This is why retailers need a strong presence in e-commerce. Chinese electronics retailer Suning (SHE:002024) has posted unaudited results for 2012 H1 that show its online operations, at Suning.com, saw a 130 percent rise in sales year-on-year, climbing to 5.9 billion RMB ($934.61 million). In stark contrast, its approximate 1,300 bricks-and-mortar stores across China grew their revenues by only 6.69 percent [1] over the same period.
Indeed, the company as a whole saw net profits decline 29.49 percent, just as it had warned, but still hit 1.745 billion RMB ($276.42 million).
The strong push into e-commerce seems to be paying off in terms of market share in the China B2C e-tailing sector too. Our most recent stats for the same period, 2012 Q2, show that Suning.com grew its market share to 3.4 percent (up from 2.4 percent at the end of 2011) to be China’s fourth-largest e-commerce site [2] – and the largest offline retailer in the e-commerce space.
Suning.com’s VP, Li Bin, said that the e-commerce division will keep its ambitious 20 billion RMB sales target for the whole year 2012. Furthermore, this August will see a promotional campaign for the website in which it’ll invest 1 billion RMB in marketing. Mr. Li added that he expects a stable quarterly growth rate of at least 70 percent in Q3 and Q4.
In terms of selling electronics online, it has stiff competition from all three of the other sites that are ahead of it in market share in China: Tmall, 360Buy, and QQ Buy. All have extensive consumer electronics offerings and are often very aggressive on promotional pricing.
[Sources: Suning IR, and Marbridge Consulting]
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