Separated from "true happiness" to set up an independent business group ,Will "entertainment" become a new label of Gome?

Per reporter: Wang Ziwei Per editor: Liu Xuemei

On March 4, the "Daily Economic News" reporter exclusively learned that gome's internal organizational structure has recently changed: the entertainment section has been pulled out of true happiness and become an independent business group, which is managed by Zhang Hao, vice president of Gome Retail Holding Company. Insiders in the industry told reporters that the internal documents of the current formal appointment have been issued.

The reporter learned that Zhang Hao, who is in charge of the entertainment business group this time, was a professor at the Communication University of China. This personnel and organizational structure adjustment is aimed at achieving organizational goals.

"Business group" is a common term used by Internet companies. Chen Yuefeng, founder of Spirit Beast Media, told reporters that becoming a business group means that the entertainment business has been once again emphasized within Gome through business and personnel changes, and its entire business scope and proportion, rights and responsibilities within the group are expanding.

From the birth of true happiness, Gome's entertainment ideas have begun to appear. It can be seen from the establishment of the independent business group that the three words of "entertainment" have been the new labels that Gome has been waiting for for a long time.

Gome's existing stores have been upgraded from electrical appliance stores to new stores for display experience Image source: Courtesy of enterprises

Entertainment business group: or cooperate with Gome's overall strategy

Some industry insiders pointed out to reporters that the entertainment was independently divided into a business department, on the one hand, the positioning and task of true happiness were further clarified, such as more focus on the "integration" of retail and the Internet; on the other hand, its strategic significance was strengthened again: entertainment may not only be the "entertainment" of true happiness, but also the "entertainment" of Gome retail.

In fact, entertainment has always been one of the strategies at the level of Gome Group. In January 2021, Gome's retail entertainment strategy was fully launched, and one of the symbols was the announcement of Gome App to change its name to "True Happiness". The name of the app, which reads quite bluntly and conforms to the language habits of young people, has put Gome's plot to target Generation Z on the surface.

Huang Guangyu once told Gome executives internally that the real happiness of changing the name is not simple, behind it is the iteration and renewal of the group's strategy. True Happiness is positioned as an entertainment e-commerce portal, focusing on creating the two core sectors of "music" and "shopping", and making every effort to enter the all-category e-commerce market, claiming to create an entertainment and social shopping experience for users.

Since then, the entertainment strategy has been engraved in the minds of Gome, and Gome has also launched a series of changes. For example, during the 618 and double 11 periods, a series of strategies were launched for young people to "buy hands", video shopping guides, and "grab-fight-zao". But these do not seem to meet Gome's expectations. Some Gome insiders told reporters that the problem may be that "there are too many things to do to make true happiness."

So in October 2021, the positioning of True Happiness has changed again, and Huang Guangyu pointed out that True Happiness's positioning is no longer Gome's "online electrical platform", but a full-scale retail trading platform. Ding Wei, executive vice president of True Happiness, once revealed that what Gome and True Happiness should do is to "integrate retail and the Internet into one."

This may be one of the reasons for the independence of the entertainment business group. Another reason may be that Gome's various businesses are warming up, and the strategy of "six major sectors into a trend" needs to be entertained to serve the overall situation.

On January 11 this year, Wei Wei, chief financial officer of Gome Retail, and Zhang Jingxing, general manager of the Enterprise Development and Investor Relations Department, held an online meeting of the Gome Retail Roadshow. Wei Wei mentioned above the meeting that the sales of Gome Electric appliances in December 2021 increased by more than 40% year-on-year. Really happy last December monthly life reached 65 million, an average of more than 3 million daily activities.

Fang Wei also mentioned that Gome's existing stores have been upgraded from electrical appliance stores to new stores for display experience. The cooperation between the entertainment business group and the offline business may already be on the blueprint.

In addition, another concern in this organizational structure change is Zhang Hao. At the previous meeting, Zhang Hao did not appear much and was full of mystery. The reporter learned that Zhang Hao is an "old employee" of Gome and has been serving the brand, marketing and other businesses.

"From a personnel point of view, the head of the business will also have more rights in the group to match and mobilize resources to support business development." Other business units will also be more formal in their cooperation with this business. Chen Yuefeng said.

Zhang Hao had high hopes. Under his supervision, can Gome's entertainment business group be refreshing?

Can entertainment help Gome accelerate?

Whether it is the playing style of "Disney + Costco" of Pinduoduo or the concept of "interest e-commerce" proposed by Douyin, there is a factor behind these strategies: the rise of young consumption power.

"The entertainment strategy is essentially in line with the interest trends of young people, so for online platforms, this is not an option, but a must. Ali, JD.com, and Douyin Pinduoduo are all doing this. Li Chengdong, founder of dolphin society, told reporters.

Chen Yuefeng analyzes from the perspective of online platform that entertainment is a process of online, video and interaction. In consumers' online shopping behavior, the demand for interaction with products has begun to increase, and entertainment and interaction are in line with the trend.

"From the perspective of marketing strategy, entertainment can give users more product awareness, and from the perspective of the enterprise itself, the feedback and demand experience of internal personnel to users will be more direct." Chen Yuefeng added.

Huang Guangyu stressed at the October 2021 conference that Gome has always been on the retail track, and the essence of the retail industry is "user thinking". Retail operators, operating services, with the aim of creating a scenario in which real consumer services are formed through commodities and by optimizing the value chain.

Chen Yuefeng believes that the purpose of retail is to meet the changing needs of consumers with cost-effective goods. At the moment of the rise of young consumption power, "entertainment and other strategies are also to achieve transaction goals, improve the repurchase rate, and ultimately achieve transaction conversion." ”

Whether from the perspective of industry competition or from the perspective of Gome's internal strategy, entertainment is a must-go move. This time, the entertainment business group will be independently turned into a business group, and Gome obviously has high hopes for it. Earlier, Huang Guangyu had said that Gome did not seek a breakthrough in a single project, but to "coordinate the advancement of the six major projects and become a trend". Such an integrated strategic play requires extremely high coordination and marching speed. Perhaps entertainment will be a booster for the speed of the March of the United States.

Chen Yuefeng believes that it is too early to judge whether entertainment can succeed. "Traditional retail companies want to make changes and breakthroughs in the field, and there are still many difficulties at present. I think there will be many problems encountered by Gome, and if Gome wants to make a breakthrough, it still needs long-term unremitting efforts. He said.

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