Author丨Qi Te
Preamble:
At present, there are almost 10,000 stores on the retail side on the market, except for convenience stores. In March this year, snacks were very busy and held a partner conference, aiming at the goal of 10,000 stores.
As a single-product store-based store on the retail side, how can a mass-selling snack store become 10,000 stores?
In investment, we often say that "category determines the ceiling".
Entrepreneurs' abilities, talents, and diligence are often very similar, but it is actually the track they choose that determines their fate. There are some categories that are destined to become 10,000 stores, while others may backfire no matter how hard the founders try.
As a chain enterprise, it can achieve a 10,000-store brand, which has some common characteristics in China's market environment.
1. High standardization: that is, the back-end supply chain is standardized and the front-end operation is standardized.
2. Most of them are based on the chain model of "pure franchise", and the management radius of franchisees is small: another core element of the formation of the Wandian brand is to help franchisees reduce the burden of management. Only on the premise of helping franchisees complete the burden reduction, it is possible for profitable franchisees to open more stores, and once a super franchisee system is formed within the brand, 10,000 stores are just around the corner.
At the same time, it should be noted that the chain format model I am referring to is a "pure franchise" model, which means that the headquarters only does brand and supply chain output, and the franchisee manages the store, excluding custody and joint operation.
3. Able to sink sufficiently: The basic plate of Chinese society is the county economy composed of 1,472 counties and 394 county-level cities, and according to the latest census, these more than 1,800 counties have a permanent population of about 750 million, accounting for more than half of the country's population. All chain brands that can become 10,000 stores must have a store model that can still survive in the county economic environment in order to impact 10,000 stores.
4. There is a high probability that a community store model is needed: the most typical is a hypermarket in the retail industry, whose store size and business attributes determine that it can only open stores in the center of the county. Therefore, even if it can cover all the county areas, the ceiling is 2,000 stores.
So go back and take a look at which food and beverage chain companies have broken through 10,000 stores today: Michelle Bingcheng, Luckin Coffee, Zhengxin Chicken Steak, Juewei Duck Neck, Wallace, KFC, Guoquan Shihui, Meiyijia, etc.
In fact, it can be roughly divided into three categories:
1. Dining (drinks): Honey Snow Ice City, Luckin Coffee.
2. Food (food): Zhengxin Chicken Cutlet, Juewei Duck Neck, Wallace, KFC.
3. Pure retail: Guoquan Shihui, Meiyijia.
You will find that no matter which category you belong to, the above 8 brands are able to meet the above four common criteria.
Why are these companies in each category?
First of all, in the field of catering (beverages), water is a relatively special existence.
Whether it is tea or coffee, it can achieve a high degree of standardization of the back-end (supply chain) and front-end (store-made). Therefore, in the field of ready-made beverage stores, there will be only two companies in the future: Michelle Bingcheng and Luckin Coffee. Water drink is the easiest category in catering to give birth to 10,000 stores.
Secondly, in the field of catering (food), the difficulty of achieving 10,000 stores will be far greater than that of water and drink, especially Chinese catering.
You will find that in the field of catering (food), Western-style fast food is relatively easy to become a Wandian brand. Whether it is Wallace, KFC or Zhengxin Chicken Steak, the reason is also that they can achieve a high degree of standardization of the back-end (supply chain) and front-end (store-made).
Juewei duck neck is a relatively special existence in Chinese catering, because there is almost no processing process at the front end, it has completely realized the retailization of catering, and has become the only brand in the field of Chinese catering that can become 10,000 stores.
Due to the complexity of its supply chain and front-end store operations, it is almost impossible for Chinese restaurants to expand entirely on the pure franchise model.
Of course, in recent years, many emerging catering brands have explored management models such as joint ventures and trusteeship to help franchisees reduce their burden and achieve standardization. However, the essence is still to hand over the difficulty of standardization to the catering brand headquarters, and its core pain point lies in the output ability of the organization, especially the core store manager.
In the end, among the two pure retail companies, one is Meiyijia and the other is Guoquan Shihui, and they can become Wandian brands, which belong to two different stories.
Why can Meiyijia become 10,000 stores?
First of all, a convenience store must be a format that can sell 10,000 stores, or even 100,000 stores.
Due to China's vast geographical depth and concentrated community formats, before the emergence of convenience stores, there were already millions of husband-and-wife shops, which essentially took over the functions of community convenience stores.
The most successful part of Meiyijia is that when the Japanese convenience stores were still studying refined operations in first-tier cities and studying how to do direct sales to franchise, Meiyijia boldly entered the sinking market and flopped the husband and wife store through the advantages of the franchise model and supply chain. After forming a certain scale and volume, it will further optimize its competitive barriers and transform into a Japanese convenience store.
The pot ring food sink and the future snacks are busy/Wanchen belongs to another story.
There is a concept in the retail industry called "category killer", the so-called category killer refers to the operation of a single category from the traditional supermarket, which is between standard supermarkets and convenience stores.
Before the snacks were busy/Wanchen and the pot circle came out, more "killer" attempts in the industry were in the direction of fruits and fresh food, such as Aunt Qian, Fresh Legend, and Baiguoyuan. Of course, the reason why it is difficult to sell 10,000 stores in these directions is also very simple, that is, as we said, the front end and back end are too difficult to standardize.
So why is the snack busy/Wanchen and pot rings?
In fact, snacks and frozen products are relatively easy to pick up as independent categories of stores in the standard supermarket.
First of all, snacks are very busy, although they are called snack shops, but their pallets can be understood as whole food categories (leisure snacks, convenience foods, dairy products, beverages, ice cream, frozen products) in addition to fresh food, rice noodles, and seasonings in the standard supermarket.
Secondly, although Guoquan Shihui is engaged in frozen products, you will find that frozen products can actually contain frozen prefabricated ingredients (prepared foods and prefabricated dishes), so there is a certain space for category expansion.
Therefore, these two categories are relatively easy to pick out for standardized replication in the super-label, and the front-end and back-end are very easy to standardize.
Of course, these two categories can be achieved, and there are reasons for luck. Without the economic cycle caused by the epidemic, snacks are very busy and Wanchen is unlikely to develop at the same speed as today; Without the pandemic, consumers would not have paid for the concept of "home hot pot".
So in what direction will the snack shop develop next?
There are actually two key success factors for the success of mass selling snacks. Horizontally, a store format that is relatively easy to pick out as an independent category was selected from the supermarket; Vertically, the circulation mode of traditional FMCG products is compressed, and it has the basic prototype of the hard discount model.
Therefore, the first phase of mass sales snacks has been a success, according to the current store density encryption and regional penetration, mass sales of snacks to break through 10,000 stores is just around the corner.
But what about after breaking through 10,000 stores? Whether mass-marketed snacks can truly replace convenience stores as the new community retail infrastructure depends on whether they can continue to evolve their own models.
We've always said that the only constant in the retail industry is change.
There is no secret in the retail industry, and the changes in the industry have always been carried out in three dimensions:
1. Bigger or smaller (refers to store size)
2. Wider or narrower (refers to the business category)
3. More expensive or cheaper (referring to the price of the item)
"Sun Tzu: Fiction and Reality" mentions the impermanence of soldiers and the impermanence of water, which is actually the most suitable way to describe the retail industry. There will be no fixed store model in the retail industry, and its changes will depend on the changes in the market and also on the cards of competitors.
What may be beyond the imagination of many friends here is that some retail companies can rely on selling "more expensive goods" to achieve through the competitive cycle, of course, this is a digression.
The future of mass selling snacks will obviously follow the line of bigger or smaller, wider or narrower.
Today's mass market snack category is actually very close to that of convenience stores, compared to convenience stores, only the two core profit products of cigarettes and cooked food are missing.
If mass selling snacks continue to expand into a wide range of categories in the future, it will unprecedentedly compress the space of the existing retail convenience system in China's community.
The core reason for this is that convenience stores have a longer distribution path and are less efficient. In the future, if the mass sale of snacks is at the same level as the convenience system, the space for traditional convenience stores in third-tier cities and below will become very small.
Because convenience stores have a longer circulation path and lower efficiency, their differentiated business ideas must return to differentiated category management thinking—constantly gaining insight into and studying the changes in consumer demand to ensure that they are "new enough" and "competitive enough" at the level of "goods". Compared with the mass snack system, the logic of "goods" is more concerned about whether I can build an omni-channel with better prices.
Therefore, the space of traditional convenience stores in lower-tier cities will be compressed, and on the whole, we believe that consumers in first- and second-tier cities will be more concerned about whether they can buy "newer" and "better" products; Consumers in communities below the third-tier cities are more concerned about price.
Finally, to summarize and answer this question, why did the mass merchandiser snack store open 10,000 stores?
First of all, the retail industry must not be able to open 10,000 stores in traditional supermarkets and hypermarkets. As mentioned earlier, there must be a ceiling on the number of stores without a community model, so the 10,000 stores in the retail industry in China can only be based on the community convenience model, that is, community supermarkets, community category stores and convenience stores.
Today, the category width of mass merchandising snacks and convenience stores is very close, and theoretically speaking, if convenience stores can open 10,000 stores, mass merchandising snacks will definitely be able to open 10,000 stores. Because in China's current stage of social retail development, convenience stores can undertake the functions of millions of husband and wife stores, and mass sales of snacks will inevitably be able to undertake the functions of millions of husband and wife stores.
At the same time, mass sales snacks can also have higher efficiency than convenience stores, so if the category of mass sales snacks is further expanded in the future, it can be said that the sinking market below the third-tier cities will become a devastating existence. The better living space of the convenience store system is to go to the higher cities, and at the same time further transform into Japanese convenience stores.
So is it the life of traditional snack stores or convenience stores that are eliminated by mass sales of snacks?