Over the past year, the new concept of retail has gradually gained popularity. One of the most prominent phenomena is that not only the industry is shouting, but also many local governments have joined in. As early as July 18, 2017, when the box of fresh horses appeared, Wang Yongkang, Secretary of the Xi'an Municipal Party Committee, said: "Xi'an should bring in the"box of fresh horses"to promote employment and development. In September 2017, Wuhan Mayor Wan Yong said that Boma Xiansheng is a typical "four new" economy, which integrates new technology, new industry, new format and new business model. He hoped that the enterprises would give full play to their advantages, seize opportunities and lay out Wuhan so as to provide the citizens with a new consumption experience of high quality, convenience and safety. In January of this year, Fuzhou put forward in the government's work report that it should make every effort to build a "new retail capital"; Shanghai, the city with the largest total retail sales in China, also announced recently that it would launch eight projects to launch "Shanghai shopping", the first of which is to develop new retail to promote new consumption.
Observing China's retail market, we can find a very distinctive phenomenon, that is, there is a serious regional division in the retail industry. Retailers in major cities, in addition to supermarkets, stores and other forms of business there are a small number of national brand cross-regional operation, the majority of retailers to department stores are local brands.
Take Shanghai Bailian share, the leader of domestic retail industry, especially the department store industry as an example. From its 2017 annual report, it is at 471. 8 billion 100 million yuan of revenue, more than 423. 5 billion 800 million yuan (nearly 89.78%) came from East China. So how much of the revenue from East China is from Shanghai? Although the annual report did not disclose the relevant data, but its 26 comprehensive department stores in 24 Shanghai, 16 shopping centers in 13 Shanghai, it is reasonable to infer that at least half of the revenue from Shanghai. From this point of view, China's leading department store is actually a company operating mainly in a city, which is very different from other developed countries'Department stores.
Take Messi store in the United States as an example. Macy's, which started in Cincinnati, ranked 425 out of the Fortune 500 in 2017, with $25.77 billion in revenue. As of January 28, 2016, Macy's department stores had 829 stores, but they were not as centralized as the Chinese Department stores, but scattered across the United States: 250 stores in the Northeast ranked first, but more than 100 in other regions.
The high protection of the industry can be divided into two aspects, one is ownership discrimination, that is, private capital is difficult to enter the department store industry. In 2002, only two private enterprises, one foreign-funded enterprise and the rest are state-owned or state-owned holding enterprises in the top ten chains. According to the National Statistical Yearbook, private enterprises accounted for only 6.7% of the total assets of retail enterprises above the quota in 2001. The two is local protectionism. Although the major domestic department stores have been transformed into self-financing independent legislators through the corporate system, if traced to the root, they and the local government are inextricably linked, it is difficult for foreign competitors to do big things.
It's 15 years since 2003, and if we look at the big retail business, private capital is no longer as weak as it was in 2002. On February 23, Deloitte released its 2008 Global Retailer Strength Report based on data released by major global retailers in the fiscal year 2016 (fiscal year ended June 2017). Of the top 250 global retailers on the list, 15 retailers in China (including Hong Kong and Taiwan) were listed, with e-commerce giant Jingdong ranking first with $35.777 billion. Ten of the 15 listed retailers were founded in the mainland, with private capital and state capital accounting for five each, sharing the autumn equally. In terms of turnover, private capital is far ahead of state-owned retail companies.
Why can private capital catch up with the retail industry? I think it's important for private capital to take a back seat in the retail war by attacking these two neglected niches of state-owned capital, the merchants and supermarkets, and by providing better services to meet the needs of customers. More importantly, these two segments were to some extent unwilling to do by the mainstream retailers of the time. It is precisely because mainstream retailers are unwilling to do so that local protectionism is weak, which provides a valuable window for the rise of e-commerce. I even think that it was not until the rise of e-commerce that China really achieved a unified market, breaking the old regional divide, because users could get products from retailers across the country or even around the world while offline markets could not.
Why do we have to talk about past events when we discuss new retail? Because local governments now attach great importance to new retail, think it can provide users with better choices, but also bring employment. But it must be noted that although the rise of new retail will bring increment, but the rise of the process will inevitably impact on the stock of retail, it is said that many cities opened a box of fresh horse and raw food stores, the turnover of their competitors fell. So, will there be a phenomenon that some local government departments will use various reasons to prevent these new retail stores from landing? We know that the reason e-commerce can rise rapidly is that without underground stores everywhere it is impossible to block the flow of its goods, and those stores that O 2O landed today will encounter all sorts of formal irregularities.
