Comments: home appliance chain giants "to the countryside" difficult to walk

Although the market has had a psychological expectation for the decline in the sales of traditional chain stores, the semi-annual reports issued by Suning and Gome have shown that either the profits have fallen by nearly 30% or the loss has exceeded 500 million. This kind of report card really surprised the industry. Faced with the first decline in net profit, or even loss, Suning and Gome have become difficult brothers this time.

According to the latest semi-annual report released by Gome, multiple factors such as the gradual withdrawal of home appliance stimulus policies, the downturn in the real estate market, and the investment period of e-commerce have affected Gome's sales revenue in the first half of the year by 22%, consolidated gross profit by 30%, and a net loss of 501 million yuan. yuan. This is also the first time since GOME's listing that it has suffered a net loss of six months. In the first half of the year, Suning’s net profit was 1.754 billion yuan, a significant drop of 29% year-on-year. This is also the first time Suning has experienced a decline in net profit since its listing.

Experienced the past ten years in full swing in the era of staking their claims, a person in charge of the home appliance chain in South China once lamented that “the golden age of the home appliance industry has become a thing of the past. It is time to stay in the country”. In fact, a closer look at Suning’s and Gome’s financial reports for the first half of the year, less shop openings, and even the closure of stores with poor efficiency have become new options for both parties. In the first half of this year, the number of Gome stores was 1,096, including 62 newly opened stores, closing 45 low-efficiency stores and achieving a net increase of 17 stores. Suning had previously said that "there will be 400 new stores in the year," but only 79 new stores have been opened in the Mainland, but at the same time, 74 stores have been replaced or closed, and there are not many actual outlets. In fact, with the increasing investment in e-commerce business in the future, the demand for the number and size of stores will no longer be the focus of debate between the two sides. How to rapidly transform and gain a firm foothold in the online market has also become a new contest between Gome and Suning.

The author believes that if the “first golden decade” of home appliance chaining has passed, then the next decade will not be so good. Prior to chatting with a chain head, he was not pessimistic about the decline in the data, that the home appliance chain will usher in a new "golden decade" - that is, three or four markets.

The author also noticed that only Suning's stores in the third and fourth-tier markets in 2011 accounted for approximately 5%. Gome also has the same measures. However, the three or four-tier market is also a home base for home appliance manufacturers and has a good channel base, and home appliance manufacturers are expanding their store systems in the township market in full swing. Earlier a few years ago, Gome Suning had proposed to sink channels, but the effect has been poor and the obstacles faced can be imagined. The giants in the township market still need to nurture the store, freight logistics is a great challenge, profit model is still being discussed. Therefore, I believe that the chain stores will not be able to go this way in the next decade.

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