gome is tops in china - home appliances manufacturers in china
Gome has become China's largest e-retailer since its establishment 15 years ago.
According to the company's internal estimates, the company has a market share of 12%. The Beijing-
The company initially sold televisions, air conditioners and refrigerators at low prices, reducing middlemen and buying them directly from manufacturers. Now, Gome (
Although the name is misspelled, it is pronounced Guo Mei, meaning "beautiful country ")
Has shifted its focus to selling Dell (DELL)
IPod nanos and Motorola (MOT)cell phones.
"Small goods won't take up too much store space, but the profit may be better than traditional electronics," Wang said . " He is a professor at Tsinghua University and is responsible for the Executive Development Project of Gome.
Gome's new strategy helped the retail giant to become famous.
Business Weekly Asia Top 50Hong Kong-
In 2007, sales of Gome's listed companies were $6, and profits jumped 38% to $0. 165 billion. 2 billion. Goldman Sachs (GS)
Gome is expected to earn $0. 394 billion in profits from $7 in sales this year. 2 billion.
Gome's actual profits and sales are likely to be higher, as part of the company's shares were not injected into listed companies when founder Huang Guangyu bought Gome through reverse
The door went public on June 2004.
According to Gome's 2008 interim earnings report, as of June 30, its listed entities had 828 stores in China, but Gome said the group currently has 1,300 stores.
Still, all of Gome's strengths last year have not recently won fans among investors.
Stock prices in Hong Kong have fallen 43% to 52-
A week high at the end of January.
Analysts believe that the stock market is facing a bad climate;
Hong Kong's benchmark Hang Seng index, for example, fell 38% from October. 30 peak.
Gome has also been affected by possible earthquakes in Sichuan and severe spring floods in southern China that have suppressed sales and led to the same situation --
Store growth fell into negative growth.
Mavis Hui, retail analyst at DBS Vickers Securities, said disappointing stock performance was "understandable" and he was still optimistic about the rebound.
"Overall, the second half still looks good," she said . ".
Most Chinese companies want to be the biggest, but few are successful companies like Gome.
The company has achieved this by constantly innovating and developing its business model.
Twenty years ago, Gome founder Huang Guangyu dropped out of school at the age of 16 and began selling imported electronics at a roadside stall in Beijing with his brother.
In 1993, when there were few Chinese brands, the brothers began selling electronic products owned by Gome.
"The key to their success is that the brand is a concept that is still growing rapidly in China," said Warren McFarlane, a professor at Harvard Business School.
Wrote a paper about Gome.
"What Gome can do is they can sell Gome brands at high quality prices.
So many people don't know who the Chinese brand is, so people use the Gome brand to trust the electronics in their store.
Gome estimates its brand value at $7. 2 billion.
Like many Chinese retailers, Gome initially focused on covering every corner of China.
Although management has given a lot of attention to opening new stores, they often lose interest in the performance of existing stores.
One desirable place is that Gome is the first retail chain in China to be picky about opening a shop in a good place, which gives it an advantage over the second in China
Suning, the largest e-retailer.
Gome also expanded by annexing the left and right of its rivals, including-third-
Largest electronics retailer in China
Beijing's largest electronics, fifth
The largest triple business, and cell-
Telephone professional retailer Dalian Xundian Communications, Shaanxi Cele communications.
Gome spent more than $1.
1 billion acquisitions since July 2006.
But as Gome expanded rapidly, it began to experience initial problems.
The second-or third-
Gome's stores in first-tier cities are not large enough to justify them.
In addition, Gome does not have enough talent and experienced managers to run the newly opened store.
Gome store area sales per square meter-
Measure the success of retail chains
Plunged 28% in 2006. It was a wake-
Phone calls from Gome Management.
Since 2006, Gome has adjusted its strategy and no longer stressed the expansion of its scale.
"The change in strategy is mainly because the company has completed the first step in expanding the network and scale.
Future development will pay more attention to increase sales per square meter of store space
The president wrote in response to a question submitted by BusinessWeek.
The core of the new strategy is for so-
Called "3C" category
Computers, communications and consumer electronics.
Not only are these 3C products more profitable, but they have doubled their profits.
China's growing consumer base has seen double-digit growth.
Gome agrees to open Motorola-branded shops-within-
A year before Suning reached a similar deal, almost all of its stores in China's top 30 stores were selling Motorola's ROKR2 phones.
Dell chose Gome as its first retail partner in China and signed an agreement with rival Suning six months later.
So far, Gome has the exclusive right to sell Apple products in China.
Gome also works closely with suppliers such as TCL and Haier to customize
Products consumers want.
This strategy seems to be successful.
However, this does not mean that everything in Gome will be smooth.
Initially the company's target was 4% or 5%
But store growth this year has cut that forecast by a percentage point or two.
On August, Gome announced a medium-term profit.
On the 13 th, Chen Xiao, president of Gome, admitted that due to the Sichuan earthquake and floods in the South, consumer spending was suppressed, and sales targets may not be achieved this year.
In addition, Gome had hoped to boost TV sales from the Olympics this summer, but initial feedback from stores showed that more people chose to stay at home to watch the Olympics rather than go shopping.
In the second quarter, Gome had some problems, but he added, "We think they actually still have room to expand their stores and improve profitability.