---
title: "In the Post-Pandemic Era, Fresh Food Supermarkets Rush to Private Domain"
description: "Holding the original position and finding incremental space is the top priority for supermarket enterprises, and private domain is a directional choice. Wang Wei, founder of Fresh Legend, advises fresh food supermarket enterprises to pay attention to online business, as consumers have been educated and online shopping is mature. By early 2022, Fresh Legend's online sales accounted for 10% and are planned to reach 15%-20% this year."
author: "楚勿留香"
publisher: "New Distribution"
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published: "2022-05-28"
language: "en"
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# In the Post-Pandemic Era, Fresh Food Supermarkets Rush to Private Domain

> Holding the original position and finding incremental space is the top priority for supermarket enterprises, and private domain is a directional choice. Wang Wei, founder of Fresh Legend, advises fresh food supermarket enterprises to pay attention to online business, as consumers have been educated and online shopping is mature. By early 2022, Fresh Legend's online sales accounted for 10% and are planned to reach 15%-20% this year.

**Holding the original position and finding incremental space is the top priority for supermarket enterprises, and private domain is a directional choice.**
**We must pay attention to online business—this is a sincere suggestion from Wang Wei, founder of Fresh Legend, in his sharing summarizing 2021 for fresh food supermarket enterprises.
In Wang Wei's view, it has become inevitable for consumers to shop online. More importantly, consumers have been educated, and online shopping, whether in terms of software, technology, or logistics delivery, is very mature.
As early as 2020, Wang Wei observed a fact: 20% of customers had gone online, and these customers basically only purchased goods online.
At that time, echoing Wang Wei's judgment, customers of traditional supermarkets and fresh food stores were being diverted: some flowed to the retail business of platform e-commerce; another part was "intercepted" by various online "vegetable buying" e-commerce; and another part was "received" by enterprises with online capabilities.
Especially the pandemic has passively cultivated consumers' online consumption habits, and this habit has been retained.
It was also at this time that Fresh Legend opened ten stores in Hefei on August 29 of that year, promoting the pre-sale model of "order today, pick up at store tomorrow" in its Fresh Legend small fresh stores.
Through the "Legend Premium" WeChat mini-program, Fresh Legend not only increased sales but also accumulated many users and gradually established its own private domain traffic.
As of early 2022, the better-performing Fresh Legend small fresh stores could achieve daily sales of 15,000 to 16,000 yuan.
Currently, Fresh Legend's online sales share has also reached 10%. "And it is profitable, even not lower than offline profits," Wang Wei said. "This number is still growing, and we plan to reach 15% or even 20% this year."
In years of practice, Wang Wei also reflected that in the past, doing online business had some radical practices, just selling for the sake of selling. "Looking back now, as long as we follow the routine and seriously maintain the online platform from the perspective of providing convenience to consumers, the natural growth of sales is also very considerable and very fast."
This conclusion from practice coincides with the view of He Di, General Manager of Tencent Smart Retail's Vertical Industry Ecosystem: "For enterprises with basic online capabilities, when the private domain share in online business is below 20%, it will basically grow automatically. If enterprises can make appropriate investments and refer to Tencent Smart Retail's private domain operation methodology, and do it with heart, generally the private domain share can reach 50%, and most enterprises can achieve it," He Di told Ling Shou.
More and more retail enterprises are starting to focus on online and embrace private domain. Whether it's regional enterprises like Beijing's Shouhang Supermarket or Puyang's Green City Supermarket in Henan, or head enterprises with a certain scale like Yonghui Supermarket, they are all developing private domain.
In fact, some traditional retail enterprises are unconsciously doing the same thing in their operations: accumulating their own private domain. After the baptism of the pandemic, enterprises' attitude towards "private domain" operation has shifted from the past question of "whether to do it" to "how to do it better."
**Building private domain operation capabilities has become a consensus among fresh food supermarket enterprises.**
As early as 2015 and 2016, offline traffic began to shrink. At that time, online e-commerce rose and took away most of the offline traffic.
He Di said that on the one hand, the customer base is getting younger, and people tend to prefer online; on the other hand, the originally relatively mature customer base also has online needs. "This is an inevitable trend, and the pandemic accelerated this process."
Currently, almost all supermarkets are facing the dilemma of the double impact of the new economic normal and the pandemic, with both sales and customer traffic declining. Even some supermarkets that have adjusted quickly have improved their difficulties, but it is still not optimistic.
Some retail enterprises have adjusted their responses. In addition to strengthening product power, they have all taken online capabilities as an important direction.
Taking Beijing Shouhang Supermarket as an example, in the first half of 2021, when some supermarkets saw significant declines in performance, Shouhang Supermarket had already begun to optimize product structure and upgrade supply channels.
**More importantly, it is consumer-centric, with more online functions added.**
First, home delivery services for regular products. Based on stores, cooperate with JD Daojia, Meituan, Ele.me, etc. At the same time, online products can be extended to basically cover all items, and offline stores do a good job of experience.
Second, Shouhang's APP products are mainly fresh ingredients, featuring specialty, quality, and precision, that is, focusing on family three meals a day.
Third, group buying. Periodic, seasonal, and high-unit-price fresh products can be put online for pre-sale, and through collective ordering and order-based procurement, achieve high gross margins.
Through WeChat mini-program ordering, consumers pick up goods at the store, which not only brings traffic to the store but also increases sales.
As of now, Shouhang Supermarket has 700 communities with 150,000 people, and sales account for about 4% of the company's total sales, with group buying gross margin reaching 15%-17%.
These users will be accumulated as Shouhang Supermarket's private domain traffic.
Liu Yihua, Chairman of Shouhang Supermarket, frankly said that the pandemic has promoted the rapid development of home delivery business, and original retail enterprises need to restructure a business model suitable for the future.
This is indeed the current situation facing retail enterprises: consumers' online shopping habits have been formed, and home delivery business has become a "standard configuration"; at the same time, the proportion of online sales will become larger and larger, and it is irreversible.
In this context, holding the original position and finding incremental space will be the top priority for supermarket enterprises.
Private domain is a directional choice.
He Di said that the construction of private domain helps supermarket enterprises solve two major problems: first, to undertake and meet the online needs of some of the original customer groups; second, to help supermarkets attract young consumers.
More importantly, it helps supermarket enterprises establish a private domain traffic pool that they own and can directly reach consumers, and also obtain full-chain data.
In He Di's view, the fresh food supermarket industry has a great advantage in doing private domain because offline stores already have customer traffic. If supermarkets cannot meet the online needs of these customers, they will gradually be divided up by e-commerce platforms.
Another fact is that the difficulties faced by the supermarket industry and the decline in offline traffic did not start with the pandemic, nor even with Tencent Smart Retail's private domain in 2018.
"But in 2015 and 2016, we began to find that offline traffic was no longer growing," He Di believes. "The construction of private domain or online business, to some extent, hedged against the fact that offline traffic was not growing. If we don't do omni-channel, supermarket enterprises may drop an additional 20% or more on top of the original sales decline."
**For supermarket enterprises, they must find a path suitable for their own development of "online" and the construction of private domain traffic.**
In 2021, Tencent mini-programs' daily active users exceeded 450 million, merchant self-operated physical goods transaction volume doubled year-on-year, and retail mini-program transaction volume increased by more than 100% year-on-year.
In fact, the new private domain business model rooted in WeChat has become an important position for more and more merchants seeking transformation and growth.
For fresh food supermarket enterprises, new users can be accumulated through fission tools such as WeChat mini-programs or bargaining red packets, bringing better value to the operation of their self-operated apps.
A top-ranked large fresh food supermarket enterprise is a deep beneficiary of private domain operation. In its view, one of the most important experiences is to deeply operate communities well. Since the second half of 2021, the enterprise has gradually converted its previous WeChat fan groups to enterprise WeChat communities.
Because enterprise WeChat has more management characteristics, for example, due to job changes, resignations, etc., the enterprise WeChat group can be better handed over.
This also shows that in the process of digital omni-channel transformation, WeChat mini-programs and private domain operation have become an indispensable part.
It is through WeChat mini-programs, self-operated apps, etc., that this fresh food supermarket enterprise has not only accumulated a huge user base but also achieved steady growth in online revenue.
Currently, online business has exceeded 10 billion yuan. According to its plan, as users' shopping habits gradually change and the user age group shifts to more young users, in the next 2-3 years, its online business share will double to more than 20%.
It is also worth mentioning that deep operation of private domain has also brought this retail enterprise closer to profitability in online business.
Regarding how physical supermarkets can do private domain operation well, another leading fresh food supermarket enterprise that is doing well in the online private domain field also summarized three experiences:
**First, do a good job of user reach.** At present, the overall WeChat ecosystem link of the supermarket has been opened up, and through WeChat ecosystem tools such as mini-programs and official accounts, users are reached accordingly.
**Second, do a good job of community operation management.** We must think of various ways to enable users to have better interaction and connection in the community. For example, many Tencent tools can be used for user information management, so that users in the group feel a sense of satisfaction and honor, and only then can the group be operated better.
At the same time, it is necessary to strengthen the "housekeeper" of the community through user operation management methods, standardize group operation, and also enable users to have better interaction and sticky connections in the community.
**Third, make good use of the complementarity of mini-programs and apps.** If it is an old customer with strong enterprise recognition, because they have downloaded the APP for a long time, their stickiness and purchase frequency will also be very high, and this part of users should be accumulated on the APP;
At the same time, under the situation where the cost of acquiring online user traffic is getting more and more expensive, it is necessary to obtain more new customer traffic through WeChat ecosystem tools such as WeChat mini-programs.
"From the perspective of cultivating and acquiring new customers, I suggest that enterprises make deeper investments in the mini-program section," the above-mentioned person in charge said.
It is worth mentioning that the "Penguin Ji Market" launched by some head retail merchants in cooperation with Tencent Smart Retail is very popular among consumers.
"Penguin Ji Market" is a major business activity launched by Tencent Smart Retail in 2022 in conjunction with retail merchants, linking to brand owners and retailers. Every month, Tencent Smart Retail and cooperative merchants arrange specific slot activities to push some special products and special items to consumers. During last year's Double 11, it achieved very good results.
This is also conducive to the mini-program transactions of fresh food supermarket enterprises and maintaining user stickiness.
Just a few days ago, an annual value list measuring the status and capability of brand private domain operation was released.
This is the 2021 "T+ Brand Private Domain Value List" released by Tencent Smart Retail on April 11. Enterprises such as Yonghui Supermarket, Carrefour, and Duodian DMALL won the annual industry benchmark in the supermarket and fresh food field.
He Di said that the release of the list has been brewing for some time, and it is indeed a good time now—supermarkets and fresh food enterprises are currently struggling, but they have also accumulated some private domain. "I hope that through the release of the private domain list, on the one hand, we can create some benchmarks; on the other hand, we can also cheer up the teams doing this in the entire industry."
In fact, the list has a bigger purpose: to awaken more supermarket enterprises to pay greater attention to private domain operation, and to replicate the successful operation experience of some supermarket enterprises that have made achievements in private domain operation to more supermarket enterprises.
In fact, for many supermarkets, it is difficult to face the current difficulties solely by relying on their own enterprise strength. They must use external forces, especially in private domain operation.
He Di said that supermarkets of different sizes and development levels have different needs for private domain operation.
The first part is for supermarket enterprises ranked TOP10 or TOP20 by CCFA (China Chain Store & Franchise Association). Their biggest challenge is to achieve profitability as soon as possible.
Because these enterprises started earlier in private domain development and have good overall penetration. As early as 2018, after the establishment of Tencent Smart Retail, it began to help head enterprises build private domain. These head enterprises are willing to invest in private domain operation and have operated for 2-3 years, and are basically near the break-even point.
More importantly, through private domain operation, these enterprises have built digital teams, have passed some pain points in the transformation process, and have laid a good foundation for the next omni-channel digital transformation, including store digitalization and refined operation.
The second part is the waist and long-tail regional chain supermarkets. At present, these enterprises are also doing it, or have historically purchased some mini-program website building, etc., but for various reasons, they have not built up private domain.
Now their main goal is to build private domain and establish private domain operation capabilities, and find the correct way to increase private domain penetration.
At the same time, He Di also gave some suggestions to supermarkets that build private domain operation capabilities.
The most critical factor is that this is a "top leader" project, and the chairman must personally approve it.
**First, set a reasonable private domain operation goal, such as about 5% of overall sales;**
**Second, find a reliable person in charge to lead the private domain operation team;**
**Third, when not having the ability to build a technical team, make good use of current technical service providers or Tencent Smart Retail's technical capabilities to get things done.**
Of course, this also requires some capital and resource investment.
He Di emphasized that investment in private domain must be done. It has at least three functions: "First, it can hedge against the decline in offline traffic; second, private domain operation is gradually reaching the break-even point, and in the future, it can help supermarket enterprises make money; third, it can help supermarkets cultivate talents for next-step development and make reserves."
To some extent, this is a stage that supermarket enterprises have to face and inevitably go through.
In the words of Wang Wei, Chairman of Fresh Legend, **future business may have no distinction between online and offline, and consumers are not purely buying online or offline; their choices are diverse.**
"In future business, competition is in the intensity of business. For example, in rainy and snowy weather, online sales are good, and when the weather is good, offline sales are good. Young people may prefer online, while the elderly prefer offline."
The biggest advantage of supermarket enterprises is to use and make good use of their supply chain to serve more consumers and more consumption needs in different scenarios. For current supermarket enterprises, they should actively respond to difficulties, build and use their private domain well.
There is no doubt that the era of deep cultivation of private domain has arrived.
Source: Ling Shou (ID: lingshouke), Author: Chu Wuliuxiang
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