Southern Finance and Economics reporter Shi Enze reports from Shenzhen
At 7:30 am on January 12th, at the entrance of Kaishike Longhua store, over 3000 customers surrounded the area. In just one hour, Kaishike's long prepared South China debut will open to welcome customers.
Inside the S-shaped fence, many people had been waiting for a long time. A dusty elder sister who came to the reporter said, "Many people in the (opening customer membership card) group lined up at 2 o'clock. Many people were trying to grab Maotai, and I came to join the fun today."
In this waiting area without ventilation, as the opening time approaches, the dense crowd is unusually agitated. Every position is the object of contention. Anyone attempting to cut in line will be stopped loudly by the crowd next to them.
At 8:30, the iron gate of the opening customers was pulled up, and the crowd instantly surged forward.
Sam, 4 kilometers away from the opening of Longhua, did not experience a decrease in foot traffic on that day. Sam, who entered Shenzhen 28 years earlier than the opening customer, has already gained a stable and loyal fan base in Shenzhen.
They are all membership based warehouse supermarkets that focus on high cost performance and their own brands. The shelf war between the two major member supermarkets in the United States in Shenzhen has already begun.
Who can truly attract consumers and win this game?
(At 7:30 am, people who have just entered the Shenzhen Longhua New City Passenger Parking Lot need to pass through layers of S-shaped iron bars to join the queue. Photo/Shi Enze)
Hot selling products return, with surprises but no joy
Maotai liquor and Herm è s bags, which caused a huge influx of people when the first store opened, have indeed returned this time.
But the expected Maotai did not appear in the corner of the shelf as expected.
Within less than 20 minutes of opening, the passageway of the liquor display area for the opening customers was surrounded and blocked, but there was no shadow of Maotai on the shelves at the scene. Many consumers who came specifically for this purpose questioned the on-site staff, and many customers directly demanded to return their membership cards. The staff standing at the center of the circle helplessly explained, "Our originally planned 21000 yuan/box of Maotai is no longer available. Customers are kindly requested to take a look at other desired products."
At 9:30, the reporter received a text message from the official website of Shenzhen Kaishike to members on their mobile phone: "Shenzhen Kaishike has never promoted Maotai on any official platform, and on the opening day, there was no special sale of Feitian Maotai. The full box of 6 bottles of Maotai liquor with 53 degrees Celsius has been sold out.".
(Consumers are gathering at the liquor counter of the opening customers to discuss their opinions. Photo/Shi Enze)
The market opening customers who once relied on 1499 yuan Maotai to attract traffic are now being backfired by traffic. Subsequently, the reporter saw many customers queuing up at the card refund office who had not been able to grab Maotai to apply for card refunds.
In addition to Maotai, the once popular product Herm è s is also returning this time. The bare sale of Herm è s Birkin (30CM) for 163000 yuan and Herm è s Kelly (25CM) for 182000 yuan left only four Herm è s available in a second. But the number of people who can popularize this part of happiness is very limited.
However, leaving behind the shock of explosive products, the other products of the opening customers did not bring too much joy to people. Southern Finance's full media reporter found that the price difference between Remy Martin XO Cognac Brandy in the liquor category and the e-commerce platform was less than 150 yuan, resulting in no one showing interest at the scene.
A pair of "fruit sisters flowers" - cherries and strawberries are the pop items voted out with their feet in the shopping cart. A big brother who only put a box of cherries in the huge shopping cart sighed to the reporter, "The price of fresh food has not really touched me, it feels like it's not as good as Sam's. It seems that only cherries are worth buying.".
The baking and fresh food areas that were not previously open to the media have attracted many customers this time. Classic styles such as durian cheese cake and green bread with raw milk, selected on social media platforms, can be frequently seen in shopping carts this time. The fresh food counter displays imported seafood products such as Australian black edged abalone, which were rarely seen in other supermarkets before. For middle-class individuals who pursue quality and freshness, it may be a fresh attempt.
First floor opening customers vs. second floor Sam
The Sam's Longhua store, located 8 traffic lights away from the city center, did not show a significant decrease in foot traffic.
Compare the prices of goods in Sam's and Kaishi's two major membership warehouse supermarkets. Taking alcohol shelves as an example, Southern Finance and Economics reporters have found that there are basically no identical products between the two. For example, Hennessy Cognac is sold in small tubes of 350ml by customers at the opening, while Sam's version is sold in 700ml, so there is no direct declaration of war on price. But Sam's sake has significantly more SKUs than opening customers.
At the opening ceremony of the opening customer, a supplier who supplies red wine to the opening customer told reporters that in the beverage category, based on his experience, Sam's gross profit is 30%, while the opening customer's is 15%. In the North American market, the profit margin offered by the opening customers allows them to slightly outperform Sam in terms of quality.
However, for opening customers, low gross profit is also a challenge. This may mean that in competition, it means fewer bottom cards, and if there is a price war, there will be less room for coping.
(On the same day, there was no significant decrease in foot traffic at the Longhua Sam's Store, 4 kilometers away from the city's customers. Photo/Shi Enze)
In addition to alcoholic beverages, the situation is also similar in the fresh category. In beef products, there are three stacking heads and dozens of choices on site in Longhua Sam's beef container. The types of goods offered by the opening customers are around 20 SKUs. Although the beef quality of the opening customers is slightly better in terms of freshness, and there is also a high-end ingredient like M9, there is not much difference in price between the two companies. On the contrary, because Sam has more price options, the overall price appears more affordable than the opening customers.
This may be related to the space of the open market shopping mall. In terms of spatial planning and design, the opening customers prefer to use a large flat floor to accommodate all products, and the remaining floors are used as parking lots. Sam, on the other hand, is designed to have two floors, with the first floor mainly featuring food categories such as fresh produce, snacks, and pre made dishes; The second floor mainly focuses on high value-added goods such as alcohol, 3C electronic products, and cosmetics.
In terms of accommodating area, Sam's two-story design undoubtedly gives it more space to accommodate more categories. The original intention of the opening customers was to adopt American thinking, designing a "tire center" and a three story three-dimensional parking lot, striving to make the "car" entry experience more smooth.
A Zero Sum Game of Two American Member Supermarkets in South China
260 yuan (Sam's membership card) vs. 199 yuan (opening customer membership card), for the two American membership storage supermarkets located only 4 kilometers apart, this is a battle against the existing middle class because few people will hold the membership cards of the two supermarkets for a long time, and "zero sum competition" is inevitable.
Consumers vote with their feet, and the key points on the table are cost-effectiveness and service, while below the table are supply chain and gross profit margin.
Starting from the opening situation, it seems that the opening customers are on par with Sam on the shelves and have not shown much advantage. The number of SKUs for goods is still not enough, and there are still many problems that need to be solved in order to achieve a higher ranking of latecomers.
At the opening customer site, a customer living in Futian told reporters that if the opening customer does not open e-commerce services in the future, they will no longer consider offline shopping because there is only one opening customer in Shenzhen. "Coming all the way to buy so many things at once, it is too inconvenient to take them home.". When asked by the reporter about the membership fee of 199, the customer said very casually, "Let's just burn incense and worship Buddha.".
Sam currently has four stores in Shenzhen, namely Futian, Longgang, Longhua, and Qianhai, with a more concentrated distribution of customers in the region than in the opening market.
In addition, currently Sam's China e-commerce sales account for over 60%, reaching approximately 37.8 billion yuan. To this end, Sam is increasing efforts to optimize the customer experience in e-commerce and jointly building a cloud warehouse (pre warehouse) with Dada, achieving delivery to home within 1 hour in key cities. This undoubtedly puts a lot of pressure on market opening customers who have not yet opened up e-commerce.
It is worth mentioning that many SF Express couriers have attracted customers outside of the stores that did not open delivery services in a timely manner. The SF Express courier stated that the first weight in Guangdong Province is 12 yuan/jin, and the second weight is 2 yuan/jin; The first weight across Shenzhen and Hong Kong is 30 yuan/kg, and the second weight is 20 yuan/kg.
When the first opening customer in South China welcomed Hong Kong traffic this weekend, perhaps the happiest person was the SF Express courier waiting outside the store.
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