Go straight or push to join? Behind the dispute over the convenience store model
Convenience Bee claims that Beijing stores are overall profitable, with a cumulative financing of US $ 1.5 billion, and will stick to the direct sales model to accelerate expansion
On May 25, Convenience Bee confirmed that it had raised a total of 1.5 billion US dollars of funds, and Beijing stores achieved overall profitability, which also brought confidence to the convenience store industry hit by the epidemic. Convenience Bee told reporters from the Beijing News that all the funds it raised will be used to invest in China's convenience store market, and adhere to the development of the direct sales model.
This has also triggered discussions in the industry on the development model of convenience stores: Is it a franchise store with a lighter model, lower cost, and more conducive to expansion? Or choose a direct-operated store that focuses on capital and systematic operation? How to balance the relationship between capital and expansion, control and food safety? For the current development of convenience stores, which model is better?
Convenience store direct sales and franchise model cause controversy
Since the opening of the first store in Beijing in February 2017, the number of convenience bee stores has now exceeded 1,500, and the expansion can be described as rapid. Its adherence to the direct management development model has continued to attract attention from the outside world. "The company insists on all direct sales and no franchise stores." In view of the false franchise information that frequently appears on the Internet, the convenience bee has also repeatedly emphasized that it has always adopted the direct sales model for development.
Regarding the adoption of the direct management model, the convenience bee believes that the food safety risks brought by joining are one of the reasons why China's convenience stores are not doing well. For convenience stores, if they do not sell fresh food or hot food, single store revenue will not be high; if they sell fresh food and hot food, the conflict of interest brought by joining will easily breed food hygiene problems. Drag down the brand.
The Beijing News reporter noted that the convenience store investment is large and the return on capital is slow. It is a long-term business. In order to reduce the pressure on funds, the major Japanese convenience stores and local convenience stores adopt the franchise model. Japanese convenience stores are mainly developed through the joining of regional retailers and individual franchisees. The supply, location, and store equipment are all under the unified control of the company headquarters. In addition to the unified supply, the joining methods of some local convenience stores require store decoration and equipment. Join the owner himself.
"Joining should solve people's problems, not money." Senior convenience store expert Lin Xin believes that opening franchises based on the premise of "solving money" makes the convenience store chain brand not doing business with consumers. Business, but doing business with franchisees, so consumer experience is often not the main factor considered by the brand. Under financial pressure, franchisees may have private purchase behaviors and food safety issues, which in turn affect the convenience store brand image, and these ultimately hurt consumers.
Direct mode enters the expansion fast lane
Wen Zhihong, partner of Hejun Consulting and head of chain operation, said in an interview with the Beijing News reporter on May 26 that direct operation or joining is a strategic choice for chain operation. For small store formats like convenience stores, it is better to temper the model and system in a direct way in the short term. "Enterprises with long-term plans and sufficient strength in the convenience store industry will need to precipitate models and systems in the early stage, and at the same time have strong management and control under the direct mode, problems between the headquarters and stores will be easier to solve." At the same time The direct management model is relatively easier to implement in store food safety management.
The investment return cycle of the convenience store industry is long, and sufficient and stable financial support is the guarantee for the survival and development of chain convenience store companies. The Beijing News reporter noted that the number of Convenience Stores has exceeded 1,500 in three years. According to its development plan announced in September 2019, the target of opening stores in the next three years will be 10,000.
It is understood that most of the operational functions of the convenience store are handed over to the digital "central brain", and the service standards of more than 1,500 stores are consistent. The order is determined by the back-end system based on the location of the business district, sales data, weather and other factors. Convenience Bee stated that its store clerk is only an executor, and its performance is not linked to the actual operating conditions such as product sales and loss reporting. When the product has expired, there will be a system to remind the clerk to discard it.
"In the long run, if you want to expand rapidly, you need to adopt the franchise model. The main reason behind this is that convenience stores usually operate 24 hours a day. The franchise model is conducive to motivate store operators, reduce costs, and improve operational efficiency." Say. But when the convenience store is highly intelligent or even evolved into an unmanned convenience store, it can greatly reduce the dependence on store operators, and direct sales may be more efficient.
Wen Zhihong further explained that the intelligence of convenience stores is reflected in digitalization, which connects all industry information data such as front-end stores and back-end supply chains to provide decision-making basis for the operation and management of convenience stores; We have made some explorations in self-service settlement and digital decision-making, and the digital capabilities need to be further improved.
Beijing News reporter Xiaorong Zhang