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Suning in China

Suning Appliance Company Limited is one of the largest privately owned electrical appliance retailers in China, it was founded in 1990 in nanjing, in China’s 3 C(home appliance, IT,consumer electronics) area,it is a home appliance retail chain enterprise leader. It was listed on the Shenzhen Stock Exchange in July ,2004. Suning annual total operating income has remained more than 50% of the increase since July 2004 successfully listed. The net profit increase of nearly 100%, by the end of 2011, Suning’s total assets of 59.78 billion yuan, sales revenue reached 93.89 billion yuan, an annual growth rate of 36.1%,it ranked third in the list of 500 private enterprises in China, announced on November 8, 2011. Relying on its excellent performance, Suning Appliance has been comprehensively recognized in the investment market thus becoming one of the home appliance retail companies with the highest market value in the world.

Suning Appliance Co., Ltd. principally operates franchised retail shops of electronics appliances in China. Suning’s main business is divided by industry: retail and wholesale industries(realized main business income of 91.56 billion yuan in 2011), installation and maintenance industry.View from the product line, the Suning’s business category experienced from the air conditioning to integrated appliances, to forward to the whole category of department stores, daily necessities, books, virtual products, financial products on the basis of 3C products gradually into the integrated retailersthe development of the road. From the view of service content , Suning has always attached importance to providing services to consumers, cultivate customer loyalty and competitive differentiation capacity. At an early stage, Suning mainly supply :store, logistics, installation, maintenance, and other basic services, via the Internet, smart terminal platform, Suning will be provided to individuals, families, small and medium-sized enterprises and the vendor partners more content value-added services, solutions, technical services, logistics services and comprehensive services.By means of cloud computing technology, Suning service strategy will be more fully realized, this model is called “cloud service” mode, is the Suning’s core path of “technology transformation, wisdom upgrade.

Chain Development :A chain network covering urban and rural, domestic and overseas markets. With the development principle of fast, steady and standardized duplication, Suning Appliance has established a chain network covering six levels of markets, including municipalities directly under the Central Government, provincial capitals, sub-provincial cities, prefecture-level cities, counties (county-level cities), and economically developed towns. By the end of 2011, Suning has nearly 1,700 chain stores in China and abroad and has kept a rate of adding more than 200 stores per year. Based on the leading role in the domestic market, 2009, in order to accumulate experience in internationalized operation and take in excellent operation and management ideas of overseas electrical appliance chain business industry, Suning Appliance acquired the Company of LAOX in Japan. In the December of the very year, it acquired Hong Kong Citicall Appliance Ltd. and entered the Hong Kong market. It took Hong Kong as the bridge tower for its overseas development and then began to explore a road of internationalized operation.

Centered on market demands, and in line with the principles of being professionalized and standardized, Suing Appliance divides its chain store formats into 4 types, namely, flagship store, neighborhood store, specialized store and boutique store with 18 specific forms, and tis flagship store has been upgraded into 7th generation. Relying on the synchronous development of “leasing, construction, acquisition and merger”, Suning pursues its development in a steady and raid pace with the plan of opening 200 new chain store annually. Meanwhile,Suning enhances its strength in self-constructed stores. Based on the existing store sandardizaion, Suning promotes its self-constucted projects in ten plus major cities nationwide through such ways as self development and order-commissioned development..

Marketing : Cooperative win-win through integration of social resources. After more than 20 years of consistent exploration, Suning Appliance has formed multiple sales channels of retailing at stores, key-accounts sales, Suning Online Store, distributing and wholesale, thus having carried out all-round services for upstream suppliers and downstream consumers.

With the brand of “Suning E-go” online store, bulk purchase, and brand advantages, Suning Appliance shares the network of entity stores, logistics and distribution, as well as after-sales service. It accelerates building a high-level online purchasing platform and creates the largest and most professional platform for 3C and consumer online purchasing, thus providing current 200 million Chinese online consumers with the most satisfactory shopping experience of 3C, consumer electronics, Office Automatic, Internet applications, home appliances, major appliances, books and general merchandise commodities.

Logistics is the core competitiveness of chain operation. Suning Appliance has established a logistics network system with three levels of regional distribution centers, city distribution centers, and transferring points. With such advance information systems as WMS, DPS, TMS and GPS, Suning has realized an operation integrating long-distance distribution, short-distance allocation and transfer, as well as retail home delivery. The average distribution radius is 200 kilometers and the maximum daily distribution capacity is more than 200,000 sets.Suning provide home delivery service within 24 hours, and take the lead to carry out punctual good delivery service so as to reduce the customers’ waiting time to the largest extent.

With an objective of “network integration, operation mechanization and management informationization” in mind, Suning Appliance has energetically established the third generation logistics base featured by mechanized operation and informationization management. The third generation logistics base integrates the logistics and distribution center, calling center, training center and the logistics center, supports retail delivery services within a radius of 80 to 150 kilometers and a circular flow volume of 5 to 20 billion yuan of commodities per year, thus having become a large platform of service and logistics support for Suning Appliance. At present, Suning Appliance is developing and constructing logistics bases simultaneously in Beijing, Guangzhou, Tianjin, Chongqing, Shenyang, Chengdu and Fuzhou. It is estimated that it can finish network layouts for 60 logistics bases in China by 2015.

Pricing rights :Because China’s household electrical appliance of high degree of homogeneity, so its demand for the sensitivity of the price change is higher, preferential prices to attract a large number of customers, the promotion enterprise’s market share, directly affect the enterprise operating performance. With the constant expansion of the sales ,Suning’s negotiation capacity with suppliers is correspondingly enhancemented, in addition, suning take active bidding procurement, buyout, cash spot and supply and marketing type, quantity purchase. Single order amounted to one hundred million yuan, save the manufacturer propaganda, marketing costs, which also got manufacturers more favourable price; Once again. Suning scale effect and enterprise location make suning can greatly reduce their cost of operation, sales force is strong, and accelerate the capital turnover,save cash flow. So many favorable conditions determine the pricing power of Suning appliance market.

In general, Suning rely on its unique “Suning E-go” business model, and actively promote the strategic cooperation and marketing channels innovation, through the pricing, investment expansion to win a good business performance. See from the stock market, investors also gives suning great recognition. As a consumer, I am optimistic about the prospects for Suning’s development in the China’s home appliance retail industry.