After several months of preparations, the first store of the “Baijia Yonghui Bravo” supermarket, which was jointly built by Yonghui Supermarket, Watsons Group (Yourtye Baijia Supermarket) and Tencent, opened. This is also the third time since October of this year, the three parties announced the establishment of a joint venture. The first store opened after the company also marks the official launch of the newly established Baijia Yonghui Joint Venture Company.
The author noticed that this is not the first time that Yonghui and Tencent have joined hands. Starting from Tencent's shareholding in Yonghui Supermarket, the two have quietly laid out a new retail “luxury circle of friends”.
According to the public information, Zhang Xuanning and Zhang Xuansong established the 2001 “Agricultural Reform” policy to promote the birth of Yonghui. A series of supply chain strategies starting from cultivating their own agricultural procurement team became an important resource for the rapid expansion of the stores. When entering the capital market in 2010, the number of stores in Yonghui Supermarket was only 156 in the country. Since then, Yonghui Supermarket has accelerated its expansion, and its spatial layout has risen from five provinces and cities to 16 provinces and cities.
After the introduction of various types of capital, Yonghui Supermarket began to try various new formats, such as super species. Zhang Xuansong, one of the founders of Yonghui, once pointed out: "There are many very fashionable words in this era: species, genes, sharing, and ecology. Yonghui as an entity also combines this era to explain these terms. Made a new business model super species, set up with new fashion and luxury catering, is the business model of 'catering + supermarket + Internet'. Currently mainly used after 80 and 90 as the main consumer, this business model we are in the whole industry It has become a more influential business model. The core of super-species is based on the support of Yonghui's entire resource platform. We have a good brand advantage when we seek property. The core one is the advantage of our partner system. In fact, we have a collection of multiple species, which is a platform for young people to organize their businesses."
For a long time afterwards, this super-species combined with the "food + supermarket + Internet" business model was used to compare with the Ali-style box horse, and it has become a "new retail test field" that the industry is relishing.
The heart of the transformation of Yonghui Supermarket is very obvious. This also prompted its hands with Tencent. Previously, Tencent increased its capital on Yonghui Yunchuang Technology Co., Ltd., a subsidiary of Yonghui Supermarket Co., Ltd., and obtained a 15% stake in Yunchuang after the completion of the capital increase. Tencent’s shareholding in Yonghui is only the first step. Soon after, Tencent and Yonghui jointly invested in Carrefour’s China market. The strategic cooperation will combine Carrefour’s retail expertise with Tencent’s digital technology and innovation capabilities. Carrefour will enhance its online presence. Exposure, increase traffic to online and offline retail operations and leverage Tencent's digital and technical expertise to develop new smart retail projects.
Ever since, Tencent and Yonghui have become two "coherent actors." Last year, Yonghui Supermarket, Watson's Pokka China and Tencent jointly established a joint venture, and the equity of Guangdong Yonghui and Shenzhen Yonghui held by Yonghui Supermarket, and Guangzhou Baijia and Jiangmen held by Baijia China. The shares of Baijia and Dongguan Baijia and part of the cash were placed in the joint venture company. All the stores of the joint venture company use the “Baijia Yonghui” brand. The value of Yonghui Supermarket and Baijia China's equity investment was 622 million yuan and 502 million yuan respectively, accounting for 50% and 40% respectively; Tencent invested 125 million yuan, accounting for 10%.
Baijia Supermarket has 54 branches in Guangdong Province. As of the first half of 2018, there are 48 stores in Yonghui Supermarket in Guangdong Province, including 13 green label stores, 5 red label stores, 21 Yonghui lives, and 9 Home super species. After the integration, Baijia Yonghui became the giant of Guangdong supermarket industry. The first store of the “Pokka Yonghui Bravo” supermarket opened recently is actually the landing project of this new brand. In the future, consumers should see more Baijia Yonghui. According to the plan, the store of “Baijia Yonghui” will operate under the dual brands of “Baijia Yonghui Bravo” and “Pokka Yonghui TASTE”.
Looking further, in addition to Carrefour and Baijia, Tencent and Yonghui also have a group of “luxury circle of friends”. For example, in December 2018, Yonghui Supermarket spent 3.5 billion to win the equity of Wanda Commercial Co., Ltd. Out of Yonghui Yunchuang's 20% stake; Yonghui Supermarket also intends to hold no more than 40% of the shares of Zhongbai Group. Earlier, Yonghui had a joint venture with Shanghai Vegetable Group. It is worth noting that among the major shareholders of Yonghui, there is Milk International, Milk International Management Wanning and 7-11 convenience stores in South China Market, and also one of the giants in the retail circle.
The author believes that from the perspective of Yonghui, from regional retailers to today, through its own development and capital promotion, it has achieved national layout and new retail business enhancement, with Tencent’s blessing, traffic portal and a group of retailers. The “Luxury Friends Lineup” capital cooperation of the circle will greatly benefit its future online and offline development. Yonghui Supermarket’s net profit for the first quarter of this year was 1.124 billion yuan, a year-on-year increase of 50.28%.
From the perspective of Tencent, physical retail is not its specialty, but in the new retail era, it must seize the offline market and achieve scenario consumption, rather than relying on online shopping. Compared with Ali's centralization strategy, Tencent is more interested in decentralization strategy, allowing companies that join the ecosystem to gain user returns by providing value to the platform. In many cooperations between Tencent and Yonghui, Yonghui has always had great autonomy and freedom of business development, which has also prompted Yonghui's retail layout to expand step by step.
Of course, in the process of development, it will inevitably experience a storm. After getting Tencent’s investment, Yonghui Supermarket, which has a market value of more than 70 billion yuan, had different opinions on the development direction of the company at the end of last year due to the founding brothers Zhang Xuansong and Zhang Xuanning. For the positioning of Yonghui Yunchuang, there are different views. After two people considered signing the "Agreement on Dissolving Concerted Actions", the outside world interpreted this as "dividing." In the future, there will be some unanimous expansion of Tencent’s and “dividing”, and it remains to be seen.