Chain operationThe business model changed four names in china, each time with a challenge. A lot of people think it's just a suit for horse armor, but open it and the bottom logic of making money at every stage is different。
In 1859, the harvard tea shop had the underlying logic of chaining
In 1859, the first tea chain was opened near harvard university in cambridge, massachusetts, united states. The founders were two jewish scholars, who placed the same tea in a single package and at a single price at multiple points, and the buyer could consume it in any shop on the basis of membership certificates. The practice had no official name at the time, but the three elements of "multi-stores, same goods, flat prices" had been put together, and that was the chain running the earliest skeleton。
The core of this model is not to sell tea per se, but to allow the same brand to appear at enough points. The customer bought tea in store a, and entering store b was still identified as the same person, with the lowest repurchase cost. In the words of now, "go to the center, go to the center, go to the center, " that's what we did in 1859。
19-year-old boxing period
From 1859 to 1878, the tea chain was largely underground for 19 years. At that time, the united states retail market was monopolized by a major department store, and a small tea store was opened without a trace. The founding team did not do anything public, but said among its members, "there's a new one downstairs at the same price." there were no newspaper advertisements, no business registers, and the system operated quietly for almost two years, like a grey business。
The transition took place around 1878, when the american middle class grew and the concept of "standardized commodities" became widespread. For the first time, the tea chain was covered in the commercial media by the word "chain", and since then the official name has also begun to expand openly. But the habit left behind by the dark box period — not dependent on advertising, but on acquaintances — continued through the subsequent chain sales phase。
The chinese market has changed its name four times
When entering the chinese market in 1998, it was called a "linking business", with emphasis on the integration of physical stores and supply chains; in 2005, it was renamed "chain sales", with a shift in focus towards team pay; in 2007, it was transformed into "capital operations", with membership fees packaged as "investment funds"; and in 2009, it was renamed "private partnerships", with a direct financial package. Four renamings, each time replacing the sensitive language on which they were targeted, remained largely intact。
These four renamings are not academic updates, but survival strategies to deal with regulation. From 1998 to 2005, the business sector was in charge of "unlicensed business"; since 2007, the silver chamber and the sec will be involved and "capital" will remain undetected for several more years. However, "partnership" is not legally viable, and the threshold for chinese private fund-raising is $2 million, which is totally out of line with hundreds of membership fees。
How does that work
A complete chain of sales closes three lines: the door shop is responsible for experience and instant transaction, the ad is responsible for soliciting new customers, and the order system is responsible for repurchases. Until 2015, the three lines were usually divided into different sectors and the data were disaggregated. After 2016, a number of brands used a set of crms to get through shop cards, advertising, order logistics, so that the three channels really turned around, creating a cycle of "raise, convert and buy."。
Here's an easy-to-neglect detail: order sales require the customer to pay first and receive the goods, and a secured transaction with the electrician “take-over-the-money” is counterproductive. The word "order" means credit risk pre-empts, customers pay before they see it, and door stores and advertising bear the trust cost of "to convince customers that you're going to deliver", which is much more difficult than an electrician model。
What's the cost of centralized management and division of labour
The central idea of chaining is to "simplify complex work." at headquarters, it only regulates the pricing, standard setting and financial aspects of the selection, while the door shop only displays the standard, receives it by word and settles it by process. Doors do not need to know the supply chain, do not need to be cast, do not need to develop their own clients, and are imported through advertising channels. This division of labour has reduced the complexity of the operation of individual stores by at least half, and new entrants are much faster。
The cost savings were realized in three locations: procurement bargaining power, with 10 shops negotiating with suppliers at a higher rate; training costs, with new staff on board from three months to two weeks; and trial error costs, with new items running data from five stores to 50. According to the 2023 annual report of the china chaining association, the average value of a chain brand using a centralized management model is 37 per cent higher than that of a single store。
In 2026, look where the chain goes
By 2026, the next variable for the chain is the ai selection and the no-man shop. In beijing and shanghai, there have been 24-hour no-facilitator shops, which have been closed with visual recognition and the cost of shopkeepers has been zero. The use of algorithms at headquarters to determine what each store sells and where it is located replaces the way in which the previous experience of regional managers was used to beat heads. The door shop is no longer a "standard implementation point" but a "data feedback terminal" where headquarters transfers in real time。
Another trend is "decentralization". In 2025, the local sections of life of the tremors and little red books directed a large number of newcomers directly to single shops, and the advertisements no longer passed through brand headquarters, but were directed to the store. "concentrated management" is being diluted by "dispersed customers", and the future chain may no longer be "a main shop that runs 10 branches" but "a back-end system shared by 10 independent stores."。
The chains around you, the headquarters or the doors? We would like to welcome a word in the comment area, which we would like to see as useful。
