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On December 23, the positioning hard discount community supermarket chain Biyide issued an announcement on its WeChat public account, announcing that it will suspend business from December 22, 2023. The news spread on the Internet, and some regular customers were shocked: "How can you say that it is gone?" Some netizens were confused: "What is Biyide? Why haven't you heard of it?"
According to Qichamao, Biyide belongs to Yirui Trading (Shanghai) Co., Ltd., which is a hard discount store brand founded by German Philipp Spangenberg in China, which has been operating for many years and has more than 200 stores in China. Its stores are about 200-300 square meters, and the number of business categories is 600. According to the official data provided by Biyide, the compound annual growth rate of sales from 2017 to 2021 is 120%, and its own brands account for about 40% of total sales. Online, some people refer to it as the "Poor Man's Happy House".
In this regard, Jia Hongbin, former CEO of Biyide Supermarket (the contract has been terminated), said that the core reason for the closure was the disruption of cash flow. Since entering China in 2016, Biyide has been in a state of overall loss. However, before the suspension of business, about 80 of the 161 stores had achieved store-level profitability. In the first half of this year, the board of directors of Biyide has been discussing the sale of the business, and there have been negotiations with potential buyers, but as of press time, the acquisition has not been confirmed.
——The life cycle of the supermarket industry
In June 2022, the International Business Daily held an online seminar with the theme of "Transformation and Development of Traditional Supermarkets", and the experts and scholars who participated in the conference agreed that the era of rapid expansion of Chinese supermarkets has ended, and there are many pain points and challenges, but it is still facing a huge consumer market with strong sustainable development capabilities, in which countless changes and opportunities are brewing. Different market segments of China's supermarket industry are showing differentiated development status, for example, the traditional large-scale comprehensive supermarket format is entering a period of decline; However, the emerging community discount supermarket is still in its infancy, and the industry business model is still in the exploration stage.
——Analysis of the marketing model of the supermarket industry
The common marketing models in the supermarket industry can be divided into membership promotion, discount promotion model, advertising promotion model, holiday promotion model, supermarket + catering model, live broadcast marketing model, etc.
——The market size of the supermarket industry
According to Euromonitor data, the growth rate of supermarkets has slowed down since 2010, but it still maintains positive growth. In 2021, the scale of the supermarket and hypermarket industry in mainland China will be 3.09 trillion yuan, with a CAGR of 2.1% from 2016 to 2021. It is preliminarily estimated that the sales scale of the supermarket industry in 2022 will be about 3.15 trillion yuan.
Huaxi Securities believes that the small and medium-sized vertical discount retail format of 100-500 square meters shows a strong advantages of streamlined SKUs, high repurchase, high ping efficiency, high turnover and low cost, especially the new discount retail format represented by mass sales snacks, fresh discount stores and low-cost retail stores, which is showing an accelerated expansion trend under the catalysis of multi-dimensional favorable conditions, and is leading a new round of retail channel reform.
Huaxi Securities estimates that if only the stock replacement part is considered, it is expected that the ceiling of discount supermarket stores in the future may be close to 30,000, and if further consideration is given to the substitution of discount supermarket stores for other formats (convenience stores, specialty stores, etc.) and farmers' markets in the future, the potential store opening space may be larger.
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