A 3500-square-metre gold retail store is about to open in the West third ring of Beijing

September 19, a 3500 square meters of gold retail stores are about to open in Beijing West Three ring, the owner of the store is once the all-powerful household appliances big crocodile Huang. Although Huang is still in prison but does not affect his overall control of Gome, the first half of Gome's first-half revenue 29.12 billion yuan, year-on-year increase of 7.4%; net profit of 690 million yuan, increased 115.2% year-on-year. More gratifying is Gome's online turnover rose 53.7% year-on-year, of which two quarterly increase of 64.8% per quarter.

Why does Gome enter the gold market?

These days of media reports that in the field of home appliances all the way, Huang Guangyu family began to "go to electrical" diversification strategy. Mr Huang's family established a multilateral gold business limited last June to run Gome's gold business. As planned, the business will be one of Gome's largest-volume new businesses in the future. It is rumored that Huang Guangyu has already thrown 1 billion of the upfront investment for the gold game.

Why did Huang Guangyu enter the gold market? There are several reasons: First, Gome's consumer groups and the consumer groups of gold overlap. A large part of consumers who need to buy big appliances are young consumers who are about to enter their first home in marriage, and this is also the mainstream consumer of gold ornaments. The second is the need for Gome to upgrade the flow of liquidity. Gome's performance this year is better than its peers, in particular, Gome online turnover has significantly increased, but because of its small volume, to solve the growth problem still need to expand the category to enhance the flow of marginal output, the gold industry to some extent in the electrical industry chain downstream, into the gold jewelry market is its electrical business extension. As for the media, "go to the electrical" Veterans think not accurate, in the future for quite a long time, electrical appliances can not be replaced, will still be its main market.

Gome to do gold electric dealer O2O, reliable?

Huang has designed a O2O business model for Gome's gold business in line with the development line. This March, the multilateral gold Online mall on-line. Its future plan is to be in the 2020, online business to cover the whole country, or even explicitly asked "not to pursue the number of stores." Currently, there are four online retail channels for multilateral gold. In addition to its own online mall, Gome Online has been on-line the "multilateral gold" entrance. In addition, Gome also chose to open a shop in the days of the cat and Jing Dong. From the real cat and Jing Dong's actual sales performance, looks rather bleak, the day the Cat Shop home promotion or even 7.18 online.

If true, as Huang Guangyu said, to the main line, do not pursue the number of stores, veterans really do not think that gome can do a good job O2O gold electric business. Gome to do gold electric dealer O2O, at least need to solve a few problems.

The question of consumer trust. 2013 China Gold jewelry Market total retail sales of about 470 billion yuan, online sales only 10 billion. One of the main reasons restricting the development of gold electric business is the trust problem of consumers. How to let users believe that the gold purchased online is true, which requires a long-term consumer education process. The theory of risk reduction holds that consumers face all kinds of risks when buying goods, and that the risk and the psychological endurance of people will affect people's purchasing decision. Gold is a high price low frequency of consumer products, which led to consumers in peacetime will not pay more attention to the industry, information asymmetry caused the existence of purchase risk, for consumers will certainly tend to choose more conservative to experience the offline shop to order. For similar to Chow Tai Fook and other online with a higher visibility of the brand, wired to do the brand endorsement, its online access to the consumer trust may be strong, but a home appliance retail brand Gome in order to establish a consumer gold brand awareness can not be overnight, do not even hit the original brand.

Second, experience problems. Even if we solve the problem of consumer trust, how to solve the experience of gold is a difficult hurdle. According to the data, gold and gold bullion respectively accounted for 61% and 32% of the market. Jewelry with gold is characterized by style, technology, width, ring, etc. need consumers to shop for the actual touch to perceive, the consumer needs to wear personally. Put aside the trust problem, online business is more suitable for standardized gold bullion, and gome if only to seize the 32% of the market is obviously too small audience. Wong Kwong Yu stressed that the main line is too idealistic, the focus of its exerting force should be line go hand in hand. The main role of the line is diversion, to attract customers from the line into the experience shop. Its upcoming 3500 square meters shop is to solve the experience problem.

Third, the question of profit. Gold jewelry Industry is a typical heavy assets, low turnover, the thin margin of the industry, the price is locked by the gold price, the relative unification of industry prices. At present, the whole gold retail industry to collect design, production process costs and other additional costs as the main source of profit, the industry's meager profit margins. Gold is much higher than the peers of the Chow Tai Fook's gross margin of about 26%, net interest rate of 9.5%; Sang's gross margin is less than 15%, net interest rate is 4.4%, can rely on quantity to win only. Such a low profit, and how does Gome, which previously had no experience in gold operations, guarantee profits? Gome's advantage lies in its many years of retail experience, efficient supply chain control ability to eliminate intermediate links, reduce costs. But it cannot be overlooked that the cost of online drainage is actually not low, and whether the current flow of gome is sufficient to support the operation of its offline Gold experience Shop is unknown.

In addition to these issues, gome to do the gold dealers, but also need to face the difficulties are consumption habits, gold consumption trends, logistics distribution, security, insurance and other issues. Single from the consumption habits, the current domestic gold investment in the majority of the population is mostly middle-aged and elderly people, this kind of people basically to offline consumption, the Internet too little understanding. And young people in addition to marriage jewelry demand, the investment value of gold is not too cold, in the past few years the sharp decline in gold and the diversification of investment methods, the attractiveness of gold investment in young people greatly reduced.

It is said that gome to ensure low prices, allow multilateral gold losses of 100 million yuan a year, in three years to win the market. In such a fully competitive gold market, 3 years is a bit too optimistic. Gome to do gold electric O2O, online to do is when the price of the butcher, to launch a sustained price war, educating consumers, to seize more market share. And the online to do is the whole channel marketing, through the establishment of experience shop and the integration of other gold store resources to enhance consumer experience, increase product customer unit price.