Huang Guangyu's sister Huang Xiuhong served as the chairman of Gome Electrical Appliances, and the offline store display charging model caused controversy

The first financial reporter confirmed from relevant parties on January 27 that Huang Xiuhong, the sister of Gome founder Huang Guangyu, has been appointed to Gome Retail (00493. HK) is the chairman of Gome's fortune business, Li Juntao, known as "Little Li Flying Knife", a veteran minister of Gome, who has been reappointed as vice president of Gome. A year after Huang Guangyu's "return", Gome Is still facing transformation pressure.

With the reduction of offline traffic, Gome Electric has opened flagship stores on e-commerce platforms such as JD.com and Pinduoduo, exporting home appliance supply chain capabilities to the outside world and striving to maintain the existing sales scale. Offline stores are more transformed into display scenes, Gome electrical appliances charge display fees to manufacturers stationed in offline stores, and manufacturers have signed contracts, but some insiders believe that this is still "old thinking".

Is deepening the "home. Gome Retail, which has undergone a strategic transformation of life, no longer relies solely on home appliance retail business, but expands to the fields of home improvement, logistics, wine and other fields, but home appliance retail is still the "basic disk" of Gome. This "basic disk" has felt more and more pressure for business model transformation under the background of the increase in the proportion of domestic home wire channel sales caused by the epidemic.

In the first half of 2021, Gome's retail revenue was 26.04 billion yuan, an increase of 7 billion yuan year-on-year; the comprehensive gross profit margin was 14.25%, an increase of 2.6 percentage points over the same period last year; the net profit attributable to the mother was 1.974 billion yuan, and the loss was reduced by more than 500 million yuan year-on-year. In the same period, Gome launched the "True Happiness" APP, and the retail GMV (total transaction volume) increased by 24.42% year-on-year, completing 75,000 live broadcasts.

While increasing the number of online channels, Gome's offline stores want to transform into offline local life service platforms. Whether it is the electrical appliances sold in the flagship stores of Gome on JD.com and Pinduoduo, or the diversified goods sold on the True Happiness APP, they can be displayed in Gome's offline stores, provided that they need to pay the display fee. In this way, Gome's offline stores do not force transactions in stores.

"This is in line with normal business logic", a person close to Gome believes that Gome's offline stores provide a display platform, according to the different locations in the storefront clearly marked prices, which is open and transparent, and customers can experience the goods, can be purchased in different channels, Gome stores do not require customers to be in the Gome store final transaction. Sony, Bossi, TCL, Konka, Vantage, Wanhe, Wanjiale, etc. have reached a strategic cooperation with Gome Inc. in 2022.

Wang Bo, CEO of Gome Electric Appliances, revealed in December last year that in the first half of 2022, Gome will spend a lot of money to create a new model of offline scenes "city pavilion"; the store will have three main store types, including city pavilions, city flagship stores, and boutiques, to strengthen the experience function.

However, a senior observer of the home appliance industry told the first financial reporter that more than ten or twenty years ago, Gome had charged an "entry fee" to the home power plant, and now charging a "display fee" is a continuation of the old thinking of the past. Offline stores are no longer as strong as they were more than a decade ago, Gome charges a display fee for three or four years, and some power plants do not take care of it. If the national electrical appliance chain does not adjust its business model and business form, the road will become narrower and narrower.

Compared with a decade ago, house prices have risen nearly tenfold, and rents have doubled; however, the traffic in offline stores may only be one-third of that of ten years ago, which makes it difficult for offline stores to make a profit. The observer believes that Huang Xiuhong's appointment as chairman of Gome Appliances and Li Juntao's appointment as vice president of Gome Appliances show that in the difficult transition period of the store, Gome has further strengthened the power of the electrical appliance sector.

Huang Xiuhong is the younger sister of Huang Guangyu and has been the purchasing director of Gome Electrical Appliances, and is no stranger to people and things in the home appliance industry. Li Juntao, who has long been responsible for the procurement business of Gome Electrical Appliances, is very familiar with the heads of mainstream home appliance companies in China, and often pats his shoulders and calls him brother in public. Their appointment will help Gome re-consolidate its relationship with the home power plant.

This year, the retail channels of home appliances are more decentralized. On January 20, Midea Group and Pinduoduo reached an agreement on annual sales of 10 billion yuan, and Midea's brands such as Midea, Little Swan, Hualing, Cuckoo, comfee and so on will all enter the Pinduoduo platform, and the two sides will cooperate in product customization, channel expansion, brand building, digital technology, intelligent manufacturing and other fields. Dong Mingzhu, chairman and president of Gree Electric Appliances, and Meng Yutong, secretary of Gree Electric Appliances, pushed the new products of Gree life electrical appliances on the video account "Pearl Yutong Selection" on Douyin.

Peng Xiandong, general manager of GfK's major appliances division, predicted to the first financial reporter that with the saturation of online traffic, retail channels will be based on online traditional retail in the next few years, and the diversification of online channels such as vertical e-commerce and social e-commerce is the main direction. "Offline channels will maintain certain opportunities at both ends, one end is a large experience store, comprehensive eating and shopping experience in one; the other end is the retail end of the low-level market or community."