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China's Experience In Metro, A Retail Giant

2013/9/17 20:33:00 9

In the case of localization, how much can a multinational company achieve? < Metro > China's president, a href= "//www.sjfzxm.com/pioneer/" > He Zhewei < /a > (Uwe Hoelzer) has its own experience. P Metro 
Less than P, one of them is that he persuaded the German management and board of directors far from Germany to agree to let the German company, which has been insisting on self-service wholesale business in the past 50 years, officially carry out the delivery business in China. You can only solve the problem by just going through the name of metro company. Why do you need to go through a lot of discussions at the company's high-level round of meetings? Metro's full name is Metro's Metro Cash & Carry. Its annual revenue of about 32 billion euros comes from the sales volume of more than 700 self-service wholesale stores in 29 countries of the world. Customers purchase their own stores in the form of "Cash & Carry", which is also a business mode of Metro. "Metro" 
Less than P, however, when Metro China formally launched its distribution business two years ago, the current sales service has accounted for about 30% of Metro's overall business in China and increased by 41% over the same period in 2012. 
 do not try to educate your customers /p >
 for He Zhewei and his company, to compete in this "very different" market, one principle is "do not try to educate your customers", which is repeatedly emphasized in various situations inside Metro. 
 for example, in order to win orders for a small restaurant, Metro must be clear that the owner or chef of a restaurant often begins to check the kitchen after closing at 10 p.m., and makes a list of the items that need to be purchased for second days, some of which must be received in the early morning of second days. In the past, Metro had been unable to turn such potential customers into real customers, because Metro employees had been off duty at that time. 
 "sounds silly, but that was the case at that time. If no one can hear such an order phone, there will be no business. He Zhewei said. 
, then, should Metro's sales representatives remind them to place orders during the working hours when they visit their customers? He Zhe Wei got a negative answer from his competitors. 
After P came to China in 2011, knowing the work of his competitors left He Zhewei with some less pleasant experiences. The 2 meter tall German once wore "a href=" //www.sjfzxm.com/pioneer/ "suit" and "/a" and shirts into the wet outdoor wholesale markets, which seemed incompatible with the crowded crowds. However, it is also there that He Zhewei sees the way Metro's Chinese competitors do business - the bosses of the wholesale market will be responsive and courteous to the shopkeepers who come to buy. 
 but the less favorable experience in the traditional wholesale market is also the opportunity for Metro. Metro's competitiveness is being able to provide customers with more value through professional services. For example, designing a monthly menu for the customers of the canteen - a cost standard of 6 yuan per person per restaurant, and metro is responsible for designing a solution, including weekly, daily recipes and ingredients, condiments, tools and so on, usually involving 300 to 400 samples. 
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At present, Metro has 64 stores in China, covering 46 cities in China. < --EndFragment-- > The acceleration of new shops has been very evident in the past two years. In 2012, 12 stores were opened in one year, and at least 12 new ones are planned for this year. Compared to the past 4 years, from 2007 to 2011, Metro only opened 10 new stores in China. 
 the main reason for the acceleration of shop opening is the positive return on business performance. Since entering China in 1996, by 2007, Metro has realized the cost recovery of its initial investment and began to turn the profit into deficit. Another reason is that Metro China has changed the principle of buying land and building shops at first, which is also one of the long-standing principles of Metro in foreign countries. Of course, the value added effect of Metro's initial purchase of land also played a role in making it profitable in 2007, at least relieving the pressure caused by rising property costs. 
 from the global level of metro, Metro Group, which also owns Real chain hypermarkets, MediaMarkt and Saturn electronics stores, and Galeria Kaufhof department stores, is also focusing its efforts on the main business of "ready to buy and sell" business, which is sold in Metro, and its performance is in the past two years, it has sold a supermarket chain store of its molecular company, and Metro's spot purchase and transportation has gained more input and accelerated the opening of stores worldwide. 
Less than P, of course, more and more attention has been paid to the rapidly developing emerging markets like China. In 2012, Metro China's sales reached 1 billion 890 million euros, an increase of 23% over the previous year. 
 if you understand Metro's history and special mode in China, you will see more clearly the changes in the company in recent years, and the path dependence and self breakthroughs behind the changes. 
 in the "ready to buy" mode, Metro's business in the world can be attributed to the B2B type. Customers become Metro members based on their business licenses, and come to purchase by themselves. In 1996, Metro opened its first self-service wholesale store in Putuo District, Shanghai. At that time, it did B2B business in accordance with this model. After 16 years of evolution, the current situation of B2B and B2C accounts for 50% of sales volume has been gradually achieved. 
In order to maintain the professionalism of wholesale customers, Metro will eliminate the sale of goods to individual consumers in the market outside P. And Metro China called the sales revenue of B2C part of the "supplementary consumption of professional customers". 
 "a typical consumer behavior is that the owner of the Chinese restaurant, Mr. Zhang, used Metro to buy rice and cooking oil for business at the weekend, but he also brought home a bottle of imported red wine or olive oil for his family. We should meet the needs of customers. " He Zhewei told the first financial weekly, "but our business model is not like WAL-MART's" Hypermarket ". 
 the company does not intend to invest too much in marketing expenses to attract individual consumers, but it seems to be feasible for companies to do both. 
 you can see the promotional poster of Metro friends at the front of Metro mall. Since 2013, Metro China has been promoting the "Metro friends" membership card that can be processed by any consumer with ID card. The original Metro membership card only refers to the professional customers who identify the company, including the names of restaurants such as "catering" and "enterprise and single business". In the previous year's experiment, this measure brought some new customers smoothly, such as those who purchased Metro value cards as welfare companies. Their employees could only use the stored value cards for one-off consumption in Metro, but through Metro friends membership cards, they were transformed into potential repeat customers in the future. 
 in fact, "can we only focus on one customer group, just like in other countries" is one of the contents that He Zhewei often explains to shareholders in Germany far away. Because we do not understand the Chinese market, the other side has never been able to understand why Metro China can not do pure business to business. "If one of them is missing, it will be difficult for our business to move on." He Zhewei said. 
The final reason for P is that metro should face up to the particularity of the Chinese market and the special needs of Chinese customers, rather than "educate customers and change their behavior". For example, those business customers, which are usually small retailers like small supermarket owners and grocery stores, are best able to "closer" to Metro. "In Europe, this demand is geographically close, and in China, this demand means that they hope you can deliver goods to them, or even put them on shelves." He Zhewei said. If Metro's customer managers ignore this requirement, more salesmen from wholesalers will take the initiative to do it well. 
 jump out rule .
 but for a large company that has acted in accordance with established rules over a long period of time, the real change is not as easy as "putting forward ideas". 
Less than P, for example, the delivery business involving the change of business mode has undergone a process from "spontaneous behavior" to "formalization". Before Metro formally promoted the delivery service to its customers, the distribution demand for an order has always been determined by the shopping malls management team, and the increased logistics and personnel costs here also need to be digested by the mall itself. "There will be a shopping mall reporting and approving process to the headquarters because there will be a cost in the end." Li Jian, general manager of Metro shopping mall in Shanghai, told the first financial weekly of Putuo. 
"P" two years ago, Metro China began pilot delivery business. At present, Metro China headquarters has a delivery department, and each shopping mall also set up a separate delivery department, including the selection of logistics providers to the daily code of conduct, all have unified requirements and specifications. 
 from this year, the HACCP (hazard analysis and critical control point) audit for distribution business has also been incorporated into the assessment indicators of general managers of Li Jian shopping malls. This is a food quality and safety control system, usually in the selection of suppliers, check the distribution center, temperature control in logistics and transportation, shopping malls, storage and sales, and other aspects of food safety. Today, the introduction of HACCP into the distribution standard will mean that Metro's delivery service is also regarded as one of its official business links. 
 He Zhewei said that at present, the delivery business of the company is growing rapidly, and its profit return is also good. "Otherwise, it will not be worth our investment." 
"P >" at present, the domestic demand for delivery is still objective. Delivery services may mean more than just how much sales we can increase, but a part of Metro's customer service. " Li Jian said. As one of the early employees of Metro China, he remembers that when Metro opened its first shopping mall in China in 1996, some star products would be robbed just after they got on the shelves. But as time goes on, you will find that the demands of customers are getting higher and higher. If you do not provide delivery service, you may lose market share in a competitive market. " 
 Metro hopes to make positive changes in response to the market, so He Zhewei has implemented a series of reforms in the company's internal management. 
In the past two years, the mall management team has gradually gained more flexible pricing power. For example, rice, soy sauce and other commodities that are closely related to the daily life of ordinary consumers, Metro headquarters will pick out about twenty kinds, use price comparison system, choose the corresponding competitors including wholesale market, and carry out the price comparison through the third party. Then, each store will use the direct price adjustment to adjust the price of a product, so as to ensure that the sale of people's livelihood commodities, whether for professional customers or individual consumers, has price competitiveness. 
 "the first thing you want to do is to have written responses from headquarters, and now we use more sales tools to decide." Li Jian said, "at the same time, the store manager also has the lower authority of price adjustment, which can flexibly adjust the price according to the actual situation of customers and the varieties of goods purchased. 
 some changes can be achieved by setting specific work objectives, while others are not able to use performance indicators to assess the overall competitiveness of the company. In the first half of 2013, He Zhewei proposed that the Metro China top management team with around 40 people be divided into 3 groups, each group responsible for 3 to 5 existing customers and visiting with the customer manager. 
 the result of a round of customer visits is that the responsible persons of IT, tax and other supporting businesses have gained valuable information in this process, and can help them improve their working methods. On the other hand, those managers who are in the forefront of the market are also able to feedback their needs more easily when they need resources support because of their participation in such cross departmental cooperation. 
"P", "indeed, executives do such a job, there is really no assessment goal, but fundamentally, everyone's goals are consistent. If the company's performance is not good enough, there will be no generous year-end bonus, I will be unhappy, they will be unhappy, their subordinates will be unhappy." He Zhewei said. He plans to establish this test as routine. 
 retailer's increment .
Compared with this management experiment, metro also intends to find more room for future growth through more experiments in business practice. P 
 2012, Metro started a pilot project in Wuxi called "retailer support program". The specific way is to set up a special trade and customer service team in 3 shopping malls in Wuxi district. Each team has 4 to 5 customer managers. They are responsible for some grocery stores or small supermarkets. They start from helping each other to arrange their shelves, and design a more reasonable commodity combination for each other. According to the actual sales situation, peripheral consumption characteristics and types of residential areas, it is suggested that these small shopkeepers adjust the proportion of brand merchandise of each category, and finally achieve the results of improving sales and profits. 
A year later, Metro's small retailer customers in Wuxi developed to more than 1000 from the initial 250 P. 
 these small retail business customers who used to walk through traditional wholesalers channels are just a type of business that Metro wants to develop recently. At present, Metro's largest business in China comes from the purchase of welfare products from enterprises and institutions, including office supplies, labor protection supplies, and staff gifts. This is the development of Metro when it first entered China. Because of the relative standardization of procurement needs, Metro has accumulated many long-term customers in the welfare products business by virtue of the quantity and customization capabilities of commodity categories. At present, the purchase scale of China's welfare procurement market is 500 billion, and Metro has gained 1% of its share. 
After , a href= "//www.sjfzxm.com/news/index_c.asp" > Metro < /a > the canteen and restaurant business that we want to develop has made this company truly realize the challenge. When He Zhewei described this, he talked about a hotel proprietor who he had contacted. "She came to us to buy many small packaged organic foods. I asked her why she bought such a small package. She said it was for her family to eat." I asked her, "what about your hotel?" "hotels don't buy them. It's too expensive." 
The reason why Metro didn't take the initiative to develop business customers was that P was too difficult to do. Small shopkeepers like to bargain, be too loyal and have low profits. "Practice has proved that as long as the services we offer are really valuable to them, even if the price is slightly higher, there will still be people willing to choose us as partners. Yes, they are indeed price sensitive, but not without loyalty. Low profit is also true, but overall sales will be very high. 
In many cases, the localization strategy of transnational corporations often comes from the joint action of compromise and positive and enterprising P. For metro, if the competitors who are born and brought up by the local market, if they want to show their competitiveness, "professional and value-added services", the premise is to compromise the market situation and make themselves more flexible and adaptable. 
The positive side of P is a forward-looking judgement of the market trend. At present, the pattern of China's retail distribution market is 60% of the business through traditional wholesale channels, and 40% through modern circulation channels. "From the cycle of market change, we believe that 5 or 8 years later, this ratio will be reversed, and then the ratio of 20% to 80%." He Zhewei said. 
 now, in the face of another large group of competitors, retailers wholesale distribution channels, metro also hopes to attract the small shopkeepers to change their habits through the professional services of the customer managers, and choose one-stop purchase from Metro. 
 "our way of working has developed mature experience in the European market, which enables us to be ready to start from scratch in China." He Zhewei said. After obtaining the pilot experience in Wuxi, the development of retail business customers will be promoted to other parts of the country by the end of this year.