The Zhitong Finance App learned that Zheshang Securities published a research report saying that the offline cycle is a new cycle of narrowing of online and offline fee rates as a necessary condition and innovation as sufficient conditions, focusing on differences, turnover rate, and experiential nature. The core indicators are passenger traffic. Looking online: Online merchants are becoming more crowded, leading to lower business turnover and reduced efficiency. The structural growth of e-commerce has been remarkable. Demand-oriented enterprise growth is better than supply-oriented platform enterprises. User selection is more biased towards cost performance, but the growth strategy of the low price e-commerce structure will soon peak due to the same corporate strategy. The decline in the offline rent rate will instead cause brands and merchants to tend to open offline stores, driving sales growth. Digital applications and talent echelon building will be added in an orderly manner, and it is expected that there will be a spiral growth trend.

Zheshang Securities said that the focus is on Jiajiayue (603708.SH) and Chongqing Department Store (600729.SH). In the new cycle, offline changes will occur, bringing more consumers back to offline. It is recommended to focus on various offline business formats, focusing on Yonghui Supermarkets (), Gaoxin Retail (06808), Hongqi Chain (002697.SZ), Zhongbai Group (000759.SZ), Sanjiang (), etc. 601933.SH 601116.SH

Turnover rate is a core indicator for measuring business efficiency. Business changes drive the increase in turnover rate to meet growing demand. Cost reduction+efficiency improvement+a better sense of experience. E-commerce has completed the construction of digital infrastructure, and the growth rate of traditional shelf-style e-commerce users such as Alibaba and Pinduoduo has slowed. In a context where the online penetration rate of e-commerce is peaking, content and promotions drive consumer retention, and enterprises are guided by consumer demand for price reduction without quality reduction, triggering offline transformation and upgrading. Traditional large stores are facing transformation, while the path ahead lies in differences. Due to the high penetration rate, the narrowing of the scissor gap between online and offline expenses, product richness, and differences in business models, the platform growth rate showed structural differences, and the high cost performance ratio was more stable and sustainable.

The scissor gap between online and offline cost rates has gradually subsided, the offline rent rate has declined, and the trend of increasing online monetization rates is remarkable. Offline has more display value, experience value, and emotional value. Standing at the present moment, offline can make a better sense of difference and experience than online, and is more suitable for attracting customers. Being optimistic about offline is not being optimistic about business in the past; Zheshang Securities is optimistic about new changes. Asset prices have stabilized, offline rent rates have declined, and offline has a strong comparative advantage. From the perspective of human efficiency, offline digital capabilities have improved, and human efficiency is rising rapidly, and standardized replication can be achieved.

The construction of supply chain capabilities is shifting from KA to an agency model, and product-based retail such as product selection and supply chain will further highlight its advantages. In the past, offline relied on the model of collecting rent due to traffic, shifting to the ability to manage cost-effective products, understand product operation and product selection, and provide consumers with cost-effective products, which is the only way to improve turnover in the future. The depth of the supply chain determines the future direction of commerce. There is a structural revaluation offline rather than a comprehensive revaluation. Under the objective competitive pattern of e-commerce that fully satisfies the demand for undifferentiated low prices, the advantages of offline differentiation, experience, and high quality and low prices will be further highlighted. In the past, the iteration of commercial enterprises was accelerating, and the iteration of offline supply chains, the ability to negotiate products, the ability to select products, and the ability to respond quickly to the market were further reflected.

In terms of business format innovation, Zheshang Securities tends to think that the ability to attract customers offline is reflected in differences, and that the high cost performance ratio of products extends to the product side, not only as a channel, but may also be an important direction for the transformation of channels into product retailers in the future. Consumption scenarios that can meet consumers' needs for food, drink, and play can achieve efficient contract fulfillment services. Whether it is a large store or a small store model, it can attract consumers in terms of future trends. The increase in cost rates, the slowdown in growth, and the convergence of gameplay under the major online trend represent that online has entered a mature stage of development. It also indicates that offline is expected to usher in a differentiated spring. It is not only low prices, but more importantly, products and experiences suited to consumer needs.

1) Offline traffic presents very structured opportunities. Traditional hypermarkets are gradually withdrawing from the stage, and new types of commercial enterprises are starting. The sales volume of offline stores consists of customer traffic, customer unit price, and repurchase rate. The customer unit price is related to category structure, CPI, and consumer consumption capacity. The repurchase rate and customer traffic can be increased through product structure and operation. Short-term store opening places more importance on customer traffic, and in the long run, more on the marginal increase in repeat purchase rates.

2) Offline expansion, transformation and upgrading are more optimistic about enterprises with change teams and ability to change. Jiayue is the first to be promoted. Discounted snacks, discount supermarkets, etc. are in line with future consumer trends. The company's customized products, own brands, and company management team incentives are in place, making it easier to attract outstanding talents. There is more confidence in state-owned enterprises transforming enterprises. In this process, looking at the future development of enterprises, Zheshang Securities believes that it is related to quality. The future, as more digital talents transition to offline enterprises, it will bring more improvements in human efficiency. New business format innovations brought about by offline upgrades.

Risk warning: The innovation cycle is progressing slowly, management mechanisms are poor, and talent system construction falls short of expectations.