A 70% jump in online sales in 2014 sparks higher profits for a Chinese appliance maker
February 27, 2015 11:04 AM
Hangzhou Robam Industrial Group Co. says net income increased 49.3% to 575 million yuan ($92 million) in 2014 from 385 million ($62 million) a year earlier. The maker of kitchen appliances attributes the uptick mainly to higher gross margins from its rapidly growing online retail channel, according to its recent released 2014 earnings report.
Robam sells its own brand of ranges, range hoods, ovens and microwaves online and through its 2,000 stores.
Robam, No. 352 in the Internet Retailer 2014 China 500, grew its total sales 35.3% to 3.591 billion yuan ($573.91 million) in 2014 compared with 2.654 billion yuan ($423.16 million) in 2013. Web sales have jumped 70% in 2014, much faster than the 30% growth for its stores, the company says. E-commerce accounted for 30% of Robam’s sales in 2014, or roughly 1.08 billion yuan ($180 million.)
That’s a high percentage of online sales, given that only 15% of household appliances were purchased online in China in 2014,according to research firm China Market Monitor Co.
Some brands hesitate to sell online because they worry about the potential conflicts with their own stores or store retailers that sell their products. To avoid that kind of channel conflict, Robam designs products specifically for online consumers, according to the company.
“We found people who buy online and offline are quite different,” says vice president Wang Gang. “Online consumers are younger, normally from 25 to 35 years old. They need more personalized products, so we offer more appearance options, such as different colors.”
Robam also introduced last year a new line of products exclusively for online shoppers: its
“Roki” brand of Internet-connected ranges, which are equipped with a seven-inch LCD screen and a microprocessor. Consumers can download more than 3,000 recipes to the screen, and the range adjusts the heat and cooking time automatically based on the recipe.
While 80% of Robam’s web sales come from its stores on such popular Chinese marketplaces as Tmall.com and JD.com, No. 1 in the China 500, the company says it will invest more this year in its own e-commerce site ShopRobam.com.
Wang says its company e-commerce site allows Robam to provide better service and foster interaction with customers.
Robam also says it plans this year to develop a shopping app for mobile phones. Purchases through mobile devices account for about 30% of Robam’s online sales, the company says.
For more information and data about the Chinese e-commerce market, please click here.