Gome Electrical Appliances Holding aims to expand its offerings by launching an internet TV system to build its presence in the “living-room economy”.
In announcing its interim results, the Hong Kong-listed company said it sees the Gome Electrical internet TV as crucial to attract a younger generation of consumers.
During the period, Gome says that with its subsidiaries it actively adjusted its strategic plan in line with the changing market environment. It launched its “Total Retail Community Building with Omni-Channel, New Scenario and Strong Linkage” strategic program to position itself for long-term sustainable competitiveness and growth.
“The group has been working hard during the reporting period to direct its resources to the strategic development of new-scenario offline physical stores and eCommerce,” says Gome.
This has meant “great-scale” transformation of its large stores in the first-tier market, as well as rapid expansion of its online business. However, this has affected the consolidated gross profit margin and profitability.
Acquisition
At the end of March the group completed its acquisition of Artway Development and its subsidiaries, and its financials have since been officially consolidated with the group.
During the reporting period, the group’s online-offline total gross merchandise volume (GMV) grew by 21.67 per cent, with a 101.24 per cent growth in eCommerce.
Revenue rose 11.42 per cent to about RMB35,312 million (US$287 million), with online sales ballooning 63.01 per cent to about RMB4614 million and comparable stores sales declining by 9.93 per cent.
Consolidated gross profit margin eased by 1.33 points, from 17.7 per cent in the corresponding period last year to about 16.37 per cent. Overall, profit was about RMB124 million, down 81.95 per cent.
Meanwhile, the group says it remains focussed on building a total retail ecosystem based on six scenarios: Leisure & Entertainment, Lifestyle & Gourmet, Home Furnishing & Design, Internet-TV, Internet of Things & Smart Devices, and eCommerce. It also has initiatives in entertainment, including online game tournaments.
It aims to work toward launching an internet-TV system strategy by vertically partnering with content providers and manufacturers.
The group also plans to build on its cloud platform for internet of things and smart devices to enable retailers to better understand consumption patterns and encourage re-purchases.
