GOME Retail (HKEx stock code: 493) stated in the announcement that the Group’s sales revenue for the six months ended 30 June 2020 is expected to be impacted by the outbreak of novel coronavirus (COVID-19). However, the Group withstood this stress test and its affected bulk home appliance business has improved in the second quarter this year following the gradual alleviation of the epidemic, achieved 103% sales growth quarter on quarter. Especially in June 2020, sales revenue was basically flat as compared with the corresponding period last year. The consolidated gross profit margin has shown a trend of month-on-month recovery in the second quarter and reached approximately 15% in June.
During the Reporting Period, GMV of the Group is expected to be flat as compared with the corresponding period last year. Among which, GMV of online community + GOME APP is expected to grow by over 70% and daily GMV exceeded RMB 1 billion. In the meanwhile, the number of online communities of the Group grew over 40% year on year to over 200,000 and reached more than 66 million users(representing 65% increase year on year). With regard to capital, the Group maintained sufficient capital after the full repayment of overseas bonds with a principal amount of US$500 million in total during the Reporting Period. As of 30 June 2020, the Group’s cash and cash equivalents are expected to exceed RMB10,000 million. In generally, the impact of the epidemic on the Group’s business was transient and temporary. Leveraging the competitive advantages gained over the years in respect of nationwide chain-store network, new technologies, online-offline integration, supply chain, logistics and professional services, the Group will continue to explore opportunities of the retail industry, grasp the development potentials arising from consumption upgrade, 5G and IoT, leading and further probing the new development of retail industry.
Further enhances full-fledged retail business by grasping market trend
In the first half of 2020, leveraging the advanced local networking layout and the consumption upgrade of the “Stay Home Economy”, the Group actively expanded its online community by centering on its physical stores and expanding to the surrounding 3-5 km communities. At the same time, GOME made good use of the comprehensive upgrade of “Store” channel on GOME APP to grow the sales conversion rate by more than 150% year on year. Additionally, the Group fully leveraged its resources and capabilities through the comprehensive operation on supply chain, online communities, logistics and services, creating a quality live streaming model with a feature of “authority + knowledge + scenario”. As of now, the Group already hosted over 1,000 live streaming events with various themes and scale, reached over 100 million people. In four of the super live streaming events, the Group’s sales revenue totalled RMB 2,500 million.
In the second half of this year, the Group and the authoritative media CCTV News will jointly hold the live streaming events across 31 provinces nationwide, showcasing the “New Store Mode” of GOME to thousands of households, bringing consumers an upgraded living experience.
In addition, the Company makes great efforts on C2M reverse customization and enhances the digital engagement of product selection, having created chart-topping items under different brands. In the first half of this year, the proportion of the customized and differentiated products increased from 37% to 45%. Together with the Company’s advantage of integration solutions, package sales, solution-based products and services, it will enable the Company to maintain its gross profit margin at the high-end range of the industry.
Strategically synergizes with partners to enjoy mutual benefits through collaboration
The Group reached strategic cooperation agreements with JD.com and Pinduoduo.com respectively in the first half of the year and already entered into the in-depth cooperation phase. JD.com has provided non-home appliance products to the Group, expanding Gome’s SKUs to comprehensive product mix. In the first half of the year, the sales revenue of the Group generated from JD.com, Pinduoduo.com and other e-commerce platforms is expected to grow more than 100 times year on year and the Group will strive to achieve RMB 20,000 million annual sales goal in the second half of this year. Along with the in-depth strategic cooperation with these two companies, the Group will further accelerate its implementation of “Home Living” strategy.
Completed infrastructure construction and entered into the new development stage
Since 2017, the Group adopted an unswerving strategy of developing into an Internet-based enterprise. Leveraging the convergence of online and offline channels, the Group built a comprehensive platform featuring retail, services and smart connection. The Group steadily become an integrated solution, service solution and supply chain provider under the “Home Living” strategy, meeting customers’ diversified needs and their pursuit of a wonderful life in the new era. The Group has successfully completed its infrastructure construction, with the integration of online and offline operations and the optimization of the store network. In addition, the business model of “In-store”, “In-home” and “In-online” has become increasingly mature. Starting from this year, the Group enters a remarkable development stage. GOME will seize the development trend of retail industry, redefining the home community by meeting households’ various material and spirit requirements. Targeting on different age groups and stages of families, the Group will create multi-function living communities to meet their requirements of catering, shopping, culture, entertainment, social intercourse, family gathering and fitness, by forming a new online and offline integrated community services platform. GOME strives to become the leading digital local community retailer and persists on creating a quality and wonderful life for households in China.
About GOME Retail Holdings Limited
Founded in China in 1987, GOME Retail Holdings Limited has been listed on the Hong Kong Stock Exchange since July 2004 (stock code: 493) and is engaged in the retail business of electrical appliances and consumer electronics in China. It is a well-known electrical appliances and consumer electronics retail chain enterprise in China. In order to establish the new retail pathway with GOME’s iconic characteristics, GOME is transforming from traditional “home appliances retailer” to become a “Home Living” one-stop home solution, a service solution and a supply chain provider, to provide customers with quality goods and services covering home appliances, home decorations, home accessories and home services. Please visit our website for more information: www.gome.com.hk
