Author | Mia
The "Shanghai Currency Zone" supermarket has been open for many years, but ALDI has been steadily elected as the master of "folding learning" in Shanghai.
Recently, a 500mL strong aroma pure grain 52 degree liquor broke the stereotype of "high liquor price" at a shocking price of 9.9 yuan, and also created a brand myth of "ALDI is crazy, Wuliangye is crying, and Moutai doesn't want to live" in the Internet sound.
It is not in vain that ALDI is called "Shanghai currency" by netizens as an extralegal place, 9.9 yuan of shampoo and shower gel, 3.9 yuan of two pairs of sleeping pants, 8.6 yuan of 950ml of fresh milk, 9.9 yuan of 1 liter of grape juice, less than 1 yuan of 1 bottle of pure water...... A large number of products have completely subverted the traditional cognition of migrant workers in Shanghai with their ultimate cost performance.
"The most important thing for people in Shanghai is to live in the Olympic area", in the hearts of migrant workers in Shanghai, visiting ALDI has also become a way of life, and the Germany retail giant ALDI has become the most affordable new specialty in Shanghai.
Unlike the Germany market, which is really a "poor ghost supermarket", ALDI has embarked on a path of localization in Shanghai.
On the one hand, 90% of the products are private label goods, and 80% of the products are from local suppliers.
On the other hand, "in Germany, ALDI is a supermarket that is not robbed by homeless", while ALDI in China has transformed into a sophisticated middle-class vegetable market, and has successfully created a high-quality and cost-effective brand image through marketing strategies such as "Aunt Xue's endorsement".
The problem is that now we have entered a new cycle of grabbing the stock market, and with it, Hema NB Outlet and Dingdong Outlet are emerging.
At present, other domestic retail companies are also learning from ALDI's "hard discount" skills, while ALDI, whose supply chain and retail companies that have been deeply involved in the Chinese market for a long time are basically on the same starting line, are facing more similar competitors.
On social platforms, 5.9 yuan 500ml rice wine and 9.9 yuan 500ml 52 degree liquor have become the most popular drainage products of ALDI.
The reason why these two products have been able to quickly become popular is first and foremost due to their attractive prices. In the current market, the provision of such a large volume of alcoholic products at such a low price has undoubtedly succeeded in stimulating the sensitive nerves of consumers.
However, what really made these two products quickly popular was their quality that exceeded expectations. Although the price is low, these two products are not alcohol blending, but real pure grain brewing, 500ml of 52 degrees of liquor, fusion of five kinds of pure grains, using the traditional solid-state fermentation process, the price is only 9.9 yuan, and 500ml of six-year-old rice wine, made in the traditional way of handmade winter brewing, the price is even more affordable to 5.9 yuan, breaking the inherent impression of consumers that low price is low quality.
Not to mention, in terms of technical standards, ALDI 9.9 yuan liquor is consistent with the well-known liquor on the market, in line with the product standard of GB/T10781.1 (first-class), and is known as "Wuliangye Pingti". After the taste, the consumer feedback is also mostly positive, "the taste is average, not mellow enough, but it is not difficult to swallow", "as a ration wine is a little worse, but the wine itself is not a big problem, 9.9 yuan and what bicycle." ”
Value for money has always been ALDI's core keyword. Specifically, from the category point of view, from baking to fresh food to hot food are all highlight products, 19.9 yuan Orleans roast chicken, 15.8 yuan roast sausage, 15 yuan 20 grain eggs, these are just appetizers; Under the dairy beverage brand "Youbai" series, 950ml of fresh milk for less than 9 yuan, and 1L of 100% orange juice for less than 10 yuan, the quality is not inferior; Aojia Liquor drinks fresh beer at 7.8 yuan a liter and low-priced good wine with an average price of 9.9 yuan, which makes people "dare not take it because it is too cheap"; Not to mention that most of the toiletries and snacks are under 10 yuan, which further strengthens consumers' perception of ALDI as a "10 yuan store".
ALDI's Westernization strategy has also successfully attracted young people who pursue a Western-style lifestyle. From farro salmon to fresh blueberries, from fragrant cheeses to parsley basil, to a wide range of sandwiches, flowers and a selection of red wines, ALDI's selection is precisely tailored to Shanghai's young people's desire for a Westernized lifestyle, despite being 80% locally sourced.
Shanghai has Shanghai currency, ALDI has Austrian currency, and the status of price butcher makes ALDI invincible. In the past, Shanghai uncles and aunts went to line up at 5 o'clock in the morning, and the entire shelves were sold out; Later, on social platforms, ALDI's must-buy list was full of consumer reviews of "cheaper than Pinduoduo", and a variety of low-priced explosive products became popular choices for unlimited repurchase.
On Xiaohongshu, there are many consumers Amway's 9.9 yuan ALDI cleanser, claiming that it is no different from the 99 yuan freeplus, this cost-effective experience, they are pleasantly surprised; female white-collar workers who live alone most often buy their 8.9 yuan 950ml Youbai series of milk, jokingly praised as "cheap enough to be drunk as water", and fresh milk of the same quality costs 39.9 yuan in Sam's 2L, which is twice as expensive; goose goose takes ALDI as its own vegetable market, bread, milk, vegetables and salad, Unlimited repurchases, but her favorite is still ALDI red wine, "Red wine under 50 yuan, buy it and cook it at home, it is not distressing at all." ”
Of course, ALDI has firmly grasped the hearts of Shanghai consumers, and it is not just as simple as cheap price.
From the perspective of distribution, ALDI in Shanghai is positioned as an "imported community boutique supermarket" just around the corner after work, which has the advantage of geographical location. Since its opening in Shanghai in 2019, ALDI has opened nearly 60 stores in five years, focusing on the dense crowds of nearby residential communities and residential buildings, providing consumers with great shopping convenience.
"ALDI is open right in front of my house, I can go three or four times a week, it can be said that it is the most frequent offline shopping place", and "the business hours are 7-21 o'clock, taking care of most of the people", Xiao Rui, who has just rented a house in Shanghai for more than half a year, told Chop Pepper.
In terms of more granular consumer groups, ALDI also provides a differentiated shopping experience compared to other supermarkets and avoids excessive overlap of customer groups.
There is no membership fee model of a membership-based supermarket, and at the same time it avoids providing excessive packaging portions, which reduces the financial burden on consumers to a certain extent, and more importantly, ALDI performs well in product quality control, which is especially obvious in the reputation of consumers.
For consumers like Kaede, ALDI is favored because it has "the best balance between price and quality." Jiujiu also expressed his dissatisfaction with some supermarkets, he pointed out, "Many supermarkets do not do a good enough job of quality control, and membership supermarkets like Sam's are not only large in portions and not suitable for small families, but also need to pay additional membership fees." ”
In addition to showing competitiveness in market positioning, it has also made great efforts to strengthen its close connection with consumers' daily life, and "life attributes" has become another label of ALDI.
In December last year, in order to meet the daily needs of Chinese consumers, ALDI announced the launch of a new "Value Value" series, which is dedicated to creating a batch of competitively priced daily necessities, covering daily necessities such as meat, poultry, eggs and milk, fresh fruits and vegetables, as well as household cleaning daily necessities, including about 100 items including 950ml carton of fresh milk at 8.9 yuan and cleanser at 9.9 yuan.
At present, ALDI's fresh and ready-to-eat products account for nearly 50% of its product range, meeting the core shopping needs of consumers in offline supermarkets.
Half past six in the afternoon is ALDI's discount time, and it is also a happy moment for migrant workers in Shanghai. For kitchen enthusiasts like Jiujiu, who are frequent customers of ALDI 6% off products, "the time to get off work is exactly the time for discounts, and when you find the right product, you will buy it, either for dinner or for breakfast".
Shanghai consumers have become accustomed to the model of membership-based supermarkets such as Sam's and Costco, and have a high acceptance of boutique supermarkets, and consumers now pay attention to price without lowering their requirements for quality, which is a new opportunity for ALDI.
As a result, ALDI has targeted "exquisite" young people who pursue cost-effectiveness, and this group often has their own pursuit of quality life, and also knows how to consume reasonably. At the same time, under this positioning, the delicate petty bourgeois middle class will also pay, and these consumers have further strengthened their mentality and image of "understanding the trend and saving money".
As a white-collar worker, Jiujiu told Chop Pepper that not many people will deeply bind ALDI to the word "poor", and it has a unique value, that is, "without sacrificing quality, through rational consumption choices to achieve the delicacy and comfort of life", is becoming a new "middle-class paradise", constantly attracting and retaining consumers.
In terms of brand recognition, ALDI has successfully created a clear and tasteful brand image through well-designed store furnishings and visual presentations.
In terms of store furnishings, ALDI has a clear space for each category, from fresh fresh fruits and vegetables, pre-made meat dishes to various snacks and groceries, to the aromatic freshly baked and fresh food area, each category has its own clear space, and the circulation design is clear and reasonable, so that customers can easily and quickly find the products they need.
Consumer Goose Goose is full of praise for the design of the baking area, she told Chop Pepper, "ALDI's baking area is very well designed, and the display has an oblique angle, so I can find the product I want at a glance." "It is not difficult to see that behind it is ALDI's emphasis on customer experience.
In terms of product packaging design, ALDI also shows its pursuit of taste and texture. Xiao Rui likes ALDI's own brand packaging, "The product packaging design has obvious three bars and bright color logos, which can be caught on the shelf at once."
This design not only successfully enhances the brand's identity, but also keeps up with the trend with a simple and stylish style. Xiao Rui also specifically mentioned the texture of the packaging, "These packages are very textured, if I don't disclose the price, no one would have thought that this is only a 9.9 yuan product." ”
Through meticulous brand building and visual communication, ALDI has successfully established a high-quality, high-grade brand image in the minds of consumers, and this image, combined with its cost-effective products, makes ALDI the ideal choice for consumers to live a sophisticated life.
What's even more high-profile is that ALDI, which once bit the cost, is now playing the marketing card.
On the one hand, ALDI invited Aunt Xue, a representative of "Exquisite Picking", as the spokesperson, and held an offline pop-up exhibition to portray Aunt Xue as a representative of Shanghai Auntie's "Knowing the Scriptures" (Shanghainese, meaning proficient in life and fashionable) class.
Through Aunt Xue's emojis and classic lines, the brand's money-saving and high-quality shopping concept was conveyed, and this innovative expression quickly attracted widespread attention on social media and became a traffic password for the brand to gain strong exposure. Consumer Xiaofeng was deeply impressed by this endorsement, she said: "The first time I saw a celebrity endorsement, Aunt Xue is still an aunt in Shanghai, and the copywriting is also very interesting, so I was attracted immediately." ”
On the other hand, ALDI has held a series of offline marketing activities with its cost-effective characteristics as the core.
In December last year, in Shanghai's Jing'an Temple subway station, huge models of radish, cabbage, croissants and milk appeared, with conspicuous low-price tags and humorous homophonic meme copywriting "I am a good dish, but cheap", cleverly conveying the brand message of "good quality, low price enough".
A straightforward approach to visual merchandising is not only cost-effective, but also effective. Not long after, ALDI launched a giant mobile milk carton bus, which attracted tourists to take photos and check in on the streets of Shanghai, cleverly promoting its "Youbai" dairy brand.
In addition, advertising slogans are also an important marketing point for ALDI, which has occupied a place in the marketing battlefield through humor and high-profile copywriting. For example, the "Do you want to try ALDI" in the recruitment advertisement, on the surface, seems to be recruiting, but in fact it is secretly boasting about yourself; The billboard of the Shanghai subway station is even more clearly connotative of the membership-based supermarket, emphasizing its own advantages: "Only by buying members can you buy good meat?" "ALDI supermarket small packaging, buy more and buy less is cheap", ALDI has successfully left a unique brand image in the hearts of consumers.
Of course, ALDI's price power is not achieved overnight, and behind it is a systematic project covering multiple links.
First of all, ALDI has made great efforts to reduce costs and increase efficiency, so as to consolidate its brand image of "high quality and low price" in the minds of consumers.
In terms of human and material cost control, Chen Jia, Managing Director of ALDI China, mentioned during the store visit that the standard area of ALDI stores is about 500-600 square meters, but the average number of employees on duty in each store at the same time is not more than 4. As a result, labor costs account for only about 4% of sales, much lower than the 10% to 16% of the average supermarket.
ALDI has also gone above and beyond to improve efficiency, streamlining logistics and inventory management by adopting a full container display approach. Products are transported directly from the truck to the sales area, eliminating the steps of unpacking, moving and storage, this efficient replenishment method not only reduces logistics costs, but also improves the speed of replenishment, taking a case of 12 bottles of water as an example, the amount of work without unpacking is only equivalent to one-twelfth of the original workload.
Secondly, by streamlining SKUs and promoting its own brand, ALDI has achieved cost control and price advantages.
On the one hand, ALDI has carefully selected less than 2,000 products to sell by reducing the number of SKUs, while reducing the number of categories for the same item. This strategy has enabled the sales volume of the next single product to increase, and the high sales volume has won ALDI greater bargaining power in negotiations with upstream suppliers, thus gaining a price advantage.
At the same time, the streamlined SKU has also brought a higher single-product turnover rate, and it is reported that ALDI's single-product turnover rate is 5 times that of the industry giant Wal-Mart. This high turnover rate can help ALDI centralize procurement, effectively reduce inventory costs, and improve the sales rate of goods.
On the other hand, ALDI has further strengthened its price advantage by actively promoting its own brands. At present, ALDI has 13 key private label brands, and these brands account for up to 90% of ALDI's total merchandise. This is particularly striking compared to the more than 30% share of Costco and Sam's private brands in China, as well as the 35% announced by Hema in November 2022.
The promotion of a large number of private label brands allows ALDI to avoid the additional costs associated with traditional brand marketing, which are often passed on to the price of goods, resulting in higher prices. By reducing these additional costs, ALDI has been able to control the selling price of its products at a relatively low level, while still maintaining the quality of its products.
The core competitiveness behind streamlining SKUs and private brands is inseparable from ALDI's in-depth restructuring and management capabilities in the supply chain.
When ALDI first entered Shanghai, it relied on goods such as wine and food shipped from Australia because it is a mature source market close to China. However, over time, ALDI has successfully transformed and now more than 80% of its suppliers are from China.
The close cooperation with local suppliers, especially the OEM manufacturers of first-line brands, has realized the direct supply model from manufacturers to end consumers, effectively shortening the intermediate links in the supply chain. Through the continuous optimization of the supply chain and production process, ALDI has realized that small packages on key products can also reduce prices.
For example, the 9.9 yuan liquor jointly launched by ALDI and Qinyuan Spring Liquor in Sichuan Province has achieved low prices and maintained low profits by optimizing the supply chain and production costs, and the "super value" series of shredded pork jerky priced at 11.9 yuan is the result of the in-depth cooperation with a large factory with a complete industrial chain after visiting and inspecting a number of factories in Jiangsu, Zhejiang and Shanghai. In terms of the procurement of small walnut kernel products, ALDI's procurement team went deep into Lin'an, the capital of pecans in China, and after several rounds of testing and comparison, finally selected a manufacturer with a whole industry chain from planting to processing.
At the same time, ALDI has demonstrated excellent supply chain synergy capabilities in inventory and logistics management to ensure the timely and stable supply of goods.
In the management of warehousing and logistics, ALDI shares sales data with suppliers. This data sharing significantly improves supply chain transparency and efficiency, not only giving suppliers real-time visibility into sales, but also allowing suppliers to more accurately predict changes in market demand when combined with market trend analysis.
Through this accurate forecasting, ALDI also effectively reduces the risk of overstocking, thereby reducing the capital tie-up and product depreciation losses that may result from excess inventory.
But now in front of ALDI, other retail companies are also learning its "hard discount" skills, and have expressed their determination to "low prices".
For example, in 2021, Hema launched an outlet store, which sells a large number of cost-effective products and expiring products, attracting consumers with a 5% discount price, which marks the shift from the traditional soft discount strategy to a more direct hard discount model. Dingdong also quickly followed suit and launched its own outlet store, expanding the competition of fresh food retail to the emerging format of discount stores.
For ALDI, which has only been in the Shanghai market for five years, it is difficult to compete with local retail companies such as Hema and Dingdong, which have been deeply involved in the Shanghai market for many years, in terms of store size and the depth of the local supply chain.
How to maintain its unique brand positioning and competitive advantage in the increasingly competitive retail market is the next issue for ALDI to consider.