Fat East came out of Xuchang, starting with the explosion of Yonghui？

Author An Xiao

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Cover source 丨 Unsplash

The wind of explosive reform finally blew to Yonghui.

Recently, Yonghui Zhengzhou Xinwan Plaza Store, which was "reformed" by Fat East, finally opened. In the 19-day rectification, Fat Donglai started from three dimensions: people, goods and fields, and strived to "save Yonghui first".

People, that is, organizational culture upgrading, humanized management, to achieve "all-staff salary increase", the salary of employees has increased from 2,500/month to 4,500/month, and the 8-hour working day system has been strictly implemented. Employees can enjoy 10 days of annual leave after working for one year.

Goods, that is, product structure upgrade, 10841 goods with unstable quality and sales volume were removed from the shelves, and 12581 items were re-planned, achieving 80% of new items, and the combed product structure reached more than 90% of the product structure of Pangdonglai.

The field, that is, the terminal scene is upgraded, the forced line is cancelled, the channel of the store is widened, and the alcohol and tobacco cabinets and customer rest areas are added, so that the supermarket and the store are more integrated and the experience is more consistent.

According to customers who have been to the scene, Yonghui, which has been "reformed", has to wait for more than half an hour in the hottest period of the day. In the morning, the supermarket began to limit its flow just 30 minutes after its opening, and other merchants in the store also ran around the queue to attract customers, which can be said to directly save the whole dying shopping mall.

In recent years, Fat Donglai has almost been honored by the retail industry, and many well-known supermarkets have invited the boss Yu Donglai to touch it. However, the fat Donglai has always been worried that he can’t get out of Xuchang. This explosive reform can be said to be another exploration of Pangdonglai’s "going out of Xuchang", but many previous attempts have failed to get out of the way. Can you get through this time by putting on Yonghui’s shell?

one

Pangdonglai is trapped in a square inch.

Since Yu Donglai introduced the "volume-selling" format to Xuchang in 1999, with the help of the 10-fold development of the domestic market, Pangdonglai tried all kinds of formats and initially completed the gorgeous turn from a street shop to a modern business group in the past ten years from 2000 to 2011.

However, in 2012, Yu Donglai suddenly stopped the expansion of Fat Donglai in Xuchang under the situation that the brand was in full swing. From January to September of that year, he closed a total of 16 profitable stores owned by Fat Donglai.

In this regard, Yu Donglai said, "We are expanding a little fast, and we are not doing as well as before. The service is not up to standard, which disappoints customers and wastes employees’ youth. This is the bitter fruit of my early blind development. " This is the first time in the history of the development of Pangdonglai to take the initiative to stop.

Looking back on 2005, Pang Donglai, who was still in infancy at that time, walked into Xinxiang. In 2015, because the store services and products could not keep up with the unified standards, Yu Donglai took the initiative to stop again and announced the cancellation of Xinxiang Store. After Xinxiang people and officials struggled to retain them, they decided to open the store again in 2016 after rectification.

Yu Donglai’s two suspensions have allowed Pangdonglai to develop into only 13 stores since 1999, including 10 in Xuchang, 2 in Xinxiang and 1 in Yuzhou.

Many foreign consumers say that the products and services from Fat East are so good that they can’t be opened to big cities. Apart from the subjective idea of founder Yu Donglai, this is more caused by objective factors with high costs in all aspects.

In 2015, Xinxiang store almost closed due to rising rents, not to mention other high-speed cities. Yu Donglai takes Zhengzhou as an example. If Zhengzhou opens a shop, the basic salary of front-line employees will be around 5,000 yuan, but the house price in Zhengzhou is currently around 15,000 yuan. Employees who have worked hard for ten years without eating or drinking may not be able to afford a house.

With the salary level of Xuchang store, it is difficult to find suitable talents in Zhengzhou. Without suitable talents, the high-level service of Fat Donglai will not be displayed. Some people may say, then take out the profits and give employees more wages, so that the store can open in Zhengzhou.

However, as we all know, the profit of products from Fat East is very low. Last year, it rushed to the hot search because "a down jacket only earned 3 cents".

Moreover, Fat Donglai implements a "three-three-three" distribution mechanism for annual profits, that is, 30% is used to pay the cost of the next year, 30% is distributed to all employees, and the remaining 30% is used for social donations. The boss only keeps 10%, which means he can’t rob people in the market with high salary.

Maybe Fat Donglai can lower the standards of products and services, and start in high-tier cities first. Anyway, Fat Donglai’s reputation has been played out and there are no consumers. But that would run counter to Yu Donglai’s original intention of establishing Fat East. It is not so much a Fat East as an ordinary supermarket with the signboard of "Fat East".

2

"DL Fat Donglai" Brand Out of Xuchang

Although Shangchao from Fat East has not yet left Xuchang, the brand "DL Fat East" has gone out first. Spiral Lab noticed that the online shopping mall of Pangdonglai has been able to choose other cities except Xuchang.

The online shopping mall is divided into three sections: Fat Donglai Supermarket, Fat Donglai Jewelry and Fat Donglai Tea. The goods in the online shopping mall are all self-operated brand products of Fat Donglai. In the supermarket sector, there are five categories, including daily use, grain and oil, food and beverage, books and Donglai gift boxes.

Judging from online supermarkets, there are basically not many products that Fat Donglai can supply at present, especially for some self-operated products with high consumer recognition, Fat Donglai can only rely on offline supermarkets to ship.

In the process of transforming BBK supermarket, in terms of product structure, Fat Donglai removed 70% of BBK products in one breath, and introduced its own brand, especially the best-selling products. This move was also immediate. After adjustment, the "DL Fat Donglai" series of products accounted for 1/3 of the sales of BBK supermarkets.

Yonghui Supermarket has also introduced a large number of self-operated products from Pangdonglai, including Pangdonglai mango juice, free love white wine, oatmeal, etc. Among them, the hook products from Pangdonglai online celebrity big moon cake and DL brewed wheat beer are even more popular.

Once upon a time, because the self-operated supply chain of Pangdonglai could not rapidly expand its production capacity, the stores of Pangdonglai in Xuchang and Xinxiang were often out of stock, not to mention the supply of online supermarkets and supermarkets such as Yonghui and BBK.

This time, Fat Donglai not only completed the export of its own brand, but also realized the channel expansion of "DL Fat Donglai", which is essentially expansion, using other people’s "field" to sell its own "goods". Because it is a self-operated brand of Pangdonglai, the pricing and profit are also in the hands of Pangdonglai himself.

This is due to the unique supply chain system behind Fat Donglai. In fact, as early as 2001-2002, Xuchang Pangdonglai Trading Group, Nanyang Wandelong Company, Xinyang Xiya Hemei Commercial Co., Ltd. and Luoyang Dazhang Company jointly initiated, jointly established and jointly developed a "voluntary chain" organization, namely "four-way joint mining". In order to reduce the cost of supply chain, a larger purchase volume is exchanged for a better price and the lowest purchase price is obtained.

In the past two years, the production capacity of the "four-way joint mining" system has expanded and shipments have become more stable. Coupled with the improvement of logistics and distribution conditions, Fat Donglai has the spare capacity to help other supermarkets.

Fat Donglai has been trying to build its own logistics system since its establishment. In January, 2021, the Xinxiang Pangdonglai Logistics Center with an investment of over 100 million yuan was completed. The construction and use of this logistics center brought a more solid and abundant reserve capacity to Pangdonglai. After two years of operation, the logistics center can not only quickly replenish the stores of Fat Donglai, but also provide strong support for online supermarkets, Yonghui, BBK and other stores selling "DL Fat Donglai" products.

three

How long can the effect of "explosive reform" last?

When the "explosive reform" is cooled at high temperature, let’s compare the scale of Pangdonglai and Yonghui. I have to say that for Yonghui, Fat Donglai can only help here.

Although the performance of each store in Pangdonglai is good, the overall scale is only 13 stores, and most of them are concentrated in Xuchang. We know that the core ability of Shangchao is to control the product supply chain, and only good and cheap goods can keep consumers buying back.

Yu Donglai once said: "The brand Fat Donglai is very advantageous in Xuchang, and many suppliers are willing to cooperate with Fat Donglai at a small profit, and still produce the highest quality products. But when you leave Xuchang, you go to someone else’s site. Not to mention various costs, many businessmen and suppliers will crowd out and suppress you. This is a very real problem. "

Moreover, the long-standing supply chain model of Pangdong is not easy. As early as 2002, Shanghai Yongle and Beijing Dazhong Electric established "Zhongyong Tongtai" in conjunction with seven household appliance chain alliances in other regions, and then in 2004, the first supermarket purchasing alliance in China was "Shanghai Jialian Purchasing Alliance". However, due to various internal and external reasons, only the "four-party purchasing alliance" in Xuchang, Henan Province was left behind.

At present, Yonghui Supermarket has developed more than 1,000 supermarket chains in China, covering 29 provinces and nearly 600 cities. This layout of national brands may not be suitable for the regional operation and management mode of Fat East, and the "four-way joint mining" supply chain mode of Fat East is even more unacceptable. As a regional retailer, Fat Donglai may find it difficult to solve this most critical problem.

However, for the self-operated brand of Fat Donglai, which has initially formed a market reputation, the distribution of goods through Yonghui’s broad channels will also help Fat Donglai gain greater scale advantages and further reduce the cost of making self-operated products.

Since the establishment of Fat Donglai, the service model and product structure have been thoroughly understood by the outside world. Every day, there are a lot of Shangchao bosses who come to Pangdong to steal the teacher’s skills. Pangdong never takes precautions, and directly hangs the list and telephone number of all product suppliers on the wall for the bosses to take pictures.

For consumers, being able to buy self-operated products from Fat Donglai in more Yonghui supermarkets and even enjoy the service experience similar to that of Fat Donglai may be another way for Fat Donglai to get out of Xuchang.