Exclusive Interview With Red Star Macalline Zhu Jiagui: What Kind Of Mountain And Sea Will The Giant Ship Turn Its Rudder?

In 2021, "light assets, heavy operation" has become the two most important keywords of Red Star Macalline.

At the spring conference in March, red star Macalline revealed that it is necessary to truly transform from property to platform.

Another industry trend of concern from the outside world is that red star Macalline and incredibly home hold hands this year.

Recently, Zhu Jiagui, one of the "helmsman" of Red Star Macalline, received an exclusive interview with 21st century economic reporter at the activity site of "stepping into the high quality development of listed companies (phase 5)" sponsored by Nancai think tank and 21st Century Capital Research Institute in Shanghai's No.1 store of Red Star Macalline global home.

As the group's CEO and general manager of the large operation center, he made a one-to-one interpretation of the company's strategic transformation and the changes in the trillions level home furnishing industry.

Zhu Jiagui

Strategic adjustment of "light" and "heavy"

21st century: why does red star Macalline strengthen asset light and operation strategy at this point?

Zhu Jiagui: This is closely related to the economic cycle of the country. The national macro-economic development has entered such a cycle, especially some of the latest macro policies issued by the state for the real estate industry. For our industry which is highly related to real estate, it puts forward the measures of light assets and heavy operation, which is also the macro-economic policy of the state, which can better adapt to the changes of the macroeconomic environment, To get more development space.

21st century: how are the "light" and "heavy" embodied?

Zhu Jiagui: in the first half of this year, we clearly put forward the idea of light assets and heavy operation.

As of the end of last year, red star Macalline had 476 home furnishing shopping malls. This year, there were nearly 500 projects, including more than 90 self operated projects. The rest were entrusted management, franchising and strategic cooperation projects.

We have completed the layout of our own stores in the core cities of China, and the chain layout has basically been completed, so the number of self built and self operated shopping malls will decline.

With the rapid development of China's urbanization, especially the booming purchasing power of the third and fourth tier cities, we need to expand market penetration more quickly by means of asset light management, such as entrusted management, so as to accelerate the settlement to county towns and some large towns with relatively developed economy.

Why should we do it in the light of assets?

Heavy assets projects, from land acquisition to construction to business opening, take a long time. The number of sinking markets is very large, and the speed of self construction will be very slow. In order to ensure the speed of 50-60 projects per year, we speed up the penetration of all levels of the national market through asset light mode. At the same time, light assets can also reduce the pressure of large amount of investment in the early stage.

21st century: from the operation in the first half of this year, what is the effect of this strategy?

Zhu Jiagui: because our stores are generally opened in the second half of the year, the number of stores in the first half of the year is relatively small.

As far as project planning is concerned, only one or two projects this year are self operated, which are in Hangzhou and Nanchang, and the other 50 projects are all entrusted projects.

21st century: Red Star Macalline takes the sinking market as its main direction. How does it plan the layout of the sinking market?

Zhu Jiagui: at present, in any county, red star Macalline can make a home market of 30000-50000 square meters.

We still have more than 700 contracted reserve projects, and nearly 500 have been opened. This is basically the pattern.

Our layout is divided into several dimensions. Beijing, Shanghai, Guangzhou and Shenzhen have almost completed the layout. After the completion of the layout of a number of cities in Tianjin and Wuhan, we will make some supplements. In some second tier markets, we still have some gaps, and more development space is in the third and fourth tier cities.

21st century: the layout of the company in Beijing, Shanghai, Guangzhou and Shenzhen has been basically completed. Where will the growth power of the first tier cities come from in the future?

Zhu Jiagui: in the future, the growth power of cities like Beijing and Shanghai will mainly come from the concentration of industries, and the resources and markets will surely concentrate on the leading enterprises,

In the future, some small factories will close down slowly, and some inefficient channels will gradually withdraw. This industry is bound to be concentrated. Maybe there are only two or three major stores left in a city, which is a bit like the pattern of Gome and Suning in the home appliance industry more than a decade ago.

No vicious competition

21st century: I noticed that there is a cooperation between the company and fanzhijia this year. What is the logic of cooperation?

Zhu Jiagui: logic is the sound development and healthy development of the industry.

For example, when we were doing online and offline integration, the two companies agreed to cooperate with ALI. On the choice of this issue, the two chairman of the board have the same mind. They are standing at the height of the industry to promote the healthy development of China's home furnishing industry.

In addition, the home furnishing industry has developed to a certain stage, we respond to the call of the state, do not go to vicious competition, do not let dealers choose one from another. The home furnishing industry places special emphasis on offline experience. Therefore, we are facing the same challenge in promoting the digital upgrading of upstream factories and downstream distributors.

It is the common pain points that lead to deep cooperation. The upgrading and development of enterprises must be formed online and offline integration with the development of mobile Internet. In this regard, the two enterprises are more cooperative than competitive in many fields.

Of course, cooperation does not mean that there is no competition, but competition must have a bottom line, and vicious competition is not allowed. For example, the subsidy war in the Internet industry, which was driven by capital and absorbed resources into one company, is not conducive to the industry. We can't have such competition without bottom line. Based on this consensus, in the daily business process, how to better serve the factory, service consumers, do a good channel layout, etc., we form a good competitive environment.

This is also an example for other industries. There should be competition between the first and second places, but cooperation is also needed instead of vicious competition.

21st century: what do you think of the future transformation and integration direction of the home furnishing industry?

Zhu Jiagui: the transformation and integration of home furnishing industry is speeding up. China's big home furnishing industry has a market of 4.5 trillion to 5 trillion, and there are nearly 1.5 trillion to 2 trillion markets related to red star Macalline and our partners.

Originally, this industry was called ant market, but now this market is moving towards integration rapidly, and some 10 billion level enterprises are rapidly formed. Ten years ago, there were few listed companies in the industry. Now there are dozens of them.

Although this industry tends to centralize, the degree of concentration is far from enough.

I believe that there will be a number of leading enterprises in various subdivisions. In addition, with the rapid sinking of our channel, the channel will focus on such head enterprises as red star Macalline.

Cross border electrical appliance business: "one in three parts of the world"

21st century: in May this year, the world's first smart appliance life hall of Macalline was opened in Shanghai, which officially entered the new circuit of electrical appliances. You also have working experience in electrical appliances and home furnishing industries. What are the difficulties in leading cross-border electrical appliances?

Zhu Jiagui: the biggest difficulty is the blind spot of cognition, that is, they don't know that they can do it before they do it.

What's the tear? It is the development of custom cabinets that promotes the development of kitchen appliances. Therefore, we think that since kitchen appliances can come in, embedded refrigerators and washing machines can also come in.

A new market opportunity has appeared. The consumption upgrade of front end home decoration serves high-end people. They have a great demand for high-end electrical systems. We are in a good position to enter the electrical appliances.

We all focused on opportunities in the field of electrical appliances at a similar time, but we found them a little earlier.

21st century: what role will the electric appliance business play in the whole business layout of the company in the future?

Zhu Jiagui: the electric appliance market has a scale of about 800 billion yuan, and 200 billion yuan is associated with red star Macalline. We have been emphasizing this point. In an 800 billion market, I only do 200 billion transactions; With a 4.5 trillion market, I only look at 1.5 trillion to 2 trillion transactions.

We have a clear distinction between what I can do and what I can't do.

Our positioning of electrical appliances is "one in three".

We hope to form the concept of buying high-end electrical appliances to red star Macalline in the medium and high-end consumer groups in three years, which is to say that there is one in three parts of the world.

From the perspective of area proportion, electrical appliances have increased from the original supplementary category to 7.5%. In the long-term business planning, it is expected to increase to 15% in three years. In the future, the area proportion may be between 15% and 20%.

Take global home store No.1 as an example. After the adjustment, the electrical business is particularly good. In the past, some high-end foreign electrical brands did not go through retail channels. After entering Red Star Macalline, they attracted a lot of high-end people. Consumers can choose high-end electrical products on one platform.

21st century: it can be said that red star Macalline has made up for the high-end electrical appliances. Is there anything else to add in the one-stop high-end shopping experience of building materials, furniture and electrical appliances in the future?

Zhu Jiagui: actually, we have nine theme museums, including sleeping life, system doors and windows, soft furnishings, etc., and the floor materials are not displayed in the form of theme museums. In the future, we will show more in the form of one shopping mall, nine or ten theme pavilions, rather than simply telling you that there are building materials, furniture and household appliances here. We should make the granularity more detailed and provide a secondary catalog for external transmission. From today's point of view, we have completed the chain through three-year business planning and category adjustment of shopping malls, which should be said to be very complete.

Focus on the main business and do it well

21st century: what actions does the company take in foreign M & A and foreign investment?

Zhu Jiagui: the investment is mainly focused on the upstream and downstream of home ecology. In terms of industrial investment, we are still very accurate. We have made relatively successful investments, such as Europa and mousse. We still focus on industrial investment.

We invest in the leading enterprises in the subdivided fields, help them develop, accelerate the transformation and upgrading of the industry, bring good return on investment to the company, and bring brand promotion to the shopping malls, which is a win-win way with one stroke.

"21st century": as the leader of home furnishing industry, how to treat the development trend of the industry and the interaction with the capital market?

Zhu Jiagui: for enterprises, the core lies in whether an enterprise operates healthily.

It doesn't matter what kind of stories I tell. What's important is to increase the company's market share and economic benefits through operation.

Red Star Macalline is different from other peers. In fact, we have added a property management company on the basis of the original one, focusing on operation and doing the work of the property management company. There is a huge space here to help dealers do communication, drainage and landing activities, which no other company in the industry can do.

In my opinion, only by focusing on operation can the efficiency of the industry be improved. Only by focusing on operation can the satisfaction of customers be improved, and the downstream dealers can be well served. Otherwise, they will become landlords.

We also hope to clarify the positioning, development, industry advantages and huge market space of Red Star Macalline to the capital market. By focusing on the main business and operation, we can bring positive market feedback through the action of re operation, so that investors can better understand what kind of company Red Star Macalline is.