Tencent cooperation Red Star Macalline Internet giants vying to lay out the home industry

On November 2nd, a strategic cooperation meeting between Tencent and Red Star Macalline was held in Shenzhen. The two parties announced that they will use the concept of “smart retail” to establish digital and differentiated consumer experiences and build a “digital” operating system. Cooperation. This means that after Ali, Jingdong, Suning, another Internet giant “killed into” the home industry and began to snatch this track.

In February of this year, Alibaba announced that it signed a strategic investment agreement with the actual home. Alihao sold 5.453 billion shares to buy a 15% stake in the home, officially entered the home market and expanded its new retail layout. In October, Tmall‘s new retail teamed up with the home of the first “new retail digital store” officially unveiled, once again attracted industry attention.

Previously, Jingdong also teamed up with Qumei to build Qumei Jingdong‘s home. According to public data, during the National Day this year, its passenger traffic increased by 186.11% year-on-year, the turnover increased by 262.01%, and the customer unit price achieved a high growth rate of 67.22%. Suning is also laying out its own home layout. At the end of January this year, Suning Tesco established the four major marketing business cluster modules of household appliances, living home, big fast-moving and smart 3C after the name change, and Suning’s home appliances upgraded “big home”.

In the new retail era, the brands in the home industry on pure online and pure lines will be marginalized in the future. After all, the traditional home store traffic is declining year by year. According to the data of the Ministry of Commerce, the sales of home stores have been declining year by year since 2014. By 2017, the sales of home building materials above designated size reached 917.37 billion yuan, down 22.6% year-on-year. The development trend of the home retail market is bound to be online and offline integration, and the omni-channel layout. The entry of Internet giants such as Ali, Tencent and JD.com will bring about a revolution in these traditional home stores.

In the past few years, the traditional store companies such as Red Star Macalline and Real Home have also tried to change, or build their own online malls, or create offline experience stores for online brands. Costs and costs, the final results are minimal, and there are few successful cases. And before the giants such as Ali and Tencent did not enter the main, the competition between the home and the Red Star Macalline was already fierce.

According to public data, Red Star Macalline, which completed revenue of 6.374 billion yuan in the first half of this year, currently has 267 stores nationwide, while the number of hypermarkets in actual homes is relatively small, with 241, but After Ali invested in the company, he has proposed plans to have more than 600 physical stores by 2022, and will actively complete the transformation and upgrading of “big home” to “big consumption”. Cooperating with the Internet giant will undoubtedly bring more substantial traffic support and financial support to the home industry, and accelerate the digital transformation of the traditional home industry.

Compared with FMCG, the goods in the home industry are an important basis for establishing a working and living space. The frequency of consumption is low, the store covers a large area, and the online occupation is relatively low. The internal changes in China’s home furnishing industry have only just begun. How to change consumers’ visits from low frequency to high frequency is a problem that many home furnishers want to solve. According to statistics, the market size of China’s home furnishing industry has exceeded 4 trillion, and the market prospect is broad. The entry of the Internet giants has only just begun, and the future integration of online and offline platforms will be a real contest at the home track.