselves to match the system that combines customer service from the public domain to the private domain.
Through the current WeChat public account of Baiguoyuan, Baiguoyuan App, Mini Program, enterprise WeChat community, etc., a store may cover the consumer members of several surrounding communities, and through the construction of such private domain traffic, a private domain traffic pool is formed, and then better serve consumers. At present, it is a service based on the enterprise WeChat doing the entire private domain traffic.
This year is the fifth year of our new retail exploration, and then we believe that the core of new retail exploration is to continuously reconstruct around "people, goods, and fields". Baiguoyuan's recent exploration in the field of fresh food and the exploration of omni-channel have been upgrading and reconstructing people, goods and fields, on the one hand, to ensure the advantages of commodity power, on the other hand, to further expand our advantageous categories around consumer demand. Behind the business of Fresh Fruits and Vegetables is the support of Baiguoyuan and ecological enterprises in the planting technology system, and the support of Baiguoyuan's solid supply chain system, relying on such advantages to provide better services for consumers. We don't do everything, but we must rely on our core capabilities to do, we can innovate and explore without boundaries, but we must do it based on the core of the enterprise.
We will do medium- and long-term planning and short-term planning, in the next three years of medium- and long-term planning, we call "new retail" to "heart retail", retail may not be distinguished between new and old, more in more innovation and exploration, the only constant is the heart of the heart, that is to say, our understanding of the essence of business is altruism, all altruistic things are the root of business, which is an understanding of business in Baiguoyuan.
In a word, we want to provide customers with higher value than competitors; one word is altruism; one word is love.
No matter what kind of exploration is done and what kind of model is used, in the end, it must be to serve customers with heart, and use heart method + algorithm. Many times, algorithmic data has good aspects to these things, but also may bring a lot of trouble to consumers, how to solve this problem? Is the heart method, is not really attentive, really stand in the consumer first perspective to think about the problem, we talk about the intention of the law + algorithm will not deviate, and ultimately guide people to be good.
There is a little time below, we have a small video, introducing a signature kiwi fruit called "Kizong" in Baiguoyuan, this kiwi fruit is now in the final season, we are not to promote it, but through this product, let everyone see the energy spent by Baiguoyuan in creating products from upstream to downstream. This product is the ninth year of research and development this year, and it has such a good taste now, so this is a long-term accumulation of things. Many companies want to go upstream, to do agriculture, to control the upstream and supply chain, but in fact, this is a very long-term work, only with a long-term persistence mentality can this thing be done well.
This is just one of the cases, many of our fruits are built in this way, and the technical team may have been rooted in the base for more than ten years. Therefore, we think that doing retail or upstream is really a commodity that must be done in a down-to-earth manner in order to really do a good job.
Today's main sharing is these, but also hope that fresh retail friends work together to serve our consumers, we work together, thank you!