Date
21 September 2017

GOME seeks to double profit by 2017, chairman says

GOME Electrical Appliances Holdings Ltd. (00493.HK) aims to double its profit and total assets by 2017 as it turns into an “omni-channel retailer”, the company’s chairman said Thursday.

“As we transform into an omni-channel retailer from a multi-channel retailer, we expect to build another GOME by 2017, which means our revenue, profits and total assets are expected to double by then,” chairman Zhang Dazhong said. “By that time, we will be the largest vertically integrated home appliances e-commerce operation in China.”

Omni-channel retailing seeks to give the customer a unified shopping experience across all channels, from brick-and-mortar to mobile.

Revenue for the company increased 10.4 percent to 56.4 billion yuan (US$9.06 billion) last year, while net profit was 892 million yuan for the period, compared with a loss of 728 million yuan a year earlier, according to a company statement.

The loss-making e-commerce business accounted for less than 5 percent of the company’s revenue last year but Zhang said it will make up 10 percent by 2017.

To achieve the target, the company will focus this year on building an open supply chain system, including procurement, logistics and information technology. It will then open up its supply chain to supermarkets, department stores, local chains and online retailers, including Dangdang and Alibaba Group’s Tmall, between 2015 and 2017.

“Capital expenditure has been 800 million yuan in past years and we expect to see a similar amount each coming year so as to achieve our doubling target,” he said.

Zhang said GOME aims to open 50 to 100 new stores this year, mainly in third- to fourth-tier cities. “There are still 100 to 200 new cities that we can enter,” he said.

– Contact HKEJ at [email protected]

AM/JP/SK

 

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