Suningyun Business faces transition pains

On March 31, Suningyun (002024 SZ) 's share price jumped to a low level, after a brief upward decline, and finally fell to its lowest point this year. And in the past weekend, Suningyun has just released a 2013-year earnings, according to earnings data, Suningyun business revenue only than the same period of growth of 7.05%, while net profit fell 95.84% in the same period, the net profit attributable to the shareholders of the listed companies also fell 86.11% in the same period.

According to earnings reports, the sharp decline in performance should be due to the decline in gross profit margins and the rise in cost rates. In the last year, Suning's comprehensive gross profit margin was 15.41%, below 2012 's 18.01%. The financial results explained that the Suningyun company increased the business expansion of the Internet, under the current market environment, price competition is more intense, drainage promotional activities appear more frequent, coupled with the 3C category of lower margin products accounted for a large, so that the Internet business gross margin at a lower level. At the same time, since the launch of the online pricing strategy last June, it also brought down the level of gross profit margin to a certain extent.

This means that Su Ning is under the line price war brought about by the low margin pressure, the same price strategy worse, the line of the sales margin under the synchronization pull low. Obviously, the spear pointed to Suning's electric business main body-suning easy to buy. Its earnings show that for most of 2013, Suning still undertook the loss of online business.

"One Wings", "O2O", "open platform" "Comprehensive Electric Dealer" is the key word of suning strategy transformation last year, in order to realize this goal, Su Ning has adjusted the organization structure for many times, exerting the open platform, entering the Internet finance, implementing the same price strategy of line on-line, extending the category to mother and infant, cosmetics, daily necessities , the bottom of the line is happy Enclosure warehouse building logistics.

Category expansion Many challenges

Suningyun 2013 earnings show that 2013, the company will be the original suning easy to buy (in addition to Nanjing) of the mining and marketing business stripping and integration of Suningyun Sales Company (formerly responsible for the line business), Jiangsu suning Electronic Commerce Co., Ltd. (that is, suning easy to buy) business, in addition to maintaining the Nanjing Regional inventory of the distribution of Mainly to the online Internet trading platform to change the profit model for the collection of open platform trading commissions and other services revenue.

It is obvious that Suning is trying to transform itself from a proprietary platform to a cat-style channel platform. Electric business analyst Ruzenwang told the 21st century Economic report reporter, Suning easy to purchase this hope to use the open platform to enrich the commodity category, tear off the simple 3C Home Appliance Dealer label, become an integrated type of electric business.

In his view, according to the development of the self-operated business and Xun of Jingdong, simple sales of 3C home appliances, suning is also difficult to achieve profitability, only to become a comprehensive electric business platform, with the flow, the formation of ecology, on this basis to achieve more profit model, including commission, promotion and Internet finance, large data and so on.

Suningyun business results show that last year, Suning easy to purchase with the help of its red children, Plantronics purchase and other mature supply chain system layout Mother and child, cosmetics category, at the same time in daily necessities, books, department stores and other categories have also been involved.

But Ruzenwang said, from the present, Suning easy to purchase in the category expansion still exist many difficulties, first Suning's supply chain advantage is 3C home appliances, its daily necessities, books and other categories do not have the advantage, and suning easy to purchase in the category expansion process appears to be decentralized, not focused.

Suning Tesco seems to be repeating the index, or Alexa traffic site statistics See, suning easy to buy traffic fluctuations far higher than the cat and Jingdong. "Such an unstable flow state, is not how many third-party businessmen dare to invest heavily in the above." ”

These people refer to the user Experience Sword refers to suning easy purchase of small pieces of logistics. As a traditional home appliance retailer, the bulk logistics is the advantage of Suning's easy purchase, but in the process of transformation to an integrated electric dealer, its small object logistics is being built, far from mature. According to its earnings, last year, it opened or completed Logistics Base layout in dozens of cities.

Imagination and execution

Suning easy to purchase the transformation appears too urgent, one side is pure line of the category full expansion, while the line to solve the problem of integration, that is, the so-called O2O, and the latter is apparently only for 3C home appliances category.

Last year, Suning implemented the line of the same price strategy to solve the "left and right mutual" problem. But in the 2013 earnings, this strategy has become the main reason for the decline in gross margin. The reason is very simple, the electrical appliances business to line for the main battlefield, price war for the major play to rob users, so Suning is bound to direct or indirect price reduction, and then pull down its offline sales price and gross margin.

These people said that this policy is a kill 100, since the loss of 1000 of the decision, in the electrical business is not ready, this kind of adventure is very dangerous. Su Ning's explanation is, the company thought that although adopts such strategy, will affect the company's performance in the short term, but rather than maintain in the old business model the unsustainable profit, as soon as possible breaks the price barrier, the positive promotion O2O fusion, establishes the new profit pattern.

By virtue of the strong online store advantages, the realization line under the fusion (O2O), has been regarded as suning easy to buy natural advantages. But this strategy in 2013 Suning inside, a boycott of constantly.

Suning easy to buy a grass-roots staff has published an article, said although the company set up a commodity management headquarters, to achieve line online under the unified procurement, will be online sales into the regional branch of the performance assessment, but the major branch in the implementation of the line is still not the same, "heavy line, light line" situation has not changed. Because although the purchase and prices have been unified, but at the headquarters level is still separate operations, the branch has no power to use the resources under the line for online services.

Su Ning's O2O model has the imagination, the question appears more appears in the execution level. This February, Jindong's internal speech raised dissatisfaction with the team's ability to execute. Until the beginning of this year, Su Ning again organizes the organization structure adjustment, the chain platform manages the headquarters and the Electronic Commerce Operation headquarters to form "The Operation Headquarters", only then gradually solves this question.

About O2O, according to the 21st Century Economic report reporter understand, although suning line shop is already in the transformation, but the distance from the Internet store there is still a gap, the future will accelerate the easy to buy direct sales area, WiFi coverage and other aspects of hardware construction, will also be in the staff to the line to guide further improvement

In the implementation of the strategy of Suning's cloud trader, we take more flowering and run hand in hand. However, for the electrical business, this approach will lead to some links in a short time, resulting in a low efficiency of the whole system. And in the future, Suning will be an easy to buy what kind of website, the reporter interviewed several people can not accurately describe. (Edit Lu Aifang)