A big Chinese electronics retailer grows its web sales 80% in 2014
January 26, 2015 05:05 PM
Gome Electrical Appliances Holding Ltd., which operates about 1,600 consumer electronics stores in China, is expanding heavily online, booking 80% growth in web sales last year, introducing faster delivery service and expanding into new product categories. Gome ranks No. 7 in the Internet Retailer 2014 China 500.
Gome says it has advantages when competing with web-only retailers, especially when it comes to higher-ticket products. “For products like appliances, consumers still like to see the product in person before they buy it,” Mu Guixian, Gome senior vice president, tells Internet Retailer. “Consumers can pick up their online orders in our stores. And our store staff can interact with them, and that leads to more up-selling.”
The Beijing-based retailer created its online business in 2002 and accelerated its development after acquiring coo8.com, a web-only retailer of electronics products, three years ago.
Gome also says its 400 warehouses across China allow it to ship large items more quickly than many competitors. The retailer last year introduced a new express delivery service called Jishida (which means “arrival in time” in Chinese), which delivers products within eight hours to consumers in 146 cities, even for such large products as refrigerators and washing machines.
That service has produced a big uptick in sales, Mu says. “After launching Jishida, our online orders in those 146 cities have increased by 60%,” he says. “We plan to expand it into 400 cities in 2015 and hope it by itself will increase our online sales by 50% in 2015.”
Gome also is investing in mobile commerce this year, and plans to open stores on Wechat, a popular mobile social platform with more than 600 million users.
The stores on Wechat are often called Weidian, which means “small stores” in Chinese. Wechat provides a full set of e-commerce features—such as a shopping cart, storefront templates and payment options—to merchants and individuals, making it easier for them to sell products on Wechat. Most of those features are free, at least for now.
Many Chinese retailers have tested the water on Wechat. For example, Chen Xudong, a senior vice president at computer maker Lenovo, has opened his personal Weidian and sells Lenovo’s products on it. Chen also encourages other employees and re-sellers of Lenovo to open Weidian stores and to sell to their social connections.
Like many large Chinese Internet companies, Gome has begun to sell financial products online. The company has invested in China-based Huishang Bank and begun providing financial products, making loans and selling mutual funds. “We hope we can sell all kinds of financial products online in the future. “ Mu says
Gome is also introducing products in new categories. For example, the retailer this month debuted a new web site, Gomehome.com, which sells home improvement products to consumers.
“On this web site, consumers can browse more than 6,000 home-design ideas and see the real three-dimensional effects on their computers after they select products.” Mu says, “If 100,000 homeowners buy from this site, our online sales will double.”