From electronic appliances to home decoration, Chinese retailer Gome wants to have it all
Gome Retail Holdings has launched a new retail strategy that will see China’s largest electronics retailer evolve into a one-stop provider for home appliances, home decoration and household services.
The move comes on the back of Gome reporting a 10.7 per cent fall in net profit to 220.1 million yuan (US$33.30 million) for the first nine months of the year on higher finance costs as borrowings increased, offsetting a rise in sales.
Wang Junzhou, president of Gome, said the company is well on track to evolving into an integrated
home solution provider.
“We are confident that these new strategies will gradually bear fruit,” Wang said.
As part of the new home solutions services, Gome has introduced home decoration design services in its stores to allow customers to experience the new offerings. These include air purification systems, water purification systems, floor-heating systems, and central air conditioning systems.
He Pian Pian, analyst with Tianfeng Securities, said the new strategy will not only bring the company new sources of revenue, but will also generate traffic for its core home electronics appliance segment.
The company’s online e-commerce business growth slowed to 58.1 per cent in the January to September period from 106.2 per cent a year ago.
While Gome is a leading player in China’s bricks-and-mortar electronics retail scene, the group now finds itself facing strong competition from e-commerce giants, accounting for only 0.5 per cent of China’s online home electronics sales in 2016, while, Alibaba and JD grabbed 26 per cent and 62 per cent of the market share in this segment during the period respectively, according to figures from China’s Ministry of Industry and Information Technology.