---
title: "Blue Moon's Return to Hypermarkets: What Does It Tell Us?"
description: "Blue Moon's return to KA (Key Account) hypermarkets has sparked industry discussion. This article examines the phenomenon of manufacturers returning to physical retail in the internet age, arguing that physical channels still hold 90% of the FMCG market and that both virtual and physical retail face development bottlenecks. It urges suppliers to recognize the value of every channel and adapt to trends rather than abandon traditional retail."
author: "黄静"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-06-17"
language: "en"
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# Blue Moon's Return to Hypermarkets: What Does It Tell Us?

> Blue Moon's return to KA (Key Account) hypermarkets has sparked industry discussion. This article examines the phenomenon of manufacturers returning to physical retail in the internet age, arguing that physical channels still hold 90% of the FMCG market and that both virtual and physical retail face development bottlenecks. It urges suppliers to recognize the value of every channel and adapt to trends rather than abandon traditional retail.

Click the image for details.
Recently, the news of Blue Moon returning to KA hypermarkets has become a hot topic in the industry. Everyone is focused on the causes and effects of Blue Moon's revolution, and various versions are widely circulated; for details, search Baidu yourself. What we're discussing today is a phenomenon: **In the internet age, online retail has become the most beautiful internet celebrity, receiving all the attention, while physical retail has been neglected and ridiculed. Hypermarkets have gone from being arrogant to submissive, and have been scorned for a long time. What does it mean when manufacturers return to physical retail at this time? We seem to have to think about several questions: Are physical stores still worth doing? How should we follow the trend?**
The current retail environment has undergone earth-shaking changes compared to the past. The emergence and mixing of new concepts, new technologies, and new business formats have completely overturned our perception of traditional retail. In the internet age, the rules of business are constantly being rewritten, channel value is being reshaped, consumer behavior is being changed, and retail sales through virtual channels have maintained a year-on-year increase, with growth rates higher than the total retail sales of consumer goods. But it must be admitted that as the sales base grows, the growth rate is gradually declining, which is in line with the growth pattern of any new thing. After ten years of development, China's internet penetration rate has exceeded half, leaving limited room for growth, and the "user dividend" that online merchants rely on is weakening. From 2008 to 2016, the growth rate of netizens gradually decreased, making it basically impossible to see significant growth again. **Virtual channels, after explosive glory, have also entered a bottleneck period.** So, both virtual and physical channels must face the same development laws and problems. Although virtual channels have seen large growth and physical channels have seen weak growth, don't forget the difference in base; the size difference between an apple and a watermelon is still objective!
**Physical channels still account for 90% of the FMCG market. Those who have been confused by e-commerce hype should follow business common sense and see through the fog to the truth.**
We hear and see physical stores closing continuously, and even RT-Mart, which claimed to never close stores, has broken that myth. The frequent store closures in physical retail are partly because retail development has entered a period of competition with new thinking, new technology, and new capital. The previous simple and extensive retail model has been challenged, and some retailers who cannot adapt naturally fall. Furthermore, during early aggressive expansion, many bad stores were opened or acquired to seize scale advantages. These negative assets eventually need to be shed as burdens, making closures inevitable. If you take a wrong path, you know to turn back; can't stores close or merge if they opened in the wrong place? You have to pay for what you do; stores must also pay for their past blindness. We see physical retail closing stores, but don't ignore that it has also been opening stores; the total number of physical stores has been rising year by year. Now look at the booming virtual online retail: do you know how many e-commerce platforms open each year under various names? Tens of thousands, but very few survive; most disappear silently without making a sound. If you worry about physical store closures because you can see them, then e-commerce platform closures don't even give you a chance to worry, because they vanish before you even see them.
Virtual retail is a capital game; without massive, continuous burning of money, it cannot survive. E-commerce is ultimately a game among oligarchs. Even a giant like JD.com has yet to turn a profit, let alone the various small e-commerce players.
The glory of virtual retail has gradually faded. After the obsession and frenzy of online shopping, and after suffering from counterfeit goods, logistics accidents, false information, phishing fraud, and other online shopping pains, more and more netizens have become rational. They now understand what online shopping is about and have begun to value the value and experience of shopping itself. **Against this backdrop, returning to physical and offline channels has become a trend. Improving shopping environments, enhancing shopping experiences, deepening customer service, updating retail technology, and community management—these measures that incorporate internet thinking with the characteristics of physical channels are the new direction for retail development.** Looking to the future, business boundaries will blur, the distinction between virtual and physical will fade, online will move offline, offline will embrace online, and virtual and physical channels will no longer be opposed but will merge, with each containing the other, creating a new all-retail development.
**As a supplier, the key point is not which channels to do or not do, but that every channel has value and you must find ways to tap into that value.** Abandoning a channel is giving up a sales opportunity. In business, who doesn't carry a hoe and dig everywhere? Who complains about too many opportunities to make money? In the process of cooperating with channels, problems are inevitable, and revolutions are allowed, but change does not mean direct confrontation or rebellion. The on-and-off relationship between Blue Moon and hypermarkets has taught manufacturers a good lesson: change requires courage, trade-offs require wisdom, choices come with risks, and giving and taking are inevitable. It's just a matter of balance. Everything in the world is about seeking balance; if you break it, you must rebuild. Without breaking, there is no building.
Let's talk about an old topic: it's often said that doing business in hypermarkets is too costly. This has indeed been criticized and never forgiven. But gentlemen, do you think e-commerce has no costs? Do you know that e-commerce costs have already surpassed physical stores? If you want to know the costs of e-commerce, a Baidu search will show you a bunch of calculations. Physical stores have certain positions, and now e-commerce companies have all of them. You think it's hard to deal with buyers and section chiefs in physical stores, but dealing with e-commerce buyers is even harder; why not try it? Many e-commerce employees have moved from physical retail companies. Do you think their concepts, routines, and methods are very different? All crows are black; after painting green, it's still the same cucumber. Regarding the cost issue, there's a classic answer: If you know how to do it, costs are not high because others will carry the burden for you; if you don't know how, costs are high because you have to carry the burden for others. So, thinking determines the way out, and the head determines the pocket. Instead of complaining and cursing, it's better to go out and explore the market.
**The product is yours, the channels are shared. Whether to do it is up to you, but how to do it is something you can decide. The country is already on the Belt and Road; shouldn't you also push forward with one push and one move?**
Author: Huang Jing
Huang Jing is an expert in hypermarket backend system design and a researcher on supplier-retailer relations. With over ten years of professional procurement experience, from large state-owned retail enterprises to foreign hypermarkets, she has served as procurement section chief, procurement manager, procurement director, training director, and other positions, giving her a relatively complete career in the modern retail industry. She has conducted in-depth research on supplier-retailer relations, especially on procurement issues, negotiation issues, cost issues, contract issues, and conflict resolution that suppliers care about.
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**Group Photos from Previous Inspections:**
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