--- title: "Giants' Decline and Rise: Who Is the Retail 'Evergreen'?" description: "The decline of giants is not death, nor is their rise eternal. Products, efficiency, and solid fundamentals are the 'evergreen' that sustains retail enterprises. Carrefour's decline and Gome's crisis highlight the industry's shift, while platforms like Meituan and Douyin rise with instant retail, urging traditional retailers to adapt or be eliminated." author: "龙商网" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2023-02-28" language: "en" canonical: "https://xinjignxiao.com/en/articles/giants-decline-and-rise-who-is-the-retail-evergreen-ea285010/" markdown: "https://xinjignxiao.com/en/articles/giants-decline-and-rise-who-is-the-retail-evergreen-ea285010.md" original_source: "https://mp.weixin.qq.com/s/dlrbJYXq867fU62so_lQQg" translation: "https://xinjignxiao.com/zh/articles/%E5%B7%A8%E5%A4%B4-%E8%90%BD%E5%AF%9E-%E4%B8%8E-%E9%9B%84%E8%B5%B7-%E8%B0%81%E6%98%AF%E9%9B%B6%E5%94%AE-%E5%B8%B8%E9%9D%92%E6%A0%91-ea285010.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/giants-decline-and-rise-who-is-the-retail-evergreen-ea285010/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Giants' Decline and Rise: Who Is the Retail 'Evergreen'? > The decline of giants is not death, nor is their rise eternal. Products, efficiency, and solid fundamentals are the 'evergreen' that sustains retail enterprises. Carrefour's decline and Gome's crisis highlight the industry's shift, while platforms like Meituan and Douyin rise with instant retail, urging traditional retailers to adapt or be eliminated. The decline of the east wind is not death, nor is the rise eternal. People drift with the wind; products, efficiency, and solid fundamentals are the 'evergreen' that protects retail enterprises' continued existence. There is no most tragic, only more tragic. This year, Carrefour has been lonely enough, but it is not alone. Gome Retail's capital chain broke, and its founder continuously 'bled to revive'; Red Star Macalline faced a debt crisis, and its founder transferred 'actual controller' status to survive; previously, Longshang.com Supermarket Weekly statistics showed that over 60% of 15 listed retail companies were in operating losses. These once high-spirited and invincible industry darlings now face a 'life-or-death choice' in changing times. Waves push forward, the industry torrent surges endlessly; the former kings have fallen from the altar, yesterday's newcomers have become new kings, and the current traffic logic frequently creates cross-border unicorns: JD.com fully lays out platform, products, logistics, and empowerment; Meituan leads instant retail; Tmall intensifies supermarkets; Douyin and Kuaishou's instant retail is aggressive... People have no constant state, water has no constant form; there is no template for everlasting business, only continuously evolving enterprises. **No Need for Joy or Sorrow** Before earning the last bucket of gold of 4.8 billion yuan, Carrefour China had already completed its mission. In June 2019, Suning announced the acquisition of 80% of Carrefour China's business, and two years later acquired the remaining 20%, marking the formal countdown to the foreign retail giant's exit from the Chinese market. In the first decade of entering the Chinese market, Carrefour was hailed as the 'Whampoa Military Academy' for domestic chain supermarkets and hypermarkets; its stores were 'living textbooks' for domestic supermarket hypermarkets to emulate, and it indirectly cultivated the first batch of modern chain supermarket operation talents for many domestic retail enterprises, becoming an important force in boosting and leading the rapid growth of China's retail industry. During this period, constrained by slow store expansion and being in a development investment phase, Carrefour, despite booming operations, did not enter an overall profit return period. The second decade (approximately 2004-2013) was Carrefour's golden return period of rapid development and profit harvest in China's retail market. Looking back at the annual sales per hypermarket store, current per-store annual sales and profits are far inferior to the performance of opening a hypermarket over 20 years ago. In 2009, Carrefour's annual sales were 36.6 billion yuan, but it was surpassed by the foreign duo of RT-Mart and Walmart, also representing Carrefour losing its advantage as the top foreign player and its 'golden period' beginning to pass. To reverse the downward trend, Carrefour explored farmer-supermarket direct docking, private brands, import and export trade, store upgrades, and online business, seeking new growth points. At the same time, its rapid sales growth and profit model that overdraws supply chain value made it earn a lot in the Chinese market. In 2013, Carrefour's annual sales in mainland China reached 46.7 billion yuan, a year-on-year increase of 3.2%, with 236 stores, an 8.3% increase, reaching its peak performance. In 2014, Carrefour's sales scale declined despite a slight increase in stores. While many peers were upgrading and transforming, Carrefour gave an impression of 'lying flat', only beautifying its performance report through the consolidation of Greater China business in the years before the sale, thus accelerating the French Carrefour's exit from the Chinese market. From 2014 to 2019, Carrefour China's annual sales were 45.7 billion, 40.1 billion, 50.47 billion, 49.7 billion, 47.4 billion, and 31.2 billion yuan (after 2016, the statistical scope expanded to Carrefour Greater China). It can be said that the Carrefour that Suning took over for 4.8 billion in 2019 was just a half-abandoned shell that had long lost market advantage. Moreover, after the acquisition, Carrefour's losses expanded year by year, reaching a new high of 3.337 billion yuan in 2021. The French Carrefour made outstanding contributions to promoting the development of modern chain supermarkets and hypermarkets in China and earned generous returns from the Chinese market. The French were satisfied and left quietly; without material interests, the usual romance was gone, and they left without any sense of ceremony. The current Carrefour is just an 'expired and outdated' product that unlucky Suning took over, testing whether it can 'turn decay into magic'. It is worth noting that recently Carrefour has frequently reported new news: first, a change of COO; second, further clarifying its positioning as a 'near-field retail service provider' and opening new format 'community quality life centers' in multiple cities across the country, rekindling a glimmer of hope after just experiencing a large-scale out-of-stock crisis in its stores during the Spring Festival. Compared to the French's unromantic 'walk away', Chaoshan native Huang Guangyu has no way back. Gome Retail is not his everything, but he is everything to Gome Retail. Through equity cashing out to inject capital and giving up the actual controller position, he maintains the hope that Gome Retail can survive until the tide turns. The biggest mistake in Huang Guangyu's 18-month exploration after his comeback was 'aiming high but lacking ability'. He saw the opportunities of the times, but does Gome have such accumulation and capability? Trying to build a social shopping platform 'Zhen Kuaile' (Real Happy) single-handedly in the short term is likely an impossible task for Gome or any enterprise. Douyin rose, Kuaishou rose, but how much money was burned behind these platforms, how much grass was planted, and how long did they provide various high-quality content? That is the scientific path for traffic logic commercialization. Gome's 'Zhen Kuaile' at best only technically completed a social shopping APP platform. The suspension of 'Zhen Kuaile' means Gome Retail's strategic correction has failed in business exploration over the past two years, but the financial burden it caused has become the direct reason for Gome's recent capital crisis. The fundamental reason for Gome's crisis is that its main business, the store system, lags behind consumption changes, and a large number of stores have become burdens. Optimizing, repositioning, and empowering Gome's stores will be the key to determining Gome's ultimate success or failure. The latest news from Gome Retail shows that in 2023, it will further streamline and optimize, retaining more than 300 main self-operated stores, introducing an investment partnership model to fully open franchising, and expanding the store scale from 2,407 to 3,200 stores. To a certain extent, the fate of declining giants like Carrefour and Gome is similar; it is impossible to reproduce yesterday's glory, but if they can catch up with this wave of 'instant retail' empowerment and rely on external forces to keep pace with consumers, they will still be an important force for the continued existence of China's retail industry. People drift with the wind; the decline of former giants is an industry trend, no need for joy or sorrow, as long as they do not lose their original intention. **The Rise of Traffic** Hema, an early explorer of the retail traffic model, actually represents the highest level of physical retail enterprises in independently exploring online business. When Hema Fresh appeared in 2016, it was most known for its large seafood dine-in and restaurant-style operations, but its store-based delivery team accounted for over 60% of its store sales. At that time, Hema had two development directions: one was to build competitiveness according to the positioning of a new retail enterprise, becoming a digitally driven retailer with integrated online and offline operations; the other was to strengthen online empowerment capabilities based on store networks, developing towards a direction of traffic platforms and efficient terminal delivery. However, as Alibaba's traffic platforms like Alipay and Taobao hit bottom, the money-burning model passed, Hema operated independently, and the rise of new short-video traffic platforms, Hema's self-operated delivery platform for instant retail also encountered growth bottlenecks. This also proves that any physical retail enterprise relying on its own APP delivery platform to develop online instant retail based on its offline stores, without opening up to external platform empowerment, will find it difficult to pass the cost accounting test. From Hema's development strategy in recent years, it can be seen that it has shifted from new retail born out of integrated online and offline operations to accelerating towards a sustainable development strategy that returns to the essence of retail business: format segmentation, scale expansion, product supremacy, and deep supply chain cultivation. That is to say, Hema has moved from its initial strategic focus on pursuing traffic and delivery empowerment to the eternal topic of retail business longevity: customer segmentation, product strength, and supply chain efficiency. This is somewhat similar to Yonghui Superstores' development strategy. First, Yonghui Life APP platform is lukewarm, relying more on third-party empowerment platforms; second, in multi-format exploration, Yonghui has never shaken off its over-reliance on the hypermarket main business, and its development of segmented formats and markets is not as good as Hema's. It can be said that Hema is an excellent retail enterprise with traffic business logic thinking, but because the maintenance, attraction, and loss of platform-empowered traffic resources overly depend on platform content interaction capabilities and continuous resource investment, Hema can only choose to be an excellent retail enterprise with internet thinking, not suitable for the path of an empowering traffic platform. However, in the context of fully popularized mobile internet resources and fully online consumption habits, traffic empowerment platforms that aggregate massive merchant resources and have the ability to empower them have become very promising. This is the business logic behind the rise of traffic platforms like Meituan Waimai, Douyin, and Kuaishou, which have become the new favorites of local life service empowerment platform models. Public data shows that in 2020, total retail sales of consumer goods were 39.2 trillion yuan, and the scale of China's local life service market was 19.5 trillion yuan, which will grow to 35.3 trillion yuan by 2025. The online penetration rate of local life services will also increase from 24.3% in 2020 to 30.8% in 2025. It is worth noting that at the beginning of this year's Spring Festival, Meituan and Douyin, both focusing on local life service platforms, staged a battle in the 'instant retail' track. Meituan's advantages after years of cultivation are, first, its 690 million high-quality active platform users nationwide, and second, its mature 5.27 million instant delivery riders covering cities nationwide. However, the traffic resources of short-video content platforms like Douyin and Kuaishou are soaring; Douyin's total users have exceeded 800 million, posing a huge challenge to Meituan's user retention. In response, Meituan tested a short-video feature 'Kan Kan Zhuan' (Watch and Earn), while Douyin, which 'turns from entertainment to commerce', quietly launched a supermarket business in January and then recruited merchants in multiple cities across the country, partnering with Ele.me to pilot 'food delivery'. Clearly, one of Meituan's two core competitive advantages, front-end entry resources, is being greatly impacted by the 'content is king' short-video traffic platforms like Douyin and Kuaishou. More importantly, the retention of entry traffic resources often changes 'overnight', which is also a relatively fragile 'lifeline' for Meituan's success or failure. For Douyin, it pursues a short-term strategy of asset-light, low-risk traffic monetization, and its cooperation with Ele.me for offline delivery means Douyin is only 'testing the waters' in the instant retail track. Physical stores dominated offline commerce in the store-network era, but under the industry trend of integrated online and offline operations, more and more 'instant retail' local life services that occupy consumer minds have become a business model that traditional physical retail enterprises and traffic platforms must pursue together. As such, it is suggested that physical retail enterprises should not spend too much energy on increasing in-store customer traffic; the decline in in-store customer traffic is a major trend, and an increase is actually an unstable, abnormal short-term phenomenon. While consolidating product and operational fundamentals, they should focus on how to improve the ability to increase home-delivery customer traffic. The decline of giants and the decrease in customer traffic are not the fault of physical retail enterprises, but the choice of consumers; no matter how strong the momentum of traffic empowerment platforms, they cannot replace the product resources and supply chain infrastructure accumulated by local physical retail enterprises over the years. But the overall pie for physical retail will definitely shrink, and competition will intensify; some physical retail enterprises with weak basic business capabilities will inevitably be eliminated. Guard your own value, embrace industry opportunities, and on the 'big cake' of instant retail traffic business logic, physical retail enterprises will not be eliminated as long as they do their own part well. --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. 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