On The Traditional Department Stores Eliminated

China's department stores suffered a large-scale shutdown crisis. When the financial crisis began, it was sweeping across the country by the year 2012.

In the first wave of shops, the Pacific department store in Beijing shut down the Pacific Century Department store and the Wukesong store. Later, Baisheng, a well-known Chinese consumer, has closed seven stores in Guiyang, Shanghai, Shijiazhuang and Beijing since June 2013.

It has been pointed out in the industry that in recent years, the collapsed department stores were often opened in new stores between 2011 and 2013, because a few years ago, the department store industry had been rising for a long time and had been running around. Once the industry deteriorated, such as the advent of the financial crisis, this batch of new shops during the incubation period took the lead.

According to the data released by UBS in early 2013, there was a negative growth in China's department store traffic in 2012. The reason behind this phenomenon is the emergence of new formats of shopping centers and urban complexes, which diverted the flow of traditional department stores.

Wu Ruiling, Deputy Secretary General of the China Chain Store Association, believes that the growth of new channels such as shopping centers and electricity providers is one of the factors leading to the diversion of traditional department stores customers. The downturn in the economic environment has also led to insufficient consumer confidence.

Chen Zhongwei, executive director of World Bank Richard Ellis, told NetEase finance that sales of department stores continued to decline in recent years, and profit margins continued to decline. We can see that the status of department stores in the retail industry is becoming marginalized.

"From the outside point of view, domestic economic growth is slowing down, shopping centers, hypermarkets, online stores and many other formats are rising, and department stores operating costs are also rising. From the department store itself, the limited operating area has become a barrier to adapt to changes in consumer demand and an excessive reliance on the mode of joint operation, leading to a dilemma of the department store industry."

He said.

Public figures show that in 2013, the average sales volume of 3000 retail enterprises increased by only 0.9% over the same period last year.

In 2013, the operating profit margin of major listed department stores continued to decline, showing a mean of 12.4%, down 0.1 percentage points from the same period, and has declined for third consecutive years since 2010.

UBS issued a history report on consumer goods industry, which once said that the establishment and operation of large department stores in China lacked much in-depth research on the market. It is not clear that market research technology has yet to be fully grasbed, and there is no objective basis for opening stores, and there is a lack of in-depth study of marketing strategies and consumer psychology, and has been in a low price competition.

On the whole, the external factors that led to the closure of some department stores in China are not related to the impact of electricity suppliers, rent increases and central anti-corruption, but from the internal reasons, many department stores blindly expand and vicious competition is also a catalyst for the final collapse.

Take rents as an example.

For example, the annual reports in the past 3 years show that the increase in rents and the number of new stores have led to an increase in the cost of labor, rentals and property management fees.

In 2011, 2012 and 2013, the total sales cost was 825 million 664 thousand and 700 yuan, 950 million 769 thousand and 400 yuan and 993 million 606 thousand and 700 yuan respectively, up 17.49%, 15.15% and 4.51% respectively.

and

The unique business model that it has built up has become the object of being punished.

Wu Ruiling explained that the traditional department stores generally adopted the "joint operation" mode, that is to say, a certain percentage of brand turnover should be deducted according to the category, which is called the "deduction point" in the industry, which is linked to the business turnover.

This is similar to the two landlord.

It has made brilliant achievements for the domestic department store industry, but Cheng Xiao He also failed Xiao He, which also led to the inertia of department stores, and did not attach importance to the operation of commodities.

Just like many people in the industry sighed, traditional department stores were eliminated, not business barriers, but business models were out of date.