Suning is waiting for a chance to turn the tables. On the afternoon of April 17, Suning signed a contract with Zhongta Co., Ltd., announcing that the first Suning Yijia Max store in Beijing will land in the CCTV Tower (hereinafter referred to as "Zhongta"). The acquisition of the "Big Mac" store with an operating area of more than 20,000 square meters seems to be a positive signal for Suning. Since last year, the return of the core business of 3C and home appliances has allowed Suning to gradually recover from the downturn. The old opponent is difficult to defend, and the new opponent is only increasing, and at present, Suning, which is still at the table, wants to break through from the traffic wall, and needs to work product differentiation and other aspects.
Large and medium-sized merchants have withdrawn from the tower store to open before the "eleventh".
"The removal of large and medium-sized electrical appliances has been completed. The relevant person in charge of Suning revealed that as a new receiver, Suning has entered the site to carry out some demolition work, and the old facilities in the mall will be demolished and renovated, "It is expected that the new Suning Yijia Max store will be unveiled before the '11th Golden Week'."
As a landmark building in Beijing's West Third Ring Road, Dazhong Electric has been entrenched in the Zhongta business district for more than 20 years. Li Hong (pseudonym), who has been in the home appliance retail industry for more than 20 years, told the editor that at the beginning of the 21st century, Dazhong Electric Appliance Zhongta Store is a benchmark store in the home appliance retail industry in Beijing and even the whole country. "Because of the blessing of the middle tower and the night view of lights, the 'home appliance night market' once held in Dazhong has attracted many Beijing citizens. According to past media reports, the single-day sales of Dazhong Electric's Zhongta store have exceeded 150 million yuan, and the annual sales of a single store once reached 1.5 billion yuan.
Li Hong said that until today, a home appliance store with an operating area of more than 20,000 square meters is also very rare in the whole country. It is understood that the Zhongta business district where the Zhongta store is located is located in Beijing's West Third Ring Road, in addition to the commercial retail space on the two underground floors, it also includes three attractions: Pacific Ocean Underwater World, Yuyuantan Park and CCTV Tower. According to Du Qian, general manager of Zhongta Co., Ltd., the middle-aged population aged 36-45 around Zhongta accounts for 26.8%, "this age group also means that the consumer group radiated by Zhongta business district has a certain consumption power."
For such a huge commercial project this time, Suning also said that it will land the first Suning Yijia Max store in Beijing. "Because the area is relatively large, we have more planning space in the exhibition design of core categories such as 3C and home appliances. Zhang Yanguang, general manager of Beijing Suning Tesco, said that relying on sufficient retail space, Beijing Suning will increase the introduction of the first store and product launch, "Our ultimate goal is to build the Suning Zhongta project into a 'global home appliance launch center', using the new advantages to radiate more customers."
The return of the core business Suning is mixed
The Zhongta business district has witnessed the peak moment of the home appliance industry, and it has also witnessed the ups and downs of competition and the comings and goings of practitioners after the change of time. Nowadays, the Zhongta store has to change owners, and the mood of the latecomers has long been different.
Before the "Big Mac" volume of the store, Beijing Suning has already "eaten" many Gome and Dazhong stores. It is understood that in 2023, Suning will open 7 new stores in Beijing, including Suning Tesco Century Jinyuan Store, Suning Yijia Madian Store, etc., of which many of the "predecessors" of the stores are Gome Electrical Appliances and Dazhong Electric Appliances.
Taking over the stores of former competitors seems to be a mixed blessing for Suning. On the one hand, the continuous layout and opening of new stores offline suggests that Suning's cash flow pressure has eased. On the other hand, the shrinkage of the "old rival" Gome's retail market also reflects the pain of a new round of reshuffle in the physical home appliance retail market.
According to the financial report data released by Suning at the end of March this year, in 2023, Suning's net cash flow from operating activities will be 2.91 billion yuan, a year-on-year increase of 561.37%. In addition, the sales scale of Suning's core home appliance business increased by 11.9% year-on-year, and the gross profit margin of household appliances and consumer electronics business was 11.86%, an increase of 11.28% year-on-year.
For Suning, the return of its core business also means that its hematopoietic capacity is constantly recovering. Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, pointed out that Suning had previously been mired in a quagmire of insufficient liquidity, and the return of cash flow and core business seemed to be a positive signal.
The "quagmire" in Zhuang Shuai's mouth goes back to eight years ago. In 2016, after rolling out the layout of eight major industries, including retail, real estate, finance, culture and creativity, investment, sports, logistics and technology, Suning had to pay tuition for the hard-to-swallow business "pie", and there was a liquidity crisis.
In 2021, Suning's crisis will still spread to the entire system. According to the 2021 semi-annual report, Suning was affected by periodic liquidity pressure, insufficient commodity supply and expenditure investment, and its operating income in the second quarter decreased by 34.64% year-on-year, and the comprehensive gross profit margin decreased by 4.32 percentage points compared with the same period last year.
Although the Jiangsu State-owned Assets Supervision and Administration Commission has since intervened with 3.2 billion yuan to bail out, Suning's liquidity crisis has not yet been completely eliminated. "In the years that Suning has been dormant, the offline home appliance retail market has undergone tremendous changes, whether it is the impact of online traffic, or the change in demand in the offline market, the current situation of Suning is just standing on the table. Zhuang Shuai said.
The traffic wall is everywhere, looking for a way to break through
Although the victory and defeat with the old rival Gome have been divided, at present, Suning's opponent has only increased. In the traffic walls built by online platforms such as Ali and JD.com, Suning's breakthrough is not so simple.
When Suning is still fighting left and right on many business lines, the rookie JD.com has already targeted the two giants of Suning and Gome. In 2015, Suning felt the threat of e-commerce competition, and instead chose to form an alliance with Ali to open the online traffic entrance.
However, borrowing someone else's hand to get traffic is never a long-term solution. Especially today, when giants are also caught in traffic internal friction. Now that Alibaba has no time to think about anything else and chooses to focus inwardly on e-commerce and cloud strategy, the non-core offline physical business will naturally be brought back to the table to examine the value. In February this year, Taobao announced the transfer of Suning's equity. Although Suning said that the change has no substantial impact on the company's current governance structure, Suning still has to give an answer to where the traffic comes from.
"In fact, for home appliance retail, traffic is not an unstoppable decisive factor. Zhang Yanguang said frankly that the user's experience and scene interaction are still indispensable factors in home appliances and 3C retail. "Often, some consumption scenarios with high customer unit prices and complete sets of product purchases are offline. Because of this, Zhang Yanguang believes that Suning's opportunities should still be found offline.
"Suning's advantage lies in the fact that it has accumulated rich supplier resources in years of offline entity experience, and in the process of online transformation, it has precipitated a batch of user data. Zhuang Shuai said that based on these advantages, Suning should improve its differentiated product capabilities, such as developing customized products that meet market demand with brands and cooperating with factories to develop its own brands.
In the face of traffic acquisition, Zhuang Shuai suggested that in the competition with e-commerce platforms such as JD.com, Taotian, and Meituan, Suning also needs to "borrow" cooperation. In this regard, Hou Enlong, Secretary of the Party Committee and Senior Vice President of Suning Tesco Group, revealed at the signing ceremony that Suning has currently deployed on multiple online platforms such as Douyin and Kuaishou to help suppliers place products in different price segments to obtain traffic and sales.
Zhuang Shuai bluntly said that in the future, if Suning wants to revitalize the "giant" of the Zhongta store, in addition to relying on its own more than 30 years of offline management experience, it also needs to consider many aspects such as traffic and experience format layout. "In any case, this attempt at the Zhongta store is a positive sign. Zhuang Shuai said.
He Qian, Qiao Xinyi/text
Source: Beijing Business Daily, provided by the enterprise