--- title: "Major: Top 10 Events in China's Retail Industry in 2017" description: "What major changes occurred in China's retail industry in 2017? What new business models emerged? Which companies stood out? Where is the future of retail heading? We take you through the 'Top 10 Events in China's Retail Industry in 2017'." author: "凌晨" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-11-02" language: "en" canonical: "https://xinjignxiao.com/en/articles/major-top-10-events-in-china-s-retail-industry-in-2017-3de9b259/" markdown: "https://xinjignxiao.com/en/articles/major-top-10-events-in-china-s-retail-industry-in-2017-3de9b259.md" original_source: "https://mp.weixin.qq.com/s/_FaABLqlNl_FMVGpbvJ6_Q" translation: "https://xinjignxiao.com/zh/articles/%E9%87%8D%E7%A3%85-2017%E4%B8%AD%E5%9B%BD%E9%9B%B6%E5%94%AE%E4%B8%9A%E5%8D%81%E5%A4%A7%E4%BA%8B%E4%BB%B6-3de9b259.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/major-top-10-events-in-china-s-retail-industry-in-2017-3de9b259/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Major: Top 10 Events in China's Retail Industry in 2017 > What major changes occurred in China's retail industry in 2017? What new business models emerged? Which companies stood out? Where is the future of retail heading? We take you through the 'Top 10 Events in China's Retail Industry in 2017'. What major changes occurred in China's retail industry in 2017? What new business models emerged? Which companies stood out? Where is the future of retail heading? We take you through the 'Top 10 Events in China's Retail Industry in 2017'. **1. Amazon Acquires Whole Foods for $13.7 Billion** On the evening of June 16, Amazon announced it would acquire U.S. organic supermarket chain Whole Foods for $42 per share, totaling approximately $13.7 billion (about 93.3 billion RMB) in cash, making it the largest acquisition in Amazon's history. Amazon's acquisition of Whole Foods marks a change in its investment strategy and a comprehensive push into fresh food business. ◆ Comment ◆ Over the past decade, Amazon primarily developed its own fresh grocery brand Amazon Fresh, but growth was slow. Through the acquisition, Amazon gained high-quality retail stores and rapidly expanded its logistics network and customer base. This marks a huge step in Amazon's integrated expansion online and offline. After the U.S. stock market opened on the 16th, Amazon rose over 3% intraday and closed up 2.4%, increasing its market value by $11 billion in one day; Whole Foods closed up over 29%, its biggest one-day gain since 2009. Amazon CEO Jeff Bezos once again convinced Wall Street that revenue growth is more important than profitability. Whole Foods' competitors—the three major U.S. retail giants Walmart, Kroger, and Target—saw their stocks plummet. During trading, Walmart fell nearly 7%, Kroger fell nearly 16% to a three-year low, and Target fell about 12%. If you can't do it well yourself, acquire it—maybe this trick was learned from Jack Ma. But it's worth noting that Whole Foods is the largest natural food retailer in the U.S. with 456 stores. Whole Foods sells organic food, mainly targeting middle and upper-class consumers. Two-thirds of its revenue comes from fresh fruits, vegetables, and meat. Perhaps that's what Bezos values most. On October 27, Amazon's Q3 operating report showed revenue of $43.7 billion, up 34% year-over-year, the highest growth in five years. Whole Foods played a significant role. **2. CITIC and Carlyle Acquire McDonald's China for $2.08 Billion** On August 4, CITIC Limited announced that all conditions for its joint acquisition with Carlyle of McDonald's China for up to HK$16.141 billion had been met, regulatory approval had been obtained, and the deal closed on July 31. This will become the largest McDonald's franchise operation outside the U.S., with the partners operating and managing 2,700 restaurants in mainland China and Hong Kong. Subsequently, starting October 12, McDonald's China's corporate name changed to "Golden Arches (China) Co., Ltd." However, the name change is mainly at the license level and will not affect daily operations: restaurant names, food safety standards, and operational processes remain unchanged. Additionally, the new company released a new five-year plan, clearly stating that new stores will be opened in third- and fourth-tier cities, with the proportion rising from the current 35% to 45%. ◆ Comment ◆ Could there be a more rustic name? With mixed feelings, we examine this "Western fast food" with a name reminiscent of "Sha County snacks." Through the name change, it's easy to see McDonald's determination to localize. In 1990, the first McDonald's in mainland China opened in Shenzhen. Initially named "麦克唐纳快餐" (a typical transliteration), it later adopted the name "麦当劳" following Hong Kong's example. Now, over 20 years later, McDonald's experience in food safety, business philosophy, and process management has been borrowed by many Chinese restaurant companies. This shows that McDonald's has been with the Chinese people for so long that eating at McDonald's has shifted from a fashion statement to being as ordinary as eating at any regular restaurant. This precisely indicates that McDonald's growth is insufficient and it no longer represents new trends. Now, many people even have a strong sense of nostalgia for McDonald's. Whether Chinese or foreign companies, it would be difficult to recreate McDonald's past glory. The most critical issue McDonald's faces now is: where is this restaurant, which accompanied many urban children growing up, heading? If it wants to make a breakthrough in the Chinese market, changing its name alone is probably not enough. **3. JD.com and Alibaba Compete in B2B Layout** On August 28, Alibaba's Retail Link announced that the number of small retail stores it covers exceeded 500,000, making it one of the platforms with the most store coverage in the FMCG B2B sector. The company stated that within the next year, it will cover 1 million small retail stores and launch its offline project—Tmall Small Stores. In April this year, JD.com CEO Liu Qiangdong announced that JD.com would open over one million JD convenience stores nationwide within five years, half of them in rural markets. With the rise of startups like Zhanghe Tianxia and Zhongshang Huimin, there were already over 70 FMCG B2B platforms in 2016. ◆ Comment ◆ With the emergence of new retail formats such as unmanned convenience stores and unmanned retail shelves, the upstream FMCG B2B market will see more intense competition and capital attention. But that's not the most important thing. Both Alibaba and JD.com are more focused on big data and offline channels. Of course, you could also interpret this as getting closer to consumers. Further expansion might involve financial services and more. **4. Alibaba "Intervenes" in Lianhua Supermarket, Becoming Second Largest Shareholder** On the evening of May 26, Alibaba Group acquired 18% of Lianhua Supermarket's domestic shares from Yiguo Fresh, becoming the second largest shareholder of Lianhua Supermarket. As expected, within a hundred days, Alibaba and Bailian Group's strategic integration reached the equity level—although expected, the speed was still surprising—unlike previous strategic cooperation framework agreements, this cooperation was at the capital level, firmly placing Lianhua Supermarket in Alibaba's hands. This also means that true online-offline integration in the supermarket sector has entered a new stage. ◆ Comment ◆ In the history of China's retail development, the curtain has risen on the largest integration and reshuffling of the supermarket sector. This is a grand drama, with Alibaba as one of the protagonists, and other online and offline giants will inevitably participate as protagonists. For offline supermarket companies in these cities, is it better to cooperate or cooperate? Of course, they could also become captives or carve their own path. **5. Various New Species Accelerate Landing, Supermarket + Dining Becomes Standard** On June 9, Hema Fresh opened its first store in Beijing, followed by Zhangyu Fresh and Super Species unveiling in Beijing. Additionally, RT-Mart's Feiniu Youxian, Bailian's RISO, Xinhua Capital's Haiwuhui, and Century Lianhua's Jingxuan are all exploring different models, with various new species accelerating their landing. At the same time, hot pot brands like Haidilao, Da Long Yi, Wei Shuwu, Xiao Long Kan, Jingge, and Chongqing Dezhuang began selling their own self-heating hot pots in supermarkets and online. ◆ Comment ◆ The hybrid format of "supermarket + dining" is being highly sought after. Methods to increase customer stickiness, such as dining, will be adopted by more supermarkets, and mixed formats that enrich customer experience will become common. Of course, online-offline integration is also an essential standard. In fact, the "retail + dining" model is not new in China. Italy's Eataly supermarket is considered the pioneer of "retail + dining," and it's now popular worldwide. Actually, it's more like dining + retail. Of course, there's also London's Borough Market, Lyon's Les Halles de Lyon, Madrid's Mercado de San Miguel, and Tokyo's Tsukiji Market, which is familiar to many Chinese. This model adds social attributes to traditional retail stores, providing a stronger sense of experience and scene. This also precisely shows that offline physical stores have various shortcomings that must be addressed. Regardless, this attitude and behavior of innovation and change deserve encouragement and praise. **6. Ant Business Alliance Established, New Pattern in Regional Retail Competition** On October 19, at the first China Private Brand Conference, the Ant Supermarket Business Alliance (English name: China ant Business Association, abbreviated as CAA) was announced. The alliance was jointly organized by 12 commercial chain enterprises from 6 provinces in China, aiming to share resources, share knowledge, joint procurement, and support each other to cope with the current complex retail transformation. The alliance's annual sales exceed 22 billion RMB, with over 2,000 chain stores, covering formats such as fresh supermarkets, department stores, and fruit chains, distributed across East China, South China, and Central and Western China. ◆ Comment ◆ In the current industry context where "new retail" is on everyone's lips, the establishment of the Ant Supermarket Business Alliance provides ideas for physical retail enterprises to transform. Facing the constant impact of e-commerce and the frequent emergence of various new retail species, physical retail enterprises, especially small and medium-sized ones, should also integrate resources and grow together. **7. Unmanned Retail Heats Up: New Supplement or Disruptor?** 2017 is called the "first year of unmanned retail," with unmanned convenience stores, unmanned shelves, and unmanned cafes emerging one after another. According to iiMedia Research data, the transaction scale of unmanned retail stores in China will reach 38.94 billion RMB in 2017 and 1.8 trillion RMB by 2022. New retail models represented by unmanned convenience shelves and unmanned retail stores are changing people's original understanding of new retail. In addition to startups like BingoBox (unmanned convenience store) and Xiaoe Weidian (unmanned shelf), Alibaba's Tao Coffee, planned unmanned gas station + convenience store, JD.com's "borderless retail," and Suning's unmanned convenience stores and HiGo Market are all advancing, signaling a new round of competition in unmanned retail. ◆ Comment ◆ To use a cliché, whether it's manned or unmanned is not the point; the point is to provide consumers with the goods and services they need. Unmanned retail is a technological innovation worth affirming and encouraging. But currently, it can only be a enrichment and supplement to retail channels and methods, neither "robbing" nor replacing. In other words, unmanned retail has its own market space, but it's hard to say it has formed a business model yet. And unmanned shelves, strictly speaking, don't even qualify as technological innovation. We believe it's hard to see a bright future for them. Whether you like it or not, unmanned retail will become a pole in the retail industry in the future. It will inevitably compete with traditional manned retail stores for consumers. But in this war, no one replaces anyone; it's not a life-and-death struggle, but more likely a co-opetition where each has its strengths and they coexist and integrate. **8. Ele.me Acquires Baidu Waimai, O2O Shifts from Three-Pronged to Two-Headed Competition** On August 24, Ele.me officially announced the acquisition of Baidu Waimai, creating the largest merger in China's internet food delivery sector. It is reported that the total acquisition price was $800 million, and after the deal, Baidu Waimai will receive a portion of cash and Ele.me shares. After the cooperation, the two will implement a dual-brand strategy, and Baidu Waimai's team and personnel will remain unchanged. ◆ Comment ◆ After Baidu Waimai was acquired by Ele.me, the three giants in the food delivery industry became two, leaving only Ele.me (Alibaba camp) and Meituan Waimai (Tencent camp). Behind this is actually a "duel between the two Mas (Jack Ma and Pony Ma)." With the huge traffic entrances from Alibaba and Tencent, the competition between the two will shift from subsidy wars to competition for merchant resources and service experience. **9. Internet-Famous Stores Like Heytea Go Viral: How Far Can They Go After Over-Marketing?** With Heytea in your left hand and Baoshifu in your right, you're a "life winner!" This is netizens' comment on the two internet-famous stores. The internet-famous trait has spread from people to business formats and brands. Guangzhou's "Heytea" and Beijing's "Baoshifu" became instantly popular in 2017 due to long queues. Despite being mired in controversies like hiring people to queue and counterfeiting, it doesn't hinder the growth of internet-famous brands. In February this year, Heytea opened its first store in Shanghai. Since August, it has been expanding at a pace of at least one store per week nationwide, and has opened specialty stores like pink stores, black-gold stores, and LAB concept stores. ◆ Comment ◆ Queuing has become a rigid enjoyment of new pleasure. For 20 yuan, you can't buy lobster or Estée Lauder, but buying some spiritual comfort is fine. After all, I queued and got it, so I must post it on my Moments. Of course, some people believe that internet-famous dining is characterized by emotional functions, social functions, and functions that reflect personal value, but at no time should the original attributes of food be ignored. **10. Six Major Express Companies Complete Listings, Logistics Competition Intensifies** On September 20, Best Inc. was officially listed on the New York Stock Exchange. Together with YTO, STO, Yunda, SF Express, and ZTO, which had already listed, all top 6 express delivery companies in China have now entered the capital market. Subsequently, on September 26, Alibaba Group announced it would invest 5.3 billion RMB to increase its stake in Cainiao. Earlier, JD.com announced the establishment of a logistics group and said it does not rule out the possibility of independent financing and listing in the future. ◆ Comment ◆ Major logistics companies are transforming from initial parcel collection and delivery to comprehensive logistics operators. After SF Express and the other three Tongda express companies entered the capital market, they are also gradually laying out businesses such as express delivery, warehousing, and supply chain. In the current era of accelerated retail transformation, efficient logistics and distribution services have become an indispensable part, with increasing importance. The **2017 (3rd) FMCG + Internet Conference** will be held in Chongqing in November 2017. The conference will closely focus on the theme "New Forces, New Ecology," inviting **1000+ distributors, 500+ brand owners, 200+ B2B platform founders, and 100+ investment and financing institutions** to jointly explore a new chapter of cross-border integration! Click the link below to review the highlights of the first and second FMCG + Internet conferences: [2016 "FMCG + Internet" Summit Forum]() -END- --- ## 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. Contact: zhaobo258@gmail.com · +86 158 5481 7671