Tuesday, September 14, 2010

Giant B & Q

October 18, 2003, Saturday, Beijing autumn, cloudless.

Less than 9 o'clock in the morning, the West Fourth Ring Road will present a busy scene, especially in the holly leaf plot, a terrible traffic jam block, that day, B & Q store opened in Beijing holly leaf.

As an internationally renowned building materials supermarket chain, B & Q in China familiar with, but the holly leaf is B & Q store in Beijing's first supermarket chains. Opening day, customers come here especially if the general tide coming from all directions, checkout the queue extends to the yard. "B & Q has more than 700 stores worldwide, for the first time in the opening day to see so many customers." B & Q International, President Gilman Yancangbuzhu speech in the excitement.

On this day, B & Q shop in Beijing holly leaf number three world records broken in the same industry: car park has parking 12,000 vehicles; store received a total of 90,000 customers; day sales of 4 million yuan.

An opening had such high sales, is the B & Q management of unexpected, after opening the day they expected sales of 2.5 million yuan. Responsible for home delivery customers new Coanda logistics company, have to this day has deployed three times the delivery vehicle.


B & Q from the United Kingdom is ranked first in Europe, the world's third international building materials supermarket chains, and its holding company is the UK's largest professional non-food retail investment group - Kingfisher. The multinational companies in China, although unknown, but for several years among the "Fortune" Global 500 list.

Shanghai B & Q has landed since 1999, has started in Shanghai, Suzhou, Hangzhou and other cities to open 13 stores throughout eastern, southern, northern and central China. China Association of Enterprises in the chain are listed in the "home in 2002, building materials, home improvement," the professional championship, total sales among the top B & Q, and also won the single-store average sales of the first.

The appearance of the gold in Beijing, holly branch is the world's largest chain B & Q is the first building materials supermarket chain settled in Beijing. David Wei, general manager of B & Q China, boasted: "We plan in the next 5 years, in Beijing, Tianjin, Dalian, Qingdao, opened a store in one after another. To the end of 2004, Beijing will have three B & Q chain stores."

Wen Dong, general manager of North China is also very confident about this program, "China's real estate industry developed rapidly in recent years, associated with home decorating industry looks promising. But now, even if all the building materials supermarkets in China together, but also the most only 2% to meet this market, we can see the very large increase in the supermarket space, B & Q is very optimistic about the prospects for this market. "

Domestic building materials circulation enterprises are mainly three kinds of industries: market stalls, factory stores and supermarket chains. Among them, the traditional market stalls occupy the main market players. In the case of a limited market share, accounting for a little more than B & Q, and other companies have to account for a little less, plus B & Q's background and strength, showing that domestic counterparts.
Insiders predict that in B & Q and other "foreign construction material supermarket," the impact of the Chinese mainland in order to store the form of a large number of traditional Yetai will "die 1 / 3 of the transition 1 / 3, Half-Life 1 / 3." Here the so-called transformation, is the adjustment of local building materials market business structure, relying on the development of supermarkets are not good at business, such as basic construction materials, bulk, and the supermarket coexistence.

But the thing that frightened local building materials market, or B & Q's low-cost advantage. B & Q, "the national cost of a global cost reduction, to reduce the area cost of the national costs," which is actually all transnational retail groups in the top-secret weapons invincible.

Wei, who to some traditional building materials as a consumer market research and found that shopping environment where not only the poor, uneven quality, and building materials business asking price is too high. Many commodities priced even higher than B & Q several times. Thus, Wei, declared, "We want to end era of the traditional building materials market profits!"

Procurement Advantages

B & Q is able to achieve low-cost, depends on its structured procurement system.

B & Q's procurement network is a combination of 3 levels. First, global sourcing networks, distributed in more than 14 countries and regions. Followed by the national network, B & Q has 14 stores in China, South China in Shenzhen as the center of East China with Shanghai as the center, north to Beijing as the center. These places are very close to the building materials production base, can reduce procurement costs. In addition, the B & Q will be in each city to find local brand suppliers. In this way, B & Q to each city to establish a procurement network gradually develop into a national network, and then into B & Q's global network.

Experts in the study found that B & Q's business strategy, which focused on the Wal-Mart's low-cost procurement and McDonald's yield advantage of multi-regional scale.

McDonald's procurement of major goods are food, low added value, relying on low-cost procurement of hard to significantly reduce costs. So crowded McDonald's in place for large-scale stores, lower prices by size of business. B & Q Similarly, it plans to open five years, 80 stores in China and to Beijing, Shanghai, Guangzhou and Shenzhen, 4, with a population density, commercial development as the key development areas of the city.

Meanwhile, B & Q also has a variety of procurement of materials and design style brand, low added value. In this way, procurement and operating cost control became a problem. Thus, B & Q has successfully used the Wal-Mart "localized procurement" and "one-stop" marketing mode of operation. Traditional Chinese building materials market for the many and scattered, weak purchasing power of the characteristics of B & Q has also played a chain of local procurement capacity sales.

Wei, introduction, B & Q, Europe's largest building materials retailers, purchasing building materials from China each year, the amount of hardware tools and other goods up to 10 billion dollars. Of the total procurement volume of 1 / 3, which has an annual procurement volume of more than 15% annually.

Wen Tung said that several years ago B & Q set up purchasing centers in China is not easy to do. Currency settlement system, and institutional and technical issues, are restricting purchases of B & Q in China, he was General Manager of B & Q in North China. Last month, he heard that Foreign Secretary in the Ministry of Commerce policy will be loosened, B & Q purchases in China will soon have to expand the space.

B & Q China headquarters in Shanghai, its national procurement centers are also located there. Compatible with the scale of procurement, purchasing centers in China B & Q has over 150 employees, about 30 people in each region, each city established a small team of procurement, from 5-6 individuals.

B & Q North District Purchasing Director Shijun Jiang stressed that the procurement can not overlook the small grass-roots group, they are B & Q procurement network of nerve endings. Excellent suppliers often found by a small team, recommended to the regional purchasing center, then be slowly integrated into the country's procurement network. Thus, with the B & Q in the development of the country, its purchasing network covers more extensive grass-roots, more and more, the number of its suppliers will follow rapidly increasing, B & Q and then significantly decreased the overall cost of procurement .

B & Q's procurement network and a magic weapon to attract suppliers that his former club Kingfisher, through the cooperation with B & Q, there are already many suppliers have gradually entered the Kingfisher Group's procurement system, not only shared large share of procurement, but also gain entry into the European market and global opportunities for other building materials chain.

Logistics Strategy

B & Q to meet the huge procurement network and distribution services required for high volume sales and logistics system can not be less natural.

In China, B & Q is the only co-operation with third-party logistics companies building materials supermarket. Wendong said with confidence: "Our logistics management is the most advanced." But he also pointed out that cooperation with third-party logistics companies logistics operation B & Q is not the best solution, but with limited resources in the community circumstances, it is the most appropriate approach. Procurement network and advanced logistics management advantages of the combination of B & Q in the Chinese market is a core competence.

"All of transnational retail enterprises into China will face the logistics bottlenecks, which directly affects the development of the national chain strategy." Wendong great emphasis on modern logistics chain selling business sense.

Therefore, the B & Q and logistics company in Shanghai New Coanda cooperation, the new Coanda responsible for all newly opened supermarket logistics, delivery both upstream suppliers to solve the problem, also solve the downstream delivery to the client.

Shekou, Shenzhen, the new headquarters Coanda was founded in 1995, is Singapore's SembCorp Logistics and Shenzhen, Shekou Industrial Zone, a joint venture with registered capital of 10 million U.S. dollars. B & Q is on the company's biggest advantage is that the city wide coverage and cooperation of business covers Asia, the Americas and Europe.

Planning in B & Q, in the normal operation of the new supermarket opened, the upstream and downstream logistics business will be assigned to different third-party logistics company. Upstream supplier delivery problems will be Jiayu Logistics companies, the daily picking each supermarket is looking for a local logistics company.

Wendong that this is B & Q now in China to achieve the most appropriate logistics solutions.

"I know that many domestic supermarkets are completely on their own materials to do the logistics, seven or eight individuals, like that on the number of trucks to solve the problem. In fact, the added value of such services often can not deliver on time, can not do to the good after-sales service, distribution capabilities even keep up, so we believe it should be a professional logistics company to do. "

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