Wumart FY 2014: faster growth in a tough environment

Date : 12 March 2015

Despite of the economic slowdown and threat from ecommerce, Wumart achieved faster growth in revenue in 2014 vs. 2013. The retailer recorded a total revenue of RMB21.6 bn (USD3.5 bn), representing an increase of 13.6% compared to 9% last year. The retailer's like-for-like sales growth was 4.36%.

Growth from retail network expansion

Under the implementation of the strategy of national expansion with regional prioritization, the retailer continued to expand in Beijing, Tianjin, Hebei and Zhejiang.

As of 31 December 2014, the retailer had a retail network of 565 stores (vs. 31 December 2013: 547 stores) comprising 168 superstores and 397 mini-marts, which occupied an aggregate saleable area of 889,924 square meters.

Of the 39 new stores opened during the year, 24 were located in Bejing, Tianjin and Heibei province and 15 were located in Zhejiang province.

Fresh business drives the growth

The fresh business achieved a sales increase of over 25%, benefitted from constant improvement and innovation in business model. The sales per square meter continued to increase by optimizing store design, facilities and equipment as well as display of the fresh products. Number of SKUs was reduced, which resulted in higher quality merchandise and efficiency.

Wumart increased direct purchase of imported merchandises in response to shoppers' increasing concern over food safety. It also expanded partnerships with quality suppliers and launched own fresh brand “Colourful Countryside”.

Enhanced online presence

The retailer's official website 'www.wumart.com' was upgraded with information on promotional activities, loyalty schemes, and store locations.

Online communication and service functions were expanded to provide better customer service. It has also launched its public platform “Wumart Stores” on Wechat, the most popular social media platform in China, aiming to provide customers with the latest information on promotions and offline activities.

Promotional campaigns and membership marketing were initiated through Wechat to attract new customers and retain existing customers with lower cost and higher efficiency.

Improved supply chain and new DCs

The retailer has been paying continuous effort on enhancing its supply chain. In 2014, the accuracy of delivery appointments, accuracy of work processes and the timeliness of delivery reached 100%, 99.997% and 98% respectively.

Efforts were exerted to ensure next-day delivery for all merchandises, so as to increase the ordering accuracy of stores and ensure the supply of the bestselling products, which resulted in reduced store stock and shrinkage rate, hence enhanced profitability and efficiency.

To support the improvement in supply chain, three newly-established distribution centers were put into operation.

In North China, a temperature controlled warehouse in Beijing was put into use. It has a site area of 5,500 square meters and a capacity of distributing nearly 2,000 SKUs. It is able to support all the directly operated stores in Beijing, Tianjin and Hebei Province.

In Zhejiang province, a constant-temperature warehouse and a temperature controlled warehouse located in Hangzhou were also put into operation, covering an area of 33,000 square meters and 3,500 square meters respectively. The annual distribution amount of these warehouses may reach RMB4 billion and RMB0.3 billion respectively, and they are able to support all the stores in Hangzhou.

Continuing the success in 2015

In 2015, the retailer will continue to adhere to the strategy of national expansion with regional prioritization, maintain its steady pace of store opening and increase its market share.

Upholding the strategy of low prices, it is committed to providing
products of good quality and low prices to the customers, improving its approach to procurement, optimizing distribution system and enhancing operation efficiency.