Metro to expand omnichannel services in China

Metro China, a retailer jointly owned by Beijing-based Wumei Group and German wholesaler Metro AG, is expanding its retail footprint in the country and further strengthening its omnichannel services through collaborations with digital retailing solution provider Dmall, according to company officials.

Claude Sarrailh, CEO and president of Metro China, said Metro and Dmall, both of which are under Beijing-based retailer Wumart's ecosystem, have jointly conducted four weeks of tests on an online ordering and cold-chain delivery service for individual customers.

The service, which is currently available in Beijing, enables Metro to deliver 1,000 orders a day of fully integrated cold chain services. The testing was largely focused on how to guarantee that the products were maintained in the right temperature despite the long distance outside of the stores before reaching the homes of individual customers.

Previously, Metro China, a mix of retailing and wholesale solutions, had provided cold chain delivery services to business customers such as canteens with larger volumes and in designated routes and frequencies.

"Metro is very good at processing food and is well-versed in food safety and quality. But we did not have strong cold chain solutions for delivery services," said Sarrailh. "It was a challenge to keep same level of quality and safety for merchandises at stores and in delivery. China is quite a hot country and it is risky to transport fresh products on the back of motorcycles."

With digital support from Dmall, Metro has started using electronic trucks to deliver food and products within a distance of 7 kilometers from their stores.

He said the plan is to launch the cold chain deliveries at all Metro stores in the country by next year. Wumei, Wumart's holding company, currently holds an 80 percent stake in Metro China, while Metro AG holds 20 percent.

"We will accelerate our expansion in the country to 5 to 10 stores next year and to 10 to 20 stores in 2022," said Sarrailh.

"The priority is to increase the density of our network in cities we have been already in."

Sarrailh said the COVID-19 pandemic has raised awareness about food safety and quality.

Having joined the Wumei's family, Metro said it has benefited from the synergy as information flow has become more transparent and the company is digitally empowered with support from Dmall.

"We have a Dmall team in our Shanghai office to provide operational systems for Metro," he said.

In addition to digital empowerment, Wumart's strong capacity in localized buying, particularly in vegetable and foods and special packaging, has also been a plus for Metro.

Wumart also has a strong willingness to improve its food quality processing and procurement, which has been a long-term strength of Metro and an area for greater synergy.

Wumart said it will join Dmall and Metro to provide directly procured products for small business owners in Beijing to alleviate their difficulties during the challenging time. The retailer's strong network for fresh goods has provided supplies to more than 2,000 small businesses, catering outlets and canteens as well as convenience stores. These business customers are able to order on Dmall's digital platform and the orders are expected to arrive the following day.

Jason Yu, general manager of Kantar Worldpanel China, said Metro has managed to keep the independence of its brand while quickly embracing digital transformation in the Chinese market.

"Metro consumers are able to order through Dmall's mobile application and get their orders at home, thereby greatly improving the shopping experience. It has also met the demand for high-quality imported and private branded merchandise from affluent individual consumers," said Yu.