Summary of Key Points
In the past two years, instant retail for alcoholic beverages has been touted as a "trillion-dollar blue ocean," attracting giants such as Meituan and JD.com to invest heavily, which in turn has encouraged many traditional tobacco and liquor stores to attempt online transformation. However, as the hype subsides, many store owners are choosing to "withdraw" or adopt a passive approach. Instant retail has not only failed to generate growth but has also turned into a loss-making venture: high platform fees and marketing costs, price wars that erode profits, and an online customer base that is both fraudulent and difficult to retain, which negatively impacts existing offline customers. It has become clear that this is more of a capital-driven "herding game," with small and medium-sized liquor stores unable to compete and thus returning to their traditional strengths, such as managing their own private customer bases and maintaining relationships with long-term clients.
Detailed Analysis
1. **High Platform Fees and Marketing Costs**
For liquor stores to engage in instant retail, they first have to pay a significant portion of their sales to the platforms. For example, some major platforms charge a 5%-6% commission, plus additional marketing fees for promoting their products. With the already slim profits from high-end wines (often only around 7%-8%), this means that the entire profit from selling a bottle of wine might go to the platform, leaving the store owner with no or even a negative margin.
Even more problematic are certain specialized liquor platforms that require a upfront payment of 300,000 yuan to join for free, or that charge brand usage fees and service charges per order. Chen Binqi, a franchisee in Hunan, found that the costs associated with these requirements resulted in a 10%-15% loss on each sale, making it more profitable to simply pay the management fee without holding inventory.
2. **Price Wars That Lead to Losses**
The core strategy of instant retail is to attract customers with low prices, but this creates a vicious cycle for liquor stores:
- Selling premium wines (like Moutai or Wuliangye): Since prices are transparent and competitors can easily match them, lowering prices leads to no sales, and not lowering prices results in no profit. For example, selling a bottle of premium wine might result in a loss after accounting for display fees, platform commissions, shipping costs, and taxes.
- Selling platform-owned products: Although the platform claims there is a profit margin, these products are often not highly sought after and thus difficult to sell. Chen Binqi's experience with the platform-owned wines shows that they sat on inventory, leading to further losses.
3. **False Online Customer Growth That Doesn't Convert**
Many liquor stores hoped to attract new customers online, only to realize it was a false boom:
- Lack of customer loyalty: Online buyers primarily compare prices and will choose the cheapest option, rarely becoming loyal customers. Trying to convert online customers to offline ones is impossible. Chen Kai, who has been in the industry for six years, has never had any online customers visit his physical store.
- Fake sales data: During promotional periods, merchants may use friends and family to create fake sales, as the profit from these transactions exceeds that from selling real products. For instance, when a big brand distributes coupons through Meituan, prices are lowered, leading to inflated sales figures on the platform but no actual sales.
- Negative Impact on Offline Customers: Lower online prices offend existing offline customers, who may feel deceived and stop doing business with the store. For example, Chen Kai's old customers switched to other suppliers when they found lower prices online.
4. **Instant Retail as a Capital-driven Game**
Many small and medium-sized liquor stores realize that instant retail is essentially designed to benefit larger players and platforms:
- Profits Divided Among Multiple Parties: Platforms and operators (such as regional agents) each take their share, leaving the store owners with minimal profits or even losses.
- Disadvantages for Small Stores: Larger brands have advertising funds to drive sales, while small stores lack both the funding for marketing and supply chain advantages, forcing them to compete in a losing battle.
5. **Return to Traditional Strengths**
Realizing the futility of instant retail, liquor store owners are returning to their traditional methods:
- Managing Private Customer Networks: By maintaining good relationships with long-term customers through platforms like WeChat groups and offering benefits, they can build trust and prevent price comparisons.
- Differentiating Products: By focusing on niche or custom wines not available on platforms, they avoid competing on low prices.
- Improving Supply Chains: By securing cheaper supplies and ensuring quality, they can offer a better value to their customers.
In conclusion, the "blue ocean" of instant retail for alcoholic beverages has turned out to be a game where small and medium-sized liquor stores are merely exploited by larger players and platforms. For these stores, it is more beneficial to focus on their core strengths—maintaining relationships with existing customers, offering differentiated products, and managing private customer networks—to ensure long-term success. This shift highlights the importance of staying true to their traditional roles as reliable suppliers rather than mere intermediaries for online platforms.