Sun Weimin: IT has brought a new room for growth in digital products - Sun Weimin, Suning Appliance

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Finance
Crisis, the retail industry, although the impact was minimal, but
IT
,
Home Appliances
The retail industry or suffered different degrees of
Sell
Declines. Meanwhile, investors more concerned that soaring rents as stores, it will decline in popularity a few years ago big chain store opened a "deficits" of the dilemma, which hurt the company's business growth.

Suning
Electric President Sun Weimin that the consumer electronics market from the national point of view, the amount of annual sales of household electrical appliances -8000 100 000 000 750 000 000 000 in between. In normal years, the annual growth rate of between 8% -10%. Taking into account a decline in 2009 sales, but there are 700 billion size, and consumption is still the main part of the city. So the question is not worried about declining sales.

Sun people believe that there are three aspects of Suning's development.

First, from the national market perspective, Suning Appliance is committed to the development of the national chain, but the actual process, Suning Appliance gap distance of the target is still very far away. National market is now more than 30 provincial cities, over 300 prefecture-level city, more than 2,600 county-level cities, which total more than 3,000 markets (not including the fourth grade in rural markets and rural markets), Suning Appliance only entered 10% of the target market.

Second space for development has entered the region from Suning, because in every 30 million people in the store is equipped with a standard entry in the Suning many regions have not formed such a shop density.

Third, from the perspective of business categories, now operating Suning Appliance products in the market accounted also mixed, white appliances, black appliances relatively high proportion, but the computer, communications,
Digital
As well as
Small appliances
Upgrading of consumer products, fast relatively low proportion of products. These are brought Suning future growth.

It is understood that, since 2005, Suning Appliance in IT, sales of digital products has been growing rapidly in recent years, sales of computer products which grew by 200% -300%, becoming the fastest-growing category Suning . However, it is noteworthy Suning IT Product gross margin is far lower than other categories of products.

This, said Sun Weimin, IT products is a low margin of a common worldwide problem. IT products, mainly due to shorter product life cycles, rapid technological change. Globally speaking, the average sales of computer products gross profit margin of 6% -8% only. But the United States, Japan and other well-known chain of IT products IT consolidated gross profit margin levels can mean up to 15% -20%. This is primarily because these companies operate in a single product and
Fitting
Other derivatives business was stronger than the capacity of both Suning Appliance.

Said Sun Weimin, IT products are also in the cultivation stage of Suning Appliance, its sales income share and profit contribution is not high. To this end, Suning Appliance on the one hand will give these products a good store location for business, on the other hand will tolerate their low margin levels, to foster their competitiveness.

For the rent increases the pressure problem, Sun people recognize that this is an objective phenomenon. However, Suning has begun to deal with them. On the one hand Suning Appliance stores will be more attention to the rational distribution, avoid intensive distribution for problems arising from internal friction. On the other hand, Suning will continue to improve the single-store revenues, strengthen the construction of the flagship store.

Sun people that, in fact, is more important than the issue of rent increases is the store going problem. To address this problem, Suning has begun to "two legs" to walk, in addition to leasing business, the Suning Appliance has begun to purchase or build their own property by way of construction of the flagship store, to ensure the continued competitiveness of stores.

Sun Weimin said that while the financial crisis had some impact Suning Appliance, but the positive side, the crisis also led to decline in the cost of investment, competition has decreased. This means that opportunities for development of Suning Appliance. Although difficult to predict in 2009, 2010, Suning scale of development and will significantly enhance earnings growth, but would seize a good opportunity for Suning Appliance to the next stage of the formation of new fissile and great development.

Article Source: http://depositarticles.com/

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