Fuping Cloud Merchant, Yonghui's "After-Move"

Source: Third Eye Retail Author: Zhang Siyao

Recently, the announcement that Yonghui CEO Li Guo was transferred to the chairman of Yonghui Fuping Cloud Business Supply Chain attracted the attention of the industry, which also triggered a discussion about whether Li Guo was simply demoted or reused. The key to the determination lies in the position of the Fuping cloud business supply chain in the Yonghui system.

"The Third Eye on Retail" learned that Fuping Yunshang Supply Chain Management Co., Ltd. was established in 2015 with a registered capital of 200 million yuan. The company is wholly owned by Yonghui Supermarket Co., Ltd., with 26 subsidiaries covering Guangdong, Chongqing, Gansu, Shanghai, Fujian and other provinces and cities across the country. According to the official, the Fuping Cloud Business Supply Chain is to deepen the construction of the fresh source, build the middle platform of the supply chain, and focus on the procurement, packaging and sales of large items at the source.

Although compared with Yonghui's well-known supply chain platforms such as Color Food Fresh and 1233, Fuping Yunshang Supply Chain only entered the industry vision with the announcement of Li Guo's transfer. But in fact, the importance of the latter within Yonghui is greater than that of the former. Its predecessor is "Yonghui Cloud Business Technology Co., Ltd.", which was once one of the four major business clusters of Yonghui, and there is also a consensus within Yonghui that "technology and supply chain will be the two fundamentals of future retail competition".

"The Third Eye on Retail" believes that digitalization is not Yonghui's medicine. So, what is the real "prescription" for Yonghui's transformation? The answer, of course, is supply chain. That is to say, while betting on the strategy of technology Yonghui, Yonghui also has the after-move of Fuping cloud business supply chain.

For Yonghui internally, the Fuping Cloud Business Supply Chain assumes two important functions. The first is to do a deep fresh supply chain through territorial procurement and source procurement; through the development of excellent commodities through "one village and one product", so as to go deep into the upstream of fresh food and improve operational efficiency and commodity advantages. The second is to gradually promote the reshaping of the category structure, the supplier introduction/exit mechanism, the unified settlement of farmers' APP, and the construction of fresh metering middle office, until the completion of the supply chain middle office construction and application.

This is also one of the three directions that Yonghui will focus on in the future, that is, to establish an efficient and clean team organization in the "gray zone" of the supply chain link, and to deepen the standardization construction into the source of the supply chain through technical, data- and organizational structure, performance system construction, thereby improving efficiency. It should be known that for a retail company with annual sales of more than 40 billion yuan in fresh and processing business, even if the cost is reduced by 1%, its income is at the level of 100 million yuan.

At the same time, Yonghui did not give up the platform concept of developing in the To B model. Fuping Cloud Business Supply Chain is an important carrier of Yonghui's plan to export fresh supply chain capabilities, and its vision is to "become the preferred fresh supply chain smart platform for customers". For example, yonghui's current promotion of farmers (rural cooperatives) information collection, farmer information archiving, farmers' APP fee direct payment and other actions are to improve the underlying construction, promote agricultural industrialization and market-oriented development, and thus enhance competitiveness outside the retail business.

According to its financial report, Yonghui plans to pull through the supply chain, operation, marketing and the three to strengthen the operation system, to achieve 70% domestic sales, 30% export sales, and 80% of the purchase of local products.

As for why Yonghui, which originated in Fujian and established a new headquarters in Shanghai, will register its core supply chain company in Fuping, Shaanxi. According to a Fujian business insider, this should be out of policy considerations such as responding to the call, so the importance is more prominent.

Change of industry to "wholesale"

Team, mechanism, technology first

There have been two important changes in the Fuping cloud business supply chain. Once in March 2017, it was renamed from "Yonghui Yunshang Technology Co., Ltd." to "Fuping Yunshang Supply Chain Management Company"; once, in October 2020, the industry of Fuping Yunshang Supply Chain Company was changed from the previous "department store retail" to "wholesale". These two changes reflect Yonghui's re-characterization of Fuping Cloud Business Supply Chain, which directly affects the future business direction.

Around 2018, Yunshang is one of the four major business clusters of "Yunchao, Yunshang, Yunchuang and Yunjin" within Yonghui. According to the internal definition of Yonghui at that time, the background support such as fresh global trade, food 100 global trade, clothing department, color food fresh and logistics center was coordinated by the cloud business cluster. Among them, fresh and food 100 global trade belongs to the team system formed by Yonghui for the iterative supply chain, and platforms such as clothing department and color food fresh are the main business directions of Yonghui. It can be said that this was an important basis for Yonghui's plan to transform into a food supply chain company at that time.

In the fresh global trade and food 100 global trade, its own brand development, source customization direct procurement, and characteristic brand agency were its main businesses that could be seen at that time. According to Yonghui's official information, it optimizes its supply chain system from five aspects: product development planning, channel comprehensive construction, brand marketing, supply chain operation diversification and team structure reorganization.

In contrast, with further development, the business scope of cloud business has become more focused. The obvious change is that the color food fresh originally belonged to the cloud business cluster. However, according to a former head of the color food business, the current color food fresh and Fuping Cloud Business supply chain belong to a parallel relationship.

So, what is the current Fuping cloud business supply chain doing?

"The Third Eye on Retail" learned that it mainly has three major businesses: one is to promote the construction of fresh sources and excavate the resources of the production area in the mode of agricultural planting and direct procurement at the source, so as to provide product support for domestic sales and export sales in various places; the second is to develop its own brands represented by "Yonghui Farm" and "Tianqu", covering five major categories of fruits, vegetables, meat and poultry, aquatic products and dry goods; the third is to set up warehouses in multiple production areas across the country for the collection, storage, packaging and packaging of commodities. Through the construction of the digital middle office of agricultural products and the ability of the logistics system, the barriers of geographical difference, seasonal difference, price difference and information difference of fresh products are broken.

"In fact, since last summer, Yonghui has focused on the layout of The Fuping supply chain. It has carried out large-scale personnel changes, transferred a large number of excellent fresh procurement to Fuping, carried out front-end origin procurement, mid-end logistics maintenance and terminal sales (to B business), opened its doors in large-scale vegetable, fruit and aquatic wholesale markets in many provinces and regions, and faced with the supply of second-batch merchants or other small and medium-sized local supermarkets. An industry insider said.

With the transfer of Yonghui Supermarket CEO Li Guo to the chairman of Fuping Cloud Business Supply Chain, it can be seen that Fuping Cloud Business Supply Chain is Yonghui's current key project. Behind this, Yonghui has also made a number of changes from the aspects of team, mechanism and technology. As Zhang Xuansong, chairman of Yonghui Supermarket, said at the performance briefing, "When the impact of external factors increases, the Yonghui management team should carry out transformative management, which is change, not reform." ”

For example, Yonghui will focus on building a national fresh operation system in 2020. It has completed the organization and construction of the provincial fresh operation department and the store fresh manager, sorted out the responsibilities and synergy between the fresh food manager and the store manager, the fresh district assistant, and the provincial operation, and the business division; carried out the inventory of fresh talents in the supply chain (100% of the talent inventory coverage rate of high economic and above talents), and at the same time promoted the talent training mechanism, introduced talents with high education and operational experience to the platform supply chain training; realized the establishment of the provincial operation department, the establishment of the store fresh manager organization, and continued to cultivate "fresh sellers" And to the front line to send 304 sellers.

In order to form strategic partnerships with suppliers, establish a flexible supply chain system. Yonghui and the category business department jointly promote the reshaping of the category structure, establish the "Supplier and Commodity Sourcing Introduction Mechanism", improve the supplier online exit operation process, implement the business operation risk early warning report, etc., complete the national unified settlement business of fresh food and gradually promote the construction of the fresh metering middle office, so as to promote the construction of the middle office of the supply chain.

"Generally speaking, the country's top retail enterprises are waiting for suppliers to come to the door to talk about cooperation. However, Yonghui did a job in 2020, taking the initiative to visit mainstream manufacturers and industry leading enterprises across the country, and finally promoted 13 strategic cooperation manufacturers. An industry insider told "The Third Eye retail".

Reach out to the farmer level

Promote the concept of platformization

"Li Guo is from a physical retail background, which is not suitable for Yonghui Supermarket, which focuses on the development of science and technology and digitalization at this stage." Sending him to the supply chain is actually something he's good at. An industry insider close to Yonghui commented.

Taking stock of the planning made by Yonghui on the fresh supply chain platform, the current Fuping Cloud Business Supply Chain is one that is closer to the source of the industrial chain. For example, the 1233 supply chain platform adopts the S2B model to operate, covering the three core businesses of domestic trade fresh food, domestic trade food, import and export, hoping to provide the demand side with comprehensive supply chain services such as global commodity docking, joint procurement, warehousing and logistics, payment finance, link marketing, quality control traceability and data empowerment. Relatively speaking, the matching transaction attribute is stronger.

The color food fresh is mainly based on standard fresh, semi-finished ingredients and other categories, and suppliers are still needed in the previous procurement link. The relevant person in charge of color food fresh said in an interview with the media, "Fuping Cloud Business Supply Chain once supplied color food fresh. After the closure of the new outbreak last year, we purchased from the Hebei base and the Shandong base and cooperated with the various bases signed by Yonghui, of which yonghui supply chain accounted for a high proportion. ”

It can also be seen that Yonghui's playing style in the supply chain belongs to the layers of progress, until it goes deep into the source of agriculture. On the one hand, this is conducive to Yonghui expanding the scale of procurement outside the retail business, so as to obtain more bargaining power upstream. On the other hand, considering Yonghui's open platform concept, having the color food business first can also help Yonghui explore the business model and appropriate playing method of To B supply.

"The Third Eye on Retail" learned that the source procurement of Yonghui's supply chain has been docked to the level of farmers. The difference is that most of the base direct procurement referred to by general enterprises is in cooperation with the "agent", who receives the goods door to door and provides them to the enterprise for procurement after appropriate mark-ups. By building a unified payment mechanism for farmers' APP, Yonghui is equivalent to removing all intermediate links and becoming a circulation node in the fresh industry chain.

From the perspective of Yonghui Supermarket, if the above-mentioned degree of deep source is successfully implemented, it can help Yonghui truly grasp the supply chain link. Then whether it is in removing the "gray area" of procurement, or improving the efficiency of the supply chain, resisting cyclical changes in prices, stabilizing the supply of goods, and making differentiation, it is conducive to Yonghui to differentiate.

For example, Yonghui Tianqu Rice signed a strategic cooperation agreement with Beidahuang Group, starting from the source of the industrial chain, through the selection of seeds and soil testing, planting supervision, standard formulation, special storage, special order processing, brand promotion, terminal services and other links, to achieve order planting full-link traceability control, which is conducive to building Yonghui's own brand barriers. Rather than simple OEM.

In terms of platform development, Fuping Cloud Business Supply Chain has set up branches in 26 provinces and cities, starting from the source of large single product procurement. This is equivalent to Yonghui going deep into the source of agricultural product planting nationwide and promoting the development of agricultural industrialization. Considering that there are no head enterprises in this track at present, if Yonghui will establish a foothold in the country's major agricultural product production areas, it may become a mainstream supplier of fresh agricultural products in the future.

Compared with some supply chain startups, Yonghui's advantages lie in its fresh specialization ability and the logistics warehousing supply chain and talent base that has been built for many years. Yonghui system orders will also provide a large proportion of support for the Fuping cloud business supply chain, so that it can quickly enter the stage of large-scale development. However, Yonghui's identity as the main body of the retailer will also restrict the development of The To B business in Fuping Supply Chain to a certain extent. Third-party retailers' concerns about data security are a major constraint.

Moreover, there are not a few companies that want to do this. Internet giants including Pinduoduo, Ali, and Meituan have laid out agricultural terminals. It can be seen that this is not only an opportunity track for industry consensus, with multiple advantages such as business increment, policy support, and platform possibilities; it is also a Red Sea market with increasing entrants, which requires enterprises to compete in many aspects such as business layout, financial strength, brand influence and government resources. 【End】