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Metro China's acquisition closes, China's retail industry integration will accelerate in 2020

2020/04/29


On April 23, 2020, Metro announced that the equity transaction between Metro China and Wumart was completed on schedule within the second quarter. The new shareholding structure is that Wumei Group holds 80% of the shares and Metro Group holds 20% . With the closing of the Metro China acquisition, China's retail industry integration will accelerate in 2020.

       When Wumart acquired Metro China, the Chinese retail industry was at an important turning point in the industry. Although the scale of the domestic retail industry is already large, it is difficult to achieve rapid growth due to the dispersion of individual retail enterprises in smaller industries. Therefore, the size of individual retail enterprises needs to be expanded and the industry's concentration will be promoted.

The main impact of the Metro China acquisition on the Chinese retail industry

Impact

details

Improve the quality of commodities in China's retail industry

Metro has long adhered to high standards of food safety control and implementation of European food safety standards and is the only full-store HACCP certified company in the market. It is understood that since Wumart acquired Metro China last year, it has already begun to introduce Metro ’s leading food safety standards, including the introduction of Metro ’s Traceability System, which will greatly improve the quality of Wumart and even China ’s retail industry.

Raise food safety standards

First, strict selection of suppliers, sharing of high-quality supplier resources and digital management with Metro, effective evaluation of the system, and direct elimination of high-risk suppliers. Accelerate the upgrading of quality inspection equipment, cultivate an international and professional internal quality inspection team, and increase investment in high-standard laboratories; second, check all levels of procurement, acceptance, storage, processing, and sales to control food safety risks and measures Implemented in all positions; in addition, a stricter quality management index evaluation system, strict execution process and position responsibilities should be established.

Establish a full traceability system

Starting from its own brand, a procurement source data platform was established to promote coverage of more items, system monitoring real-time records, and transparency of the entire process of information. Not only that, but also to establish an external audit system, the introduction of HACCP certification system, CCIC China Inspection and Certification (Group) Co., Ltd. and other third-party testing agencies, the headquarters first audit, and gradually spread to all stores.

Source: public data collation

       In recent years, China's total retail sales of social consumer goods has continued to increase. According to data, in 2019, China's total retail sales of social consumer goods reached 41,166.4 billion yuan, an increase of 8% year-on-year.

2014-2019 China's total retail sales of consumer goods and growth

Data source: Mob

  The data shows that the retail scale of China's social consumer goods has grown steadily. The total retail sales of social consumer goods in 2019 reached 41.2 trillion yuan. Currently, the online and offline integration of the new retail industry is accelerating, showing an overall trend of omni-channel, digitalization and communityization. In the future, with the help of emerging information technology such as 5G, big data, artificial intelligence, the overall efficiency of the retail industry is expected to increase significantly, and the market scale will also accelerate. (Shz)

       The above data refer to "Analysis Report of China's Retail Industry in 2020-Market Depth Analysis and Investment Prospect Study".