GuShiio.com Wen | Consumer bus
Orange, a native of Chuzhou, Anhui Province, found that after working in Shanghai for three years and returning to her hometown, her consumption habits and those of her parents had been completely separated.
Orange’s family used to be a clothing tail goods business. His parents frequently went to Jiangsu, Zhejiang and Shanghai to find women’s clothing tail goods, and then sold them in Chuzhou Zijia’s store. This business allowed her to finish college and kept the family of three safe from worrying about food and clothing.
However, since 2019, Orange’s tail goods business has deteriorated. Even though parents still shout for big-name women’s clothing that comes from first-tier and second-tier shopping malls, the price is usually only 20% to 30% off the tag price, fewer and fewer customers come to visit, and the family finally closed the store three years ago.
Orange parents and their generation attach great importance to cost-effectiveness. Being able to buy big-name goods at super affordable prices, even if it is just the last product that has been eliminated in first-tier and second-tier cities and is still very valuable.“”
But oranges do not like this kind of consumption. She will collect Chuzhou’s hand-brewed coffee shops on public comment, go to the mall to visit FILA, grit her teeth and place an order for lululemon on Douyin, and regularly buy Bubble Mart dolls and Disney’s Sichuan Sand Seven Children. Compared with helping her parents build the family business, she prefers the best products in first-tier cities.
What made Orange happy was that Box Horse drove to Chuzhou in November last year, which allowed her to buy the baking, juice and low-calorie snacks she used to buy, and suddenly dreamed of returning to Shanghai. What surprised her was that there were always many people in Chuzhou’s box horses. When they first opened, they even had to queue up in long queues. This became the thing she was most dissatisfied with with this box horse: there are many people on weekdays. Doesn’t everyone have to go to work? rdquo;
01 Offline supermarket, who is bucking the trend
There are not many young people outside the fifth ring who express similar exclamations to Orange. From New Year’s Day to Spring Festival, they visited Box Horse Fa’s circle of friends and had a universal copy with Xiaohongshu——“”。
The xx here can be replaced by many third-tier cities or even smaller cities. Some people say that half of Taizhou’s people are in boxes of horses, but those who don’t know think they are in the scenic spot. Some people said that everyone in Zhangjiagang was in Hema. Someone immediately responded that he went there every day and tried a lot of food. Some friends in Weifang said that not only are there many people in Hema, but even the road outside Hema is surrounded so tightly.
The purchasing power of these consumers is also strong.
Hema Dongying Store in Shandong Province opened in November last year, with a first-day turnover of nearly 2 million yuan, which is comparable to the first-day turnover of many Yonghui after being transferred. In January this year, Hema opened its first town-level store to Shengze Town, Wujiang, Suzhou, Jiangsu Province. The store sold nearly 500 king crabs a day on New Year’s Eve, breaking the national single-day sales record for Hema king crabs. The manager of Shengze Store also said,It sells for 500 only because the store only has 500. If it stores more, it can sell another two to three hundred.
In the past two years, there have been too many stories about the surge in consumption power in the sinking market. Some county ladies supported lululemon’s sinking market in China, and some county Brahmins dressed up Ralph Lauren and Brother, whose average price was over a thousand yuan, into regular clothes in the system. Box Horse has created another phenomenal scene that has been visited by young people in small towns and turned into a Cyberfair, or the most popular Disney in every city and town.
From the perspective of the broader market, the situation of the entire China chain stores in 2024 is not good.
Data from Lianshang. com shows thatIn the first half of 2024, nearly 500 supermarket stores across the country were closed,It also counted the performance of the 11 most representative supermarket retail companies and found that their total profits fell by 11.76%. Even Yonghui, which is making adjustments using Pang Donglai as a template, will still close 220 stores in 2024.
There seem to be only three offline supermarkets that are still applauded and popular. One is Sam’s Club, which can earn tens of thousands of yuan a month even online purchasing, the other is Pang Donglai, which is known as the local retail Jerusalem and Xuchang 6A-level scenic spot, and the other is a box horse that is determined from repeated patterns of horizontal jumps.
But Hema is different from the other two families.
Pang Donglai never left Henan. Sam was limited by the store’s high property requirements and his own development plan, but slowly expanded. Most low-tier consumers want to buy these two products, either drive to Henan or a first-tier and second-tier city near their homes, or can only buy through purchasing. Only Box Horse opened the store to consumers ‘doorsteps.
In 2024, Hema opened a total of 72 stores at an average rate of one store in five days, bringing its total number of stores to 430 last year, surpassing Wal-Mart hypermarkets. inOf the more than 70 stores it opened last year, nearly one-third of them opened in second-and third-tier cities and below.In December last year alone, box horses, regarded as a symbol of middle class within the Fifth Ring Road, were successively laid down in Zhangjiagang and Taizhou in Jiangsu, Linwei in Shaanxi, and Weifang in Shandong.
After letting go of his hands and feet outside the Fifth Ring Road, Box Ma presented a good report card. Its CEO Yan Xiaolei mentioned in an internal letter at the end of last year thatThe company has achieved double-digit growth based on nine consecutive months of overall profit, and the number of customers has also increased by more than 50%.
02 The ladies of the county who don’t want the best goods
We found some data on why consumers in low-tier cities can see Box Horse out of Disney’s immediate vision:
- From 2013 to 2023, the number of 100 billion counties with a GDP of more than 100 billion yuan in my country increased from 9 to 59.
- “Data from the New First-tier Cities Research Institute shows that the annual growth rate of per capita consumption expenditure of residents in third-tier cities exceeds 21%.
- According to the “2024 Research on the High-Quality Development of County Economy in China” report, the total retail sales of consumer goods in counties in China will reach 46.3% in 2023. Consulting firm McKinsey predicts that by 2030, 66% of the increase in personal consumption in China will come from counties.
There are two main types of people who are causing the consumption power of small cities to rise steadily.
The first group of people have always lived in small cities. Generations of business have allowed them to master a large number of resources, connections and ways to generate wealth, thus accumulating social wealth. They can not only live in a big house and drive luxury cars in the county, but also go to Sanya. Vacation and sweeping duty-free shops are known as Brahmins in the county. Someone told consumer buses that Shengze, which sold 500 king crabs on the previous day, was a strong economic town with the textile industry as its pillar industry. People can often see Ferraris and Culinan on the street.
The second group of people is returning young people who have returned to their hometowns from north to north, Guangzhou and Shenzhen. Data shows that from April 2021 to April 2024, first-tier and second-tier cities are in a state of net relocation, while third-and fourth-tier cities have shown a clear trend of net migration. A large number of returning young people, like oranges, retain their original consumption concepts.
According to Black Ant Capital’s “2022 Research on the Trend of Young and Middle-aged Consumer Demand in the County Market”,“The average annual income of returning young families exceeds 100,000 yuan, and the average annual household expenditure (excluding loan repayment, car purchase, purchase, etc.) is close to 50,000 yuan, which will be higher than that of some local youth and upstream youth.In addition, the marriage age of young people in low-tier cities is low, often getting married and having children around the age of 30, and family-related expenditures will also rise steadily.
These young people don’t even look down on the snack discount stores that are popular in the sinking market. A consumer who returned to her hometown in southwest China from Beijing told us that she had developed the habit of reading food ingredient lists. For the sake of maintaining her figure, she hardly shopped at discount snack stores with lower prices. Instead, she would spend more. Buy food with fewer additives and shorter duration.
Returning to the story of Heima’s expansion in low-tier cities, some Heima employees told us thatAll Hema stores opened in the sinking market use 88-liter large shopping carts to replace the 36-liter small shopping carts in Beijing and Shanghai.Because they found that ladies in the county and Brahmins in the county often had more shopping needs. On the Little Red Book, many county consumers in Hema are also discussing king crabs, salmon, cherries, and which low-temperature yogurt and freshly baked baking are the best.
Apparently,In the small-town consumption supported by this generation of young people, what they want is not tail goods but top-notch goods. What they value is no longer just cost performance.Instead, there may be a higher premium, but also a greater emphasis on quality, design, experience and social attributes. However, in the past, there were still too few sinking retail sales that could meet this demand.
03 It’s time to solve the good word of sinking retail
In the past decade or so, the biggest tone of the retail industry has been online and digitalization. However, the essence of retail is ultimately to provide a faster, better and more economical experience. Online and digitalization can be done more, faster and more economical. However, the problems that have not yet been solved in terms of supply chain and quality have not yet been solved. The more retail sinks, the more good the problem becomes. The above-mentioned consumers value precisely this good.
Hema realized this first. In the 10 months since Yan Xiaolei took over as CEO of Hema, on the one hand, she confirmed that she should focus on Hema Xiansheng and Hema NB in terms of model. On the other hand, she emphasized the need to drive commodity power through innovation and focus on health and convenience. hit money. andIn the sinking story of Box Horse, what it does is to make these popular models appear in front of consumers in the low-end market with zero-time difference.
During the Spring Festival of the Year of the Snake that just passed, Box Horse had already used many high-end goods to smash the dining tables of small town people. Young people who have mastered the power of New Year’s Eve dinner have begun to use boxes of HPP juice and small sweet wine to replace the white wine that their fathers pushed for cups, and used fast-moving dishes such as the Eight Treasures King Crab Seafood Fair and Angus Beef Shouxi Pot to make themselves a chef. Even the old-fashioned milk/fruit/snack gift boxes that used to be visiting relatives and friends have been replaced with the aroma of money and the cheerful New Year’s Eve flowers.
In many box horse sinking stores, the baking area has become a must for buyers who are too crowded to walk.”——It is said that the baking products of Hema Dongying Store sold for 400,000 yuan on the first day of opening, which is more than the turnover of many chains in a single day.
What makes the ladies in the county rush to buy is ultimately the new and unique and quality-to-price ratio provided by Box Horse.
Take baking as an example. Since every Hema Xiansheng store has a large baking area, it is already a sizeable national baking chain. It can use the national unified supply chain standards to allow Chuzhou, Taizhou, Weifang and Dongying consumers to eat short-term animal cream cakes of the same quality as those of Beishangguang. Last year, Hema had a hit piece of strawberry box cake that sold hundreds of millions of yuan a year. Not only did it reduce sugar from cream in the formula, but the strawberries it used were grown by it in cooperation with suppliers. It has also built a baking factory in Kunshan, which can deliver flour from the origin directly to the factory through pipes, thus saving 6% of costs on toast, sweet potatoes and other products.
In Xiaohongshu, Hema Manufacturing already has its own small town tap water: A friend from Weifang said that after comparing Hema with other local retailers, they gave it a fresh and good review. A friend from Dongying mentioned that Hema’s 50-yuan portion of roasted eel and red velvet cake are really not expensive. A friend from Linwei found his husband in a photo of frantically grabbing Hema roasted chicken and said that the same product sold more than a thousand pieces a day……
After wandering in the sinking market for some time, Box Horse seems to have become the business card and drainage tool for the new city that local governments and shopping malls are looking for.
Some industry insiders said that some third-and fourth-tier cities have long been eager for business formats that can drive offline consumption. When they saw the opening effect of Hema in Dongying and other places, they began to throw olive branches to Hema. Some Xuzhou consumers mentioned that the local box horse is still crowded ten days after its opening, and the number of merchants on the first floor has increased. There is also a Zibo native who works in Dongying and shops in Box Horse three times a week. He is a little angry with his hometown and asks if Zibo’s shopping malls can’t see the wealth.
Apparently,The new generation of small-town consumers who have seen and used top-notch goods will no longer let themselves return to the past consumption era when they can only buy the same products and everything only depends on cost performance.Retail in small cities should reach the next level.
According to media reports,The number of stores opened by Hema in 2025 will definitely exceed 24 years, and may set a record for opening stores in history.According to some public store plans, it will continue to open to Suzhou and Fuyang in Anhui, and Taizhou, Cixi, Shaoxing and Jiaxing in Zhejiang this year.
Reviewing the past, we found that this is the most profitable moment since Hema was founded. Guess where Disney will appear in the next county, and how many county ladies will rush to get the strawberry cakes, poplar branches nectar and roast chicken there.
