Return to Suning, Win in SynTao, China Marketing Plan-Zhang Jindong: Moving Forward along the Old Road of Gome?
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Two and a half years after resigning as chairman of Suning Tesco, Zhang Jindong once again returned to the public eye as the chairman of Suning Holding Group. Seeking to Research China's Think Tank: Winning in Business, China's Marketing Planning, National Research and Political Affairs, Seeking Decision-Economic Information Think Tank. At Suning.com's 2024 annual work deployment meeting, Zhang Jindong shouted out Suning.com's goal of achieving comprehensive profitability in the new year, and put forward requirements for Suning's future strategic deployment.
In the past few years of the Internet winter, it has long been common for the boss to shout. In the past, Suning's old rival Gome shouted such bold words as "take back the market in 18 months" and "surpass the historical level in 2025", and then the three major Internet giants also shouted the slogan "never lie flat" to motivate employees in the face of fierce traffic competition. The key is that after Zhang Jindong returns to Suning again, what kind of countermeasures can he come up with to achieve the goal of "comprehensive profit"?
01 The return of Zhang Jindong has long been foreshadowed
Zhang Jindong returned to the stage after two and a half years, but it does not mean that Suning has gone through the "darkest moment". Long before Zhang Jindong resigned as chairman of Suning.com, Suning's crisis had already begun to erupt. In 2020, Suning handed over a very eye-catching report card, with a net profit loss of 6.807 billion yuan after deducting non-profits, and the monetary funds on the account were only 25.89 billion. In the first quarter of 2021, its debt was as high as 100 billion. Faced with the dilemma of not making ends meet, Zhang Jindong began to work hard.
In February 2021, there was news in the market that "Shenzhen State-owned Assets" wanted to acquire Suning shares to bail it out, but in the end it was not implemented. In the end, it was the local government that "transfused" 3 billion yuan for Suning. Zhang Jindong has also pledged shares many times, and until June 2021, more than seventy percent of the shares directly held by Zhang Jindong have been pledged.
On June 15, 2021, Suning urgently suspended trading and issued an announcement stating that the company's actual controller Zhang Jindong's 540 million shares were frozen by the judiciary, and Suning Electric Appliance Group Co., Ltd., the company's third largest shareholder, passively reduced its holdings of 10 million shares due to the relevant provisions of the agreement triggered by some stock pledge repurchase transactions. Suning's debt has exploded, and the 3 billion yuan bailout fund is obviously just a drop in the bucket. In July of the same year, Zhang Jindong took the initiative to apply for resignation as chairman of Tesco, and said in an internal letter that "every adjustment and change made at present is to make Suning Tesco develop better."
From the perspective of equity structure, Suning's largest shareholder at this time should be Jiangsu State-owned Assets Supervision and Administration Commission (SASAC) behind Jiangsu New New Retail Innovation Fund + Jiangsu New Retail Innovation Fund Phase II, with a total of 22.55% of the shares, the second largest shareholder is Zhang Jindong with 20.35% of the shares and Suning Holding Group, which acts in concert, and the third largest shareholder is Taobao China, which holds 19.99% of the shares.
If Zhang Jindong completely withdraws from the management, then the management power will come to the hands of Jiangsu SASAC and Taobao China, in fact, after Zhang Jindong's resignation, it is Huang Mingduan of the Alibaba department who is at the helm of Suning Tesco. Jiangsu SASAC has funds, and Ali has resources, perhaps this is also an important reason why Zhang Jindong resolutely chose to withdraw.
But Zhang Jindong, who single-handedly built the Suning Empire, is obviously not willing to give up. In April this year, Huang Mingduan of the Alibaba department no longer served as the chairman of Suning Tesco, but was replaced by Ren Jun of the "Zhang Jindong department" as chairman and president.
After that, Zhang Jindong also appeared in the public eye more and more frequently. In April last year, Zhang Jindong appeared at the core high-level meeting of home appliance brands as the chairman of Suning Group, and in August, Zhang Jindong appeared at the "Suning Summer" event. At the end of last year, on the occasion of the 33rd anniversary of Suning Holding Group, Zhang Jindong, as the chairman of Suning Group, issued a letter to all employees, encouraging Suning people who have experienced the darkest moment to look at future opportunities.
Immediately afterwards, Zhang Jindong directly released Suning.com's goal of achieving full profitability. From this point of view, Zhang Jindong's short-term "exit" is more like paying for the wrong decisions in the early stage, rather than really retreating behind the scenes, Jiangsu SASAC has no intention of intervening, and the "Ali Department" Huang Mingduan is inevitably powerless for outsiders, and in the end, Suning is still surnamed "Zhang".
02 踩着“国美”影子逆袭
In order to achieve the goal of "comprehensive benefits", Zhang Jindong has clarified the two major directions of online and offline: one is to focus on the offline market, insist on opening large stores and good stores, and improve market coverage by combining urban and rural areas and multiple tracks, accelerate the entry into the urban blank market, and it is expected to open more than 3,000 new stores throughout the year;
Zhang Jindong is not just "shouting slogans", Suning has been working hard to implement these two reforms in the past year. In September last year, Suning Yijia Madian store officially opened, located in the North Third Ring Road, this store was originally a large and medium-sized Madian store under Gome, which means that Suning has begun to "buy the bottom" of home appliance stores. And this is just one of the stops of Suning's expansion store, since last year, Suning has also successively taken over a number of stores in Beijing from Gome and Dazhong.
It is not difficult to see that after a round of "slimming", in 2022 alone, Suning will cut 58 Carrefour supermarkets and 463 home life specialty stores, and Suning seems to have rekindled its interest in the offline market. As early as 2021, at the celebration ceremony of Suning's 30th anniversary, Zhang Jindong has made it clear that he will focus on the main business of retail in the next ten years.
For Suning, which once had to fight with JD.com to the end, this adjustment of strategic direction is also like an attempt to overtake in a corner, and even has a little shadow of the early development of the old rival Gome. In fact, in the context of the Internet dividend has been infinitely approaching the ceiling, the three Internet giants have tried their best to fight for price and service, and it is really difficult for the fourth and fifth parties with slightly weaker strength to have a chance to break through.
Suning is also aware of this,Suning Tesco as a full-category online e-commerce,To survive in the cracks,It is necessary to find a breakthrough in differentiation,For Suning,From the 3C category、Offline channels、Home appliance retail, etc.,It's better than fighting traffic with the three giants。 On the online side, Suning announced in November 2022 and May 2023 respectively that it has joined hands with Meituan and Ele.me, and more than 600 of its stores have entered the two platforms. As Zhang Jindong said, Suning should deeply link and take root in major traffic platforms, and give full play to the advantages of retail capabilities such as supply chain and logistics after-sales.
From this point of view,Suning is actually well aware of its own advantages and disadvantages,From the perspective of product categories,Home appliances3C category is Suning's core advantage;From the channel point of view,Compared with online traffic competition,Offline physical stores are Suning's network advantages,Through these two points,Suning is enough to build a retail network focusing on home appliances3C category。
Therefore, Suning weakened the daily department store category that it is not good at, and became bigger and stronger in the direction of advantageous categories, focusing on "family scene solutions", one is through cooperation with Meituan, Ele.me and other traffic platforms, and the other is sinking into more blank markets, so that Suning can further "learn from the strong and make up for the weak", give full play to its own supply chain and service advantages, and meet the consumer demand in more large home furnishing fields.
03 Guomei is upward, Suning is facing downward
However, while Suning has ambitions, it is still too early to say whether this will help it turn a profit completely. For Suning, there are still many things that have not been completely resolved. Although Suning has significantly closed more Carrefour stores since the beginning of this year, the resulting shopping card turmoil, supplier arrears and other problems have not completely stopped. In addition, Carrefour China's net profit loss attributable to the parent company in the first half of 2023 will still be 1.293 billion yuan.
For Suning, it was Carrefour's perfect supply chain resources and store resources that were originally looked at, but these former "high-quality assets" have become a burden for Suning, which is now eager to focus on its main business. At the same time, Suning's debt crisis has not yet been resolved. According to the data, as of June 30, 2023, Suning's liabilities totaled more than 60 billion yuan, and the asset-liability ratio also rose from 63.77% in 2021 to 90.69%. In this context, Zhang Jindong wants to "open a big store and open a good store" on the one hand, and on the other hand, he wants to achieve "comprehensive profit", and the financial pressure is not small.
Looking at the experience of Suning and Gome, they all have the mental journey of "30 years in Hedong, 30 years in Hexi", from the leader of the home appliance industry to the catch-up and then to the escort, it is inevitable that there is unwillingness in their hearts. For this reason, Gome Huang Guangyu will shout "return to the market position in 18 months", and Suning Zhang Jindong will also ask "Suning people are not allowed to lie flat", but it is not easy to reverse the strategic mistakes of the year through the current transformation.
Because of Huang Guangyu's absence, Gome missed ten years of e-commerce, and after Huang Guangyu's return, Gome went all out to enter the online market, and even became an MCN himself, but everyone knows the result. Suning, on the other hand, wants to reverse the investment strategy of "multi-point flowering", return its attention to home appliance retail, and empower online to offline through the coordinated development of online and offline integration.
Compared with Gome's bold "upward" strategic layout, Suning has more abundant e-commerce strength, and it also has insight into the congestion of the online market at the moment. However, as mentioned above, the debt crisis, asset burden, loss pressure, is still a sword hanging over Suning's head, to kill a "new road" in this context, will test the innovation ability of Suning's new retail strategy, how to seize the traffic of the online e-commerce market through channel innovation, service innovation, marketing innovation, Suning still has a lot of tough battles to fight.
Return to Suning, Win in SynTao, China Marketing Plan-Zhang Jindong: Moving Forward along the Old Road of Gome?