Encountering the impact of community group buying, low platform support, and the tide of internet shops has receded?

Economic Observer reporter Zheng Shuxin "Is your small shop business okay?" On March 10, when the reporter threw this question to Zhou Xueli, she only heard her sigh: "Now the retail sales of the store have fallen sharply, the gross profit of community group purchase has dropped to about 5%, plus the cost of labor, rent and so on, the small shop can not help me make money, and several small shops around the store have also closed the store and transformed." ”

Zhou Xueli is the owner of a Tmall small shop in Wuhan, and when the reporter also asked about the business of the small shop in 2020, her answer was all growth figures: even during the epidemic period, the comprehensive profit margin of Tmall small shop reached 15%, and the increased profit of community group buying vegetables was also about 10%.

In less than two years, the operating conditions of Zhou Xueli's Tmall shop took a sharp turn for the worse, what happened? Zhou Xueli attributed the reasons to several aspects, on the one hand, the support of the platform weakened, on the other hand, the impact of community group buying.

The Tmall store run by Zhou Xueli was once seen as a big move in Alibaba Group's retail layout. Its basic logic is to empower and transform small supermarkets, husband and wife stores, etc. through Ali's retail platform, so that they can be spread all over the country. In 2017, Alibaba announced that it would build 10,000 Tmall stores that year and reshape offline retail.

However, Zhou Xueli's encounter reflects the current living conditions of Tmall Shop to a certain extent. In fact, not only tmall small shops, but also Suning, another one that has also built an offline small store, also has a trend of retreat. In 2018, Suning Xiaodian ranked fourth in the number of stores in China's convenience store list with 4508 stores, and since then, the number of Suning Xiaodian stores has been decreasing, and the number of Suning Xiaodian stores in 2021 is only 1568.

Professor Chen Liping of the Capital University of Economics and Business believes that the giants transformed small shops in order to solve the traffic problem of the sinking market and the problem of reaching the last mile of consumers. At present, the practice of the giants has not achieved the desired effect, but this does not mean that the transformation of small shops should stop, in the future aging society, small shops can play a role that is difficult to replace through other channels.

As for how to play the game of retail terminals in the sinking market, the giants must continue to think.

There is less support for the platform

Zhou Xueli also remembers that the first contact with Alibaba's retail platform was in 2019. She tried to place orders for some goods for her small shop through the retail platform, but she did not expect these cheap and fashionable goods to sell well, and since then she has continued to purchase goods through retail passes, and finally changed the name of the store to "Tmall Small Shop".

The retail platform can be seen as the grasp of Alibaba's transformation of small stores, which can provide small shop owners with special purchase channels, exclusive goods, big data and other services, and the retail platform can also be connected to Alibaba's ecosystem.

After becoming a Tmall store, Zhou Xueli's small shop did enjoy the benefits of a large platform, such as low purchase prices and platform activities, but some offers did not last long. She took the Nongfu Spring Brand Day as an example, on the event day, consumers can come to the store to buy Nongfu Spring's products and receive coupons and reduce the price. In addition to these activities, Retail Connect will also give some marketing support to new products, "but now these activities are basically gone."

In the past, Retail Connect has established direct cooperation through scale procurement and brand owners, and in 2020, Lin Xiaohai, vice president of Alibaba Group and general manager of the Retail Pass Business Unit, once told reporters that the lower purchase price is the first step for Ali to do Retail Pass. Ali helps small shops select products according to the big data platform, combines the hot goods in each city, formulates the planning of commodity categories, and then reverses the purchase of brand owners according to the plan, recommends the goods that consumers love to buy into small stores, and realizes the transformation from helping brand merchants sell goods to helping small shops buy goods.

But Zhou Xueli, as a self-employed person, did not feel this change. On the contrary, her most intuitive feeling is that the platform's support for small shops is getting smaller and smaller, "these two years can be said to have no service, can only rely on themselves", although the name of the store is still hanging on the Tmall small shop, "but in fact, it is a good job, and no one cares if it is not done well."

The impact of community group buying

Zhou Xueli had wanted to report the problem to Ali's relevant staff, but the news she heard was that the retail business had been eliminated within Ali, and Ali was doing subtraction.

The information Zhou Xueli got was not accurate, and the retail business was still progressing. In 2016, Alibaba established Retail Connect, which is committed to building a one-stop FMCG purchase platform for more than 1 million couple stores, and improving the digital operation capabilities of small shops through POS smart terminals. In March 2021, Alibaba set up a community e-commerce platform Taocai on the basis of the original Hema Market and Retail Pass.

Ali's description of Taocaicai is: Relying on the supply chain advantages of the Group's N-disk goods, Taocaicai has set up a rich category of "cloud shelves", while accessing ecological resources and providing a variety of module support, so that the small store has "one store multi-functional": the "cloud vegetable farm" built by Taocaicai, the convenience store supported by the Taocai retail business, the sending and receiving express delivery business supported by Cainiao Station, and the takeaway delivery supported by Ele.me. "One store multi-functional" allows the area of a single small shop of tens of square meters and the free time of the owner to sit and wait for customers, all of which have been efficiently utilized. As a result, the income structure of small shop owners has also changed: more people have entered small shops, increasing the sales income of earning the difference in goods; in addition, new service income from businesses such as Tao Cai Cai and Cainiao Station has been added. After running for half a year, the comprehensive income of couples who access Taocai vegetables increased by 30%.

Zhou Xueli also joined seven or eight community group buying businesses such as Taocaicai and played the role of the head of the group, but what she did not expect was that the community group buying caused a fatal blow to the profit margins in the store. "Before the daily necessities can always sell a little, there is a profit margin, the community group purchase is too cheap, consumers 'nine mao nine', 'nine pieces of nine' second kill group to buy some daily necessities, will not come to the small shop to buy." Zhou Xueli said that before opening a store, she could save 100,000 yuan a year, but now not only does not make money, but is busier than before, in order to share the pressure, she also hired an employee, and the cost has increased.

As for ali's drainage problem, Zhou Xueli said that she did not agree. She said that many consumers take the things purchased by the community group and leave, and even they feel that the community group purchase is cheaper than the store, and they are less willing to buy things in the store.

Today, Zhou Xueli knows the shopkeepers of many small shops in Wuhan who have closed their shops, and she and three of them have huddled together to keep warm and open a special counter for rural revitalization.

Although the Tmall small shop does not make money, Zhou Xueli did not choose to close the store, she has opened a small shop in the community for many years, and there is an emotional connection with the community neighbors, she wants to borrow the accumulation of rural revitalization help counters, upgrade the small shop again, and serve this part of the consumers.

Adjust the small shop

Compared with Ali, Suning's adjustment is more radical.

The loss-making Suning Xiaodian has long been spun off from listed companies. According to the announcement released by Suning Tesco in October 2018, as of July 31, 2018, suning Xiaodian's net assets were -310 million yuan, a net loss of 296 million yuan in the first seven months of 2018, and Suning Tesco also borrowed 653 million yuan to develop Suning Xiaodian business. For the loss, Suning explained at the time that it was due to the rapid opening of stores, most stores were in the cultivation period, and the company made more upfront investment in organizing personnel, store development, promotion and supply chain.

Not only is it a loss, Suning Xiaodian has closed a large number of stores. According to the "2018 China Convenience Store TOP100" released by the China Chain Store & Franchise Association, Suning Xiaodian ranked fourth with 4508 stores, ranking behind EasyJet, Kunlun Hospitality Convenience Stores and Meiyijia of Sinopec and PetroChina. However, in 2021, the number of Suning Xiaodian stores is only 1568. In three years, Suning closed 3,000 Suning stores.

An industry insider said that Suning small shop in the top-level design defects, first of all, Suning has no experience in doing small shops, the location of Suning small shops is more open on the street side than in the community, there is no clear positioning, mainly standard products, no fresh food, poor functionality, it is difficult to compete with convenience stores, followed by the owners who join Suning small shops are mainly tobacco hotel owners and people who do not know much about retail, small shop goods Have price problems and string problems, and there are many deficiencies at the implementation level.

Suning told reporters that Xiaodian has a new business track adjustment, but did not disclose more information. JD.com also declined an interview about the business.

It is undeniable that when the traffic dividend is divided and the difficulty of e-commerce drainage increases, e-commerce companies have long turned their attention to these small shops that are closer to consumers, which is the entrance to new traffic and the grip of the platform sinking, even if the small shop business is adjusted, the sinking market is still the "favorite" of the Internet giants.

Wang Chengrong, president of the Beijing Business Economics Association, analyzed that the reason why the platform did the transformation of small shops is to compete for the traffic of the sinking market, through the small shop directly to the consumer, he believes that this trend is worth affirming, the husband and wife store itself has low flow of people, high cost, high price and other issues, in the face of fresh e-commerce and community group buying of foreign pressure, the living space of small shops is getting smaller and smaller, and the platform can help small shops reduce the cost of purchase, increase traffic, and improve the level of digitalization.

However, after several years of practice, Wang Chengrong found that there are some problems in the transformation of small shops by Internet giants, small shop formats are very different, small shops are located in different communities, different sizes, and uneven operating levels, not all small shops are suitable for transformation, transformation also has costs for small shop owners, plus small shop owners have different digital capabilities, and some small shops are not very suitable for transformation.

Chen Liping believes that in the transformation of small shops, it is not right to only consider the economic role, should consider its social attributes, the relationship between small shop owners and community residents is highly sticky, in the aging society, small shops in addition to selling goods, can provide some life help for the elderly. China can refer to international practices, in Japan and other countries small enterprises to set up voluntary chain organizations, play a greater role in the commercial society, and the current Internet platform in the transformation of small shops, did not take into account the particularity of China's sinking market retail terminals, did not establish an organized management model.

People close to Ali said that Ali is rethinking the transformation of small shops, not only to combine community group buying and small shops, nor to imitate small shops as a distribution channel, but to consider from the perspective of community commerce, combine community functions and economic functions, and re-play the role of small shops.