According to the Hong Kong Stock Exchange on January 9, Huitongda Network Co., Ltd. passed the hearing of the Hong Kong Stock Exchange, with CICC (601995), Citibank and China Renaissance Capital as joint sponsors.
Huitongda has opened up a long-neglected track – retail industry corporate services located in vast rural, township markets.
The number one channel in China's retail industry is not e-commerce, hypermarkets, convenience stores, but millions of township and town mom-and-pop stores, which constitute the "capillaries" of Chinese commerce.
However, these township mom-and-pop shops are like pieces of "lonely boats", loose and unorganized; their business models are the most traditional, at the end of the supply chain, with high purchase prices, single commodity structure, no guarantee of quality, and weak anti-risk ability. Originally, the traditional industry from factory production to channel sales, and then to consumers is a relatively fragmented state, lack of full-link coordination. How to build the digital capabilities of each link into a "faucet" for the downward trend of commodities and the connection of industries, and a "router" for resources to go up and serve farmers, this is the key.
With the mission of transforming millions of township husband and wife shops, Huitongda conforms to the trend of the times and uses SaaS to connect all the links in the industrial chain to achieve cost reduction and efficiency improvement of the whole link.
China's rural sinking market has broad prospects. According to the statistics of the Ministry of Commerce, from January to August 2021, the retail sales of consumer goods in rural areas were 3,679.8 billion yuan, an increase of 17.2%. As of 2020, the growth rate of retail sales of consumer goods in rural areas has been faster than that in cities and towns for 8 consecutive years. The Ministry of Commerce, the Cyberspace Administration of China and the National Development and Reform Commission jointly issued the "14th Five-Year Plan for E-commerce Development", which clarified the clear growth targets for the development of China's e-commerce during the 14th Five-Year Plan period: the annualized growth of online retail sales nationwide was 7.58%, and the annualized growth of rural e-commerce transactions was 9.36%, higher than the overall average.
"SaaS+ Supply Chain Service" one-stop service for enterprise digital upgrading
Different from the general SaaS products, Huitongda has an iron army team that can teach the owners of township mom-and-pop shops how to use SaaS tools and train bosses one-on-one in Internet business thinking.
By taking "help to sell" as the core, Huitongda provides SaaS solutions for township mom-and-pop stores, so that township stores can realize digitalization at low cost, and at the same time connect with the Internet to become smart retail stores; at the same time, through "help to buy" as the core, huitongda provides supply chain services for township stores in six major industries. Therefore, Huitongda's SaaS+ supply chain service is a one-stop solution that can fully meet the needs of township store operation and store management.
For rural areas, brands and factories located in the upstream of the industrial chain are difficult to reach, therefore, Huitongda is based on the sinking channel retail network of 21 provinces and 160,000 township stores across the country, and cooperates with 6 major industries such as home appliances, consumer electronics, alcohol, agricultural machinery, transportation and travel, and more than 20,000 channel partners to bring high-efficiency sinking market terminal sales channels, as well as terminal consumption big data and traffic, to help it more accurately match terminal demand and effectively reduce production and circulation costs. Help the industry to reduce costs and increase efficiency.
For example, the "Sawano Mobile Phone Shop" in Hebei Province, where owner Feng Liye joined Huitongda in March 2021. Under the influence of the epidemic and other epidemics, entities are even more difficult to do, customers are buying mobile phones from the Internet, and the impact of e-commerce on entities is also very large. Even if you usually engage in activities, there is no good idea.
"Joining Huitongda is looking at the marketing tools of the super boss, the group spike set coupons and other functions. There is also a rich supply chain to replenish the supply of goods. You can also sell products from different industries, such as air conditioners, TV washing machines, etc. Feng Liye said that the 418 and 518 activities set up second-kill products, let customers pick up in the store, and then combined with their own offline activities, the turnover increased by 100,000 yuan compared with the previous year.
Feng Liye is also more concerned about the stability of the supply chain. He pays attention to the super boss products every day, Apple mobile phones often purchase, Apple 13 can not get goods from other channels before the listing, only from Huitongda can get goods. Feng Liye said: "On the day of the first launch of Apple 13, the net profit of less than half an hour after opening the door was 3,000 yuan. Large and small home appliances are also cheap, especially small household appliances, purchased to do activities as gifts, the price is very appropriate. ”
From the perspective of covering commodity categories, Huitongda operates to cover the sinking market households "high-priced commodities with fast expenditure growth and high requirements for experience and service", mainly including: household appliances, consumer electronics, agricultural machinery, transportation, home building materials, drinks and beverages, and the current commodity SKUs have exceeded 100,000.
Business model: Shopify + JD. + Pinduoduo
From a SaaS perspective, it is similar to Shopify in the United States. Shopify provides a package of solutions for retail enterprises, Huitongda provides a package of solutions for rural retail enterprises; Shopify does a relatively large scale, relying on fees and subscription-based advertising, and Huitongda also provides a supply chain, to a certain extent, Huitongda is heavier and deeper than Shopify.
From a supply chain perspective, it is similar to JD.com. Jingdong is its own procurement, and then sold to C-end consumers; Huitongda is first sold to small b merchants, and then sold to C-end consumers, although the gross profit is low, but Huitongda costs much lower, logistics and distribution costs are very small, in the long run, Huitongda's profitability is not bad.
From the perspective of reverse customization, it is similar to Pinduoduo. On the basis of having a self-operated supply chain, Huitongda will feedback to the factory according to the needs of the township mom-and-pop shop, so as to achieve customization. Taking the 418 activity held in 2021 as an example, the company launched all member stores to reverse "group factory goods", on the one hand, to give the member store "factory goods direct batch" preferential purchase price, on the other hand, to help manufacturers accurately obtain order demand, quickly turnover products. During the warm-up period of the event alone, a brand of 1.5-horse air conditioner alone was directly "wholesaled" from the manufacturer to more than 70,000 pieces shipped to township stores around the country.
The unique business model allows Huitongda to continue to penetrate in the sinking market.
In terms of the coverage scale of member stores, Huitongda has now covered 21 provinces, 19,000 towns and more than 160,000 member stores, leading the industry. With the upgrading of Huitongda's supply chain and SaaS service capabilities, the conversion rate of small shops is also increasing. From the perspective of penetration rate, Huitongda's service market has gradually penetrated from townships to counties and low-tier cities. The type of customers has gradually expanded from member stores to channel cooperation customers. At present, the company has signed 160,000 small stores, and the sales scale in 2020 is 50 billion. According to the scale of trading business for the sinking market and China's overall market in 2020, Huitongda ranked first and third respectively.
In recent years, the Chinese government has continuously introduced various policies and systems to promote the development of the sinking market, which has sustained policy benefits.
At present, the digital countryside has entered the government documents, the Ministry of Commerce and other 17 departments "Opinions on Strengthening the Construction of the Commercial System in the County to Promote Rural Consumption" was officially released in September 2021, the central government gave each demonstration county construction fund support of 20 million yuan, Huitongda is actively applying for some projects, has been in Jiangsu Province, Zhejiang Province and other 5 counties to apply for construction, transformation of rural business.