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Business / Companies

Suning powers up profit-building plan

By Wang Zhuoqiong (China Daily) Updated: 2014-05-09 10:58

Suning powers up profit-building plan

Shoppers go online to compare prices at a Suning Commerce Group Co store in Nanjing, Jiangsu province. The company opened 97 stores in the secondand thirdtier cities in the country last year. Lang Congliu / For China Daily

Suning Commerce Group Co, a major electronics retailer that is turning to online sales, has vowed to lift profits by focusing on consumer-centric supply chains; a more open online platform through collaborating with third parties; and a fast and responsive delivery system by building one of the country's largest logistic networks.

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In a conversation on Thursday with more than 200 investors at company headquarters at Nanjing, Jiangsu province, Suning Chairman Zhang Jindong compared the company's transition from traditional retailer to e-commerce company to the process of constructing the outside and then finishing the interior of a house.

"It is clear that people can see something built from scratch, but it is hard to see how the building is renovated," Zhang said, speaking about the challenges the retailer faced after changing its name last year to showcase its emergence as an e-commerce player and its strategy of offering products at same price online and offline.

In 2013, Suning reported revenue increased 7.05 percent to 105.2 billion yuan ($16.9 billion), but that profits and net profits plummeted 95.5 percent and 86.1 percent, respectively.

Ben Cavender, a senior analyst for China Market Research Group, said Suning was late to arrive to the fast-developing e-commerce transition in China.

Moreover, Suning has lacked clear brand identification with consumers, he said.

Zhang laid out plans to get the vehicle back on track this year, including building a supply chain that is oriented toward consumer needs and working with suppliers to develop products with better marketing focus.

Their brick-and-mortar stores will serve as a channel to strengthen their electronic appliances businesses, especially in communication products and intelligent housewares, he said.

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