I. The Abnormal and Normal State of Hypermarkets A few days ago, I was training a leading food brand. The boss told me that they directly operated over 2 billion yuan in sales through the hypermarket channel in a year, yet still lost money. A leading brand in the industry, selling over 2 billion yuan a year in hypermarkets alone, and still losing money. What more do you want? The countdown for hypermarkets' heyday has begun, for the following reasons:

  1. The novelty has worn off Initially, consumers were excited about hypermarkets' "complete assortment, low prices, and good shopping environment," but that novelty has long passed. Ask the people around you how long it's been since they last went to a hypermarket for fun. To buy a roll of toilet paper, you have to enter on the first floor, wander through eight circles, and exit on the second floor...
  2. Poor shopping experience Convenience? Of course, community stores are more convenient. Hypermarkets are relatively farther away, have long checkout lines during peak hours, and have convoluted, deliberately confusing mandatory routes.
  3. No obvious price advantage Compared to e-commerce, hypermarkets are clearly at a price disadvantage. In some categories, hypermarket prices may not even be better than those at convenience stores or small shops in residential areas.
  4. Losing badly in fresh produce Compared to specialized fresh meat and vegetable stores or fruit and vegetable shops around residential areas, hypermarkets are at a disadvantage in terms of product quality, freshness, promotional tactics, and operational flexibility. Those outside the industry don't know, but insiders understand that a butcher wielding a cleaver is definitely a skilled craft...
  5. Rising costs and manufacturers exiting As the economy slows, some brands are leaving hypermarkets. But hypermarket buyers still want to shear the wool of five sheep from this year's four sheep. The channel costs for existing manufacturers will keep rising, and more manufacturers are waking up: "Hypermarkets aren't the be-all and end-all. I won't die without them. Damn it, I'm done with this money-losing business."
  6. Loss of real estate supporting dividends Developers don't build farmers' markets or bring in a Carrefour when developing a residential project (the government won't do it, and developers won't either). But after every development, BC supermarkets, meat and vegetable stores, and fresh produce supermarkets inevitably appear. "The closer you are to consumers, the farther you are from competition"—these BC supermarkets, fresh produce stores, and meat and vegetable shops near consumers are constantly diverting and intercepting hypermarket customers, which is a fatal blow to hypermarkets. The abnormal era of hypermarkets relying on sensational bargain prices to attract attention and squeezing manufacturers' fees for back-end profits is counting down. After eliminating a batch of unrepentant hypermarkets, this channel will gradually return to a normal state of doing honest business, earning front-end margins, improving product mix, increasing sales per square foot, and supporting itself.

II. E-commerce's Carnival Is Not an Endless Feast E-commerce's carnival is still ongoing. But the feast is not endless; looking back over the years, The once passionate slogan "If you don't do e-commerce today, you'll have no business tomorrow" is now a joke. How many FMCG categories have been disrupted by e-commerce? What percentage of sales does e-commerce account for? It's clear to all that for many manufacturers, Double 11 has become a chicken rib—a loss-making, price-undermining, and reputation-losing affair. E-commerce forcing Chinese manufacturing to produce low-quality, low-price products is only a temporary thing. Major brands won't stoop to that, and consumers will reject the poor performance of small, shoddy brands on e-commerce. The quality of products on platforms like Taobao has already been psychologically labeled by consumers... Not to mention taxation, quality supervision, platform responsibility, legal risks... the sword of Damocles hangs overhead. Well, this monster has been stirring up trouble for a few years, but eventually, it must return to its cave and honestly work for its keep. Its good days are numbered; it might as well eat and drink what it likes. The Stone Age ended not because stones went extinct. The Steam Age ended not because coal ran out. It's because consumers had better choices. The agglomeration effect of trade brings about monopoly, but for consumers, monopoly and monolithic business forms are definitely not better choices. At every stage, the agglomeration effect of trade creates a few farces. But farces will end, value will be restored, and demystification is inevitable. Those who once held power with approval stamps were arrogant for a while, but now that's a relic.

III. Habitually Scaring People with 'Death' Is a Disease—Cured by a Good Beating In my lifetime in marketing, I've been "scared to death" several times— Over twenty years ago, when I first entered the industry, I heard people say, "Alcohol capacity represents sales capacity, and alcohol character represents personal character. If you can't drink, why are you in sales?" This almost scared me, a non-drinking student, away. A dozen years ago, I heard masters say, "If you don't do channel intensive cultivation, you'll die. You must flatten the channel." This scared private enterprises into imitating Master Kong, drawing routes, using one chart and two tables, and carrying route manuals... Later, experts said, "Hypermarkets will kill traditional small stores; if you don't do them, you'll die." This fooled many manufacturers into lining up and throwing money into hypermarkets, spoiling the game rules. Many manufacturers over-direct-operated, causing product prices to bottom out, and in turn killing their own distributor channels... In recent years, masters and experts have become widespread, and everyone on the street talks about "Internet thinking; if you don't go online, you'll die." Well, watch the experts take the stage with meaningful expressions, their thoughts more convoluted than the urinary tract, and under their instigation, enterprises bravely sacrifice themselves... Looking back at these death threats, well, this dream is really damn nightmare. In fact, these confident predictions, like "alcohol capacity represents sales capacity," are ignorant, brainless, one-sided assumptions. Those who habitually scare people with the word "death" have a disease—cured by a good beating. According to these predictions, in real life, those enterprises that go against the "prophecies" and still haven't "died" are survivors with nine lives. They startle up from the dying bed, and laugh and talk for another hundred years. Truly rare, thank this world for letting me see so many dinosaurs.

Wei Qing, written on October 4, 2016, on the high-speed rail from Beijing to Shandong

New Food Era · New Distribution — 2016 China "FMCG + Internet" Summit Forum — This is a grand event focused on how the FMCG industry's channels should transform under the trend of Internet+ transformation Agenda 08:00-09:00 Registration 09:00-09:05 Host opening 09:05-09:35 2016 China FMCG Industry Trend Analysis Report—Zhao Bo 09:35-10:05 FMCG Enterprise Transformation Strategy and Path—Liu Chunxiong 10:05-10:35 Opportunities and Challenges Brought by FMCG Channel Transformation—Liu Zhao, CEO of Waiqin365 10:35-11:05 Reconstructing Distribution Channel System to Promote Urban Retail Upgrade—Tian Yuan, General Manager of Alibaba Retail Link's Backend 11:05-11:25 Channel Efficiency in the Internet Era—Fu Xiaoyun, Vice President of Benlai Holding 11:25-12:00 Roundtable Forum—Brand Transformation: Improvement vs. Reconstruction? Guests: Liu Zhao, Liu Chunxiong, Fang Gang, Chen Feng, Shi Zhengchuan, Deng Xia 12:00-13:30 Lunch 13:30-13:50 Dealer Transformation: Urban Distribution Trends—Wang Qi, CEO of Weijie City Distribution 13:50-14:20 Roundtable Forum—Why Dealers Should Do Logistics in Transformation Guests: Zhao Bo, Wang Qi, Liu Zhongmin, Tang Guangliang, Wang Cheng, Sheng Yan 14:20-14:40 How FMCG Enterprises Leverage the Internet to Take Off—Wang Hui, E-commerce Operations Director of Xijiu 14:40-15:00 Detailed Explanation of Zhongshang Huimin's One Machine, Two Wings Strategy—Su Xiaoxin, Vice President of Zhongshang Huimin 15:00-15:20 Category Value and B2B E-commerce Development Strategy—Wang Chaocheng, CEO of Yijiupi 15:20-15:40 Supply Chain Finance as a Lubricant for B2B to Drive Traditional Business—Chen Xian, CEO of 51 Order 15:40-16:00 Zhanghe Cloud Factory Helps Upgrade FMCG Supply Chain—Yang Lixiang, CEO of Zhanghe Tianxia 16:00-16:30 Integrating Small and Micro Retail, Reconstructing Business Ecology—Miao Dong, Vice President of Quanshi 16:30-16:50 B2B Investment Principles and Ideas—Zhao Mingwei, Vice President of Junlian Capital 17:00-17:30 Roundtable Forum—Who Is the King in FMCG B2B Models? Guests: Fu Xiaoyun, Zhuang Jianzhong, Jiang Tao, Zeng Weiqin 17:30-19:30 Dinner For manufacturers and dealers who want to transform, this grand event is not to be missed. Interested friends can long-press the QR code below or click "Read Original" to register. Registration: Long-press the QR code below or click "Read Original" ↓↓↓ Click "Read Original" [Register]