The density of convenience stores and their reach to consumers align closely with the retail transformation from selling goods to managing people. A gentleman hides his tools and moves at the right time. Under the new retail trend, new formats such as Super Species, RISO, Hema Fresh, and unmanned stores are emerging. From concept to implementation, from e-commerce to physical stores, from hypermarkets to office scenarios, retail transformation is underway, with all parties sharpening their tools. But wait, the target is not pigs or sheep, but convenience stores. Recently, Yuan Bin, co-CEO of RT-Mart's Feiniu.com, announced the "RT-Mart e-Lu-Fa" plan to recruit 10,000 town agents and open 10,000 Feiniu convenience stores. This RT-Mart B2B project, which had been dormant for nine months, has already covered 200,000 merchants, with monthly transaction volume growing from tens of millions to 300-400 million. However, competitors are not lacking in this field: JD's New Path and Alibaba's Retail Link are already on the way, both harboring the goal of capturing millions of convenience stores. Why convenience stores? Convenience stores: the focal point of retail transformation Retail formats reflect the evolution of retail transformation. In the Han Dynasty, Chang'an scholars gathered and traded in a market named after locust trees, hence the exchange of books was called "Huai Market." This was a microcosm of the bazaar. Chinese retail began with periodic markets, which were later revolutionized by department stores, marking the first evolution of retail formats. As counter-style department stores like Friendship Mall became landmarks and expanded to counties, open-shelf supermarkets replaced the counter model. Then, the third evolution saw the rise of chain stores specializing in categories and brands such as home appliances, outdoor bags, and FMCG. The chain model established unified management and large-scale operations, improving store efficiency. Suning and Gome rose during this transformation. Chain stores took business from hypermarkets, while community chains and mom-and-pop shops also shared retail traffic. Retail formats gradually became diverse and rich. With the maturity of mobile internet and electronic payment, e-commerce formats like Taobao, Tmall, JD, Vipshop, and Dangdang launched a new round of deconstruction and reconstruction of retail. This is another deep transformation. Now, the integration of online and offline in new retail is pushing transformation in new directions. It's clear this is a technology-driven revolution. Traditional retail's business model is a "real estate" model, centered on supply-demand relationships to exchange goods and services. From production to sales to consumers, the biggest features of "commercial real estate" are high prices, complex processes, and sluggish market response due to insensitive supply-demand relationships, though offline physical stores offer a good consumer experience. However, e-commerce, through payment and logistics technologies, not only manages massive product catalogs and shelves, creating absolute price advantages, but more importantly, it accumulates user data, which has become the primary resource. The retail transformation mindset has shifted from managing goods to managing people. Undoubtedly, this is an overwhelming revolution of e-commerce over physical retail. It can be observed that retail changes are happening across all formats: brand hypermarkets, department stores, large supermarkets, chain stores, chain convenience stores, and mom-and-pop shops. And seemingly overnight, small formats like fresh e-commerce, unmanned convenience stores, and unmanned shelves are emerging. As industry analysts note, the future of retail won't see billion-scale hypermarkets or department stores; retail carriers will become smaller and denser. Small-format convenience stores are the core of retail transformation. Because the density of convenience stores and their reach to consumers align closely with the transformation from selling goods to managing people. According to Kantar Retail data, there are nearly 7 million small stores in China, including mom-and-pop shops, contributing 40% of total retail channel shipments. About 30% of mom-and-pop shops are in townships and rural areas, and 46% in third-tier cities and county-level cities. Looking around, whether it's Alibaba's New Retail, JD's Unbounded Retail, or Suning's Smart Retail, their battles are more intense at the convenience store entry point. Alibaba and JD's million-store plans, and Suning's accelerated convenience store expansion, confirm that the race point of retail transformation has landed on convenience stores. Internet: the key to convenience store transformation A store less than 60 square meters: a checkout counter on one side, a central aisle of shelves, shelves along the walls, stocked mainly with beverages, snacks, and FMCG like grain and oil, and behind the shelves a bedroom with a bed, cooking area, and storage for parcels. This is typically the standard for community convenience stores in outer areas. Now, on the convenience store stage, B2B has begun to attack. In July 2014, Alibaba's Retail Link platform was launched. In August this year, Alibaba Retail Link announced it would cover 1 million retail stores in the coming year. Additionally, Lin Xiaohai, general manager of Alibaba Retail Link, stated that the goal is to renovate 600-1,000 Tmall stores, and by the end of Alibaba's fiscal year, 10,000 "Tmall stores." At the end of 2015, JD established the New Path division; previously, Liu Qiangdong announced plans to open over 1 million JD convenience stores nationwide in five years, half of which would go to rural areas. Besides giants like Alibaba and JD, other entrants include department store chains like Wangfujing and RT-Mart, express delivery companies like YTO and SF, and B2B platforms like Zhongshang Huimin and Zhanghe Tianxia. What is the essence of B2B? New retail consultant Bao Yuezhong's answer: use FMCG channels plus internet thinking to reconstruct a new FMCG channel model. The core is to improve channel efficiency, reduce channel links, and lower channel costs. In a word, internetization is the key to convenience store transformation. Promote internetization across the supply chain to improve efficiency and experience, achieving industry transformation. In the traditional channel model, goods go from brand owners to convenience store terminals; the deeper the channel, the more layers of distributors and sub-distributors, at least four. After multiple layers, distribution costs rise. For example, a brand covering 1 million stores would need a 10,000-person team; if a small store wants to stock 10 brands, it needs 10 brands and 10 people to deliver. This results in stores not making money and consumers paying high prices. Additionally, channel layers cause inefficiency and slow turnover, and complexity leads to counterfeit and shanzhai products, ultimately harming brands and consumers. Channel internetization is essentially a reconstruction of the supply chain, shortening links to improve efficiency. B2B platforms like Alibaba Retail Link, JD's Zhangguibao, and RT-Mart's e-Lu-Fa are rising. Due to different genes, their approaches differ, but they all focus on strengthening connections between brands, distributors, and users, leveraging their advantages (product, finance, logistics, technology) to achieve precise matching between supply and demand. JD and Alibaba differ notably in promoting convenience store internetization. JD's model is mainly self-operated, using its product and logistics advantages plus a ground promotion team to cut out distribution links. Brand direct operation ensures quality. Meanwhile, ground staff can train convenience store personnel and provide guidance on product selection and general merchandise. Alibaba Retail Link's approach is a matching model, emphasizing support for retail stores through finance, data, logistics, payment, and other value-added services to help them upgrade and transform. Of course, when transforming convenience stores, Alibaba also selects city partners to jointly promote. Regardless of the form, a survey by Dige found that many convenience store owners don't value B2B platforms much; some even have more than five B2B apps installed. Their reason is simple: whoever offers the biggest discounts gets the order. Returning to the topic of convenience store internetization, the real intent is to drive offline traffic to online. At that time, perhaps when the fortresses of individual convenience stores are conquered, the deep water of reform will truly arrive. The current attack is just the prelude to a good show. Source: IT Old Friends (ID: itlaoyou-com) -END-