Click to read the original text for details. On the 24th, Carrefour announced: Carrefour signed a term sheet with Tencent and Yonghui regarding a potential investment in Carrefour China, while its French headquarters announced plans to cut 2,400 jobs and shift its business focus to e-commerce and organic products. The significance of this news is that the long-pending Carrefour China has finally been "sold" to Tencent. 01 Carrefour Was Bound to Be Sold That Carrefour China wanted to sell itself has been an open secret in China's retail industry for years. 1995 marked the 36th year since Carrefour's founding, and in that year, the first Carrefour store in mainland China officially opened. Over 23 years, Carrefour had its moments of glory: Within just a few years, it established strongholds in Shanghai, Beijing, Jiangsu, Guangdong, Sichuan, and Yunnan. By 2006, Carrefour had over 100 stores in China, and each new store was a huge hit. During this period, Carrefour was like a foreign monk who could chant scriptures better; local retailers were eager to learn from Carrefour's model and poach its talent. At that time, China's local retail industry was still in its infancy, and mature hypermarkets like Carrefour basically had a free ride. The vast market and long-term leading position made Carrefour feel very comfortable, and gradually it stopped being keen on change and optimization. Carrefour, which had been smooth sailing, suffered its first major blow during the 2008 Beijing Olympics. The globally watched Olympic torch relay faced unfair treatment in Paris, France, and Sino-French relations hit a freezing point. Despite official statements that Carrefour was a friendly Chinese enterprise, Carrefour China was dragged into a vortex because of this incident. However, this was just the beginning. From then on, Carrefour was like a row of dominoes, continuously regressing. In 2009, Carrefour China's leading position in the hypermarket sector was overtaken by RT-Mart, which had once learned from it. Soon, its number of stores in China was also surpassed by its biggest rival for half a century, Walmart. Every year thereafter, Carrefour China's performance and profits declined, falling by more than 10% annually. Until last year, there was still no sign of improvement. It was only a matter of time before Carrefour China, mired in a quagmire, would be sold. 02 Why Carrefour Had to Sell To save itself, Carrefour had struggled to survive, but none of its efforts achieved the desired results. First, it lost the counterattack against e-commerce. In 2013, Carrefour China launched its e-commerce platform "Carrefour Online Mall," focusing on home delivery, because they believed that the decline in performance was simply because consumers were too lazy; as long as they could deliver to their doors, with Carrefour's years of reputation, victory was within reach. Moreover, Carrefour's delivery was too slow: in Beijing, the fastest was next-day delivery, and only a few areas in Shanghai enjoyed 3-hour express delivery. Also, users had to spend 129 yuan to get free shipping, compared to Tmall Supermarket's 88 yuan and JD Supermarket's 99 yuan; it had already lost in both time and price. Second, linking with food delivery platforms was a drop in the bucket. When Dianping, Meituan, and Baidu Waimai were in fierce competition, Carrefour could be seen among them. But compared to other giants, Carrefour's presence was particularly small. These platforms could bring a few hundred orders per day to stores, but for hypermarkets with annual revenues in the hundreds of millions, this was just a drop in the bucket, better than nothing. Third, Carrefour also tried to grab the convenience store business. In 2015, Carrefour first launched "Easy Carrefour" convenience stores in Shanghai, using its cost advantage in real estate from hypermarkets to compete for community convenience store business. However, from the first store to now, "Carrefour Easy" has only 30 stores. Even so, Carrefour attempted to adjust its business mix. Starting in 2017, all new stores reduced their self-operated retail space while expanding experiential business proportions, hoping to retain customers. This plan was implemented for a year but still failed to stop Carrefour China's decline. Its own breakout attempts failed, while new competitors grew stronger. RT-Mart, once a junior, rose up, and the impact of e-commerce was even stronger. Last year, Tmall's "Double 11" global shopping festival achieved a single-day transaction volume of 168.2 billion yuan, nearly a month's sales for Carrefour's global market. Furthermore, Carrefour's brand was greatly discounted. Employees were slack, product prices were high, relations with suppliers were strained, and supply was insufficient... These negative aspects that should never appear on a globally renowned supplier were all present at Carrefour. Finally, the exhausted French headquarters had to shrink overseas operations and focus on the European home market. Carrefour's old rival Walmart faced the same dilemma, and their fates in China were almost a carbon copy. 03 All Wars Ultimately Become Tencent and Alibaba's Home Turf Previously, there were rumors that Carrefour China, which was pending but bound to be sold, would eventually belong to Alibaba. Just two days before the news, media reported that the buyers were Auchan and Alibaba. But clearly, Carrefour joined the "anti-Alibaba alliance" and partnered with Tencent. Some joked that all wars ultimately become Tencent and Alibaba's home turf. After all, just 15 days earlier, RT-Mart had completed its equity transfer with Alibaba, announcing it became a member of Alibaba's offline retail layout matrix. Walmart also partnered with JD.com early in 2016. Tencent obviously would not let go of this last remaining major hypermarket. There were early signs that Carrefour would choose Tencent. In April 2015, Carrefour and Tencent cooperated to roll out mobile payment technology across stores under its Chinese subsidiary. This time, Tencent will further promote WeChat, WeChat Pay, cloud computing, and other services within Carrefour's ecosystem, and develop supporting retail services on its social platforms. It's a continuous stream of online traffic! Clearly, Tencent is very suitable for Carrefour. Last year, China's traditional retail industry saw frequent major moves, and the vigorous "new retail" arrived. This year, every traditional supermarket will inevitably face the harsh reality of e-commerce reshaping the offline market. With Carrefour's cooperation with Tencent, national retail supermarket enterprises have basically completed their alignment. Sun Art Retail, Bailian, Sanjiang Shopping, and New Huadu have joined Alibaba's "new retail" camp, while Walmart, Yonghui, and Wushang Group have become Tencent's allies. The battlefield layout is set; the outcome will be seen sooner or later. ▼ Extended reading: How does "new retail" "kill" traditional stores? (After reading this, you'll understand!) Recently, a post has been circulating on social media, titled: "Destroying you has nothing to do with you!" "As the year-end approaches, walking on the street, watching the bustling crowd, the thief cries! A cashless life leaves him with no way to start; now almost everyone goes out without cash, everything relies on mobile payment, even buying vegetables doesn't need cash, and even phones are hard to steal because people are always looking at them, never leaving their hands. A profession that has existed for thousands of years—the pickpocket—has been destroyed like this. New models create new lives; if you don't accept new things, you'll be eliminated! What killed the pickpockets wasn't the police, but WeChat and Alipay. Unfortunately, Principal Ma and his team are now working on "new retail" again. What new retail wants to eliminate is traditional stores! 01 What the heck is new retail? 2017 was the first year of new retail, and we saw many forms of it. For example: Hema Fresh represents a "supermarket + seafood and fruit market + restaurant" O2O new species; unmanned supermarkets and unmanned convenience stores are big houses or small boxes without cashiers, where customers pick items and pay themselves; unattended shelves are convenience stores where office workers only need to walk the last 10 meters to buy things. These new retail forms are diverse, and opinions vary on their reliability, but they either involve heavy investment from giants like Alibaba and Tencent, or they easily secure tens of millions in venture capital. Regardless of which one succeeds first, "new retail" has become an inevitable trend in retail development. 02 Retail has many "forms," but what is its "spirit"? In summary, no matter what form new retail takes, they all share these commonalities: all their sales are online, yet all sales are fulfilled through offline stores. They all manage with "three transformations": online, chain, and data-driven (unmanned). It can be predicted that a large number of traditional stores will gradually fall into a predicament: higher costs, fewer customers, until "corporate death." Because O2O (online-offline integration) and chain operation (branding of sales terminals) are unstoppable facts of social development; traditional stores should harbor no illusions about this. In the past five years, traditional stores have decreased by 20%. This decline is about to enter the "fast lane" because new retail is here! 03 How does new retail, with its online, chain, and data-driven features, "kill" traditional stores?

  1. Steal customers with online traffic—Online shopping uses various promotions to stimulate the public; ordering online is gradually becoming everyone's purchasing habit, and this inertia is eroding offline consumers bit by bit.
  2. Steal customers with offline convenience—New retail is in communities, offices, and cars; it lets customers "not move their mouths or legs," making distances extremely short and maximizing satisfaction of consumers' "laziness."
  3. Steal customers with customer management—Based on fully data-driven management, new retail "knows customers' hearts best"; it knows what you like and when you need it. Highly personalized customer relations stick customers tightly, and they never go to traditional stores again.
  4. Steal customers with lower costs—New retail's chain characteristics make supply chain, logistics, and operations highly intensive. Upstream companies give policies, and prices can be so low that you're losing money, but they still make a profit.
  5. Steal customers with strong brands—Consumers' brand awareness is growing, and the trust cost of stores is rising. Ultimately, new retail uses chain brands to endorse quality, and traditional stores can only sell unprofitable "commodity" products.
  6. Steal profits with information technology—New retail uses high-level informatization to guide product optimization, and stores achieve sales sharing without inventory, while individual traditional stores are like small boats and isolated islands in the ocean.
  7. Steal profits with stronger resources—Based on large scale and big brands, they can directly cultivate markets, create best-selling exclusive products, and sales data provides credit evaluation for capital providers, supporting large capital and low costs. The "tricks" used by new retail may be unheard of for traditional stores, and they may watch themselves being eliminated day by day without being able to fight back, feeling helpless. With just these 7 tricks, traditional stores are "completely defeated" in front of new retail and are bound to be eliminated by society. 04 When new retail strikes, how should traditional stores respond and save themselves? Is it true that traditional stores can only either "wait" to die or "seek" death? The answer for you is: First, accept new things and follow trends; open your mind and thinking, otherwise nothing else matters. This is called "not waiting to die"; Second, as small individuals, you can only let others spend money to bring you along, unite and stick together, turning "sheep" into "wolves." This is called "not seeking death"; Finally, leverage your unique advantages, play to your strengths and avoid weaknesses. What new retail has, you have; what new retail doesn't have, you also have. Source: CEO Business Insider, Business Think Tank -END-