Produced by | Entrepreneurship is at the forefront
Author | Fu Yancui
Edit | Feng Yu
In the sinking market, convenience stores are experiencing a fierce battle.
Five years ago, when Holly, a young townman working in a first-tier city, returned to the county seat to open a convenience store, there were 8 convenience stores around the two communities.
The wheels of the times are rolling forward, symbolizing the busy urban life of convenience stores, and now their tentacles are more and more deeply rooted in the area below the third line.
Not only husband and wife convenience stores, but also chain convenience stores are collectively "sinking". Starting from 2020, chain convenience store brands such as Lawson, 711, and FamilyMart have chosen to accelerate their expansion, stepping out of the north, Shanghai, and Guangzhou, and stepping forward into third- and fourth-tier cities and even small counties.
But the payback cycle of convenience stores usually takes a year to a year and a half, or even longer. How does this business, which earns more than 100,000 yuan a year, stir up waves in the sinking market?
1. Return to the county seat to open a convenience store
In front of him is a convenience store full of all kinds of goods, Liu Wei stands in front of the cashier by the door, from time to time with the residents who walk into the convenience store to talk about a gossip between acquaintances and acquaintances, and skillfully scans the code with the machine in his hand, and packs the goods selected by customers into plastic bags. From time to time, he would remind the residents that they had just entered the drink they liked.
"Try to make every customer who enters the store feel that the small shop is very grounded." In Liu Wei's words, since opening this convenience store in the community, he and his wife have been repeating this work every day.
In May 2020, Liu Wei's company, which worked in Guangzhou, collapsed due to poor management, and he was also forced to lay off, "At that time, I invested a one-month resume, but I did not find a job equivalent to the original salary, and I also had to rent and eat in Guangzhou, and there were wives and children to support at home, and it cost money everywhere." ”
Liu Wei's original salary was only more than 8,000 yuan, but the expenditure was not small, the rent was more than 1,000 yuan, the transportation and telephone bills were 300 or 500 yuan, and the food and daily expenses were also more than 1,000 yuan a month. Calculated, he himself has a small monthly expenditure of 3,000 yuan. Moreover, because his wife has to take care of 3-year-old children, she has not worked outside her hometown, and it costs 2,000 or 3,000 yuan per month for the two of them.
Coupled with the fact that children are about to go to school, parents are getting older and families are spending more. He could still save more than 2,000 yuan a month, but unemployment made him completely lose his source of income.
"I have to work outside the home to be separated from my wife and children for a long time, and my feelings are also affected by distance. Working outside the home is not smooth, and the rent is about to expire, so I have the idea of returning to my hometown to find a livelihood that can make money. After all, in addition to supporting the family, you can also accompany your family. ”
Therefore, Liu Wei just consulted with his wife, and then quickly packed up his luggage and returned to his hometown in Wanzai County, Yichun, Jiangxi. But about what to do to make a living, it has always bothered Liu Wei.
"I also forgot that it was the first day I came back, and one night I was in a depressed mood passing by a convenience store, and I sat on the side of the road staring at the storefront for a long time, looking at the people coming in and out, and suddenly thought that it would be nice to have such a convenience store." Liu Wei told "the forefront of entrepreneurship" that convenience stores seem to be an industry with extremely low entry barriers and no technical content. And he also has some savings in his hands over the years, and he feels that opening a convenience store is at least not too risky, not only can sell goods but also look after the house.
Therefore, Liu Wei began to learn the steps and costs of opening a convenience store through platforms such as Douyin, Xiaohongshu, and Zhihu.
In mid-August 2020, Liu Wei began to look for a suitable storefront in the community where he lived, and applied for a business license and a tobacco monopoly certificate. Fortunately, the rent in the county is also cheap, a 130-square-meter house, the monthly rental price is only 1200 yuan. Then, the purchase of equipment (tobacco racks, shelves, cash registers, cash register equipment, monitoring, ice cream cabinets, water cabinets, etc.), decoration (ceilings, floors, signboards, lighting systems, etc.), and the first batch of goods also found the corresponding suppliers.
"I directly signed a 5-year rental contract, afraid of going wrong later, and directly paid the rent of 14,000 yuan a year." The equipment cost 20,000 to 30,000 yuan, the decoration cost 20,000 yuan, and the first batch of payment backlogged 70,000 or 80,000 yuan. Liu Wei revealed to the "forefront of entrepreneurship" that he spent 140,000 or 150,000 yuan before and after opening this store.
"Fortunately, it is also on the right track now. After paying rent, water and electricity, you can earn 6 or 7,000 yuan per month. Although my wife and I have to go to the store alone every day, the family can be together every day, and we are quite satisfied with this income. Talking about today's life, Liu Wei said with a satisfied face.
Holly and Liu Wei are in a similar situation, he has also worked hard in first-tier cities for many years, and he also wanted to return to his hometown to develop in his 30s. However, he changed careers earlier than Liu Wei, and in order to start a convenience store, he first went to work at the county convenience store for a period of time.
"I've always wanted to open a convenience store, but I always feel that I don't have to run around for my life, just looking after my home and selling goods is the most stable life." Five years ago, in order to be able to open a store smoothly, Holly went to work in a relatively mature store in the county, and actually contacted it for 2 months, and finally understood the workflow of the convenience store.
"There are 5,000 or 6,000 people living in the surrounding area of the store where I work, and the flow of people in the county town is OK, and the other party's business time is relatively long, with a business area of 180 square meters, and the daily working hours are 8 a.m. to 11 p.m., and the daily flow can reach about 10,000." The monthly net profit feels like it can be more than 10,000 yuan. ”
After Holly learned about the situation of opening a store, she also began to choose a site, rent a house, apply for a business license, and purchase monitoring equipment, computers and shelves.
Holly told "The Forefront of Entrepreneurship" that he has been operating this convenience store for nearly 5 years and now has a fixed customer base, with an income of 8,000 or 9,000 per month.
Obviously, convenience stores, an industry with low entry thresholds and simple operations, are becoming a new choice for more and more young people. These more and more convenience stores in the community are more grounded than first-tier cities, and have been integrated into the community and become an indispensable part of the life of community residents.
2. Unlock the wealth password
Of course, like all physical stores, retail formats such as convenience stores are not so easy to make money. This not only requires entrepreneurs to work at least 15 hours a day, 24/7, but also whether the industry makes money or not, which is greatly related to the location of convenience stores, the profit of selection and whether funds can flow quickly.
First of all, site selection is an important factor in whether all the real economy can make money. Therefore, entrepreneurs need to investigate the local market environment, understand the number of residents in the surrounding areas and the number of residents in the community.
"The nightlife of the county is less prosperous than that of first- and second-tier cities, so it is best to choose the main entrance and exit of the community, the traffic artery that must be passed through the commute to work, or the crowded location in the community." And the best occupancy of about 2,000 households within 500 meters is the best. Liu Wei added that the owner can also crouch near the community to see how many customers in similar convenience stores, especially the student group, will also be helpful for future selection.
At the same time, Liu Wei does not recommend setting up shops in crowded places like intersections. Because such a site is not only expensive, and the community often has walls, urban planning is not a block system, residents in order to facilitate and lazy to go out of the gate, often choose to buy in the convenience store downstairs.
In addition, because it is open in the community, the decoration lights of the store must be bright so that it can attract customers at night; the signboard outside should also be conspicuous, "I really started to engage in convenience store entrepreneurship, only to find that there are many doorways inside." Liu Wei had to sigh that even he had thought of the convenience store business too simply before.
Holly, who has been engaged in the convenience store business for 5 years, also has many "secrets" that she has explored when running convenience stores.
"I was also quite entangled in the location of the community. There are 8 convenience stores in my neighborhood and around a neighborhood, and the best location is also occupied by them. So I opened a convenience store next to a store with the best traffic, and focused on differentiated competition in the selection of products. Holly revealed that in the first year of opening the store, he took advantage of the flow of people in the other storefront, often changed the selection, and relied on children's toys and the latest Internet celebrity snacks to stand on his feet.
He further suggested that some goods can choose to find a distributor online to wholesale, "because it is cheaper." ”
Holly revealed that he is looking for some Internet celebrity products on the Internet, and after the experience, he feels good, and he will call the wholesaler of the place of origin according to the information on the product. Because such net red products often do not have distributors in the county, the other party will not have price protection measures.
"But we can't all goods come according to this 'routine'. Some dealers have low profits, but they can be exchanged. For many goods with short shelf life, you need to buy from this part of the dealer. Holly continued.
At the same time, Holly also noticed that since the epidemic, it is best to add vegetables and fresh business in conditional convenience stores.
"The high-margin products of convenience stores are 'eating and drinking', and the fresh food and beverages in my store account for only 4% of the total merchandise, but they contribute 60% of the turnover." Holly revealed that in general, the profit margin of tobacco and alcohol drainage products is not high, such as tobacco is only 10% profit. However, as a FMCG beverage, 2.2 yuan can sell for 3 yuan, and the net profit is 8 cents. Coupled with the epidemic, vegetables have also become the main drainage products.
Even there are some tricks in the placement of goods. Holly will allow customers who choose necessities to pass by high-profit products according to the size of the profit. Play some slow-paced music to allow customers to stay in the store more, thereby increasing the unit price.
Convenience stores are not the same as traditional supermarkets, talking about fast-in and fast-out - to achieve "high frequency of purchase, but very little inventory." "Last year, there was a flurry of cigarettes that were not easy to sell, and I hung them upside down, and the purchase price of 183 yuan was sold as soon as possible at 180 yuan, because it was necessary to flow the funds as soon as possible in order to make more money." Holly gives an example.
Obviously, convenience stores as a retail industry, although the entry threshold is low, but it is not easy to run well and make money from it.
3, the city is full of convenience stores
Speaking of which, convenience stores originated in the United States, developed in Japan, entered China in the 1990s, became popular in densely populated areas of first-tier cities, and then Rosen, FamilyMart and other enterprises have entered, convenience stores with their convenience, precision and the characteristics of providing a variety of value-added services, from the variety of retail formats stand out.
As chain convenience stores become more and more deeply rooted in areas below the third line, husband and wife stores mushroom in various communities, and the convenience store industry has become more and more inward-looking.
According to the observation of the "forefront of entrepreneurship", at present, in the third and fourth tier cities and below, the phenomenon of convenience stores getting together is becoming more and more serious, and there are 3 or 4 small convenience stores on a street in some places. In the residential areas of bustling places, in the residential areas in front of the buildings and behind the buildings, and even within a distance of 300 meters, 3 or 4 convenience stores can be opened.
In the Gu'an County community where Yingying is located, a total of 6 buildings have opened 3 convenience stores, "and some of them mainly focus on fresh vegetables, and some will send some cooked food in their own communities, forming a certain differentiated competition." ”
In fact, public data show that there are currently about 6 million non-chain convenience stores that are mainly engaged in FMCG in China, and it is they who control more than 40% of the domestic FMCG circulation. At the same time, according to the new distribution of the "2019-2020 FMCG Retail Small Shop B2B Competitiveness Report", nearly 86% of the stores of FMCG retail stores in the country are still distributed in third-tier cities and below, serving about 74% of consumers in mainland China.
The Ministry of Commerce issued the "Notice on Promoting the Branding and Chaining of Convenience Stores for Three Years", proposing to strive for the total number of stores of brand chain convenience stores nationwide to reach 300,000 by 2022.
Under the influence of the epidemic, in view of the fact that convenience stores are one of the few industries that still maintain high growth, the sinking market has also been targeted by major convenience store chain enterprises because it has the advantages of low rent, low manpower and low water and electricity compared with first-tier cities.
Zhang Sheng, vice president of Lawson China, once said: "During the epidemic period, lawson's store performance in East China achieved a 30% month-on-month growth, of which the growth rate of third- and fourth-tier cities was far greater than that of first- and second-tier cities. In Zhangjiagang, a county-level city under the jurisdiction of Suzhou, for example, the sales volume of rosen community convenience stores increased by nearly 80% year-on-year, while the year-on-year growth rate of Shanghai stores was only about 10% to 20%. ”
As early as May 2020, "7-11" has opened stores in Hunan and Henan and opened the franchise system; Jinan has opened 3 new stores and plans to open no less than 100 stores in two years. In August 2020, it opened six stores in Tangshan, Hebei Province, and five stores in Haikou in October to welcome customers, while also exploring the Fujian market.
Yang Xiang, chairman of Jiangxi Ledoujia Convenience Store, believes that the sinking market must be done. For example, he said, some department stores with higher city levels have lower sales performance, and the higher the sales performance of stores in cities or counties with low city levels.
In recent years, Tianfu Convenience Store, a local convenience store brand in Guangdong Province, has also accelerated its pace of development in lower-tier cities and even counties and towns in the northeast and west regions of Guangdong Province.
The rolled up convenience stores have also put some husband and wife stores and franchise stores into operational difficulties.
"In a year, 2 couples and wives convenience stores have closed down, and 1 has changed people." Holly revealed.
Another owner who has done franchise business is also complaining that he has opened a convenience store for half a year, and the transfer advertisement has been issued for 1 year, but he has not been able to transfer it. "The front commercial street, the side of the 6-storey community, each floor has 8 households, and there is no competition 200 meters to the left and 100 meters to the right. But the transfer fee of 50,000 yuan was not taken over. ”
The other party revealed that his storefront is 40 square meters, of which the franchise fee is 10,000, the deposit is 10,000, the signboard is 16,000, the opening fee is 0.95 million, the decoration fee is 30,000, the equipment is 60,000, the first shop is 30,000, the smoke is 30,000, the rent is 65,000 / year, and it cost 260,000 before and after. It's still at a loss.
In fact, the convenience store industry is still essentially a slow business.
The time for the return on investment in this industry is not short, for example, Liu Wei's convenience store wants to make a formal profit for more than a year and a half, "the tight funds suggest not to open a store, supermarket investment is basically a one-time expenditure, if the store can be profitable, it is better to continue to invest under the unprofitable situation." Holly Road.
In other words, the industry makes hard money.
"Doing convenience store business mainly depends on whether you are diligent enough, isn't that what you start from scratch?" Holly used to think that opening a convenience store would be very idle, but now she feels that each line has its own hardships. He now opens the store at 7:00 in the morning and closes around 12:30 in the evening, spending 15 hours a day in the store, "I can't go anywhere in this line, and after a day of closing, customers may go elsewhere to buy." ”
If once upon a time, convenience stores more often symbolized the urban ecology, then with the return of small town youth and the return of convenience stores to the county, they gradually injected more urban color into this new retail format.
*The caption in the text is from Visual China, based on the RF protocol; the picture in the text is from the photo network, based on the VRF protocol.