On the evening of March 26th, Gaoxin Retail (06808. HK) announced that Lin Xiaohai resigned as CEO of Gaoxin Retail and was transferred back to Alibaba Group for another appointment, with Shen Hui serving as Executive Director and CEO of Gaoxin Retail. Huang Mingduan remains as the Chairman of Gaoxin Retail.
The announcement shows that Shen Hui has rich management experience in the retail industry. He joined Gaoxin retail atomic company Auchan in 1999 and participated in the preparation and construction of Auchan brand entering China. Later, he successively served as the general manager of the store and the human resources director of Auchan China. In addition, he worked in Auchan, France, as the general manager of the store from 2010 to 2013. From February 2016 to May 2017, he served as the general manager of Auchan brand operation.
Previously, Alibaba Group Chairman Cai Chongxin had expressed his intention to reduce the proportion of physical retail business at a financial report meeting.
In 1996, Huang Mingduan established RT Mart in Taiwan. In 1998, RT Mart entered the mainland market and opened its first store in Shanghai. In 2010, RT Mart surpassed Carrefour with a revenue of 40.4 billion yuan, becoming the new champion of retail in China. From 1997 to 2015, RT Mart never closed a store and was hailed as the "land war king" in the supermarket industry.
With the rise of multiple retail formats such as e-commerce, the one-stop shopping mall format has been impacted, and RT Mart has also begun to report store closures. In the era of Huang Mingduan, Gaoxin Retail experimented with online transformation and launched businesses such as Feiniu.com e-commerce and B2B "e-Road Development". After Alibaba took over, Lin Xiaohai began to lead the transformation of Gaoxin Retail.
On November 20, 2017, Alibaba Group announced that it had reached cooperation with Runtai Group and Auchan Retail. According to the strategic agreement, Alibaba Group invested HK $22.4 billion to acquire the shares of Gaoxin Retail, holding 36.16% of the shares. In 2020, Alibaba Group announced a total investment of HKD 28 billion, directly and indirectly holding a 72% stake in Gaoxin Retail, becoming the controlling shareholder.
On the eve of June 18, 2020, Lin Xiaohai was transferred from Vice President of Alibaba and General Manager of Retail to CEO of RT Mart, reporting directly to Alibaba's then CEO Zhang Yong. Huang Mingduan still holds the position of CEO of Gaoxin Retail and Chairman of RT Mart China.
With the personnel handover, at the end of 2020, RT Mart welcomed a special annual meeting. At the annual meeting, RT Mart aired a feature film summarizing the achievements of the Huang Mingduan era.
At the end of the feature film, it is mentioned that why does RT Mart still resolutely engage in online retail in the already dominant era of offline retail? Huang Mingduan said: "The future belongs to the Internet era. We must keep up with the pace of the times and transform new retail in advance to reduce the impact of new retail businesses."
Lin Xiaohai expressed his gratitude to Huang Mingduan for leaving RT Mart, the top asset in the retail industry, at the annual meeting, while also recognizing the challenges and opportunities faced by RT Mart.
Specifically, he pointed out, "There are now 1 billion consumers who spend 6 hours a day online. Consumer purchasing habits have become anytime, anywhere, online and offline, and door-to-door."
In addition, the brand merchants on the supply side are changing, with stronger creativity in product development, faster product iteration, and enhanced product long tail effects. Competitors have also changed: from a battlefield battle that focused on regional location, to today's multi-dimensional competition facing community fresh food stores, B2C e-commerce platforms, capital driven front-end warehouses, and community group buying.
Lin Xiaohai emphasized at the annual meeting that in the future, RT Mart should innovate, restructure its hypermarkets, and explore various new formats. In 2021, Huang Mingduan and Lin Xiaohai had a conversation on the same stage, both of whom believed that physical retail should transform towards miniaturization, community-based, and convenience.
Based on this concept, Gaoxin Retail has launched a new store model, Zhongrunfa (also known as RT Mart Super) and Xiaorunfa, with the former benchmarking Hema's standard store model, Hema Fresh, while the latter focuses on residential areas.
Gaoxin Retail has proposed to open 30-50 Zhongrunfa and 200-300 Xiaorunfa by 2021.
As of September 2023, there were only 19 Zhongrunfa stores, and at its peak, there were 103 Xiaorunfa stores that disappeared from the company's financial reports due to store closures.
In April 2023, the first M member store under Gaoxin Retail opened in Yangzhou, China. Lin Xiaohai stated that the opening of the M member store marks the entry of Gaoxin Retail into a new track with an investment oriented mentality, requiring the Yangzhou store to "not allow profits for three years" and opening three M member stores in the 2024 fiscal year.
In the past two years, Gaoxin Retail has increased its efforts to adjust its business format. According to incomplete statistics, from January 2023 to present, at least ten RT Mart stores have closed or announced closure, involving multiple provinces such as Hunan, Jiangsu, Hubei, and Sichuan.
In response, Gaoxin Retail stated that the closure of RT Mart's stores is a normal business adjustment, partly due to property expiration and other reasons. The company will open new stores based on market and customer needs. In the future, a total of 21 new stores will be opened nationwide in three business formats: RT Mart, RT Mart Super, and M Member Store.
Overall, during his tenure as CEO of Gaoxin Retail, Lin Xiaohai completed the construction of supply chain capabilities for self operated fresh produce through digitization and organizational innovation, and promoted the development strategy of omnichannel and multi format.
As of now, Gaoxin Retail has three main business models under its umbrella: RT Mart, RT Mart Super, and M Member Store. It has more than 500 stores across the country, covering more than 230 cities in 29 provinces and autonomous regions. Online platforms such as RT Mart Fresh have reached 70 million users.
As Lin Xiaohai resigns and Shen Hui takes the helm, it remains to be seen how the development path of Gaoxin Retail will change.