Who's after Metro?

Lead: Although Metro has always stressed that it will not sell its business in China and increase its development in China, with the decline of its performance in China, the news that Metro China has been "acquired" has been repeatedly reported. In the 23 years since entering China, Metro China once had a high-light moment, but in recent years, rumors of going or staying have been with you.

Head map source | Oriental IC

Not every foreign retailer can arouse the bidding desire of many buyers like Metro China, such as Ali, Tencent, Vanke and Suning.

Following the rumor that China business of Metro was acquired by Alibaba in March, 2065438+2009, Metro did not respond, but kept watching silently, with a view to further expanding the selection range. According to Reuters's report at the end of May, at least eight bidders are prepared to participate in the second round of bidding for the majority stake in Metro China, and the whole bidding process is likely to end in September 20 19.

Bidders include not only Alibaba and Tencent, but also a consortium composed of real estate developer Vanke and private equity firm Apollo Capital, a consortium composed of Yonghui Supermarket and Gaoyou Capital, a consortium composed of Hopu Investment and fresh mobile e-commerce platform Meicai. Suning Holdings, Wal-Mart Stores, Supermarket Operator Wu Mei Group and other major players in China's retail industry. As a foreign retailer who has been in China for 23 years, Metro China has been attracting the interest of many Internet companies and traditional retail enterprises, making industry leaders compete for bids, despite the mediocre performance and declining revenue in recent years.

Meng Qian, chief analyst of Guotai Junan Retail, told China Entrepreneur that this is because Metro entered China from 1995 and has been positioned as a warehouse supermarket, with B2B business as the main business, which has obvious advantages compared with local retail enterprises. "On the one hand, Metro has accumulated a group of stable and cooperative high-quality enterprise users during its 20 years of operation in China. These customer resources and cooperative relationships are valuable resources for many retail enterprises; On the other hand, Metro has its own global supply chain advantages, and its own brands, including fresh goods, have good quality and reputation. "

However, it is obvious that with the acceleration of the Internet process in China, consumers are affected by changes in e-commerce and consumption habits, and the advantages of Metro have become a stumbling block. "The location is not in the core area, and the storefront area exceeds 654.38+100000 square meters. From the perspective of convenience, it is not as good as the consumption experience of China retailers, and the emergence of e-commerce has also weakened its price advantage. " Li Li, a new retail expert and former vice president of e-commerce of Wanling Group, explained that for foreign-funded enterprises, selling is the easiest way, followed by keeping the brand and being managed by Chinese enterprises.

The most valuable card

Although Yonghui Supermarket had previously announced preliminary communication with Metro China, it did not conduct substantive business negotiations with it on the acquisition, nor did it form any consistent opinions and documents.

Only this time, Metro said frankly that its goal is to establish a strategic partnership and maximize the growth potential of its business in China. In addition, it is confirmed that the company is currently negotiating with potential partners and continues to narrow the list of bidders, but will not comment on the specific details and the sale process for the time being.

Some insiders believe that with the e-commerce consumer market in China becoming more and more mature in the application of big data, cooperation with Metro may bring synergy, and both parties can complement each other in the supply chain and data to achieve a win-win result.

As the largest retailer in Germany, Metro, founded in 1964, not only created the business philosophy of cash-and-carry system, but also designed the store into a large-scale storage structure, mainly focusing on wholesale and retail. Compared with the traditional wholesale distribution, the advantages of cash purchase and self-delivery are high cost performance, timely delivery and longer business hours. After entering China, with this emerging model, it has attracted many consumers in China, and its revenue has been rising all the way. In 2008, Metro's revenue reached 65.529 billion euros, almost reaching an all-time high.

However, business has always had its own laws. Once you break through the threshold of the highest point, it will be either a long bottleneck period or a rapid decline. Obviously, Metro is doomed, too. According to the relevant financial report data, from 2009 to 20 13, Metro's revenue was fairly stable, basically fluctuating around 65 billion euros, without much change; From 20 14, Metro's revenue began to decline. In just two years, its revenue dropped from nearly 60 billion euros to 2 187 billion euros, a decrease of nearly 60%.

Metro had to start a series of divestment adjustments. In 20 15, Metro sold Kaufhof, a local department store, to Hudson Bay Company of Canada for the first time for $3.2 billion. In 20 17, the companies selling electronic products and appliances were separated and managed by the consumer electronics group Ceconomy alone; 2065438+September 2008, Metro started the systematic divestment procedure of real estate and all related business activities. As a supermarket chain owned by Metro, Real currently operates 282 supermarkets and real estate portfolios in 65 locations in Germany.

At the shareholders' meeting in February, 2065438+2009, Olaf Koch, chairman of Metro Group, said, "Metro has taken an important step to become a pure wholesale enterprise by divesting its hypermarket business. In fiscal year 20 18/ 19, we will continue to invest in the expansion and digitization of delivery business to achieve sustainable growth. " Olaf Koch believes that although the 20 17/ 18 fiscal year is facing unexpected challenges for Metro, after adjustment, the future focus will be on Horica and Trader (Horica is the sales channel of liquor major customers, generally referring to the group buying major customers in the retail channel; Traders refer to wholesalers and retailers specializing in food.

Although Metro has always stressed that it will not sell its business in China, and in order to become a better food supplier, it will increase its development in China. However, when a group of foreign retailers who entered China at the same time quit or sought self-promotion, Metro was at a loss and wanted to seek new development opportunities, such as setting up a consumer electronics chain store with Foxconn, entering the convenience store business, and opening a "Hemaijia" convenience store in Shanghai, which always ended in discord; In order to localize the China market, with the help of Ali, the online business did not bring much room for growth, and Metro China was once in trouble.

However, according to Metro's long-term divestment strategy, it is more important to find a good buyer for China District at the right time. How does Metro China, which has failed many times, value $654.38+$50 million to $2 billion?

Like the German Department, Metro still insists on the strategy of opening a store only by buying and not renting after entering China. Jean-Christophe Bretxa, CEO of Metro Real Estate Group, believes that construction land is a kind of scarce resource, so the urban environment needs to make efficient and diversified use of real estate. In the future, when Metro Real Estate rebuilds Metro Cash-and-Carry Stores in China, Turkey and other countries, it can integrate retail, living space, entertainment and other living areas and functions.

"Although the initial investment cost is high, self-sustaining property can increase the inherent assets of the enterprise and make the business more diversified." Cui Xiucheng, a senior analyst in Ke Rui, told China Entrepreneur that Vanke took a fancy to Metro, on the one hand, because the investment attribute of residential buildings will become weaker and weaker in the future, and the profits of residential projects will be thinner and thinner, so Vanke urgently needs to increase the profit growth point. On the other hand, in the short term, Metro is also in the period of property selling, so it is better to let go at this time.

"20 1 1 years ago, Metro mainly cultivated in first-and second-tier cities in China. It has many self-sustaining properties and rich assets in first-and second-tier cities such as Beijing and Shanghai. " In Meng Qian's view, these properties of Metro have become very scarce assets, and they have also experienced obvious asset appreciation. According to statistics, in recent decades, the rent of commercial real estate in China has increased by 5% ~ 8% every year.

According to the incomplete statistics of China Entrepreneur, from 2000 to 2006, Metro set up warehouse management companies in Wuhan, Hangzhou and Chongqing respectively, with an accumulated investment of nearly/kloc-0.8 million US dollars. Property Management Co., Ltd. was established in seven cities including Changsha, Xi and Tianjin, with an accumulated investment of nearly 40 million US dollars. According to the growth rate of the above-mentioned real estate rent, Metro may already have the "land king bombing" in hand.

A thin camel is bigger than a horse?

Although compared with Wal-Mart and Carrefour, which entered China in the same period, Metro has only opened 95 stores in China for more than 20 years, less than a quarter of the first two, and its popularity among consumers is not as good as the first two, but at the enterprise end (B end), Metro China rarely meets competitors. This alone will make it difficult for Alibaba, which has accelerated its layout in to B business in recent years, to let go and extend the olive branch of cooperation many times.

Even as early as 20 15, Metro has settled in Tmall International, and reached cooperation with Alibaba in commodity supply chain, cross-border e-commerce, big data and other aspects to complete the opening of online and offline data. 20 18, Cainiao said that Metro has reached a cooperation with Cainiao to further reduce the supply chain cost through its supply chain system.

However, this time Ali's appeal is more urgent. From 2065438 to March 2009, Alibaba carried out a new round of organizational restructuring, focusing on the two markets of consumer and enterprise services, emphasizing that while maintaining the independent development of Tmall and Taobao brands, it opened up two consumption scenarios, realizing the hierarchical operation of consumers and platform merchants, and meeting the diverse needs of different consumers and merchants. At the same time, Ali also hopes to improve the production and operation mode of retail enterprises from the aspects of supply chain, management and technology through the transformation of production relations, so that more enterprises can move from sales digitalization to wider digitalization, but the problem is that for most offline enterprises, digital transformation is still a new proposition, and it will take time to accept the change.

Not only Ali, but also Tencent's organizational restructuring has put the to B business in the first place, and smart retail is also considered to be an important strategic direction for Tencent's development. Different from Ali, Tencent pays more attention to the value of connection, and realizes the upgrade from consumer Internet to industrial Internet by connecting people and connecting content.

"The advantage of Metro is that it has enough B-end users and is relatively sticky. Coupled with the membership policy, Metro can better understand customers' buying habits and offline product data. "In addition, Metro's fresh supply chain has obvious advantages, Meng Qian said.

It is understood that as early as the end of 2007, Metro established its own traceability system, and by 20 17, nearly 4,000 kinds of traceable commodities have been successfully developed, mainly in fruits and vegetables, aquatic products and meat products, accounting for more than half of the annual sales of fresh products. However, the quality standards of private brand food are more stringent. In order to ensure the taste and freshness of fish, Metro directly buys fish from foreign selected fishing grounds twice a week and transports them to China by air, which takes less than 72 hours from fishing to shelf.

Nevertheless, Metro began to shrink its retail business in China from 2065438 to September 2008, looking for someone to take over the offer, but there are still many people waiting to see, and the person who took over the offer has not yet appeared. In this regard, Meng Qian explained that the acquisition of multinational companies often goes through a very complicated negotiation process, and the negotiation time is very long. "What's more, it is still in the initial stage of the transaction, and both parties should try and play games on the acquired assets and prices. The current plan does not represent the final plan. "

According to a person familiar with the matter, if the bid is attractive, Metro is even willing to sell up to 80% of its China business to its partners in China, while retaining a minority stake. The ultimate winner of this transaction depends on the fierce bidding and the negotiations behind it.