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Metro announced the of- ficial launch of its online B2B mall on May 7. The launch was followed by Metro’s plan of building more delivery spots and self-owned logistics systems. In order to support its B2B business, Metro plans to increase the number of its stores in China by 100% in 3-4 years.
Though there are no apparent cases in which entity retailers had achieved success in ecommerce, but Metro stressed that its B2B pattern was different from the others.
Presently, Metro had 54 stores in mainland China, which contributed 1.5 billion euros to its annual sales amount last year, up 18% from a year before. However, compared with Wal-Mart having over 300 stores, Carrefour with over 200 stores and TESCO running more than 100 stores in China, Metro is a bit slow in development pace.
“We hope to expand the number of clients and increase sales amount through ecommerce. We cannot disclose the concrete investment amount into the ecommerce at this moment, but it must be multi-billion level and will be followed by more investment,” said Feng Liu, vice president of Metro China. According to his survey, 90% of the ecommerce market in China is taken by B2B dealers while C2C websites like Taobao.com only takes a small portion in spite of its higher fame. That’s the business opportunity Metro wants to grab.
“We are different from ordinary shopping malls like Carrefour and WalMart. We originally are a retailer targeting corporate clients. Our major client groups include hotel and catering companies, small- and middle-sized wholesalers and public units. 60% of our clients have the experiences of shopping online and 86% of the enterprises and public units went online to do shopping,”said Feng Liu. After the establishment of B2B platform, Metro will actualize the nationwide delivery and directly send commodities to clients that are within the 200 kilometers from the selfbuilt logistics centers.
Presently, traditional retailers are rare to achieve success in ecommerce. Though Wal-Mart has founded its headquarters of ecommerce in China and taken the shareholding right of Chinese online retailer Yihaodian, it has not seen any substantial progress in this field. Carrefour China even stopped its online shopping services.
The huge investment, the bottlenecks in logistics and consumers’ habits are the three major problems preventing entity retailers’ transformation into online retailers. A string of online shopping websites met its fate of being closed last year.
“The huge investment is indeed a big problem. Profits are hard to see if the cost is out of control. Many shopping websites put 30% of their revenue into marketing and 16%-18% into delivery and logistics. This cannot ensure profits. But Metro has a definite base of corporate clients so that the marketing fees can be saved. In addition, Metro has its own logistics and delivery center which can save the cost,” said Hu Xingmin, general manger of Metro (China) Ecommerce Corp.
“We do not want the online dealers to have conflict with entity business or the two parts to contend with each other for consumers. Instead, we launch online business to recruit more new clients. Prior to that, Metro already opened a flagship store in Taobao.com and found that a part of online clients were new clients. Therefore we plan that 70% of our ecommerce platform’s clients are new ones,” Feng Liu pointed out.