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Mingchuang’s “Make a Change”: Where is the growth engine next?

Embrace the line, shake hands with Tencent, and create a superior product that is accelerating transformation and upgrading.

At the end of 2013, Mingchuang Premium opened its own store. In the following five years, when traditional retail sales were generally affected by e-commerce, Mingchuang’s products grew against the trend and became retail at an average of 600 stores a year. The industry is unique. In the three years since its establishment, the turnover of Mingchuang’s excellent products has exceeded 10 billion. What is the concept of this speed? Alibaba spent 4 years from 0 to 10 billion, Jingdong used 6 years, and Vipshop used 7 years.

In the era when e-commerce is invincible, Mingchuang has become a powerful sniper, and it has also boosted people’s confidence in offline value. As of the end of 2017, Mingchuang Youpin has opened more than 3,000 stores worldwide, with total sales of 12 billion yuan, more than 1,000 foreign stores, and more than 70 countries.

Just as the famous creations were proud, a new round of changes in the retail industry came to the fore. Along with the tide of consumption upgrades, the relationship between online and offline began to undergo profound changes, and traditional retailers have used their e-commerce platforms to enhance their digital capabilities.

Famous and innovative products – how does this traditional retail wave respond to current changes? You know, Ye Guofu, the founder of Mingchuang, is a strong advocate and practitioner of traditional retail. He once said that traditional retail is weak. Not the e-commerce is powerful, but the former is too profitable, users are forced to go online, even when Ma Yun proposed a new retail concept, he still threatened that e-commerce will die in the next 3-5 years.

However, in 2018, the attitude of Mingchuang’s excellent products to e-commerce has turned sharply. In April of this year, Mingchuang Excellent Products tested the waterline business. The first batch of stores went online to Jingdong, and then they settled in the US group, hungry and other local life platforms. By the end of September, the famous key products in 33 key cities across the country. Nearly 800 stores have been on the line to Jingdong, and the intensity is evident.

However, this is just a step in the handshake between the famous products and the e-commerce. On the eve of National Day, Mingchuang’s products were enlarged and announced that they have obtained investment of 1 billion yuan from Tencent and Gaochun. The official calibre is that the purpose of the tripartite cooperation is to expand on big data, smart stores, smart retail and digital operations. Cooperation.

But it’s worth noting that this is the time when the famous products have received external investment for five years. On the one hand, it is standing on the team Tencent, on the other hand, it is always known that the cash flow is abundant, and the story behind it is worth pondering.

Even so, the concept of online and smart stores is greater than the current practical significance, because it is still difficult to achieve significant results in the short term, whether it is online orders or transforming smart stores. Some insiders have revealed that the cooperation between Mingchuang’s excellent products and Jingdong’s homepage is still in the process of running-in, and the order quantity and stability are far from enough. Even if it is reached with Tencent, the specific landing plan seems to take some time.

The more pressing question currently facing the famous products is: Where is the next growth engine?

Maintain a keen sense of user demand

Ye Guofu’s two successful entrepreneurial experiences have been well known. One is the small jewelry brand “Oh,” which was founded in 2005, and the other is the successful creation of famous products. Although oh yeah sells small accessories, famous products focus on daily necessities, but the two brands have intrinsic links and genes in one line.

Before the establishment of Ode, Ye Guofu had already lived a life of food and clothing by relying on several cosmetics stores. This was because of the poor family at the early age, and at the age of 21, he gave up his studies and went south, and Ye Guofu, who had been working hard from the grassroots level, was A good start.

Ye Guofu’s keen sense of business also began to show up at that time. In a chat with the former clerk, Ye Guofu learned that the sales of small jewelry is very impressive, so immediately on-the-spot inspection and verification, to determine that the small jewelry will be promising, oh yeah will be officially online.

Oops, the main low-cost exquisite small accessories, mainly for the “negligible majority” at the bottom of the pyramid – the monthly income of 2,000 yuan, the female consumer group aged 12-28. Once such a small jewelry store opened, it quickly became popular. By 2007, the number of “Oh yeah” stores was nearly 1,000, with a total retail sales of 560 million yuan, and even more than 2,000 at the end of 2010.

With the expansion of the scale of Yeah, Ye Guofu’s product awareness has gradually strengthened. He has clearly emphasized that small jewelry should be developed and refined, and “fine gaps make a huge difference.” In 2008, it has become the leader of the jewelry industry, and it is a 15 million yuan ERP enterprise resource planning system.

In the era when the management of the small jewelry industry is still relatively extensive, the ah has consciously improved the operational efficiency of the store through refined management.

In fact, this product awareness, the idea of ​​strengthening supply chain management, has become one of the core competitiveness of Mingchuang. Although the store’s store has been reduced to a few hundred, Ye Guofu’s entire energy is also placed on the famous products, but he still said: “Oh, the entrepreneurial process, let us create famous products, It has a great contribution to the perception and control of the supply chain, and also has great value for the construction of retail chain system, talent reserve, management, and supplier communication.”

Looking back, in 2005, the Internet industry was also undercurrent. This year, the global* portal Yahoo injected $1 billion into Alibaba, while the latter acquired Yahoo China. This capital injection allowed Ali to make great progress in the B2B and B2C fields; Tencent acquired Zhang Xiaolong’s Foxmail this year. And established “Tencent Guangzhou Research Institute”, a few years later, it gave birth to WeChat that changed people’s social and lifestyle; Liu Qiangdong also decided to completely abandon retail stores and completely transform e-commerce in this year.

Therefore, along with the success of the embarrassment, the e-commerce platform is also growing rapidly, until one day, Ye Guofu found that the bonus of the small jewelry gradually disappeared.

Oops, the loss of competitive advantage, on the one hand, because of the increasing number of imitators, the influx of many players to narrow the profit margin; In addition, Oops also encountered a more powerful opponent – Taobao’s 9.9 package, when both sides When commodity development strategies and profits are comparable, oh, but also have to bear higher rents and labor costs, the competitive pressure can be imagined.

At that time, traditional retailing was also caught in the panic of e-commerce. Ye Guofu personally went to inspect the Japanese retail industry. He was surprised to find that Japan’s retail industry was thriving compared to the domestic sorrows. After the inspection, Ye Guofu gave birth to the idea of ​​making famous products.

Ye Guofu believes that the reason why Japanese people are willing to go offline stores is because Japanese physical stores have cheap goods, good service, and a comfortable shopping environment. People have no reason to go online shopping. The reason why China’s e-commerce giants such as Ali Jingdong are Because traditional retail is too profitable, consumers are forced to go online.

It is in this kind of cognition that Ye Guofu has created a famous product with good shopping environment, good service, low price and good quality. Behind these appearances, there are direct sales, design control, and investment. The rapid transfer, fan operation and other internal strengths have become the original driving force for the rapid development of Mingchuang’s products within five years.

But whether it is awkward or a famous product, their common feature is to sell small-priced small commodities, so that users can be decisive without any thought, and the iteration of products and the upgrade of stores rely on Ye Guofu. Accurately taking the consumer psychology and consumer demand of users at different times, this trend is also an important reason why today’s famous products can carry out my innovation.

“Sinking” famous products

For the ever-changing user needs, Ye Guo is as sensitive as any retailer, but with the expansion of the business turntable, he began to focus on using technology to strengthen this sensitivity, so that the famous products are In the future commercial war, there is a faster response speed.

A former person in charge of the famous product said: Mingchuang is strengthening its own big data analysis ability, and perceives the trend of consumer behavior through big data science.

In the past five years, Mingchuang’s “scanning micro-signals can be free to send shopping bags” is to consciously digitize members. Up to now, the number of fans of the Chuangchuang Youpin public number has exceeded 20 million. More than 20 million fans have important guiding functions for the creation of new products and products.

Of course, the acquisition of such data will be more diverse in the future. Chuangchuangyou will accumulate more consumption data through cooperation with, Meituan, and Hungry. Now I have reached a strategic cooperation with Tencent, and I will definitely make more useful attempts in big data and smart stores in the future.

Even so, there is still a lot of uncertainty about whether Mingchuang’s products can continue to be brilliant in the past.

Some experts believe that the external financing of Mingchuang’s excellent products for five years may indicate that it has taken some pressure on funds. For example, Mingchuang Premium uses the investment franchise model, which requires the store to have a considerable shipment. Once the shipment is insufficient, the franchisee will not make money. If the franchisee can’t make money, the possibility of a contractual due date is small, which puts the cash flow of Mingchuang’s superior products under pressure.

Mingchuang Premium franchisees need to pay 80,000 yuan per year of “licensed trademark use” (available for three years), goods security of 750,000, plus the cost of rent, decoration, etc., calculate the store opening of a store is about 300 Million.

The revenue distribution mechanism of Mingchuang Premium is: 62% of the total daily revenue is owned by the outstanding products, and the remaining 38% (33% of the food) is the income of the franchisees. The product is transferred to the franchisee account. The goods are provided free of charge by Mingchuang Premium, but the logistics costs, store rent, labor, electricity, business, tax and other miscellaneous expenses are borne by the franchisees.

The official data of Mingchuang Youpin shows that the average monthly turnover of all* stores is 500,000-600,000 yuan, but after five years, can such sales performance be maintained? It depends largely on consumers. whether for product excellence name goods still buy it.

But the “sink” strategy of product excellence name might be able to explain some problems.

This “sinking” does not only mean that the stores of famous high-quality products open to more third- and fourth-tier cities. To be precise, the concept of “sinking” here means that the famous products must be opened to more uncovered areas. And there is a huge demand for this kind of boutique ten yuan store.

First of all, of course, sinking the third- and fourth-tier cities. At the beginning of the development of Mingchuang’s excellent products, it was mainly concentrated in first- and second-tier cities, and there are still large expansion areas in the third- and fourth-tier cities. As can be seen from the history of the fight, it is true that for the majority of users in the third- and fourth-tier cities, low-priced goods still have great appeal, not to mention the products of the famous products are more designed and the quality of the products is better.

The second is to enter the overseas market. At present, the importance of overseas markets for famous products is even better than that of the domestic market. Ye Guofu previously stated clearly: “The strategic focus of Mingchuang Premium in 2018 is to expand overseas markets.”

Mingchuang Premium has entered the United States, Brazil, India, Indonesia and other countries. In these overseas markets, the sales of famous products have exceeded domestic sales. Ye Guofu once revealed that in Delhi, India, the price of a famous designer is twice that of the domestic one, and the daily turnover can reach more than 50,000 yuan.

This is why Ye Guofu dared to declare that the medium-term strategic goal of Mingchuang Premium is “100 billion stores in 100 countries” – in 2022, it will be stationed in 100 countries and regions, with annual revenue of 100 billion yuan, reaching stores in the world. 10,000 homes. Because in their view, even if first- and second-tier cities are saturated, third- and fourth-tier cities and overseas markets are still promising.

The “Troika” against the new retail

In the current retail industry, some people say that it is a consumption upgrade, while others think that it is a downgrade of consumption, but regardless of consumption upgrade or consumption downgrade, one thing is clear: Consumption is hierarchical, users are layered, the key depends on what you are doing. Which part of the user group.

However, the future development strategy of Mingchuang’s excellent products seems to be to wipe out the low, medium and high-end consumer groups.

At the same time that Mingchuang’s products are stepping up to the sea, we are not difficult to find out. At present, in addition to the daily necessities brand MINISO, the Group is still launching the living home + clothing brand NOM, furniture + home brand MINIHOME. Mingchuang’s excellent products also clearly stated that the three major brands cover different consumption grades of low, medium and high.

In these three types of stores, MINISO corresponds to a lower consumption grade, which is why MINISO does not increase the coverage density of first- and second-tier cities, but instead penetrates overseas markets and domestic third- and fourth-tier cities.

Furniture + home brand MINIHOME

The demand for mid-end and high-end consumer groups will be more satisfied in the future through the two store types NOME and MINIHOME. Of particular concern is the fact that at least six stores have been opened for NOM.

In June of this year, NOME, a subsidiary of Mingchuang Premium, opened its flagship store in Shanghai Global Harbor Shopping Center. The merchandise category covered 8 categories of clothing, shoes, accessories, skin care, household items, bags, food, digital accessories, more than 3,000. SKUs, of which clothing accounts for about 50%.

Compared to MINISO Japanese-style stores and merchandise, NOM focuses on Nordic style, with more types of goods and larger areas, usually around 400 square meters, and the price of goods is higher. Among them, the price of apparel goods is 49-799 yuan. Between the price of household items is between 9.9 and 199 yuan, of course, the quality of goods will be better.

Perhaps, in the next five years, Ye Guofu is going to use these three store types to meet the needs of users at different levels of consumption, plus Mingchuang has a strong supply chain capability, and can be well-versed in “direct investment + investment to join “The model opens quickly, and its future may form a positive competition with Netease’s strict selection and MUJI.”

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