The sudden change in consumption concept of American consumers is still a big test for their retail industry. Recently, the US "" Washington Post published an article saying that compared with 2021, this year's holiday shopping season seems relatively dull. Consumers are becoming more rational - buying good-quality products, comparing prices from multiple parties and reducing expenses.
Retail companies such as Cole Department Store and Target performed lower than expected in the third quarter, and the net income of Target alone fell by nearly 90% compared with the same period last year. However, Costco, the largest discount retailer in the United States, is an exception, with performance very stable in the post-epidemic era.
In Costco's 2022 fiscal year financial report, the company's total annual revenue was US$226.954 billion, and increased by 15.8% year-on-year; net profit was US$5.844 billion, a year-on-year increase of 16.7%. High revenue and low profits are a major feature of discount retailers. In recent years, retail giants such as Walmart and Carrefour have been constantly "closing stores", but they have not affected Costco's growth pace.
Costco makes the best cost-effectiveness to the extreme, which coincides with the American consumers' pursuit of affordability. In order to provide members with more affordable products, Costco's gross profit margin has remained at around 13% all year round, and the gross profit margin of the commodity sales business is only 11%. There is another regulation in this company that if the gross profit margin of a product is priced exceeds 14%, the chairman needs to sign and approve it.
discount retail model originated in the United States, but nowadays, there are also offline and online special sale e-commerce Vipshop. In the post-epidemic era, consumers' pursuit is common, and discount retail companies can provide more extreme cost-effectiveness and good services, so they are very popular. Costco in the United States grew against the trend and Vipshop in China also performed very steadily.
In Vipshop's Q3 2022 financial report, the total GMV was 37.6 billion yuan; Non-GAAP's net profit was 1.6 billion yuan, and the operating profit margin was relatively low. Relatively speaking, this is closer to the essence of business. A good business is a small profit model, neither making huge profits nor losing money. Only in this way can we continue to gain the favor of users and achieve high-quality and sustainable development of .
For example, this month's Double 11, Vipshop brought freshness to consumers. The platform does not apply for promotional rules such as full discounts and orders, and directly and simply and roughly reduces the price, and the price of 5,000+ big brands is as low as 10% off. For example, Bosideng's mid-length down jackets are as low as 13% off, Casio sports watches are as low as 22% off, and CK is as low as 99 yuan, which really allows consumers to buy them at affordable prices.
This is why, in Vipshop's financial report, user stickiness maintains high growth, and more high-value users are converted into paid members. The number of active users of super VIP increased by 21% year-on-year, accounting for 40% of the contribution to online net GMV. Among them, there are many Generation Z and male users.
So, in the post-epidemic era, the discount retail model is more resilient. Similarly, for consumers, everyone spends lower economic costs to meet higher-quality consumption needs, which is also a kind of high-quality consumption.
