Suning Logistics: Cold Chain Boosts Business Model Evolution

Are the new retail strategies of e-commerce giants in a bottleneck?

It’s too early to conclude this proposition, but the new retail leader —— fresh e-commerce It did encounter difficulties. At the end of the past May, Box Ma opened the store for the first time in three years. Before that, Yonghui’s super-species were stripped of earnings due to performance losses; the US group’s small-scale strategic contraction only retained two stores in Beijing. Suning Sushengsheng and Jingdong 7FRESH are also faced with the question of slowing down the store.

“ There is a pit to fill in, if you can’t fill it, then you have to withdraw from the market. In a public speech in March this year, Box Horse Fresh Life CEO Hou Yi directly defined the competition in 2019 as the new retail “filling the pit battle”. Even if you don’t consider the cost, the fresh e-commerce companies also have “efficiency and” experience two big pits to fill.

Suning’s choice to break the way is to let the store “go westward” and work hard on the back end to build a cold chain. Since 2018, Suning Logistics has built 46 cold chain warehouses in more than one year, covering 188 cities.

Like the ion propeller that propels the Earth in the movie “The Wandering Earth,” cold chain logistics is becoming an important thrust in the evolution of Suning’s business model.

Suning speed, low-key and amazing

Sichuan Ya’an, Lijiang South Road, Ping An Home Community, 43-year-old Li Qin received a call from the express. Within five minutes, Suning Logistics Courier, wearing a black and yellow uniform, handed the yellow fresh box to her hand.

This is the order she took from the mobile app the day before. The order was released and she regretted it —— more than a month ago, Suning Fresh opened the service in Ya’an. She is not sure if the purchase method is reliable. What worries her even more is that if the seafood purchased is not fresh, it will definitely affect the son of the upcoming college entrance examination.

At the moment she opened the box, she was relieved. The temperature of the ice bag in the box is still very low; the cockroaches and whiskers of the prawn are all intact, and it looks good to sell. The courier also asks her to find out that the goods are not fresh and contact the return and payment in time.

These shrimps from Yantai, Shandong Province, were harvested from the origin, and were distributed to the cold chain warehouse in Chengdu, Sichuan. The local Suning logistics courier delivered the goods to the Li Qin family’s table. It only takes 24 hours. In the past, in the inland third- and fourth-tier cities, only SF was able to do this. Today, Suning’s cold chain logistics has been low-key and strong to catch up.

At the same time as Ya’an, Guangdong Jieyang, Guizhou Zunyi, Inner Mongolia Erdos, Hunan Hengyang and other cities also opened the second-generation service. More and more inland cities can eat freshly imported durians and mangosteens from Thailand; at the same time, Inner Mongolia’s beef and mutton can be transported to 188 cities covered by cold chains within 24 hours.

In the exploration of new retail, e-commerce giants have chosen fresh e-commerce as a guide. Indeed, in the core business districts of first- and second-tier cities in the past few years, glamorous box horses and super-species, with durians, cherries, lobsters and arctic shells, have refreshed consumer perceptions of the experience.

When the new retail enters the bottleneck period, when the player is still turning, Suning has already rushed into the third- and fourth-tier cities with the advantage of offline.

Time pushed back to the end of 2017, Suning released a smart retail development strategy, Zhang Jindong announced at the press conference that Suning Internet stores will expand to 20,000 or more than 20 million square meters in the next three years. .

After a year and a half, Suning gave an amazing answer to the terminal development. . In 2018, the number of self-operated stores and franchise stores in Suning increased by 7,819, with a total number of 11,064. At the beginning of 2019, Suning has acquired dozens of stores in Wanda Department Store.

In Suning’s stores, in addition to the traditional Suning Tesco stores, Suning stores are mainly concentrated in first- and second-tier cities, and Suning retail clouds are distributed in third- and fourth-tier cities. There is no doubt that logistics is the glue of these stores.

On the online, Suning Supermarket, Suning Fresh, Chinese Characteristic Pavilion, and overseas purchases cover different consumption scenarios; offline, cold chain logistics begins to cover the origin, from the production warehouse to the front warehouse. And the central kitchen and processing center with its level, and finally the end of the express outlets and Suning store. In short, each logistics node has the ability to store and distribute, and its coverage continues to expand and sink further.

In just over a year, let the cold chain cover nearly 200 cities and become the leader of domestic cold chain logistics. How does Suning do it?

On the management side Suning vigorously introduces advanced technology, mature management system and outstanding talents in the cold chain industry. When many traditional enterprises are still struggling with the transformation pains, Suning has already laid the foundation; at the executive end, Suning insists that the layout is down to the west, and the professional cold chain storage area exceeds 200,000 square meters. Under the smart retail ecology, “Suning cold chain + fresh processing center, & ldquo; Suning cold chain + front warehouse and other modes in the country quickly landed.

At present, Suning’s cold chain logistics covers more than 2,000 SKUs, including breakfast, vegetarian food, fresh food, fruit and fast-moving consumer goods. The nerve endings of Suning’s smart retail have reached the third- and fourth-tier cities.

The cold chain connects stores, which serve retail, and retail is at the heart of Suning’s entire strategy. In the past year, SuningIt is a strategic need to invest a lot of resources in the development of cold chain logistics. Suning’s business model has also evolved quite effectively. According to the financial report, revenue in 2018 was 244.957 billion yuan, a year-on-year increase of 30.35%, and net profit rose 216.38% year-on-year.

Another data worthy of attention is that Suning’s annual research and development expenses amounted to 2.262 billion yuan, an increase of 80.81%.

Experience, Continuous Evolution

Speed ​​and breadth are the most important indicators for measuring a logistics company, but this is not the only standard for Suning Logistics to be a cold chain. When releasing the smart retail strategy, Zhang Jindong once explicitly mentioned that the value of smart retailing to the construction of consumer scenes is to make the scenes complete, refined, and secret, and to maximize the consumer’s mind, time and space.

“Doing speed, breadth, and even depth can all be solved by increasing costs, but this is only part of the user experience. The relevant person in charge of Suning Logistics revealed that in the past year, almost all of the time has been meeting and arguing for the user experience, and visiting stores in different regions. Driven by high technology and standardization, Suning Cold Chain has made six innovations in user experience.

1. Establish operational standards for the entire process

Standardization of cold chain warehouse construction, Suning Logistics has forward-looking design in warehouse structure, refrigeration equipment, energy-saving design, etc. The company strictly implements standardized management and realizes large-scale supply through reprocessing mode to ensure standardization and high quality of fresh products.

2. Supply Chain Integration Service Process Design

2019, Suning The logistics will be built in the production bases of many characteristic agricultural products in the country, and will automatically build 200,000 square meters of modern multi-temperature cold storage in 13 cities across the country, including constant temperature, cold storage, freezing and deep cooling. Fresh products “ tailored to the appropriate storage temperature.

3. Realize operational refinement

With the expansion of fresh goods SKU, Suning cold chain controls the temperature of every segment of the supply chain in the middle and lower reaches of the supply chain. Distribution, through the cold chain packaging refinement, cold chain transportation and distribution refinement, cold chain pre-cooling and storage refinement and other programs to achieve differential cold chain transportation, warehousing and distribution.

4.Building a smart + cold chain

Suning Logistics has built three IT data platforms, LEGO, Tianyan and Tianji, through independent research and development, and provided efficient operation of logistics from the underlying system. Technical Support. Since the beginning of construction, the cold chain warehouse has been equipped with Suning Logistics Intelligent + to enable big data application and analysis, to guide the analysis of actual business operations, and to achieve business efficiency and cost double balance.

5.Smart Logistics with Technology Services

Suning Logistics’s investment in smart logistics, such as unmanned distribution vehicles, logistics drones, AGV robot warehouses, etc., also helped Suning’s cold chain. development of. In the future, Suning Logistics will apply robots, wear-assisted devices and various automation technologies to the entire cold chain storage, transportation and distribution.

6. Always adhere to “green logistics”

This year’s two sessions, Zhang Jindong as the NPC deputy recommended to develop cold chain packaging consumables standards, encourage companies to explore the use of new recyclable cold chain packaging. Suning Logistics launched the first step in the 13th city to promote cold chain recycling boxes, zero-adhesive cardboard boxes and other environmentally friendly packaging, Suning Logistics also launched a cold chain dedicated thermal insulation box, reducing at least 20 million white foam boxes each year.

The new technology and the full process standardization have enabled Suning to solidify a good enough user experience while maintaining speed.

The field of cold chain logistics is an industry that needs long-term to look at. The environment of fresh consumption, its high cost investment, and the limitations of self-growth of cold chain mode determine the network to mode. From product to ecology, it takes a long process of cultivation, and cold chain companies cannot prosper alone.

From the current situation of the industry, SF Express is a fresh distribution network. Suning and Jingdong start from the cold chain warehouse, and take the warehouse allocation mode. The daily fresh and delicious is still a fresh instant match. In the model, Ali’s An Xianda is mixed with diversified products, and the focus is still on the warehouse allocation model. Therefore, in the end, the cold chain enterprises that combine business and logistics have greater opportunities.

Over the past year or so, Suning has expanded nearly 8,000 offline terminals and extended the coverage of cold chain logistics to many third- and fourth-tier cities. In terms of such achievements, in the top ten cold chain enterprises in the industry in 2017, no one can match the cold chain of Suning in terms of storage capacity and distribution coverage.

As a retail self-built logistics company, Suning Logistics has a considerable infrastructure network value. Potential energy. It is worthwhile to follow up on where this potential energy will go in the future. Undoubtedly, under the premise that Zhang Jindong constantly emphasizes “opening up”, Suning Logistics, which has served many tripartite companies such as Sharp, Panasonic, Midea, IKEA, and Shangpin Home, will open its doors. From the perspective of doing commercial infrastructure, Suning’s cold chain is obviously not satisfied with the system cycle.

After all, online, community groups, fresh supermarkets, and even chain pharmacies, waiting for this cold chain network to reach the business model and consumer scenes.

The little lion has to keep running. (*This article has indicated the source and source, the copyright belongs to the original author, if there is any infringement, please contact us)

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