The Industrial Giant Reborn.

Chapter 222 Rapidly Expanding Overseas Retail Industry
Time soon arrived in May. In the United States, in the suburbs of the northwest of New York City, several long traffic flows converged from several directions. It was the branch of Costco Group in New York City, and it was also the largest store of Costco. branch.

"There are so many people here today, it feels comparable to the Celtic supermarket we went to yesterday." Chen Zhiwen said on the third floor of the property where the Costco supermarket is located, looking at the crowds coming in and out at the door.

"As early as three months ago, we had already advertised that on the first anniversary of the New York branch, there would be a 10% discount on a large number of products. Costco's products are already the cheapest in New York City. With a 10% price reduction, how many members are not tempted." Pierce said with a smile.

Although he has entered the age of 60, he still looks full of energy. This may be because his recent career has developed relatively smoothly. As the general manager, Pierce basically has no entrepreneurial pressure. At the same time, his boss Chen Zhiwen strictly requires him to have regular physical examinations. And follow the requirements of two nutritionists to control diet and increase exercise.

It was a bit annoying at first, but after a long time, my body actually improved a lot. Although it is not as good as when I was in my prime, at least I feel more than ten years younger than my peers.

"Now in the entire United States, how many members do we have?" Chen Zhiwen asked again.

"Now we have 35 stores in the United States, with a total of 212.2 million members." Pierce said, this is the most important data for the entire Costco company, and he needs to master every change of 1000 people.

"A supermarket has an average of 6 members, which is not bad." Chen Zhiwen nodded and said, the characteristic of Costco is that it can cultivate very loyal members. After all, its products are cheap, and they let users pay membership fees. As long as you are a normal person, you will come here to spend, otherwise the membership fee will be for nothing, unless you are really busy and really have no time, but there are very few such people.

"Yes, plus the 9 branches we are about to open this year, by the end of this year, the number of members should exceed 250 million. According to the previous average consumption data, by the end of the year, our monthly turnover will exceed 8000 million US dollars. It’s an average annual turnover of 10 billion U.S. dollars.” Pierce said a little excitedly.

"One billion US dollars a year, this is really a watershed." Chen Zhiwen was also quite pleased.

With Pierce, an old professional manager who doesn't fight for power and understands the operation of member supermarkets, coupled with his almost unlimited financial support, Costco's development speed can be said to be a miracle in the retail industry.

Target a small number of types of goods, reduce procurement costs, target middle-class families with the most spending power in a city through membership, and then cultivate user loyalty and stimulate their consumption through cheap products. City.With so many factors combined, it's hard not to think about success.

In the original history, Costco opened 17 stores within three years even though it stumbled through its own financing and development, and the sales of each store exceeded 2000 million US dollars. However, that was in the early 80s, which may be five years away from now. But the impact should not be great, and they have enough funds to open a larger branch store, and the promotional efforts to attract members are also greater.

"It's just that the scale has grown, and some things can't be hidden. Eric, the Wal-Mart you invested in is also planning to build a warehouse-style supermarket." Pierce said.

"Wal-Mart? It's normal, as expected." Chen Zhiwen smiled and shook his head.

The size of a large company cannot be concealed. After all, there are so many industries. Relatively speaking, only those who have bought a house to collect rent and have no commercial activity can become invisible rich people, such as the Zhang Yuliang family in Hong Kong. Community development, with a large number of transactions, will definitely be dug up by the media.

This is especially true for supermarkets. With so many cities, such a large area, and a lot of vigorous publicity, other colleagues are not fools.

Costco is now a non-listed company, so there is no need to publish its own financial data, but the amount of goods in and out of the supermarket, the approximate consumption of members, and even the approximate number of members cannot be hidden. Even if others make a mistake, they are only right. Eighty percent, you know the scale.

Chen Zhiwen didn't intend to hide this information, just like Red Bull, it's just that being discovered is a process. Among the peers, whoever discovers first may be a coincidence, but it may also be really capable.

Sam Walton, presumably the latter.

Pierce went on to say: "Walmart is planning to open a supermarket similar to our Costco in Fort Smith, Arkansas, which is also mainly member-oriented and open to all people."

"Arkansas is where Wal-Mart's headquarters is located. The membership store should be built there to test the waters. However, Pierce, how did you know about this?" Chen Zhiwen asked.

Not to mention now, even in the Internet age of later generations, when a company builds a supermarket, the news may not necessarily go online, and it may be just a drop in the ocean when it goes online, and it will not be discovered by people who don't know about it.

"Wal-Mart poached people from me, and poached a team to leave, close to 20 people." Pierce said.

"Oh, so that's how it is." Chen Zhiwen nodded and said, "Let them alone, we can't help them if they want to open a warehouse membership supermarket, but Wal-Mart is developing very fast now, it is impossible to compete with us with all our strength, their The main competitors are big supermarkets like Celtic.”

Wal-Mart's entry into the game was already expected by Chen Zhiwen. In the original history, in the early 80s, Sam Walton noticed Pierce's original new business model, and then opened his own Sam's Club, but it was a step behind It is equal to ten steps behind, even if the funds are much stronger than Pierce, Wal-Mart itself has the advantage of the supplier chain, but Sam's Club is still not as good as Costco, but it has also reached the second level in the world, which is considered to be a very big threat .

But in this life, Chen Zhiwen's capital investment in Costco is almost unlimited. If Costco's talent pool is not enough to support the expansion speed, it would not be a problem to build 70 supermarkets now.

In terms of funds and bank resources, perhaps Chen Zhiwen, who has Midea arcade machines, may not be as good as Wal-Mart, but it is impossible for Wal-Mart to invest too much money in the field of member supermarkets, because Wal-Mart’s main track is still ordinary supermarkets, Wal-Mart We have already had rich experience and achievements in the field of ordinary supermarkets, and we must invest a lot of funds in it. We can’t stop on the way of expansion, because once we stop, we will be courting death. Banks, suppliers, and investors will not agree, or even It is impossible to extract a slightly larger part out.

"I also know this, but if this member store of Wal-Mart develops well, like ours, then investors and banks will definitely invest money, maybe other funds, and it has nothing to do with Wal-Mart itself." Pierce said again .

"What you said is also possible, but it may take a few years. In just a few years, we can occupy the megacities in the United States first. In a big city like New York, we can build 2-3 to cover most of the Population, as long as there are a large number of our members in this city, then we can sit back and relax." Chen Zhiwen said lightly.

Different from traditional supermarkets, member storage supermarkets have a stronger first-mover advantage, because membership fees are required, and once a person pays membership fees at Costco, other peers want him to run another one. members, the difficulty will increase tenfold, and the cost will be lower when the scale is large. Just like Coca-Cola, how can outsiders compete?Not to mention the cultivation of shopping habits, even if the price is the same, people will tend to choose to shop in the supermarket they often go to.

With so many moats, as long as they are built and they don’t make big mistakes, the city can basically sit back and relax. On the contrary, supermarkets like Wal-Mart, because there are more varieties of goods in the supermarket, more branches, and advantages in terms of distance, can Coexisting in the same city with Costco, differentiated competition.

Later generations of Sam’s Club actually avoided the urban expansion where Costco was located. At that time, Costco could not expand on a large scale due to capital constraints, but it is different now.

"My thoughts are the same, but in this way, a lot of funds will be needed, or a bank loan in the name of Costco." Pierce said.

"No, I will mobilize some of the funds for you. In addition, you also know that I am a major shareholder of Wal-Mart. Wal-Mart's stock has risen quite a lot in the past two years. With these stocks as collateral, you can lend a lot of funds. "Chen Zhiwen said with a smile.

Midea’s arcade business has high profits. Although some of them are used to secretly acquire stocks of Hongkong Land and Wharf, most of them are still in overseas accounts. The reason why they don’t invest in the Hong Kong market to make quick money is because of the possibility in the United States. After all, Costco has great strategic significance.

In 75, in order to acquire Hutchison and deal with Hutchison’s debt crisis at the same time, Chen Zhiwen used 12% of Wal-Mart’s shares to the extreme, and almost mortgaged all the credit lines. However, when the time entered 76, Hong Kong real estate The market recovered a bit, and Hutchison also sold a large number of profitable businesses that Chen Zhiwen didn't like, cashed out a lot of funds, and also repaid part of the Wal-Mart stock mortgage debt.

If Wal-Mart stock is used as collateral now, it will be no problem to borrow tens of millions of dollars.

"That's good. I can expand with confidence. The inflation in the United States is very strong now. All the people are looking for ways to find cheaper goods. Now is the best time for us to develop members. I am going to launch another event, very Members can come to experience the shopping environment of Costco, but one person can only come twice a year. I think many people are reluctant because we pay the membership fee first, but they cannot experience our shopping environment first. Contradictory."

"In principle, I don't interfere with such things, and I don't know much about the marketing of member supermarkets, but as far as I know, many regular members only come once every two or three months, while other non-members can enter once every six months, isn't it a bit strange?" Fair?" Chen Zhiwen asked back.

"Then add a limit on the maximum consumption amount." Pierce thought for a while and said: "Anyway, this is just an event. I can choose one or two branches to test and see the effect. If it is not good, it will be cancelled. Promote slowly."

"Okay, then you can figure it out." Chen Zhiwen nodded and said, the contradiction Pierce said does exist, and the membership fee of tens of dollars (different in different places) is enough to stop many people. After all, it is a long time for many people. even a day's income.It is also normal to have a proper on-site experience, but if you take a big step, it will shake the entire membership system, so you need to be cautious.

"Then I have the data and results, and I will summarize them for you." Pierce said with a smile.

"Okay." Chen Zhiwen said, although he spends most of his time in Hong Kong, but Pierce will often organize the situation of Costco and mail it to him by air.

Moreover, he also monitors the situation of Costco in real time. In every store, headquarters, and various departments, especially finance and personnel, there are Chinese arranged by Chen Zhiwen. These Chinese are either transferred from Hong Kong, or the United States. Recruited, these people work normally under normal circumstances, and if they find something abnormal, they will report it to the connector in Hong Kong.

At the same time, Chen Zhiwen will also specially hire a tripartite financial institution to review Costco. Pierce also approves of this behavior because it was discussed a long time ago. Chen Zhiwen gave him a lot of management autonomy, but the relevant review is sure No less.

"Also, there is another small thing." Pierce said again: "I hope that the Hong Kong factory will produce some snacks in addition to producing Coca-Cola, so as to reduce the procurement cost of Costco."

"Snacks?" Chen Zhiwen frowned, showing a little interest.

"Yes, it's snacks. Many members of Costco will come to a big shopping once a month or two. The main choices are drinks and snacks. For drinks, Coke Sprite is the main one. Our own very cola is because It’s cheap, and many people choose it, and snacks are a bigger market. Our statistics show that the sales of snacks far exceed that of beverages.” Pierce said: “Another point is that beverages are full of water, which is very Heavy, shipping costs are high, snacks are much better, margins are much higher, it’s just that a large part is not in-house.”

"There are many kinds of snacks, which ones do you want produced in Hong Kong?" Chen Zhiwen nodded and said.

When a large-scale supermarket reaches a certain level, it will inevitably find ways to produce some simple and high-selling products as much as possible, and the simplest products are beverages and food, which sell well and are easy to make. For example, RT-Mart, the largest supermarket in the mainland, has its own beverage and food brands under its banner.

However, not all simple products are produced, such as clothing, although it is very simple, but supermarkets are not the main channel for selling clothes, and clothing does not account for a large proportion of retail sales in supermarkets.

"The highest-selling snacks have always been potato chips, popcorn, chocolate, buns, and biscuits. Eric, which ones do you think are suitable for Hong Kong production?" Pierce said.

"Potato chips are fine, but popcorn takes up too much space, and the cost of transporting them from Hong Kong is too high. Chocolate is not good for the time being. There is no production experience in Hong Kong for this stuff, and there are no raw materials. You can also try small bread and biscuits. , but whether it can be sold well or not depends on the taste produced." Chen Zhiwen thought for a while and said.

"Of course, but as long as it's not bad and the cost is our own, we can lower the price further, which will attract users even more." Pierce said with a smile.

(End of this chapter)