Shulou(Shulou.com)11/24 Report--

Photography: Shen Yibin of the IT Times is in full swing on one side of the double 11 online e-commerce promotion, while on the other, the established home appliance retailers Gome and SUNING are silent. It was not sales that broke the silence, but Gome's unpaid wages and SUNING's losses.

Huang Xiuhong, chairman of Gome, said at a staff meeting at the Gome headquarters in Beijing on October 28 that the company would only provide social security for its employees and would not pay any more wages until the end of December. In the medium to long term in the future, there will also be uncertainty in the payment of wages. After the meeting, employees are also required to sign a commitment, the main content of which is "employees understand that the payment of employees' salaries may be delayed in the next six months to one year," and "do not spread negative information and emotions."

SUNING, the "brother in distress", is also having a hard time.

Prior to this, "SUNING bankruptcy liquidation" made an uproar, but now, the news that "supply and marketing cooperatives have acquired a 39% stake in SUNING" has once again set off waves. Although SUNING officially clarified and refuted the rumors, the former home appliance retail giant was plagued by rumors, coupled with the loss of the third quarter results, people can not help but worry about the living conditions of the domestic home appliance retail industry.

The logo of Gome Tiger and the logo of SUNING Lion are deeply rooted in the hearts of the people and are still eye-catching, but the two "giants" are shaky. Liu Buchen, former chief consultant of Kuafu Business Management Consulting Agency, believes that Gome and SUNING have similarities to such an extent, but Gome's current situation is much more serious than SUNING.

On November 7, a reporter from the IT Times visited 10 SUNING, Gome and Yongle stores in Shanghai, four of which have closed down and one Suning store has reduced its original two floors to one floor.

01. One month, the IT Times reported at the end of September that "wage cuts, shop closures, and huge losses, who will save Gome from the cliff?" After that, the problem of Gome's arrears of wages continued to ferment, and the reporter once again visited the second store of Gome Xuhui in Xujiahui.

Around 17:00 on November 7th, the same rush hour and pedestrians coming and going, the difference was that the door of the second store of Gome Xuhui was closed, and the three suspension notices pasted on the door formed a sharp contrast with the business schedule. The door of the eye-catching "Gome" disappeared before. Looking through the window, it was empty, with several load-bearing columns standing in the center, so abrupt that even the shelves were empty, as if Gome had never done business here.

The Gome offline store on Cao'an Road also failed to escape the crisis of closure. Half a building of the Gome signboard, the wind and rain hit some of the color, but still eye-catching, more eye-catching than the signboard is the same color of Gome's "prosperous shop rental." The glowing "guide desk", neatly arranged shelves and prototypes full of shelves would look no different from normal business were it not for a red warning line in front of the door and a white closure notice on the wall.

"this Gome store doesn't close until the end of October. I didn't come to Yongle until after Gome closed its store." Chen Mei (a pseudonym), a promoter at Cao Andian of Yongle Electric Appliances, which is less than 60 meters apart, told the IT Times that Gome had closed several offline stores in Shanghai in the first half of the year, mainly because the rent was too high to support revenue.

According to the interim report released by Gome Retail at the end of September, 562 stores were closed, 192 new stores opened and a net decrease of 370 stores in the first half of 2022, while China Meijing decreased by 326, Yongle 25, Dazhong 12 and Bee Star 7.

As analyzed by Liu Buchen, Huang Guangyu, the founder of Gome, still follows the experience of the first decade of Gome's development. as long as he lags behind his competitors in revenue for a period of time, he begins to open stores on a large scale, resulting in increased operating costs and the emergence of many ineffective stores, followed by a wave of shop closures.

Shanghai Gome was not spared from the tide of shop closures, but Yongle, which was acquired by Gome, shows a different picture.

Walking into the Cao an store of Yongle Electric Appliances, an elderly couple is asking at the mobile phone counter. Mei's air-conditioning promoters are busy introducing products, and there are some customers walking around the mall, with an estimated number of about 10 people. Yongle Zhongshan Park Store does not have many customers, but it is still somewhat popular.

"although Yongle was acquired by Gome, I feel that Shanghainese trust Yongle, especially some elderly people." Chen Mei said that after arriving in Yongle, she obviously felt that she had gained popularity, coupled with the double 11 promotion and the 10% subsidy for first-class energy-efficient household appliances in Shanghai, at present, offline stores were 200 to 300 yuan cheaper than online stores, and the number of customers naturally increased.

02. On the evening of October 28, SUNING released a financial report showing that in 2022, revenue in the first three quarters was 55.538 billion yuan, down 51.95 percent from the same period last year, with a net loss of 4.545 billion yuan, a loss of 39.94 percent year-on-year, and a year-on-year increase in comprehensive gross profit margin of 6.30 percent. In a single quarter, SUNING's operating income in the third quarter was 18.328 billion yuan, down 16.57 percent from the same period last year, with a net loss of 1.805 billion yuan, a loss reduction of 56.16 percent over the same period last year. Because the net profit after deducting non-profit for three consecutive years is negative, SUNING's stock becomes more "ST Tesco" in May. In order to take off the "ST" hat and get out of the difficult period, SUNING made efforts online and offline at the same time, seizing the opportunity of double 11 to turn things around.

Online, the sales scale of SUNING Tmall's flagship store increased by 47.81% in the third quarter compared with the same period last year, and SUNING App also launched "SUNING Suida". As long as there is a SUNING store within 5 kilometers of the consumer distribution address, you can enjoy real-time delivery services.

In addition, SUNING has reached a strategic cooperation with Meituan. More than 600 stores across the country have settled in Meituan, covering a total of 175 cities. Orders for mobile phones, computers and household appliances will be delivered in 30 minutes at the earliest. As of November 4, SUNING had placed more than 55000 orders on the Meituan platform, and mobile phones have become the most popular "digital takeout" for consumers, with 60 percent of the orders coming from young consumers born in the 1990s.

SUNING staff told the IT Times that this year, SUNING's offline store's Singles Day event runs through four weekends. Since its launch, the number of orders for household appliances in SUNING stores has increased by 127% month-on-month, the sales of green and energy-efficient home appliances have increased by 132% month-on-month, the weekend passenger flow of SUNING stores across the country has more than tripled, and sales in newly opened stores such as Shanghai and Nanjing have increased by more than 100%.

But is that really so?

A reporter from the "IT Times" visited a number of SUNING offline stores in Shanghai and found that the passenger flow was not very large, and there was a phenomenon of shop closure.

Also in Cao'an Road, also next to Gome, SUNING has the same fate. Two "notice letters of moving out within a time limit" were affixed to the closed door, and it was learned from the contents that the SUNING Cao'an Road store was closed in mid-October. Through the window, you can see that the mobile phone shelves are full of prototypes and billboards are erected, but the ground is covered with rubbish and a mess. SUNING Zhao Jia Bang Road shop closed and moved out as early as the end of August.

The larger SUNING Dahua Road store has also been reduced from the original two floors to the first floor. "the rent is too high, so you can only give up one floor." Zhou Ying (a pseudonym), an employee at SUNING's Dahua Road store, told the IT Times that thanks to the Singles' Day event, the number of customers on weekends has increased, but there are still not many customers on weekdays. In terms of sales volume, after cooperation with Meituan, the sales of small household appliances are good, but the sales of large household appliances are still not good, which is also related to the product attributes.

"online sales are no better than offline, online Taobao, JD.com, the competition is very fierce." Zhou Ying said frankly that Suning offline store cost is high, online store competitiveness is not strong, can only make efforts in real-time retail.

A reporter from the IT Times noticed that SUNING usually chooses to open stores in large supermarkets such as Da Yun Fat and Carrefour, which is also different from Gome's store opening strategy.

"at present, home appliance chain stores no longer have the ability to attract people independently." Liu Buchen told the IT Times that when SUNING opened his store in or next to a large supermarket, he could "borrow" the flow of people brought by the supermarket and increase the probability of customers coming to the store.

03. This is a critical autumn of survival. "SUNING's top priority is how to achieve positive growth, while Gome's top priority is how to avoid death." Liu Buchen believes that there are three main factors for the crisis in both of them, namely, the factors of the times, the environmental factors and the self-factors.

The factor of the times, at present, is an era dominated by Internet e-commerce, and online and offline integration is extremely important. SUNING, who was once close to the new retail model, fell into a complex capital bureau, while Gome, which focuses on opening offline stores, may not be able to join in the first place.

Environmental factors are mainly due to the repeated outbreaks of the epidemic and the general malaise of the home appliance industry in recent years, and the cost of offline stores remains high.

Self-factors should be analyzed separately. Gome is mainly in strategic thinking, still according to the old way of operation; SUNING has no major strategic problems, but under the dual influence of the times and environmental factors, the acquisition of Carrefour has become a heavy burden.

Liu Buchen said that SUNING and Meituan vigorously develop real-time retail and 3C business, and double 11, which will certainly make a substantial contribution to SUNING's revenue. However, the retail of home appliances is not like the rigid demand and sustainability of takeout, coupled with the continuous efforts of JD.com and other real-time retail, forming a set of their own logistics and distribution system, SUNING faces tremendous competitive pressure. "if the three major factors are not solved, SUNING will not be able to fundamentally reverse the current situation." Liu Buchen said.

Even SUNING, who did not miss the Internet, did not win the dividend of the new era, let alone Gome, which bowed himself into the game. The "snobbery" of the Internet is always tearing open the wounds of the old people. The hegemons of traditional retail chains are now struggling to be marginalized by the Internet.

The tiger has no meat to eat and the lion has no water to drink.

Pictures from Gome, Meituan, IT Times

This article comes from the official account of Wechat: IT Times (ID:vittimes), reporter: Shen Yibin, Editor: pan Shaoying, kicked Girl, typesetting: Ji Jiaying

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