Suning to Open 15,000 Stores Amid Shakeout of China's Retail Sector, VP Says
Yicai Global
DATE:  Jan 22 2019
/ SOURCE:  yicai
Suning to Open 15,000 Stores Amid Shakeout of China's Retail Sector, VP Says Suning to Open 15,000 Stores Amid Shakeout of China's Retail Sector, VP Says

(Yicai Global) Jan. 21 -- Suning Holdings Group plans to open 15,000 stores this year amid a cull of China's offline retailers, according to the large e-commerce operator's vice president.

Suning has dared to "rush" amid a slowdown in the retail sector, Sun Weimin said in a media interview on Jan. 19 that included Yicai Global. Sun said he also expects half of all brick-and-mortar retailers to be eliminated as e-commerce channels develop further and retail giants continue to expand their offline presence.

The group, which is one of China's largest privately owned retailers and has both online and offline channels, opened almost 8,000 stores and hired 68,000 new employees last year. The Nanjing-based company aims to recruit another 80,000 this year.

Suning's omni-channel sales rose 38 percent annually, backed by expansion of both online and offline channels, with an overall growth rate three times higher than the average for national retailers. Online sales gained 70 percent, a growth rate 1.5 times higher than for the entire e-commerce sector.

About half of the outlets it opened in 2018 were convenience stores. Sun said that compared with those of 7-Eleven, Suning's supply fresh foods to homes and offices, serve as delivery centers for online stores, and provide value-added services, including property information and financial management in cooperation with major banks.

Suning will shift its traffic flow focus from online to offline channels, because the cost of the online stream is increasing. The convenience stores are traffic entry points for Suning's offline channels.

Online sales now account for more than a half of Suning's retail sales, and the growth rate of online sales is 10 times that of offline sales. But Sun said that offline channels are more profitable. While 20 percent of online merchants make profits, 80 percent of offline vendors achieve that.

Consumer habits are changing, since shopping through mobile phones is faster and more convenient, so retailers must make online operations profitable, for which localized delivery is one of the solutions.

Suning owns Shenzhen-listed unit Suning.com [SHE:002024]. Its shares rose 1.3 percent today, compared with a 0.6 percent gain in the Shenzhen Composite Index.

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Keywords:   Suning,Retail