The opening of the Shenzhen market saw shoppers queuing up in a long line. The scene of popular products being sold out is rare in a time when goods are already not scarce. This indicates that even in times of sluggish consumption, as long as there are good channel endorsements, good products and prices, it can still stimulate consumers to pay their wallets, and supply can play a unique role in stimulating demand.
Shenzhen's opening of stores has continued its previous popularity, from 2019 in Shanghai to later opening in Jiangsu and Zhejiang regions, with consumers queuing for several hours. In 2022, the total revenue of two stores in Shanghai was 3 billion yuan, with an average sales of 1.5 billion yuan per store and daily sales exceeding 4 million yuan per store.
This is very different from the continuous decline of offline stores in China. Many supermarkets have closed down, and the performance of listed companies in supermarkets has continued to decline. Industry insiders believe that under the impact of e-commerce, offline physical advantages are no longer available, consumer behavior has changed, and few people go to supermarkets to shop.
But why can market opening customers achieve the goal of "opening up one business and expanding one"? Consumers seem to not care about the fatigue of transportation, transportation costs, or the convenience of e-commerce shopping, but return to their previous consumption scenarios?
This indicates that the opening customers can provide a supply capacity that is unmatched by supermarkets on the front line. The opening customers adopt a membership system, with a very low gross profit margin for their products and earn membership fees. This is not new, as it entered China in the 1990s, but it has been dormant for a while. Market opening customers will carry forward this model by relying on their ability to generate good profitability even with low gross profit margins.
From the financial report, the gross profit margin of the products of the opening customers is generally around 10%. It is said that the opening customers have an unwritten rule that once the gross profit margin of a product exceeds 14%, it must be approved by the CEO and the board of directors in order to maintain a low price. The positioning of market opening customers is not to serve merchants, but to help consumers select goods.
Consumers usually need to spend a lot of time on brand identification, product comparison, and other aspects, worrying about counterfeit and inferior products. However, in the case of market opening customers, consumers only need to put the necessary products on the cart because they have already found the most suitable product for consumers and "cut" the price to the lowest.
On e-commerce platforms, countless anchors are shouting, "Family members are charging, prices have already reached the lowest point." However, looking at the anchor's income and the amount of tax evasion, it is clear that the gross profit margin of the product must be much greater than 10%. Market opening customers have far more control over the supply chain than these anchors.
The opening of the market has greatly reduced the number of product categories, which is quite important for some patients with choice difficulties. A simple product, in order to achieve hierarchical positioning for consumers, requires the introduction of multiple types, complicates the product, increases the difficulty of consumer selection, and avoids price competition.
Those who queue up for market opening customers cast a vote of trust in them. On e-commerce platforms, they can purchase cheaper products, but they need to be identified. The brand power is likely to be poor, but what market opening customers can buy must be the most cost-effective products. If they are not satisfied, they can return them unconditionally.
Consumers trust market opening customers, and businesses can follow this channel to ship in large quantities, which has the opportunity to drive the upstream industry chain.
There is a view that if you purchase a product from one channel, you give up on purchasing from other channels, and the total amount will not change.
In fact, the rise of e-commerce has not simply taken away offline purchasing power, as the total amount of consumer shopping is rapidly increasing. Under various stimuli, the total consumption is also rapidly increasing.
Good products and services can stimulate consumers' desire to shop.
A cinema industry insider told reporters that during the release of Wolf Warrior 2, they were overjoyed because the audience was very engaged and knew that the movie would definitely sell well, which would increase cinema revenue.
Recently, movies without box office appeal have been released, and cinemas can only have a large number of empty seats, which are wasted. Cinemas are channels, and movies are products that reach consumers. The quality of products can determine consumer desires, and consumers who have money will not pay for low-quality movies.
If a good movie is released, the box office will be high, otherwise the box office will be low. This indicates that the quality of commodity supply can affect the total consumption.
Many times, supply can even create demand. For example, consumer dining tables are becoming increasingly abundant, and the types and amounts of consumption are increasing. Compared to a few years ago, nuts, dairy products, beef and mutton have become daily consumption, expanding the overall consumption plate. Behind this is the rise of many industries.
Industries such as television, computers, and mobile phones have all grown from scratch, creating consumption through supply. Mobile phones are particularly typical, with increasingly diverse functions. From hardware to software, industry giants have emerged one after another.