FamilyMart: "Internet Plus" Strategy

In early 2016, all major retailers in China reported slow or negative-growth businesses. Aside from the impact of slowing economy, media and trade reports show that consumers are shopping more and more online, especially via their mobile devices. Filled with the anxiety, traditional retailers, though still believe the value of their “brick-and-mortar” stores, realize that they must face the changing consumer behavior and reshape their competing strategies. O2O seems to be the prevalent buzzword and conventional retailers wonder if they need to jump on the bandwagon and come up with their own O2O strategies. The idea of O2O is to take the full advantage of the mobile Internet – literately, a 24-7, no boundary, two-way communication, big data, and So-Lo-Mo interaction platform. In theory, this model would allow retailers to combine both on- and off-line benefits to offer their customers the best shopping experience and eventually boost their sales. Feeling the same anxiety, the chairman of Ting Hsin Group, Yingxing Wei, ponders: Should FamilyMart, Ting Hsin Group’s subsidiary that operates convenient stores in China, go online too? More specifically, should FamilyMart leverage its 9 million plus customer members and channel them to online business, transforming FamilyMart into a true O2O platform and generating more sales? Chairman Wei asks FamliyMart’s CEO, Jianhong Lin, to thoroughly look into these matters and report his thinking to the board of directors next month. Lin needs to examine all factors - FamilyMart’s core business, value propositions, resources, constraints, and capabilities and seriously think about: If going O2O were a sensible direction, what would be FamilyMart’s strategies?