This "shouting" did not set off a hot discussion like last time, and there was no public report. However, some market participants forwarded the "propaganda" content to the Business Observer for a small-scale exchange.
In recent days, business observers have been thinking about where the future of fresh food lies, whether it is platform fresh food or self-operated fresh food. Who can get through both? Or, who can make the market bigger?
Recent publicity about the fresh track.
Three years ago, the clamor about takeout.
one
unnormalized
Before discussing which model is better, let's first understand some basic characteristics of fresh food.
The operation characteristics of fresh food are short-term and fragile, and it has the shortest supply radius and the smallest need supply radius among all commodity categories.
This has led to the localization and localization of fresh food. Except some fruits, root vegetables, frozen aquatic products, etc. It is difficult for other fresh products to be directly transported to consumers at low cost and long distance.
Fresh food with high frequency and low gross profit means that gross profit can be higher, but low unit price and high loss lead to low gross profit. For example, even if the gross profit rate of a single 2 yuan dish is 50%, the gross profit rate is only 1 yuan.
Most importantly, there is no standard for fresh food, at least in the current industrial environment in China. Business observers disagree with Hou Yi's statement that fresh food is the standard.
Because from the practical point of view, it is precisely because of the irregular characteristics of fresh food that it is difficult to develop on a large scale. The standardization cost of fresh food is too high and needs a lot of money. It is precisely because of the non-standardization of fresh food that the management of fresh food is very difficult, and often there will be "uneconomical scale".
Therefore, after decades of development, no particularly large enterprise can do standardized fresh food through independent operation.
Take management difficulty as an example. Even if a fresh product is sold in standardized packaging and boxes, it may look similar in appearance, but it is actually different, and the procurement cost can be much worse. The key is that there is no way to compare the freshness of different procurement costs.
Like retailers, when the fresh food business develops to a certain scale, it often faces a big bottleneck at the management level, and there will be a situation where the gray space is too large and the front end is "not locked". On the surface, it may be a problem of attracting investment and chain operation. But the essence is actually a procurement problem, and the "root" lies in the non-standard characteristics of fresh food.
How did the non-standard characteristics of fresh food come from?
In addition to the characteristics of the category itself, such as short shelf life and easy damage, a freshness is a price, and the freshness performance of fresh food is different every day.
In addition, agricultural production in China is very scattered, and the permanent population in rural areas exceeds 500 million. This also leads to the irregularity of the initial planting end. Different seeds, different planting techniques, different infrastructure such as logistics, different soil conditions and different geographical and climatic environments in different regions of China. The countryside is a natural economy, and the scattered lifestyle of small farmers has also led to a lot of information asymmetry. Wait a minute.
In the past, we often saw the news that agricultural products were unsalable and the prices fluctuated greatly, partly because of the scattered agricultural production and asymmetric information.
But there is also a misunderstanding, that is, there will never be demand for high-quality agricultural products, and Ningxia Tan sheep and Caobian cattle, including "running chickens" produced in JD.COM, can't be bought.
It is also a "face-saving" thing to buy quality fresh food for relatives and friends. How can it be unsalable? In fact, I am not worried about sales.
Slow sales are often caused by poor quality or poor transportation infrastructure. In the past, everyone used to help sell unsalable fruits and fresh food through WeChat friends circle. Nowadays, fewer and fewer people are helping to sell unsalable fresh food in the circle of friends. It is a shame to recommend sales to friends because of poor quality. The failure of logistics performance leads to the failure of fresh delivery, which can not only help people, but also easily offend people.
Therefore, the irregularity of fresh food is the backwardness and irregularity of the whole industrial chain. From seeds to seedlings, planting, warehousing and logistics to retail distribution.
Fresh is not a standard product.
Even on the consumer side, fresh consumption is not standard.
People in China don't eat cold meals, but eat hot meals three times a day. The eating habits of hot meals have led to the diversification and rapid changes of China people's eating tastes. The imbalance of economic development, the traditional rural natural economy (solving employment) and the eating habits brought by different climatic environments have become unique everywhere, which in turn leads to huge differences in regional consumption. Therefore, compared with developed markets, China's consumption habits are more "scattered" and irregular.
two
platform
Let's talk about the characteristics of freshness first, and then talk about the mode of freshness.
There are two existing fresh-keeping modes: platform mode and self-operated mode.
Let's talk about the platform mode first.
It can be said that the platform model is the only successful model for fresh retail in China, especially for fresh e-commerce.
The vegetable market is a platform model (integration of small merchants), and the offline hypermarket is also a platform model in the early days (joint venture, non-self-operated). The most successful online fresh-keeping is Pinduoduo, or the platform model.
Why can the platform model become bigger when it is fresh? What are the advantages?
Business observation believes that there are four main points.
1, the supply and demand ends of fresh consumption are scattered, the foundation of intermediate circulation and performance links is weak, and the business entities are also scattered. This has led to this track becoming the world of individual merchants.
Moreover, the platform model has strong adaptability and high efficiency in matching supply and demand. If there are only a few buyers and sellers in the market, there is no need for a platform.
2. The nonstandard characteristics of fresh food make it easier to differentiate, and consumers are willing to accept new things in the case of diversified diets, which increases the space for differentiation.
Self-employed individuals are flexible in operation, with strong sense of responsibility and high integrity, and it is easier to play the differentiated value of fresh food. Therefore, a large number of self-employed people can survive in the market. The platform model can load a large number of merchants, amplify the differentiated value of fresh food, attract a large number of users, and then increase the transaction volume.
3. The dispersion of fresh food also leads to unstable supply and poor upstream delivery and stocking capacity.
In the fresh market, it is actually no problem to make a high order. Promotion can get higher orders. The problem lies in the supply side, the presentation side, and especially the supply side. Upstream enterprises are generally small in scale, do not have stable stocking and shipping capacity, and cannot meet the high order volume or promotion demand.
At the same time, the limitations of the supply side also lead to the consumption of energy and manpower in the game and negotiation.
For example, if a supplier has the processing and shipping capacity of 654.38+10,000 pieces per day, then it only has the production capacity of 654.38+10,000 pieces, and it is impossible to make a higher quantity. If you want to promote sales, you have to make 200,000 orders that day, and the upstream can only supply 6,543,800+copies. In this case, if the supplier knows that you want to make a big push, the supply price may rise, and products of various quality grades will be supplied in mixed batches, because he knows the localized fresh food market, and you have no other supply channels to meet the demand for order quantity.
In this case, the platform model has more advantages than self-management, because it can put all small businesses in, turn massive suppliers into massive retailers, and then connect massive users for efficient matching. Then a large number of suppliers aggregate the supply capacity of different specifications and then match a large number of users, and the order volume can be higher. Suppliers (becoming retailers) set their own prices and supply their own goods, which also saves a lot of games and negotiations. On the contrary, we can do a lot in quantity.
The management of the platform is very simple, the organization can be very flat, the digital and standardized infrastructure can be built, and the price and traffic level display and performance process can be automatically managed, which has high human efficiency.
But if we want to control the supply chain and establish standardized and large-scale supply capacity, we need to burn a lot of money.
4. Expanded the value of informatization.
The "monopoly" of Internet platform is mainly the "monopoly" of information. In the field of e-commerce, the platform mode of the Internet mainly focuses on the efficient matching and interaction of commodity information. It is a non-stock (pre-sale) mode, which makes goods online, digital and informationized, and then carries out efficient interactive matching of supply and demand information with a large number of users. This light asset model is very efficient and has a very good return.
But it is very difficult to do this offline. First, limited by geographical space. More importantly, it is difficult to digitize, because offline is a model with inventory. The digitalization and informatization of dynamic spot inventory in stores are difficult, with high investment and complex transformation, but the return value is average. Compared with pure online channels, the return is too poor.
Therefore, in theory, the greater the transaction volume of non-inventory mode, the greater the value of informatization and the higher the return (the gross profit of information and data traffic advertising products is high). Therefore, online is advocating C2M, C2B and sales-oriented mode, and hopes to get rid of fresh spot inventory transactions and full pre-sale. They all follow the platform model and try to amplify the value of informatization.
From this perspective, the ultimate "foothold" of the Internet must be attributed to the strength of the platform. At present, the platform is the most efficient in integrating supply and demand information, and so is the fresh category. Because if you want to make your own fresh food, the value of informationization is limited. (The self-operated products are limited, the service user base is limited, and the transaction volume is greatly affected by time and space restrictions. )
These are the advantages of the platform model, but the platform model also has some challenges.
The core issue is cost coverage.
The gross profit of fresh food is too low, the loss is too high, it needs more manpower to take care of it, and it needs a high-cost cold chain performance environment.
This leads to the platform model is very fresh, but it can't cover the cost. (The gross profit is low, and the platform has to draw commission. )
One of the core reasons why the vegetable market can make a big difference is that there are government subsidies.
The past joint venture model of offline supermarkets is also successful, but its profit does not directly come from fresh food.
Supermarkets gather passengers by outsourcing fresh merchants, and then make profits by realizing traffic. The profit model is actually the profit model of commercial real estate. (Fresh-gathered passenger flow is converted into buying high-margin goods to gain profits, as well as collecting advertising income such as entrance fees and shelving fees, and subletting rents for shops facing the street).
In the later period, because of the continuous diversion of electrical appliances, clothing, fast-moving labels and other businesses, the non-food business can no longer be done, and the gathered fresh food flow has no place to be realized, so it changed from joint venture fresh food to self-operated fresh food.
This leads to the transformation of supermarket's self-operated mode to make fresh food, and the fresh food category should be able to directly generate profits and fill the performance, not just a "drainage tool".
After all, in the past, the gross profit of fresh food through joint venture platform was very low, and many fresh food businesses were unprofitable.
However, there is also a big problem in the transformation of supermarket's self-operated fresh food, because everyone is transforming, which leads to fierce competition and the ability of fresh food to attract customers continues to decline.
Although the transformation of self-operated fresh food has supported the performance growth of hypermarkets in the past five or six years, the performance of many enterprises can stabilize and achieve growth, and the core kinetic energy is fresh food business. However, when everyone strengthens fresh food and does fresh food online and offline, supply and competition also increase, resulting in a decline in customer appeal.
Therefore, from the perspective of the development of hypermarkets, the platform fresh-keeping mode makes hypermarkets chain, and the transformation of self-operated fresh-keeping mode has played a role in stabilizing performance. However, with the intensification of competition, it seems difficult to continue to grow in a self-operated way.
The threshold of freshness is too low, and differentiation is relatively easy to do. A large number of individual small businesses can do it. With so many competitors, it is difficult to make fresh food by self-employment.
Then came the peer-to-peer platform model in Pinduoduo, which did not compete directly with small enterprises and self-employed. Instead, put small enterprises in the platform and let small enterprises compete with small enterprises. The platform formulates rules and obtains huge transaction volume and data.
Pinduo has grown up. It has been verified that the platform model is still the best trading model in the fresh e-commerce market, and it can carry the largest trading volume like the offline vegetable market.
But Pinduoduo, like the offline fresh platform, also needs to cover the cost.
Fresh and low gross profit does not make money, and it is difficult for the platform to extract much commission from it. To get a high commission, businesses may all run away, but it is impossible to "monopolize" fresh food (it is impossible for a single Internet company to monopolize commodity information, and it is impossible to "choose one from the other").
Then, can the flow of fresh gathering be profitable through other categories and make money through traffic advertising, just like the hypermarkets in the past? Can you grab some digital advertising market from Ali and JD.COM? Is one of the keys to the future.
Another key point is that most categories of fresh food are localized business categories, which are short-lived and fragile. Therefore, it is very limited to make a fresh platform through online B2C. Such as meat and leafy vegetables, it is difficult to operate and does not support the performance end (the three-day performance limit cannot meet the demand and the performance cost is high). Therefore, Pinduoduo is also doing the mode of community group buying platform, and cutting into the local fresh product management.
In theory, this road can continue to increase the trading volume of the fresh platform, but it will also increase the financial pressure on the platform.
three
Independent operation
The self-operated model is fresh. At present, the advantages are mainly reflected in four points.
1, which can be better distinguished.
Self-operated fresh food can better export standards and processes to the upstream, which is conducive to better differentiation. Enlarge the differentiated value of fresh food.
2. Improve the quality.
Depending on the supply situation of traders, the quality of supply is not stable. And self-control business process, especially upstream, can make fresh quality better by making origin.
3. Dig deep into the profits of the industrial chain.
Self-control process, reducing handling and circulation links, is helpful to de-intermediation and tap the profits of industrial chain.
4. Reduce information asymmetry.
Self-control supply chain, you can know the floor price only when you go to the place of origin, and it is more difficult to know the fresh floor price by relying on the supply of traders.
Fresh products have the characteristics of high frequency, scattered supply and demand, asymmetric information and large daily price fluctuation.
The challenge is:
1, the competition is fierce.
Due to the low threshold of fresh food, scattered supply and demand, fierce competition. At present, corporate management often cannot compete with self-employed individuals. The self-operated mode of fresh food is not particularly large, and the bottleneck is obvious when it reaches a certain scale.
2. It is difficult to manage.
Fresh non-standard can't be compared. Fresh purchasing non-standard products has always been the death hole of self-operated fresh retail companies.
First of all, all corporate incentives are more profitable than direct corruption.
For example, many online companies are also doing self-operated fresh food. The original slogan is that the Internet is digital and transparent, which can put an end to corruption. However, major corruption cases have also occurred in these online self-operated companies (not made public). Some "subjects" are also relatives and classmates of the founder.
Fresh non-standard can't be compared, and the "supply price" has too much room for change.
The fresh-keeping operation ability, profit and customer attraction of many fresh-keeping retail companies are declining. On the surface, it is a front-end operation problem, but the essential problem is procurement.
Some market participants believe that buying fresh non-standard products is a dead end in the hope of winning the market's self-operated model through the advantages brought by large-scale quantity. The "quantity advantage" is simply not reflected in the face of the high investment (more efforts, careful selection and purchase) and high integrity of a single merchant.
Therefore, it is often said in the market that fresh food management is "uneconomical in scale". It is more obvious in the case of cross-regional expansion and rapid development.
3. Great investment.
Because there is no standard for fresh food, it needs to invest heavily in standardization to produce scale effect. From planting to circulation to retail.
"Business Observer" believes that this can not be completed by a single enterprise, and it may be a trillion investment.
4. The price will be more expensive.
For example, if a supermarket only has a life cycle of 100 months, at which stage do you think the fresh sales performance of this supermarket is the highest?
Some market participants said: "The sales performance was the highest in the first month of opening, and then it declined month by month. Because the supplier gives you the lowest price in the first month, because when developing new customers, the supplier will give you the lowest supply price. So, do you expect suppliers to become cheaper and cheaper? Impossible, it will only get more and more expensive. "
5. The labor cost is cheap.
Because of the low labor cost in China, there are a large number of people who grow and sell vegetables. Investment in automation equipment can produce efficiency value and cost advantage, which is often not as good as "manual workshop".
The "exit" of large vegetable vendors is a long-term thing.
Therefore, from the above advantages and challenges, the self-operated mode of fresh food often represents "correctness", but in practice, the bottleneck is great, and few enterprises can make fresh food particularly large by doing self-operated fresh food.
Compared with the platform model, the trading volume of the self-operated model is completely different.
What does this mean?
The current self-operated model is definitely not the future, and it is definitely necessary to find ways to cover the gray space in the big mechanism in order to further break the game and break through the bottleneck of development.
Judging from the current development of large Internet companies, everyone is running and trying.
Ali and JD.COM are comprehensive, and they make a "platform+self-management" model.
Pinduoduo and Meituan mainly do pure platform mode.
In the darkest moment, you need a pair of eyes to catch the light.
But more importantly: forbearance.
Many times, failure is not because you can't find the direction, but because you can't get to the end.
In the fresh retail market, every track is struggling.
For upgrading and growth, for overcoming difficulties, for market share, for opponents, and for breaking through self-limits.
Endure is painful, but if you can't endure it, there will be no future.
The 200214th China Fresh Retail Conference sponsored by Business Observer will be held in Shanghai from September 22nd to September 24th.
At this conference, we will focus on how to endure, how long and how to endure.
The first phase will be held for a period of time, and people in the fresh retail industry are welcome to share their wisdom.