Su ningyun Transformation net profit fell 96%

March 31st, Su ningyun shares gapped rapid decline after a brief upward, fell to its lowest point this year. In just the past weekend, Su ningyun released 2013 earnings report, the data show that only revenue growth of 7.05% over the same period, net profit was down 95.84% over the same period, net profit attributable to shareholders of listed companies fell 86.11% over the same period.

earnings report, a sharp decline in results from the decline in gross margin and cost rate increase. Last year, Suning consolidated gross margin was 15.41%, down from 2012’s $18.01%. Earnings explained that the company has increased Internet business development, at prices below the current market environment, competition is more intense, more frequent draining promotional activities, coupled with the 3C class of lower margin products accounted for relatively large, Internet business gross margin is at a low level. At the same time, since last June launched the price strategy of online and offline, also bring down the line under the gross margin level to a certain extent.

this means that Suning bear online price war brought low gross margin pressures, the same price policy line will be sold under one disaster after another, the synchronous low margin. Obviously, pointing to a spearhead Suning business subject — suning.com. The results showed that most of the time in 2013, suning.com still undertake online business losses.

"two wings", "O2O", "open platform" and "integrated business" is the last year Suning strategic transformation of the keywords, to achieve this goal, Suning repeatedly adjust the organizational structure; force open platform; Internet finance; the implementation of online and offline price strategy; expanded online category to the mother, cosmetics, daily necessities, department stores, books and so on; under cover line is staking built logistics warehouse.

category expansion challenges

Su ningyun reported in 2013, 2013, the company will continue the original suning.com (except Nanjing) mining sales divestiture and into around the Su ningyun (the original sales company responsible for the line of business), Jiangsu Suning Agel Ecommerce Ltd (suning.com) business in addition to retain the Nanjing area for the national inventory deployment delivery sales, mainly shift to online Internet trading platform, open platform for profit model trading commissions and other service revenue.

obviously, suning.com is trying to transition from proprietary platform to Tmall channel platform. Electricity supplier analyst Lu Zhenwang told reporters in twenty-first Century economic report, suning.com’s move is hoping to open platform rich category of goods, tear pure 3C appliances label, become an integrated electricity supplier.

he said, according to the development of Jingdong self-service fast and easy, simple sale of 3C appliances, suning.com is also difficult to achieve profitability, only to become integrated business platform, with the flow, the formation of the ecological, on this basis, in order to achieve more profitable model, including commissions, marketing and Internet banking, big data and so on.

Su Ningyun business finance

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