Shaanxi Shangchao narrowly meets the needs of transformation

Development is caught in the bottleneck, the provincial government tries to transform the service provider

      As of June 2010, a number of local brands such as Lanting, Danzi, Sophot and Yumu have successfully entered the large-scale chain KA stores such as China Resources Vanguard and Yinhai Supermarket in Xi'an, Baoji and Yan'an, and the second and third-tier markets in Shaanxi. 80% of small monomer supermarkets have also achieved stable sales, while maintaining double-digit sales growth every year. However, Chen Chunhuan, the general manager of these small and medium-sized brands, Shaanxi Xinyi Trading Co., Ltd., is faintly worried.

“The number of large and medium-sized supermarkets with more than 5,000 square meters in Xi’an has more than 50, and the supermarkets in the county-level market are increasing by 100-1000 square meters. However, consumers in the primary market have strong brand awareness, and local brands do not have many opportunities. The management of supermarkets in the prefectures and counties is not standardized, and the output of single stores is generally low.” Chen Chunhuan said that the company currently has more than 16 local first- and second-line brands, including Lanting, Danzi and Sophot, except for more than 30 China Resources Vanguard supermarkets. In addition to the steady growth of sales, most of the prefecture and county markets use the form of buy-and-buy management rights to cooperate with regional small supermarkets. This part accounts for more than 50% of the total channel, and the average monthly fee of 50,000 yuan or 60,000 can guarantee 8%. The above sales gross profit. While some small supermarket chains and regional private small supermarkets can also have more than 20 small-scale supermarkets, they lack management regulations and treat local second-line brands only as “cost brands” of retail stores, thus bringing great benefits to agents. Cost pressure, Xinyi company has gradually withdrawn from such supermarkets.

Also feel the channel pressure is Shaanxi Golden Monkey Trading Co., Ltd., general manager Zhao Dong said that in addition to the frequent terminal promotion materials costs, personnel, business and logistics costs also have more than 30% increase, the agent's financial pressure After the increase, the profit margin of the agent brand was compressed.

For these increased channel pressures, most agents hope that manufacturers will give support to store bar code fees and staff wages. On the other hand, they are also accumulating funds and training mature teams, actively seeking first-line brands and differentiated brands, trying to Brand agents transform to brand channel service providers.

Chen Chunhuan introduced that, in the case of Danzi, the brand has already established a second-line brand status in the Shaanxi market. The manufacturers provide a large amount of support for the terminal to provide sufficient materials, counter design, and staff salaries, and the agents operate and sell back in the supermarket channel. The aspect is relatively easy. "From second- and third-line brand agents to first-line brand service providers, although the profits will be much less than now, the influence of the brand will bring longer-term benefits, which requires agents not only have sufficient funds. Reserves require agents to build mature professional teams and change business ideas."

According to industry insiders, large retailers will increasingly favor new cosmetic channel service providers who have mastered new information technology and management technologies by reducing the no-load rate and introducing “best economic batches” and other business processes. Performance model reforms and other means, in logistics costs, loss of goods security, supply timeliness, especially the implementation of brand image communication and promotion in the channel will have more advantages.

The generation of self-built terminal small supermarkets is increasing the risk

      After moving from the first-tier city of Xi'an to the prefecture-level city Baoji, the characteristics of the supermarket channel and the encounters of the prefecture-level agents have undergone different changes: the urban area is dominated by large department store channels, the supermarket is relatively weak, and the majority of the generations are looking for small and medium-sized chains in the county. Supermarket cooperation, I hope to reduce the pressure on funds through the implementation of actual sales. In fact, the increase in supermarket management fees, special activities and taxes has brought great risks to second-tier brands.

Zhang Yu (pseudonym) has represented three Guangdong second- and third-line makeup brands in Baoji. Since 2008, he has cooperated with three local powerful supermarket chains, namely, “Honoshi” supermarket, Zhongxin Supermarket and Sanyou, first with the headquarters. These supermarkets sign the arrival agreement and various fees, and then supply and arrange the promotion personnel for terminal promotion and maintenance according to the demand of different county branches.

"Although the local small supermarket chains can sign a cooperation agreement with the suppliers, it seems that the financial pressure of the agents is much smaller. In fact, the expenses of the local small supermarkets are growing in disguise, and the management is chaotic. The supermarkets that have been smashed have also caused great harm to small and medium-sized suppliers.” Zhang Yu revealed that almost all local supermarkets have a 10% increase in the cost of promoters sent by suppliers, and most suppliers carry out inventory in supermarkets. There are also a lot of lost and lost goods, which inevitably increases the operating costs of suppliers.

In the context of this general increase in fees, the 2009 national policy of fully levying value-added tax on the retail service industry most directly reduced the profit of suppliers: most small and medium-sized brand-level agents have no general taxpayer qualifications. It is required to issue a VAT invoice, and the agent can only solve it by means of a one-off. It not only increases the cost of three points, but also delays the settlement period of one month or so to more than two months. The time for returning funds is greatly extended. The pressure on the agent has increased.

This is not the worst case. In 2009, due to poor management and management, Wangjia Supermarket in Baoji District was all liquidated. With the collapse of Wangjia Supermarket, nearly 3 million yuan of goods could not be settled with suppliers. “I am nearly 50,000 yuan in Wangjia Supermarket. The payment has not been recovered so far, and it cost a few thousand dollars to recover the cost of these goods. Zhang Yu said that the failure of local supermarkets to operate poorly is the biggest risk for local brand suppliers because of the recovery of purchases. It seems to be nowhere in sight.

At present, the average supermarket sales maintained by Zhang Yu is about 6,000 yuan per brand. In the off-season or slightly worse, it can only sell for 4,000 yuan, and the highest month is no more than 8,000 yuan. This sales level Can only meet market operating expenses and a small surplus. The high-input, high-risk, low-return supermarket channel operation model made Zhang Yu think of trying to build his own terminal: in addition to rent, water and electricity and personnel wages, the sales of goods have more than 20 points of gross profit. As long as a stable sales team is established, the risk will be Can be controlled within the minimum range.

Agents who have already tried to build their own terminals have a precedent in the Shaanxi market: Shaanxi Golden Monkey Trading Co., Ltd. has built more than 10 direct-operated chain stores of “Aimei Makeup”, with a single store area of ​​less than 50 square meters and outlets throughout Xi’an. In Yan'an, Hanzhong, Yulin and Ankang markets, the number of new stores is still increasing; Shaanxi's largest agent, Baili Company, also sells its own agents L'Oreal, Maybelline, Shiseido, and three “Sunshine Beauty” cosmetics stores in Baoji. Well-known brands such as Mentholatum, the store area and product sales profits also have a competitive advantage in the region.

Most agents, including Zhang Yu, said that direct cosmetics terminal stores can establish a good image for the agent's brand, and can effectively control risks and ensure continuous growth in sales and profits. In the long run, agents will build their own terminals. It is a trend.

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