Home > economy Channel >                 text

Jingdong wants to expose the five-star electric appliance to the bag. It has been exhausted for two months. Home appliance retail or welcome integration

April 15, 2019 03:10
Author: Li Jia

Oriental Fortune APP

  • Convenient
  • Mobile phone viewing financial news
  • Professional, rich
  • Master the pulse of the market

Read articles on your phone

  • prompt:
  • WeChat sweep
  • Share it with you
  • Circle of friends
Summary
[Jingdong wants to expose the five-star electric appliance to the bag. It has been exhausted for two months. Home appliance retail or welcome integration tide] The home appliance retail industry is ushering in a new round of integration. Recently, it is reported that Jingdong will include five-star electric appliances in the bag, the two sides have had substantial contact, and Jingdong has sent a team to participate in the five-star electrical appliance for a comprehensive investigation. (Securities Daily)

K diagram jd_31

The home appliance retail industry is ushering in a new round of integration.

Recently, there is news thatJingdongOr the five-star electric appliance will be included in the bag, the two sides have had substantial contact, and Jingdong has sent a team to the five-star electrical appliance for a comprehensive investigation.

A person familiar with the matter told the "Securities Daily" reporter: "Jingdong team's due diligence on the five-star electrical appliance has been nearly two months, has come to an end, or will soon have results. This time, Jingdong mainly looks at the five-star electrical appliance in Resources such as outlets in markets below the third and fourth tiers."

For this timeMergerJingdong said that it was temporarily inconvenient to disclose, and Wuxing Electric related people did not comment.

However, the person in charge of Wuxing Electric told the "Securities Daily" reporter: "Five Star Electric has collaborated closely with Jingdong, and has integrated in terms of brand, traffic, technology and operation, and some physical stores have already landed. The two sides are jointly exploring the new retail model."

She said: "Five Star Electric is also seeking to continue to grow bigger and has been interested in mergers and acquisitions, targeting regional chain enterprises. Five Star Electric will further penetrate in more channels."

  Jingdong expansion line under the wing

  Lock five-star appliances

The "love" of Jingdong and Wuxing Electric has sprouted a year ago.

Although the capital marriage between the two parties is still in the exploratory stage, through the operation of last year, the two have now completed deep integration at the level of business, technology and operation.

Jingdong and Wuxing Electric have been hand in hand since 2017, and have achieved comprehensive cooperation across channels and cross-category. They have opened the Jingdong Five-Star Electric Unbounded Retail Experience Store in many places across the country, and both parties have quickly copied this model in physical stores. In the Luoyang, Hangzhou, Suzhou, Fuzhou and other places opened 20 stores, the opening plans of other regional provinces and cities are also in progress.

Working with a retail company with a large number of offline physical stores and other resources, let Jingdong taste the sweetness. Yan Xiaobing, senior vice president of Jingdong Group and president of Jingdong Mall's electronic entertainment group, said that during the “Double 11” period last year, more than 50 flagship stores under the five-star electrical line were linked with Jingdong, and passenger traffic increased significantly, with sales increasing by 200%.

According to informed sources, in the acquisition of Wuxing Electric, Jingdong also faces multiple competitors. However, the cooperation reached by the two sides last year laid the foundation for this "marriage". "At the time of the cooperation between Jingdong and Wuxing Electric, the two sides are already planning acquisitions, but the price has not been discussed. Now things have made breakthroughs. If it goes well, it will soon have results."

So, what attracts the two parties to one? In recent years, in the face of the gradual loss of online dividends, Jingdong vigorously lays down the line, and needs to plump its own online and township channels as soon as possible. It looks at the huge sales network and store resources of Wuxing Electric in the regional market for many years.

"At present, the outlets of Wuxing Electric are mainly in the second to fourth tier cities. They are laid out earlier in East China and have strong strength. In Jiangsu alone, Wuxing Electric has a 40% share in the chain market, and its outlets have been from the provincial capital. Covering the town, the coverage in Anhui and Zhejiang is also strong. The provinces in southwestern regions such as Henan, Sichuan, and Yunnan have also risen and developed rapidly in recent years. The strategy of expanding their outlets is centered on the provincial capital. Said.

It is understood that at present, Wuxing Electric has more than 220 offline chain stores in seven provinces including Jiangsu and Zhejiang.

Industry observer Ding Shaojun told the "Securities Daily" reporter: "Five stars have certain brand influence in the regional market and have a fixed user base. This is its advantage. However, if Jingdong cooperates with it only through franchise stores, there is a certain degree. Controlling, the cost-effectiveness of developing direct-operated stores is not high. If JD.com directly acquires a mature offline brand, it will facilitate its omni-channel three-dimensional layout and efficiently expand the offline market."

However, there is still uncertainty in this transaction. "Jingdong and Five Star Electric AppliancesshareholderNegotiating a long time on the acquisition, in addition to the price issue, it also involves the interests of major shareholders Jiayuan Chuangsheng, CITIC Trust and the existing management team, and Wuxing Electric itself has great ambitions and constantly seeks expansion opportunities. This makes it difficult to acquire Jingdong. Said the person familiar with the matter.

  Five Star Electric Dissatisfied

  Intended to be bigger

Five-star appliances also need to take advantage of Jingdong's brand and traffic to quickly realize Internet transformation and expansion.

Five Star Appliance was originally affiliatedBest Buygroup. In 2006, Best Buy entered the Chinese retail market by acquiring a majority stake in Jiangsu Wuxing Electric. Eight years later, Best Buy once again announced the sale of its five-star electrical business to Jiayuan Group.

In the same year, Wuxing Electric announced its strategic plan for the next five years: the total number of stores in each industry will reach 850 in the next five years, and the sales volume of physical stores will triple. In other words, by 2019, Wuxing Electric will reach a sales scale of 40 billion yuan.

The ambition of Wuxing Electric has never been annihilated. Insiders of Five Star Electric revealed to the "Securities Daily" reporter: "In the store, the company's goal is to achieve 4,000 store sizes by 2025, and expand the 'Wanzhentong' franchise store to develop township stores. The model will be self-operated. In combination with the way to join the township, the company is currently developing 20 Jiayuan five-star squares with an estimated annual sales of 80 billion yuan."

She said: "The company is open to peer or cross-industry cooperation. At present, it has established extensive cooperation with home appliance enterprises such as home appliance upstream enterprises and Jingdong. Retailers have to continue to grow bigger and have always been interested in regional chain channels. I am looking for M&A opportunities. I have already contacted some target companies."

However, in the eyes of the industry, Wuxing Electric has always had the idea of ​​creating a “pan-home appliance” ecosystem, and is accelerating the pace of expansion, which may not easily give up core resources. At the same time, there are a large number of projects under development that Wuxing Electric has unpredictable. This will increase the negotiation capital for Wuxing Electric in the acquisition of Jingdong.

  Retail channel mutation

  Quietly changing

The combination of Jingdong and Wuxing Electric Appliances is a revolution in the retail channel of home appliances.ReorganizationA microcosm of it.

At the moment, the disappearance of e-commerce dividends, the cost of online shop users' drainage has surged, online growth has encountered ceilings, and offline stores have been slow to find a way to break the problem. The retail industry is ushered in a round of change and restructuring.

Internet retailers are starting to look for breakthroughs online and expand. In the past two years, Jingdong's home appliance business has increased its offline expansion speed, and its outlets have also achieved coverage in the fourth and fifth grade markets. The physical retail enterprises such as Wuxing Electric, which has been sticking to the offline, have also tried to find incremental and speed up the introduction. Internet partners to achieve complementary resources.

"The dividend of online Internet traffic has been exhausted, and the next opportunity is in the third- and fourth-tier markets. During this period, the advantages of retail enterprises with many offline physical stores in the market below the third-fourth line are highlighted. 'Big fish eat small fish', alliance cooperation, mergers and acquisitions will increase. At present, whether it is Gome, Suning or Jingdong, which is based on online channels, is developing in line with offline development, actively deploying and expanding offline. However, such a traditional retail offline market will also be further squeezed." Ding Shaojiang believes.

Have huge offline resourcesSuning Online MarketIn the past four years, it has been in the tough stage of transformation and transformation, and its main business profit after deduction is also in the loss channel. Suning Tesco’s financial report shows that Suning has purchased more than 90% of the products in recent years.Operating incomeMainly from the retail of traditional main businesses such as 3C home appliances and digital IT.

According to industry analysts, “In recent years, Suning’s revenue has grown rapidly, mainly from the expansion of traditional business fronts from offline stores to online stores, which has led to an increase in sales outlets.”

Gome also ushered in an important year of transformation this year, accelerating the development of new business and sinking channels.

“The increase in the consumption power of the three- to six-line consumer market has become the consensus of the industry. The market growth is also much higher than that of the first-tier cities. With the acceleration of urbanization, this market will become bigger and bigger in the future. Gome is accelerating the county store. + New retail store expansion to achieve more complete channel expansion.” Gome insiders said.

He said: "At present, we are expanding the three- to six-line market through the county store + new retail store. In 2019, we plan to open a total of about 700 county stores and new retail stores. For the county stores, Gome mainly adopts the self-operated model. In terms of new retail stores, Gome is integrating the four- and five-line market couples through franchising, empowering new retail stores through the Gome supply chain system, and accelerating the coverage of channels and outlets in the township market."

The industry believes: "The change in market competition and pattern has forced enterprises to make changes from the inside to the outside. In this process, the value of physical retail is being revalued. At present, e-commerce platforms are actively cooperating with physical retail, one In terms of online traffic dividends, the main consumer spending scenario for Chinese consumers is still offline, and offline physical retailing presents new value."

【Related reports】

  Jingdong wants to sell five-star appliances to the retail of home appliances or welcome the tide of integration

(Article source: Securities Daily)

                (Editor: DF380)

you might be interested
  • News
  • stock
  • global
  • Hong Kong stocks
  • US stocks
  • futures
  • Foreign exchange
  • life
    click to see more
    No more recommendations
    • name
    • Latest price
    • Quote change
    • Hand turnover rate
    • Capital inflow
    Please download Oriental Fortune products to view real-time quotes and more data.
    Click ranking
    Solemnly declare:Oriental Fortune.com publishes this information in order to disseminate more information and has nothing to do with the position of this website. Oriental Fortune Network does not guarantee the accuracy, authenticity, completeness, validity, timeliness, originality, etc. of all or part of this information (including but not limited to text, data and graphics). The relevant information has not been confirmed by this website, and does not constitute any investment advice for you. According to this operation, the risk is at your own risk.