Gome: Increasing buyout ratio to support low-price strategy

Advocating "Wolf culture" gome (micro-blog) began to return to the image of the price killer. Today, Gome adopted the underwriting, custom mode and 15 color TV companies signed 5.95 million large orders, and announced from August 1 onwards, Gome color TV prices let 20%. Gome's president, Wang Junzhou, said Gome would raise the buyout to 60% within 3 years, eventually shifting the pricing power from suppliers to retailers.

Increasing buyout-type proportional support low-price strategy

Gome has put forward 2013 years of channels, a variety of procurement model combinations, stores in the terminal all-round customer experience, maintain a low price of the four strategies.

It is worth pondering that, for Suning line online below the same price, Gome proposed a full range of low prices. At the meeting, Gome Vice President Li Juntao that Gome's 27-year development, the most not afraid of is playing price war.

Wang Junzhou that the ability to achieve low prices through goods and supply chains does not sacrifice the overall profits of the firm. "The capacity of the supply chain depends on the first choice of goods, the second purchasing capacity and the ability to control the retail price, and the third Inventory Control ability, as long as the control is better than others." He said.

Gome is implementing retail price control through buyout and underwriting with suppliers.

"We want to trade with the manufacturers through step prices, not in the form of rebates," he said. Wang Junzhou said in an interview with Tencent Science and technology.

At present, the business model of supplier and retailer includes buyout and rebate, because 80% is mainly rebate, so the pricing power of commodities is controlled by suppliers. In the future, Gome will swap the proportions of the two models.

With terminal retail pricing power, Gome's partnership with suppliers will become simpler. The previous model for charging the entry fee will not exist, Wang Junzhou said: "The two sides put all kinds of fees into the contract model, minimizing uncertainty."

Increase the size of the shop speed by 10% per year

Gome says the capacity of commodities and supply chains will be built as the core competitiveness of the future. "In the background, Gome implemented the SAP system in 2011, in this round of the line under the big competition to fully show the superiority of the system, management to a single product, this new design concept and design ideas, for our backstage to provide a strong support, including logistics system to improve and build, In the country more than 300 urban logistics centers to carry out a large and efficient integration, which is now our core point in the background construction. "Wang Junzhou said.

Gome expects that the large losses of e-commerce will gradually be reflected in the next six months or a year. "The losses method, one is to reduce the cost of one is to increase income." He also thought.

Gome is more profitable than its online rivals ' continued losses. "Low-priced strategies will lead to an increase in gross profits." "Risks and benefits need to be balanced, with less risk, lower returns, and more risk-bearing capacity," Wang Junzhou said. "Large scale, strong digestion ability." ”

To enhance the size of the United States, Gome will maintain a 10% per annum expansion speed, the first level of the city to the main shop strategy, to the tertiary market extension. In addition, gome more attention to enhance the profitability of a single store, "after 1.5 has not been profitable, we will consider closing." Wang Junzhou said.

Gome's confidence comes from improved profitability after 1 years of online adjustment. Gome expects net profit in the second quarter of 2013 to grow more than 100% in the first quarter of 2013, according to a new Gome announcement. In the first quarter of this year, the net profit for the second quarter would be at least $153 million, at a profit of $12.34 billion.

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