Sun Art Retail changed its coach, Huang Mingduan did not come back, and the former Auchan executives took over with an annual salary of 4.8 million
Following Freshippo, RT-Mart in Alibaba's physical retail sector also announced a change of leadership. Before the announcement, it was reported that RT-Mart founder Huang Mingduan would return to the front line, but on the evening of March 26, RT-Mart's parent company, Sun Art Retail, announced that Lin Xiaohai had resigned as the company's executive director and CEO due to another appointment from Alibaba Group. At the same time, Shen Hui, a former senior executive of Auchan, a retail subsidiary of Sun Art, was appointed as the company's executive director and chief executive officer.
It is understood that Sun Art Retail and Shen Hui entered into a service agreement with a fixed term of three years. Under the terms of the service agreement, Shen Hui, as an executive director, does not receive any director's fee, but is entitled to a fixed annual salary of RMB4.8 million and share options, as well as an annual management bonus, the amount of which is determined by Sun Art Retail's remuneration committee and the board of directors after taking into account the operating results and his performance.
It is reported that Shen Hui joined Auchan China in 1999 and served as the general manager of hypermarkets, with rich retail experience, and was a retail talent trained by Sun Art Retail. Since 2019, Shen Hui has started his own business and worked as an independent consultant, providing coaching services for large enterprises. After the announcement of the personnel change, as of the close, Sun Art Retail's share price rose 9.22% to HK$1.54.
Ali's senior executives withdrew and proposed a "multi-format omni-channel" strategy
Alibaba, who is optimistic about the integration of online and offline, put forward the concept of "new retail" in 2016 and "sweeps" physical retail. In 2017, Alibaba acquired a 36.61% stake in Sun Art Retail for HK$22.4 billion, and used RT-Mart as a new retail test field to start the road of transformation.
Retail e-commerce expert Zhuang Shuai told Nandu reporters, "Before and after Daniel Zhang took over from Jack Ma, in order to cope with the pressure of the end of the Internet traffic dividend and improve Ali's moat, Ali opened a period of 100 billion yuan of acquisitions, including Youku, Ele.me, Yintai, RT-Mart and dozens of other enterprises. Alibaba generally adopts the model of acquisition and independent operation and management, and RT-Mart and Yintai are both run by Alibaba executives and teams."
Ali chose Lin Xiaohai, who had worked in a fast-moving consumer goods giant, from the inside. According to public information, Lin Xiaohai graduated from South China University of Technology, has 21 years of work experience in Procter & Gamble, and served as the president of marketing of Procter & Gamble Greater China before joining Alibaba in 2016. At Alibaba, he served as Vice President and General Manager of Alibaba's Retail Tong Division. It is understood that RetailTong is a top-ranked FMCG B2B platform in China, founded in 2015.
In May 2020, Lin Xiaohai joined Sun Art Retail, and in December of the same year, he officially took over from RT-Mart founder Huang Mingduan to take the helm of RT-Mart. During his tenure, he proposed the strategy of "multi-format omni-channel", completed the supply chain capacity building of fresh food self-operation through digitalization and organizational innovation, and opened Sun Art's retail M member store. Up to now, Sun Art Retail has three main brands: RT-Mart, RT-Mart Super and M Membership Stores, and has opened more than 500 stores across the country, covering more than 230 cities.
RT-Mart's revenue fell below 100 billion yuan and frequently closed stores
Lin Xiaohai's withdrawal is not surprising to the outside world. Prior to this, Hema, another new retail vanguard of Alibaba, has just changed the No. 1 position, and Hou Yi, founder and CEO of Hema has retired, and Yan Xiaolei, CFO of Hema will concurrently serve. Earlier, from time to time, there was news that Alibaba would sell RT-Mart, including physical retail. In response, Tsai Chongxin, chairman of Alibaba Group, said that it would gradually withdraw from non-core physical retail.
Alibaba, which focuses on its main business, wants to accelerate its exit from non-core businesses that do not make money. RT-Mart has been frequently mentioned in recent years as a decline in revenue, losses and store closures. Judging from the financial report, after Ali's shareholding, Sun Art Retail has been going downhill. In 2018, Sun Art's retail revenue was 101.3 billion yuan, down 1% year-on-year, and in 2019, Sun Art's retail revenue was 95.4 billion yuan, down 2.9% year-on-year, and its revenue fell below 100 billion yuan. The digital transformation initiated by Alibaba's executives has not reversed the decline. Revenue in fiscal year 2021 was 88.134 billion yuan, down 29.3% year-on-year, and revenue in fiscal year 2023 was 83.662 billion yuan, down 5.1% year-on-year.
Due to the aging of the business format, the hypermarket format that expanded rapidly around 2000 was rumored to be closed one after another, and RT-Mart was no exception. Nandu reporters previously reported that from February 17th to 19th, RT-Mart Jiangsu Zhenjiang Xuefu Road store, Sichuan Deyang store, and Hunan Zhuzhou store announced the closure.
In addition to the common "lease expiration" in hypermarkets, the reasons for the closure are also due to the impact of the epidemic and the consumption environment, and traditional supermarkets under pressure on their performance have taken the initiative to close their stores and stop losses. Sun Art Retail's 2023 semi-annual report shows that for the six months ended September 30, 2023, revenue was 35.768 billion yuan, down 11.9% year-on-year, and net loss reached 378 million yuan, an increase of 334.5% year-on-year from 89 million yuan in the same period last year.
Regarding the closure of stores, Lin Xiaohai also said that the past few years have been a "painful transition period" for hypermarkets, and in the future, Sun Art Retail will explore more new retail formats based in Shanghai and the Yangtze River Delta. In response to the wave of store closures, he mentioned that this year is a year of transformation for Sun Art Retail, from a "channel-based retailer" to a "merchandise-driven retailer".
Zhuang Shuai told the reporter that Ali chose to acquire RT-Mart because of the supply chain resources of offline retail giants. RT-Mart has made up for the shortcomings of Tmall Supermarket in the supply chain, and access to supply chain resources is the key to increasing Alibaba's financial revenue data. The second is to get a professional retail team. "It doesn't make that much sense to transform offline. ”
RT-Mart internally trains senior executives to take over the baton He was the general manager of Auchan China hypermarket
Before the decline of the hypermarket format, RT-Mart had a glorious past, creating a record of not closing a single store for 19 years. RT-Mart opened its first supermarket store in Shanghai in 1998 and then developed rapidly in China, with revenue of 40.4 billion yuan by 2010, making it known as the "King of Supermarkets". At that time, the annual sales of a RT-Mart store in Hainan could reach 1 billion yuan, so that there was a saying in the industry that "there is no grass around RT-Mart".
Now, in the new cycle, RT-Mart's parent company, Sun Art Retail, has been a drag in Alibaba's financial report, and Alibaba, which is no longer running along, has chosen to withdraw. Before the announcement, there was news that founder Huang Mingduan would return to the front line. At present, RT-Mart has chosen a talent that it has cultivated itself and has rich retail experience. According to the official website, Huang Mingduan was transferred to the chairman of the board of directors and non-executive director on May 15, 2021, and also served as a director in several subsidiaries of the company. He is responsible for leading and supervising the performance of the Board's duties, ensuring the effective functioning of the Board and ensuring that good corporate governance practices and procedures are in place.
Shen Hui is 49 years old and graduated from Harbin University of Science and Technology. In 1999, he joined Sun Art Retail Atomics, a company at Auchan, and was involved in the preparation and construction of the Auchan brand in China. From 2010 to 2013, he worked at Auchan France as the general manager of the store. From February 2016 to May 2017, he served as the general manager of Auchan brand operation.
According to relevant media reports, Shen Hui has always been known as a pioneer of reform internally, and once went to France for two years through the Auchan Fly program for his outstanding performance. During his tenure as general manager of hypermarkets, he took many reform measures, but in the face of the overall industry malaise and the obstacles of Auchan's own shortcomings in China for many years, the effect was not obvious. In May 2017, less than a year and a half after taking up the post of General Manager of Auchan China Hypermarket, he announced his departure. Since 2019, Shen Hui has started his own business and worked as an independent consultant, providing coaching services for large enterprises.
However, in the eyes of more industry insiders, the change in the No. 1 position has increased the possibility of RT-Mart being sold. As of 3 p.m. on March 27, after the announcement of the change of leadership, Sun Art's retail share price surged 11.35% to HK$1.57.
Written by: Nandu reporter Huang Pei