The membership store format is optimistic about the market prospects, which has triggered a battle among major merchants. After Metro upgraded its products and Hema entered its member stores, Wal-Mart’s Sam’s Club, which has mature business experience, recently opened its flagship store in the Chinese market. On October 22,After a period of testing the waters, Carrefour’s first member store in the Chinese market also officially opened.
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However, this member store of Carrefour encountered difficulties on the first day it opened.
In the middle of the night on October 22, Carrefour insiders revealed to a reporter from China Business News that on the first day of the opening of its member store, a large number of brand suppliers expressed their willingness to no longer cooperate because its direct competitors gave these brand suppliers a second “Choose one” stipulates that if you want to cooperate with a Carrefour member store, you can no longer cooperate with a rival member store, and if you choose a rival member store, you are not allowed to cooperate with a Carrefour member store.
At approximately 23:00 on the evening of October 22, the official Weibo of the Carrefour member store issued an open letter stating: “Today is the opening of Carrefour’s first member store in China, and it is also an important step for Carrefour’s innovation and development. But today we also give members I’m very sorry. On the first day of opening, competitors pressured suppliers to buy empty-related products, which prevented many member consumers from buying. In fact, Carrefour’s member stores were built to open, and the competition continued to put pressure on some brands. When the brand was supplied to Carrefour member stores, the products that the brand was competing for were removed from the shelves. Even on the opening day, some brands were under pressure from the competition and had to go to the site to scan the goods and buy out all their products. News of continued cooperation. Carrefour member stores are firmly opposed to unfair competition in the commercial field, and are opposed to forcing merchants to “choose one of two” based on their market position. They have reported to relevant departments. We hope to jointly promote a fair and competitive market environment and promote the industry A good pattern of coordinated development.”
Although in the open letter, Carrefour did not directly specify the competitors that are putting pressure on the brand, Carrefour insiders revealed that it is a relatively well-known membership store brand with a certain scale.
CBN reporters learned that the current retail market is fiercely competitive, and standard supermarkets and hypermarkets are under huge pressure on profitability. Relatively speaking, member stores with higher unit prices have good profitability and have fixed membership fee income. Therefore, Sam’s Club, Costco, Hema’s Club, etc. have emerged in the market. The price of Metro’s PLUS annual card is 199 yuan; the annual fee for ordinary members of Sam’s Club is 260 yuan, and the annual fee for excellent members is 680 yuan; the annual fee for COSTCO is 299 yuan; the annual fee for Carrefour is 258 yuan. These member stores know how to dig deeper into the value of membership, and will accurately subdivide the membership, thereby enhancing the stickiness with members. Public information shows that COSTCO’s membership renewal rate has reached 90%, and it contributes a stable profit to COSTCO every year.
Compared with other brands, Carrefour entered the member store market late, and currently does not have the advantage of market share. Carrefour insiders revealed to CBN reporters that due to the relatively high market share of their opponents, many suppliers under pressure have chosen to stand on the side of their opponents. As a result, some brands appeared on the first day of the opening of the Carrefour member store. Scanning the goods on the spot to buy out all of its products, and even said that it would no longer continue to cooperate with Carrefour member stores.
A reporter from CBN once saw on-site at the Carrefour member store that its model and products are quite similar to Sam’s Club, Costco, etc., and because the SKU of the member store format is significantly less than that of ordinary hypermarkets, it will be selected. Explosive products are also concentrated in a single store of about 4,000, so the products will inevitably have a high degree of similarity. This has also intensified competition among various brands. Of course, some exclusive products are differentiated, such as private brands. But at present, the proportion of private brand products in major member stores is not particularly high. According to Carrefour’s plan, there will be 20% differentiated products in its member store products, and more than 20% product iterations each year, hoping to have more product control in the future.
Some insiders believe that it is rare for suppliers to collectively buy back products and even express their willingness to no longer cooperate on the first day of opening, but it also directly illustrates the fierce competition in the member store market. The suppliers behind everyone are highly overlapped with core products, causing retailers to compete with each other for resources. Fair competition is very important, and retailers should also make more differentiated products, rather than relying on pressure on suppliers or homogeneous competition to dilute everyone’s interests. (Le Yan)