Since last year, the retail industry has undergone a bloody transformation. Traditional mom-and-pop shops, hesitantly moving forward amidst concerns, have finally made their new choices; new retail, riding the wave, continues to push forward, with most still in the cash-burning phase; chain convenience stores are expanding from first-tier to second- and third-tier cities. The potential of China's convenience store market is indeed limitless, but the current situation is too fragmented, small-scale, and not yet significant. The crux of the problem lies in capital chains and supply chains. However, remember that analyzing specific problems is the key to solving them. Some rise, others fall; in recent years, new and old brands have alternated and risen, with capital giants also fueling the trend. With the recovery of traditional retail, convenience stores have become the hottest retail format. Lawson's entry into Nanjing was met with immediate sellouts, and Japanese chains like FamilyMart and 7-Eleven have announced accelerated expansion in China this year. Capital has also entered the fray: in November last year, Today convenience store announced a 200 million yuan B-round financing; on March 9 this year, Xi'an Every Day convenience store announced a 200 million yuan investment led by Chunxiao Capital. "JD plans to open 1,000 stores a day, with a JD convenience store every 300-500 meters." On April 12, Liu Qiangdong's remarks about JD convenience stores at the 2018 China 'Internet+' Digital Economy Summit once again made 'convenience stores' the focus of industry discussion. Liu Qiangdong stated that in the next five years, JD will open over 1 million JD convenience stores nationwide, with one every 300-500 meters, half of which will be in rural areas. Prior to this, Alibaba also launched the Tmall Xiaodian (Tmall Small Store) renovation plan, and Alibaba's Lingshoutong announced last year that it would cover 1 million Tmall Xiaodian stores in 2018. From these grand plans, it's clear that the convenience store market has moved from the budding spring to the hot summer, much like the recent weather, with a sense of stuffiness amidst relief. It's often said that the real economy is declining year by year, yet now e-commerce giants are going offline to engage in physical retail. E-commerce wants to integrate convenience stores, but will small shop owners be tempted? Should they choose Alibaba or JD? Both use a franchise model for retail upgrade; no matter how sweet the words or impressive the data, what matters is actual benefits. In other words, can I make money by joining you, or more than I do now? Currently, China's convenience store market has three characteristics: first, low distribution density with huge development space; second, obvious regional patterns, but national distribution is still under construction; third, Chinese and foreign brands have different development strategies, leading to vastly different revenue situations. What are the costs of joining JD or Alibaba? Tmall Xiaodian Required Investment

  1. Deposit: 10,000 yuan.
  2. Technical service fee: 3,999 yuan/year, renewed annually.
  3. Average monthly purchase amount: over 10,000 yuan in physical goods on the Lingshoutong platform.
  4. Signage costs: borne by the owner, amount confirmed with third parties based on actual conditions. Q: What services will Tmall Xiaodian franchisees enjoy? A: With the mission of achieving better small stores, franchisees will enjoy T+1 delivery in areas covered by forward warehouses, T+2 delivery in uncovered areas; 48-hour after-sales service; fresh food delivery (expanding to second-tier cities within a year); credit purchase with up to 52 days, average 37 days extra repayment period; value-added services from the Lingshoutong recharge center; Tmall brand authorization for store signage and shelves (optional LED signage) visual design. Tmall Xiaodian Promotion Plan and Scope Tmall Xiaodian's promotion is limited to 2-6 tier cities, expanding from second-tier to sixth-tier, determined by the progress of the three-level warehouse and distribution system executed by Lingshoutong's new distribution, ultimately covering county level, not towns or below. Currently, Lingshoutong has achieved efficient coverage in East China, South China, and Central China; entered Sichuan in May; is now opening the Southwest market; built the Tianjin regional warehouse on August 22; and will open the North China market by year-end. JD Convenience Store Required Investment JD adopts zero franchise fee, zero management fee, zero training fee for franchisees, only charging a quality deposit. Store rent, utilities, renovation, and inventory costs are borne by the owner. The quality deposit ranges from 10,000 to 100,000 yuan, plus renovation costs typically 30,000-50,000 yuan. At first glance, opening a JD convenience store requires less investment, while Tmall Xiaodian has a higher threshold. First, only small stores already ordering through Lingshoutong are eligible; the hard requirement is monthly purchases of over 10,000 yuan through Lingshoutong and a store area of over 50 square meters; soft conditions include location, service level, reputation meeting Tmall Xiaodian standards, and willingness to bear renovation costs; franchisees must pay a 10,000 yuan deposit, 3,999 yuan/year technical service fee, and renovation costs confirmed with third parties based on the owner's desired level and actual conditions. The total renovation cost is controlled at 11% of traditional chain convenience store costs, about 30,000-60,000 yuan. JD's Zhangguibao platform, according to incomplete statistics, offers several thousand products. Although sourced directly from producers, which should be advantageous, combined with JD logistics, it seems a strong alliance. However, several thousand products may not fully meet the needs of some convenience stores. Some merchants report that some products have price advantages, while others are more expensive than local sourcing. According to leaks, some say that joining JD Zhangguibao only allows purchasing goods, not exchanges, and cannot hang the JD brand; to franchise with signage, a quality deposit of about 60,000 yuan is required. From JD and Alibaba's approaches, they both adopt a "rebranding" model to transform "mom-and-pop shops." They mainly provide training, store renovation guidance, brand authorization, and access to online data systems. But both focus on becoming suppliers to convenience stores, not on quality control. Not touching management, in the view of He Wen, founding partner of Chunxiao Capital, "This is down-to-earth; on one hand, owners are given full freedom, and on the other, Alibaba and JD's strong product selection capabilities help owners save costs, increase profits, and complete retail upgrades well." According to the head of JD New Channel, as of March 2018, JD convenience stores open 1,000 to 1,200 new stores weekly, receiving 50,000 applications daily, many from workers wanting to return to their hometowns this way. In fact, compared to JD's guidance on renovation and operations, owners care more about location and pricing. But that's not the most critical issue; they mainly care about getting products at better prices and whether upgrading under JD or Tmall guidance can effectively boost sales. If a small store is in a bustling urban area, the city convenience store market is already a red ocean, surrounding consumption is saturated, and online shopping can deliver same-day, then the income increase after upgrading may not be significant. Returning to traditional mom-and-pop shops, they seem to have no advantages now, but why have they survived in the market for so long? Through cost-benefit analysis, owners can determine what purchasing channels and methods to adopt to maximize profits. For traditional mom-and-pop shops, costs mainly include rent, labor, and product prices; saving expenses is equivalent to increasing income. Rent is unavoidable, meaning reducing labor costs to lower expenses, while comparing prices to get low-cost goods. What is a "mom-and-pop shop"? As the name implies, it's a shop run by a husband and wife. Such scenes are common in China, especially in small cities or counties: the husband handles purchasing and moving goods, the wife handles stocking and cashiering, giving the small convenience store a sense of life. Labor is saved, but business is tough, facing survival difficulties, so traditional mom-and-pop shops have to change. Chaotic product selection, uneven quality, severe homogenization, and declining operational efficiency year by year are common problems faced by almost all "mom-and-pop shops" across China, and they are the reasons these small stores desire transformation, hoping to catch the wave of giant-led renovation and use giants to improve themselves. However, for "mom-and-pop shops," the renovation wave by Alibaba and JD is an opportunity because they are on the verge of being eliminated by the times. According to incomplete statistics, there are about 6 million such small stores in China, penetrating every capillary of the Chinese economy. For Alibaba and JD, this is an opportunity but also a challenge. It's understood that some merchants who have run supermarkets for a long time already have multiple purchasing channels and are skeptical of JD or Tmall's pricing and flexibility. Moreover, how many of them know how to order online? For a small store with annual profits of only tens of thousands of yuan, they may not be willing to join Tmall or JD. From a capital perspective, since the second half of last year, many investment institutions, including Sequoia, Chunxiao, and Xinzhongli Group, have begun entering the convenience store sector. Chunxiao Capital invested in Xi'an Every Day and 131 Convenience Store in 2018, and Sequoia Capital invested in Jianfu and Today convenience stores. Previously, e-commerce giants competed for online traffic, but dividends are gone; now they are turning to offline physical retail. In the future, the outcomes of convenience store renovation by giants like Alibaba and JD, how long their interest in this renovation business will last, and whether they will absorb chain convenience store brands are all worth watching. Source: Kaiman Unmanned Convenience (km4000_bl) Activity Process:

8th: Check in at designated hotel in Changsha; 9th: Visit Changsha New Gaoqiao; 10th: Visit Guangzhou No.1 Life; 11th: Visit Dongguan Caihua Commercial Trade; 12th: Return or free arrangement for sightseeing; Distributor friends interested in transformation are welcome to join us for understanding and on-site inspection: Organization Format ************1. Company visit

  1. Actual market case visit************************3. Warehouse visit
  2. On-site explanation/one-on-one communication************5. Salon training Participating distributors only need to pay a 200 yuan registration fee Other expenses are self-covered Long press this QR code or click "Read Original" to register Long press QR code to add WeChat for registration Previous inspection group photos: << Swipe to see next image >> 8th Japan New Retail Inspection Group Photo, from left to right: Japan Aeon Headquarters, Japan's 4th largest convenience store MINISTOP store manager sharing, "MUJI's Transformation" author Watanabe Yonehide giving a lecture on MUJI, Kyoto 8001 Managing Director Hirotoshi Minami explaining the fresh food + farm business model. << Swipe to see next image >> 7th B-end E-commerce Inspection Group Photo, from left to right: Maidelin, Haiding, Wangcang. << Swipe to see next image >> 6th B-end E-commerce Inspection Group Photo, from left to right: Zhongke Shangruan, Shuhai Supply Chain, Yunmei Shares, Yishang Logistics. << Swipe to see next image >> 5th B-end E-commerce Inspection Group Photo, from left to right: Huiwangxing, Beiquan, Tongying Tianxia, Quanshi Hui, Zhongke Shangruan. << Swipe to see next image >> 4th B-end E-commerce Inspection Group Photo, from left to right: Alibaba Lingshoutong, Qianmi Network. << Swipe to see next image >> 3rd B-end E-commerce Inspection Group Photo, from left to right: Yunbao Shangmeng, Weijie City Distribution, Wanshang Yizhan. << Swipe to see next image >> 2nd B-end E-commerce Inspection Group Photo, from left to right: Jinhuobao, Caiba, Yishang << Swipe to see next image >> 1st B-end E-commerce Inspection Group Photo, from left to right: Piduoduo, Beiquan, Yishang. ClickRead Originalto register -END-