Su ning: Growth dilemma and the emergence of online business

E-commerce expands retail from limited geographical space to unlimited cyberspace. CPPCC member, Suning Appliance (002024, shares bar) Chairman Jindong said in an interview: The next ten years, Suning will no longer be a traditional appliance chain, but to do China's "Wal-Mart + Amazon." Suning also High-profile announced the next decade ambitious online sales target. Since Suning's physical store can significantly reduce the cost of warehousing logistics, physical shop and shop synergy effect is obvious, so relative to pure Internet enterprises, Suning "Wal-Mart + Amazon" model may be more successful.

Growth dilemma leads to online business

In the past ten years, with the increasing urbanization rate and the continuous improvement of residents ' income, China's household appliance chain enterprises have ushered in the gold development cycle. Suning electrical Appliances from Nanjing Road 60th 200 square meters of stores, growth into 70 billion of the large-scale chain enterprises. Companies in mainland China, Hong Kong and Japan to expand the scale of the chain, 2011 Annual net increase of 373 chain stores. As of the end of 2011, a total of 1724 chain stores, in the mainland to achieve 256 of the national level above the market network coverage.

However, with the rapid expansion of the region, the one or two-line city gradually saturated, three or four-line city ping effect is lower, suning appliance chain began to face growth dilemma. 2011, the company achieved revenue of 93.9 billion yuan, an increase of 24.4% per cent, the realization of net profit of 4.82 billion yuan, increased by 20.1% per cent, basically in line with expectations. But from the ping effect, comparable to the growth of the store, the situation is not optimistic. 2011, the company compared to store revenue growth of 3.39% year-on-year, the trend of slowing growth. With the quality of store resources are constantly occupied, the new store marginal turnover reduced, thereby constantly pull low ping effect.

It is an inevitable trend to achieve the upgrading of the industry, the original retail format is a single shop form, followed by the chain of business, is now the rapid development of network retailing. 2011, China's e-commerce turnover of more than 6 trillion, accounting for 13% of GDP, of which online shopping transactions reached 773.56 billion, an increase of 67.8%. In 2012-2015, the growth rate of online shopping will remain at around 30%, and the proportion of total retail sales in 2015 will be over 8%, the consultancy predicts.

From the development of the company, the electric business upgrade has opened up the online businesses, but also more advanced and effective. For example, Suning combined with the real estate change trend, open a lot of community stores, but with macro-control, community shops no longer have scale effect. Suning through the online retail network, well covered by the community residents, "flagship store + Center Store + Network Retail" combination is necessarily better than "20% flagship store +30% Central store +50% Community Shop" combination.

The successful rise of suning Tesco

Suning easy to Buy is Suning's network shopping platform, February 2010 began to run, the current year to achieve revenue of 2 billion yuan, 2011 suning easy to buy all the year to achieve sales of 5.9 billion yuan (including tax), an increase of nearly 200%, completed the basic goal of 5 billion, successfully among the first three domestic e-commerce.

Suning Appliance has recently carried out a large personnel adjustment, Suning electric appliances vice President Jingun as the executive president of Suning, Suning easy to buy up to the group strategic Business Unit, with the procurement department, operations, Services, finance department on an equal footing. 2012 Suning sales target of 20 billion yuan, or challenge 30 billion yuan.

Suning is more successful than a pure Internet dealer. Su Ning accumulates the core ability of retail business is the important reason that its electronic commerce has the formidable explosive force, because Suning has focused on commodity management, self-built Logistics, supply chain management, and enterprise management in the way of informatization for more than more than 10 years. In warehousing and logistics, Suning has 94 warehouses nationwide and is expected to complete 8-10 small pieces of distribution center construction by 2015. 2011 Suning Store Distribution Point 1000, is expected to add to 2000 stores distribution points in 2012, physical stores can significantly reduce the cost of warehousing logistics.

Suning future will become the whole category line + offline retailer, products include home appliances, department stores, and even expand to financial products, virtual products, value-added content of the comprehensive services, similar to the United States business leading Wal-Mart, and its consumers to provide solid and online seamless user experience, but also similar to the United States E-commerce giant Amazon.