Can BBK, which is surrounded by "flow", get out of the business dilemma?
Yu Donglai, 68, became the "mentor" of Wang Bu, the founder of BBK, a local supermarket in Hunan.
This is a helping and reforming plan led by Fat Donglai, a Henan Shangchao enterprise. It will systematically adjust BBK in terms of employee salary, working hours, store planning, product reorganization, supply chain, price optimization and service improvement, and transform 2-3 BBK supermarket stores in 2-3 months.
Pangdonglai and BBK are well-known local supermarkets, and the founders of the two companies, Yu Donglai and Wang Tian, both embarked on the road of entrepreneurship in 1995. However, due to the different development routes chosen-Yu Donglai stuck to the local area of Henan, and Wangtian expanded abroad early, after nearly 30 years of establishment, the two enterprises have reached their respective present situations.
At the same time that Fat Donglai started "helping", the reorganization of BBK made progress. Chengdu Baitu Youni Culture Communication Co., Ltd. and China Foreign Economic and Trade Trust Co., Ltd. (together with its industrial partner Sinochem Modern Agriculture Co., Ltd.) were confirmed as the successful industrial investors in the reorganization.
Among them, Baitu Group, with "Red Man Economy+Brand Empowerment" as the core, has hatched kol with goods such as "Luo Wangyu" and "Zhang Xixi", and once put three sheep and worry-free media on the comprehensive strength monthly list of Tik Tok e-commerce MCN institutions.
Can BBK, which is surrounded by "flow", get out of the business dilemma?
Step by step to the left, fat east to the right.
Despite the influence of external environment, most traditional supermarkets in China have been paying for the rapid expansion in the past two years, and BBK is no exception.
In March 1995, Wang Tian and his wife Zhang Haixia established Xiangtan BBK Food Company, and the company’s first mass-market store was officially opened in Xiangtan in the same year. In 2001, BBK opened a 28,000-square-meter comprehensive shopping plaza in Xiangtan, and has since embarked on the fast lane of development; In 2002, the number of BBK stores reached 27, and its annual sales exceeded 1 billion yuan, making it the largest chain enterprise in Hunan. In 2008, BBK was listed on Shenzhen Stock Exchange, becoming "the first private supermarket in China", with more than 300 stores in its heyday.
Time has changed. Due to the rise of online retail and new retail formats, domestic hypermarket formats have declined in recent years. After losing money for two consecutive years and closing several stores, BBK started the reorganization process on October 26, 2023. As of April 6, 2024, a total of 13 investors have paid deposits, of which 10 investors have submitted restructuring investment plans. In addition to industrial investors, the recruitment of BBK financial investors is also in progress.
While promoting restructuring and solving the problem of supplier funds, BBK began to promote the restart of supermarket stores from the fourth quarter of last year. "As of March 2024, BBK had restarted 83 supermarket stores in Hunan and Guangxi." BBK told Time Finance.
Unlike Wang’s early expansion route, Yu Donglai doesn’t seem to have much "ambition" for scale.
In 2002, after operating a tobacco and alcohol company for five years, Yu Donglai opened the first Pangdonglai Life Plaza in Xuchang, Henan; In 2005, Fat Donglai first expanded to Xinxiang, and "Xinxiang Fat Donglai Department Store" opened. By the end of 2023, there were only 13 stores in Pangdonglai, and they always stuck to Xuchang and Xinxiang.
In the early days, it also tried to spread the layout. More than ten years ago, Pangdonglai opened some small supermarkets on the basis of big stores in Xuchang and Xinxiang. However, since 2012, Fat Donglai has successively shut down more than a dozen small shops in Xuchang Street. In 2013, Yu Donglai said in Weibo that Xinxiang Pangdonglai Store closed after the property contract expired, and attributed it to the internal strategic adjustment of the enterprise. "The scale of the enterprise was reduced because the current management ability could not be reached."
Fat Donglai, who lives in a corner, was not high-profile in the past. It was not until 2020 that he donated 50 million yuan to fight the epidemic in Wuhan that he began to be known to the public. In the early years, Lei Jun and Ma Yun also visited Fat Donglai. In Lei Jun’s mouth, Fat Donglai is "the existence of China retail industry", and Ma Yun also said that "Fat Donglai is a mirror, which can show the shortcomings of other enterprises".
"Explosive reform" step by step, starting with salary increase
Stepping on the rapid expansion of the "thunder", the former "first share of private supermarkets" had to put down their posture and accept guidance from their peers.
Their interaction can also be traced. On December 12, 2023, at the invitation of Wang Tian, the chairman of BBK, Yu Donglai visited BBK, and successively visited BBK stores in Changsha and Xiangtan, and gave on-the-spot guidance. In April this year, Fat Donglai sent a team of 20 executives to Changsha to help BBK.
Specifically, BBK will combine the corporate culture and business strategy of Pangdonglai, and plan to make systematic adjustments in terms of employee salary, working hours, store planning, product reorganization, supply chain, price optimization, service improvement, etc., giving priority to building a sample of Pangdonglai-style stores in Changsha, and transforming 2-3 BBK supermarket stores in 2-3 months. The remaining BBK stores will also refer to the sample stores, which will be comprehensively transformed by the BBK team.
This is not the first time that Fat Donglai has helped his peers. In July, 2023, it organized a team including purchasing, operation, stores, finance and other business sectors, and combined with a main team of pro-fresh-keeping department to carry out the reform of Gabrielle, a local supermarket in Shangrao, Jiangxi Province, and adopted six measures: increasing employees’ salary, shortening business hours, adjusting store layout, optimizing product quality, improving fresh-keeping ability and restoring customers’ trust.
According to the report of Lianshang. com, after one month’s adjustment and reform, the sales of Gabrielle Wanli Store were 400,000-450,000 yuan on weekdays and exceeded 500,000 yuan on weekends. The average daily sales of Gabrielle Henderson Store increased from 125,000 yuan to 220,000 yuan a week after the reform, and it reached 250,000 yuan at the weekend.
Shen Hongli, general manager of Pangdonglai Supermarket, and Jia Jianquan, a pro-chairman of Qinghai, are the principal and deputy commanders of the transfer of Gabrielle. This assistance to BBK is also led by two people, and David Xu, general manager of fresh food in Pangdonglai Supermarket, is the executive director.
Judging from the adjustment and reform measures carried out by BBK, it is similar to the direction of Gabrielle. On the evening of April 9th, BBK issued an apology letter to customers, which mentioned that it had realized its own problems and sincerely said "I’m sorry" to everyone. He also said that he would optimize procurement channels, remove products with insecure quality, adjust shopping malls and improve employees’ salaries and benefits.
At present, the business hours of 17 BBK supermarkets in Changsha, Yueyang, Changde and other cities have been adjusted to 9:30-21:30 (previously from 8:00 to 22:00). In addition, BBK Changsha Meixi Store started employee recruitment with a monthly salary of 4,000-5,000 yuan. Time Finance found in the recruitment software that the salary of cashier, cleaning and other posts in BBK Supermarket was 2000-3000 yuan.
Bao Yuezhong, a new retail expert, analyzed Time Finance. The current problem of BBK cannot be solved by measures such as raising wages and compressing working hours. "As a large chain enterprise, its problems are very complicated, and the final result of Fat East’s help needs further observation."
The fat man who was "famous" came from the east, and he was not so god in the local area.
Despite the outstanding performance of products and services, the real success of Fat East cannot be separated from the help of social media.
Time Finance learned that since 2023, in the comment area of many store-exploring videos such as Sam and the market opener, a large number of praises for Fat Dong came into being, attracting many netizens to experience punching in thousands of miles. However, with the deification of Fat Donglai, its words and deeds are also under the magnifying glass, and employee welfare and business hours are widely discussed.
Luo Chen has just joined the production and operation post of Pangdonglai. According to him, the company’s job application is under great competitive pressure. "There are 209 open recruitment positions, and about 30,000 resumes have been delivered, but the salary is about 80,000-100,000/year, which is really good in Xuchang with an average monthly salary of 3,000 yuan."
As a Xuchang person, in Luo Chen’s cognition, Fat Donglai is just a supermarket that everyone recognizes and trusts. "We locals just regard it as an ordinary supermarket, which is not as deified as online. Because of the high quality of goods, it is generally not cheap, and we will not go shopping every day. Everyone regards it more as a place to spend time."
According to Luo Chen’s memory, the explosion of Xuchang’s fat east was the explosion of "pilgrims" after a blogger’s shop-exploring video went out of the network in early 2023. "Now I dare not go to Fat East on weekends and holidays. The roads adjacent to the stores are jammed, and even the small town of Xuchang is crowded. A few days ago, during the Tomb-Sweeping Day holiday, there were basically no local cars on the road. "
The shopping experience of being at home has always been a business card from Fat East, but with its increasing voice on social media, it has also spawned a large number of purchasing agents.
Tang Ting, who went to college in Xuchang, pointed out to Time Finance that after purchasing more last year, many things could not be bought, and the foreign purchasing vehicles pulled goods. "I once saw a shopping cart full of washcloths and baby wipes, thinking it was a promotion. As a result, after taking two bags, someone next to me said that this was her goods."
In order to reduce the impact of purchasing on the brand, on April 5, Fat Donglai issued a statement, saying that a large number of accounts of Fat Donglai without authorization from the company were found on Taobao, Pinduoduo, Tik Tok and other online platforms, which misled consumers and would use legal means to protect their rights.
Help from different places, Fat East will go out of Henan?
Many times’ assistance to supermarkets in different places has also made the outside world see another path for Pangdonglai to get out of Henan-exporting business philosophy.
Under the word-of-mouth effect, many retail entrepreneurs hope to learn from Yu Donglai. Previously, Gansu Xinle Supermarket, Hubei Yasi Supermarket and a pro-supermarket in Qinghai had all been personally led by Yu Donglai.
On the one hand, the pressure of rent and labor costs in third-tier cities is relatively small, and if it expands outward, it will bring greater financial pressure; On the other hand, the expansion needs to overcome the difficulties and risks of building supply chains and logistics centers, and it will also face fierce competition from local enterprises.
Yu Donglai has repeatedly rumored that Fat Dong wants to open a shop in Zhengzhou. In his speech, he responded: Why not enter Zhengzhou? The house price in Zhengzhou is too expensive. If you come to Zhengzhou to open a shop, how can I arrange my staff? In the latest live broadcast on November 17th last year, Yu Donglai once again responded that there is no plan to open a shop in Zhengzhou for the time being.
At present, there are 13 stores in Pangdonglai. Among them, there are 8 comprehensive shopping malls (Angel City, Times Square, Life Square, Xinxiang Dapang, Xinxiang Life Square, Beihai Store, Golden Triangle Store and Yuzhou Store), 1 large-scale clothing specialty store (clothing building) and 4 medium-sized community supermarkets (Yunding Store, People Store, Labor Store and Jinhui Store). According to the plan in early 2022, Fat Donglai plans to add 1-2 stores in 2024.
Recently, Pangdonglai has also expanded its online channels, opening a WeChat applet "Pangdonglai Online Mall" and "Pangdonglai Franchise Store" in Tik Tok. If the effect of helping other enterprises such as BBK reaches expectations, it may not be impossible for Fat East to come out of Xinxiang and Xuchang.
(At the request of the interviewee, Luo Chen and Tang Ting are pseudonyms.)