After opening the whole scene business and comprehensive integration of the supply chain, Carrefour, which is full of vitality, is making efforts to facilitate the home business. From the beginning of 2020 to now, Carrefours daily average single volume from Suning e-commerce channel has grown by 60% on a month on month basis, and the daily average single volume in Suning Xiaodian channel has increased by 202% on a month on month basis. By the end of this month, Sunings own channel Carrefours one hour reach unit volume is expected to account for 30% of Sunings overall online unit volume.
Solve the problem of merger and acquisition integration
On June 23, 2019, Suning e-commerce announced that it plans to invest 4.8 billion yuan to acquire 80% of Carrefour Chinas shares. Such a major acquisition is hailed by the market as a milestone event of the online and offline integration development of the domestic retail industry.
According to the public information, Carrefour China officially entered the Chinese mainland market in 1995. It has 210 large-scale comprehensive supermarkets and 24 convenience stores in China, covering 22 provinces and 51 large and medium-sized cities, and has about 30 million members. In 2018, Carrefours business revenue in China was close to 30 billion yuan, ranking among the top 100 fast moving consumer goods (supermarkets / convenience stores) chains in China in 2018. Affected by the impact of the Internet, offline retail operations are in trouble, Carrefour China has also experienced periodic operating losses.
In the face of the decline of market share and periodic operating losses, will Carrefour China become a burden for Suning after its acquisition and incorporation into Suning system? The market once expressed concern.
Referring to the original intention of purchasing Carrefour China, Tian Rui, CEO of Suning Carrefour, said in an interview with the Securities Daily, at that time, it was very important for us to strengthen the whole fast-moving sector and complete the layout of the scene business.
Tian Rui told reporters that Carrefour has its own historical precipitation in the fast-moving supply chain after operating the Chinese market for 20 years. In addition to the members, Carrefours outlets are all over the densely populated business circles of the first and second tier cities in China. The model of shopping mall + shopping mall around Carrefour is just suitable for the layout of the whole scene and multi industry development in Suning.
The integration after M & A is the biggest problem of M & a success, especially the integration of personnel and culture. On February 25, 2020, Suning e-commerce held a conference call for analysts, which attracted 110 investors from home and abroad. In this conference call, some investors asked Tian Rui about the integration of Carrefour and Suning in terms of personnel and culture after the merger.
Since joining Suning smart retail market in September 2019, Carrefour has gradually completed smart upgrading in digital empowerment, supply chain integration, double line operation and other aspects through the digital transformation of Omo integration.
Now Carrefour has been completely localized. As a new community life center, Carrefour has been deeply integrated into the whole scene, all channels and all industry system of Suning. After a quarter of running in, Carrefour broke the curse of loss and achieved the first single quarter profit in the fourth quarter of 2019 in nearly seven years.
Convenient home business
Affected by the novel coronavirus pneumonia, house has become the norm of residents life. In order to reduce the frequency of going out, online purchase of necessities for peoples livelihood has become the choice of many consumers. Therefore, the prevailing house economy further promoted the convenience of home service.
Professor Cui Lili, executive director of the E-commerce Research Institute of Shanghai University of Finance and economics, is not only an industry expert but also a regular customer of home business. Speaking about the development status of home business, Cui Lili told reporters, in the special situation of the epidemic, consumers have to try all the applications that can provide online purchase and offline real-time delivery in order to meet the needs of daily life under the protection. The online performance ability of the supermarket has a great impact on the user experience. It can be said that the epidemic has given mass consumers the equal opportunity to vote for each platform with their feet.
When it comes to Carrefours home business, Cui Lili told reporters that during the outbreak, the demand for home business in supermarkets increased dramatically, and there was a large space for the development of home service. Carrefours joining not only enriches the business form of Suning system, but also increases the coverage of outlets. The mode of online and offline single warehouse house matching can better increase the floor efficiency of Carrefours offline stores.
During the interview, the reporter learned that relying on the layout of the front warehouse of 209 stores and the urban core business district, Carrefours home service can not only meet the demand of one hour for users within 3 kilometers, but also recently expand the scope of local distribution to 10 kilometers, providing 3-10 kilometers of local distribution for half a day. During the epidemic period, with the help of Sunings own traffic import, the order volume of Carrefour home businesss own platform, including Carrefours small program, Suning e-commerce and Sunings small store, increased rapidly.
From January 24 to February 8, the order volume of Carrefours home business in 209 stores in 51 cities increased 3.5 times month on month. On February 21, Carrefour launched the home promotion activity. On that day alone, the home order volume of 209 stores in Carrefour increased by 597% year on year, 165% month on month, and the average customer price increased by 89% year on year.
The home business is a very important business module of Carrefour in 2020. Basically by the end of this month, the proportion of Carrefours one hour orders from Sunings own channels can reach 30% of Sunings total online orders. For this data, Tian Rui expressed great confidence.
Carrefour China still has a good brand awareness in China. If the operation ability of online home can be further improved, I believe there is still room for further increase in future revenue. Cui Lili said.