Where is Yichu Lotus?

Can Yichu Lotus bloom all over China?

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-"Subheavyweight" foreign retail enterprises have also started a crazy "enclosure movement" in China, because they think they can at least play the role of "queuing for others", and their position in the team will determine the final "commission".

-On September 25th, outside the central gate of Nanjing, a large number of articles covered with military canvas were piled up in the open air along Jianning Road, and the warehouse of the goods factory next door to the West Railway Station was also heavily guarded. There are 20,000 to 30,000 barrels of oil and hundreds of tons of rice piled up here, and dozens of workers are busy nervously in the sound of walkie-talkies.

It's like a military rally, just for the opening of a new supermarket on September 26th. At the same time, supermarkets such as Carrefour, Xinyijia and Times in Nanjing are also threatened, and various price reduction methods attract shoppers to queue up, bringing a "pre-war" atmosphere to Nanjing retail industry in autumn.

These are some scenes that happened in Nanjing on the eve of the opening of China No.20 Store of CP Lotus. Lotus Lotus is a retail enterprise under Zhengda Group, and Chinese people are no strangers (Zhengda Group ranked 329th among the top 500 companies in the world in 2002). Yichu Lotus first entered China on 1997, and has opened 19 chain stores in Shanghai, Hangzhou, Nanjing, Han and Guangzhou. This is the first time that Yichu Lotus has entered the Jiangsu market.

-At the beginning of 2003, Lotus obviously accelerated the speed of opening stores in China. On July 30th, 2003, at the Shanghai International Procurement Fair, CP Lotus announced that it would invest 100 billion yuan to open 100 stores nationwide in the next two to three years. In the following 60 days, CP Lotus 18 Shandong Taian Store, 19 Tianjin Store and 20 Jiangsu Nanjing Store opened one after another. It is said that the target of opening stores of Lotus in Yichu before the end of 2003 is 24. This is obviously an amazing speed in the whole retail industry in China.

-Not a multinational company.

-CP Lotus is not a multinational retail enterprise.

-1997, Yichu Lotus has worked hard in Thailand for five years, with about 35 supermarkets. However, at this time, Zheng Da Group, the parent company of Yichu Lotus, resolutely sold 80% shares of all Lotus supermarkets in Thailand to Tesco Group, the largest retailer in the UK, and concentrated on developing in China. In the same year, Yichu Lotus opened its first store in China, which opened the prelude for Yichu Lotus to enter the China market.

-Facts have proved the correctness of the fair judgment. In Thailand, Yichu Lotus began to make a profit only when it developed to Store 17, and the profit target has been achieved in the fifth store in China. At present, the annual turnover of Lotus at the end of 2003 is about 5 billion yuan. This achievement is quite gratifying for the development of Lotus itself, but compared with its competitors, it is only a "sub-heavyweight" player at best. Statistics show that at the end of 2002, the annual turnover of Shanghai Hualian Group, Lianhua Supermarket, Dalian Mall Group, Beijing Gome Electrical Appliances Co., Ltd. and Beijing Hualian Group Investment Holding Co., Ltd., the top five retail chain enterprises in China, were 21473 million yuan,1833 million yuan,1279 million yuan and/kloc-respectively. In 2002, the annual turnover of Carrefour, a multinational retail giant, in China alone reached 1 1 billion yuan. From this perspective, it is easy to understand why CP Lotus is so active in the retail market in China.

Zheng Da Group, the parent company of Lotus, is a multinational enterprise founded by Chinese in Thailand, which is a typical family business. Xie Guomin, president of Zheng Da Group, took over a small shop selling rapeseed with an area of only 20 square meters from his father Xie Yichu. Now, Zheng Da has grown into a multinational group with tens of billions of dollars of assets, with subsidiaries in more than 20 countries and regions around the world.

Perhaps it is the unique thinking of the orientals. When managing such a huge industry, Xie Guomin, like most domestic family businesses, pushed his family to the front line of management.

-Xie Hanren, president of Lotus in Yichu, is said to be busy preparing for Xi 'an's new store recently. Xie Hanren is the son of Xie Guomin, and Luo Jiashun, the vice president of Shanghai Yichu Lotus, is the son-in-law of Xie Guomin. Obviously, after Xie Guomin formulated the grand strategy of "occupying the retail market in China" and the actual combat tactics of "one day 1 1,000 stores", this decision-making and execution chain composed of "father and son" can show the highest efficiency.

-Another advantage of Lotus's rapid expansion in China can not be separated from Zheng Da Group. 1979, Zheng Da Group built its first feed factory in Shenzhen Special Zone, becoming the first batch of overseas enterprises to enter the China market after the reform and opening up in China. Since then, it has further extended to livestock and poultry industry, aquaculture and production and processing industry, until the retail industry. Today, more than 20 years later, Zheng Da Group has invested more than 100 in agriculture and animal husbandry projects in China, covering all provinces, municipalities and autonomous regions except Qinghai and Tibet.

-Zheng Da Group has invested in China for so many years, and its understanding of the China government and the understanding of China's business environment is naturally beyond the reach of "foreigners" such as Wal-Mart and Carrefour. When Shanghai first started to develop Pudong, no one in Lujiazui wanted to go. At the invitation of the government, Zheng Da Group invested several billion yuan to develop Zheng Da Plaza, which promoted the development of Lujiazui. After the introduction of the government's "western development" policy, Zheng Da seized the opportunity to let Yichu Lotus invest 20 million US dollars in Chongqing, and quickly established a hypermarket with an area of 20,000 square meters. It is said that there are 5-6 stores in Chongqing alone in its 100-store plan.

-Lotus's best understanding of China's business environment is its settlement system. As we all know, the headquarters of the retail giant Wal-Mart is in Shenzhen, and the branches in other places are under the jurisdiction of the headquarters, and its finance must be settled by the headquarters, which will inevitably lead to the tax revenue flowing from the location of the store to Shenzhen. It is said that this is one of the reasons why many cities are indifferent to Wal-Mart's presence. For example, in Shanghai, in fact, Wal-Mart had already talked about opening a store in Shanghai before Carrefour, but because Wal-Mart insisted on placing the settlement center in Shenzhen, this matter has not been successful, and this delay is eight years. In the latest urban business plan in 2003, Shanghai will restrict the opening of large supermarkets within the inner ring. Obviously, Wal-Mart is inevitably at a disadvantage in the competition of Shanghai retail market.

-Lotus seems to have no idea about all this, and almost all its 20 stores in China firmly adopt local settlement methods. Although the finance is still managed by the headquarters, the settlement is placed at the location of the store, and sometimes a secondary company will be set up for convenience, so that the reputation of Yichu Lotus in the local area is naturally good, and sometimes no one will care too much.

For example, no.4 shop in Wuzhong Road, Shanghai, few people will notice it without careful observation. In fact, this store has two names: Lotus at the beginning of the month and Changfa Shopping Center. And the latter is the use name of industrial and commercial registration. But people will think that this store is the Lotus Store in Yichu.

-"Now that we are choosing land in other places, the local government will give us great convenience and even hold a special investment promotion meeting to let us choose local suppliers." Luo Jiashun, vice president of Shanghai Yichu Lotus, said proudly.

Today, the retail industry in China is in a critical period of gradual opening up. All foreign-funded enterprises have seen the great temptation of the future China market, but they are all constrained by policies and cannot let go. Lotus Lotus, with Zheng Da Group as its background, may just want to make a difference by using its status as a "non-transnational multinational company".

-What's the hurry?

The expansion speed of lotus in Yichu is really amazing. Wal-Mart, Carrefour, Metro, etc. Expansion plans have also been put forward, but no hypermarket dares to increase this speed to an average of 30 stores per year. At present, there are more than 70 "Trust-Mart Discount" chain stores with the largest number of foreign supermarkets in China, but they have been under construction since 1997, with an average of 65,438 stores opened every year.

-The speed of Lotus in Yichu largely comes from its special "setup" organization, which is called the establishment department internally. The preparation office consists of commercial development department, design department, engineering department and other institutions, and its main job is to run around. Because business circles in China attach great importance to geomantic omen, sometimes Lotus simply calls this preparatory department "Geomantic omen group". The president of the integration department of "Feng Shui Tuan" is the vice president of group construction, a veteran who has worked in the group for 30 years, and is honored as Dr. Zheng by employees. Luo Jiashun said, "I will definitely call him Senior."

However, there is no real Mr. Feng Shui in this preparatory department. Generally speaking, the place where Lotus Yichu thinks that "Feng Shui is good" should meet the following standards: First, the location of the store should not be in the commercial center, and generally choose the urban-rural fringe. Because the main product of Yichu Lotus is life, not only the business center is expensive, but also there is no economic benefit. Yichu Lotus Store, located in Zheng Da Square, Lujiazui, one of the commercial centers in Shanghai, can be regarded as a special case, but it is a pity that it is not used because it is its own house.

-Second, we must accurately understand the construction pattern of surrounding residential areas, especially the future pattern. Because we have to consider how high the local consumption power is, and then we have to accurately judge how many stores we need to open.

-The third thing to consider is logistics. Luo Jiashun said: "If we want to deliver goods from our warehouse, do we have the ability to handle it? If so, is there any way to optimize the cost? "

-three items that look so simple have become the book of Feng Shui selected by Lotus in Yichu. According to Luo Jiashun, the fastest record of Lotus in Yichu from site selection to final opening is 3 months. "We think this is an ideal speed." Luo Jiashun said very seriously.

-Why did Yichu Lotus suddenly start to exert its strength after entering China from 1997, and "run wild" all the way? Some insiders analyzed that it was mainly because it saw its superiority over other foreign capitals, and its impact was because in China's retail market, as long as you want to exert your strength, you have to impact.

There is a saying in the industry that stores are densely built around a distribution center, that is, only when the number of stores reaches a certain scale can the distribution center play a powerful role and ensure the price advantage in the market. The investment of this modern distribution center is generally about $80 million, but this distribution center can only show its scale effect when it can support about 150 to 120 stores with a radius of 300 miles. Otherwise, the distribution center will not reduce the cost, but will increase the logistics cost. For example, up to now, Wal-Mart has only set up 28 branches on 9.6 million square kilometers of land in China, and the scale effect of Wal-Mart's distribution center cannot be presented at all. In this way, we can understand why the lotus needs to expand its scale at present.

At present, Yichu Lotus has established a giant distribution center of 50,000 square meters in Shanghai. Full-time responsible for the distribution of daily necessities in many stores across the country, including fresh and daily necessities. Shanghai Yichu Lotus Business Development Department revealed that all logistics details are handled by Yichu Lotus internally and will not be outsourced. This distribution center can serve 18 to 25 stores at the same time. But even the shops in Nanjing and Hangzhou count. At present, there are only 12 stores in the Yangtze River Delta, which is far below the lowest efficiency of this distribution center.

-East China, North China and South China are the key points of lotus layout in Yichu. Coupled with the development of the western region, the four districts-with Shanghai as the center-radiate Guangzhou, Beijing and Wuhan. Considering the scattered suppliers, the expressway system is not so developed, and the idea that the distribution center serves the whole country is unrealistic. Therefore, the distribution center will be built in the above areas. This can just serve all 100 stores.

-Luo Jiashun said: "The money you put into the warehouse is the most valuable in the long run. If I only have four stores now, it is not cost-effective for you to build a warehouse at that time, but if we continue to open, the constant sharing of expenses will definitely help suppliers save money, help us save money and help customers save money. At the beginning of this chain reaction, we can't stay in any link in the middle. "

Obviously, the "enclosure movement" of CP Lotus is preparing for the full opening of the retail industry in 2006. CP Lotus should seize these years to complete its "big appearance" in China, so he set the deadline of 100 store plan within three years-before 2006.

-Chess with "pending function"

Different from Wal-Mart, Lotus is a pure hypermarket, and its development process has been greatly influenced by the diversified development of Zheng Da Group. In the final analysis, Lotus's "enclosure movement" was carried out with the direct support and even planning of Zheng Da Group.

As a giant enterprise that started from a small seed shop in Bangkok, agriculture is still the core industry in Zheng Da. As one of the largest animal feed companies in the world, Zheng Da Group also produces countless agricultural and livestock products such as chickens, ducks, pigs and eggs, and is now one of the largest shrimp producers in the world. Coupled with retail terminals such as CP Lotus, it is obvious that Xie Guomin's business philosophy is to achieve vertical business integration, so that the company can make money from every link in the food chain.

-Luo Jiashun mentioned such a set of data about Lotus's own brand: At present, Lotus's own brand sales account for more than 10% of the store's sales, including food, dry goods, daily necessities and household appliances. Except for a few branded products, most of these products are products of subsidiaries of Zheng Da Group, especially agricultural products.

In fact, Zheng Da Group's agricultural products are the signature products of Lotus. It is said that many customers are most satisfied with two types of lotus containers: fruit and fresh food. As Li Shaozhu, Senior Executive Vice President of Zheng Da Group, said at the Kunming Fair, one of the cores of doing business is to find complementary advantages. China needs to import tropical fruits such as durian and mangosteen from Thailand. At present, the average tariff of fruits and vegetables in Thailand is 60%, while that in China is 20%. More importantly, after zero tariff in the future, those "special fruits" produced by Zheng Da Group in Thailand will definitely have a good landing channel in China.

-Of course, this is the conventional judgment of the early industry on the significance of Lotus to Zheng Da Group. But it may not be that simple. According to insiders, Trust-Mart from Taiwan Province Province is also expanding rapidly recently (opening new stores), because many multinational groups (not necessarily retail enterprises) interested in entering the China market want to establish their leading position in the mainland retail industry in one step, so they told Trust-Mart that when Trust-Mart reaches 65,438+000 stores, they will fully acquire Trust-Mart, so they will "trust-mart".

-Looking back at the history of Chia Tai Group selling 80% of the shares of Yichu Lotus to Tesco Group, I'm afraid it's hard not to make people imagine that when Yichu Lotus completes the "100-store plan" in China in the future, when the policy restrictions of the retail industry completely disappear and everyone starts to "practice real kung fu" to fight for internal strength, isn't Chia Tai Group looking for another company to take over?

-In fact, a large number of "sub-heavyweight" foreign retail enterprises started a crazy "enclosure movement" in China because they knew that they could at least queue up for others, and their position in the team would inevitably determine the final "commission".

-What best reflects Lotus's understanding of China's business environment is its settlement system. Almost all of its 20 stores in China resolutely adopt local settlement methods. In this way, Lotus in Yichu naturally enjoys a good reputation in the local area, and sometimes people don't care too much if they beat the ball.