Core Viewpoint - AEON is facing significant challenges in the Chinese retail market, leading to store closures and continuous losses over the past eight years, primarily due to increased competition from e-commerce and changing consumer preferences [2][3][4] Store Closures - AEON's Guangzhou Tianhe City store is set to close in June 2023, with ongoing discussions regarding the lease [1] - The company has been closing stores in various locations, including Shenzhen and Beijing, indicating a trend of contraction in its operations [2] Financial Performance - AEON has reported continuous losses since 2017, with a net loss of HKD 341 million in 2024, an increase of 81.4% year-on-year [7] - The company's revenue for 2024 was HKD 8.095 billion, down 6.9% from the previous year, highlighting declining sales amid rising operational costs [7] Market Challenges - The rise of e-commerce platforms like Tmall and JD.com has diverted foot traffic from traditional retail stores, contributing to AEON's struggles [3] - AEON's strategy of offering low-priced items has become less effective as competitors adopt similar tactics and consumer preferences shift towards quality and personalized shopping experiences [3][4] Supply Chain Issues - AEON's reliance on Japanese imports has led to inventory challenges, with 30% of its Japanese products having a sell-through rate of less than 15% [4] - The company's supply chain efficiency is lagging behind competitors, with a fresh produce turnover rate of 3.7 days compared to 1.2 days for Hema [4] Rental Cost Pressures - AEON's business model, which prioritizes prime locations, has resulted in high rental costs that are not matched by sales revenue, leading to store closures [6][7] - The company has been forced to close underperforming stores early to mitigate losses, indicating severe pressure from rising rents [7] Strategic Recommendations - Experts suggest that AEON and similar retailers need to refine their business models, focusing on niche markets and enhancing product quality and customer service to remain competitive [9][10] - AEON's recent store openings in lower-tier cities may provide new growth opportunities, as these locations avoid direct competition with major players like Costco and Sam's Club [10]
广州29年天河城永旺传闭店，实体商超如何避免给“房东”打工？