To The Left Or To The Right? Traditional Retail Solution Providers

The courage to live with broken arms embraces the electricity supplier. We call it the left leaning line.

On the other hand, we return to the acreage of three acres of solid retail, which we call the right deviation line.

The game rules of business do not care about right or wrong. The key lies in how to cultivate the core competitiveness of enterprises based on their own choices and build a "moat" successfully.

This is our basic judgement of route choice.

Home appliances can be said to be the most mature industry in China's retail chain development.

After the early years of fighting, the industry gradually established a duopoly pattern between Suning and Gome.

In the past five years, they also experienced the baptism of e-commerce.

Over the past five years, we have been able to feel the difference between them in their attitude towards the electricity supplier.

Suning is no doubt the representative of the left leaning line.

Suning's electricity business has been developing for ten years, and suning.com has been active in the Chinese electricity business for five years.

Since surpassing Gome in 2009, Suning is constantly sorting out its strategy.

From three years to ten years, and then to

In the face of more and more urgent situation, the strategic adjustment of Jiangsu and Ningxia is becoming more and more frequent.

But the point is that e-business is becoming more and more important in the whole Suning group.

In Suning's latest online map of the two wings, e-commerce has been elevated to the main position.

Suning is pforming the entire group's organization and traditional business into an Internet based business center.

This has to be a great feat of the retail industry.

But the reason why Suning is able to do so is also based on its strong foundation.

Under the Suning line, business has been developing more steadily, and it started to invest ahead of time in logistics, deploying information system and upgrading marketing mode, laying a solid foundation for it to embrace the electricity supplier.

In addition, Suning's attention to the strategic importance of electricity providers has enabled suning.com to sit firmly in the top three position of B2C.

But even so, Suning's current pformation is also facing pains: declining revenues and deep losses.

Fortunately, Suning has accumulated enough capital to spend the winter. Some early investment businesses such as logistics have begun to bring returns, such as logistics.

Gome is a typical right-wing line.

However, the right deviation of Gome is the choice of being forced.

In 2008, Gome has just completed the compilation of Yongle, Dazhong and Feng Xing electrical appliances, and the number of stores nationwide has reached 1333.

So when the financial crisis struck, Gome defined 2009 as a strategic contraction year.

But the 4 trillion that the Chinese government launched quickly changed the direction of China's economy.

This allowed the Suning Appliance, which was expanding against the market, to seize the opportunity.

At the same time, Wong Kwong Yu, who was sent to prison by Gome's soul, and the "Chen Huang war" that broke out subsequently slowed down the further development of Gome.

In 2011, Gome went back to the road of expansion after resolving the civil strife.

This year, Gome added 417 stores in one breath.

But in 2012, the Chinese household appliance industry suddenly entered the cold winter.

After the great leap forward, Gome should have recuperated, but the market did not give it such an opportunity.

In the same year, Gome's retail sales fell by 24.5% compared with the growth rate. The net profit of the listed companies also fell from a profit of 1 billion 800 million in the previous year to a loss of 810 million yuan.

This is the background of Gome's electricity supplier development.

In the second quarter of 2012, Gome launched the electricity supplier, launched the most "gold content" price war in history, and even led to the sharp decline of Gome's gross profit in the quarter.

Gome later released data show that in 2012, Gome's electricity business gross margin was only 2.7%.

Gome's traditional gross domestic product can even exceed 20% of its gross domestic product.

The effect of the Gome price war was also immediate. The revenue from the electricity supplier jumped from 470 million yuan in the first quarter to 1 billion 450 million yuan in the two quarter.

Gome electric business left behind for so long, it seems to have seen the hope again.

But in fact, it is not.

At that time, the situation in Gome was already very grim.

In the first quarter of Gome sprint business, the company recorded a net loss of up to 580 million yuan.

This is also the most serious loss to Gome so far.

Gome is unable to maintain such a situation, so the charge has not yet been completed, Gome's electricity supplier has been defeated.

After that, Gome's electricity business slowed down. Two years ago, the quarterly record of Gome business was not refreshed until today.

In 2012, Gome achieved 4 billion 400 million yuan pre tax sales and shrank to 3 billion 500 million in 2013.

However, the electricity supplier sector is still a black hole in Gome, which has brought a net loss of 760 million yuan and 540 million yuan to the group in the past two years.

The destruction of the electric business has not forced the national beauty to be on the way, and the development of the Gome has been flourishing.

In the fourth quarter of 2012, Gome successfully reversed its losses.

In 2013, Gome's revenue grew and its financial position was further improved and consolidated.

After careful investigation, we found that in recent years, Gome's income in the first tier cities except Beijing has hardly increased or even declined.

According to the category, Gome's income growth from IT, digital and mobile phone products is also very weak, and the core consumer electronics is regarded as the potential stock of the appliance retail industry.

The Gome, who quit the electricity supplier competition, has found its own living space in the traditional appliance field in the two or three line market.

According to Gome's strategy of redeveloping Gome in 2017, the income from the electricity supplier accounts for only 1/4 of the future revenue increment, and the growth of the traditional household appliance chain is still regarded as the main force of growth.

Product differentiation and operation refinement are Gome's current efforts to break through.

Gome also proposed the development strategy of joint venture with supermarkets and department stores.

In the two quarter of this year, Gome's revenue from that part of its business has just reached 136 million.

Although it is a way of thinking, it is far from the positioning of pillar businesses.