Gome Electrical Appliances in transformation
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A drop in profit resulting from the implementation of a strategic transformation plan is predicted by Gome Electrical Appliances Holding for its latest six months.
The group says it expects its results will improve once the “Omni-Channel, New Scenario, Strong Linkage” strategic transformation has been completed.
Based on a preliminary review of the latest management accounts of the group (including the data of Artway development and its subsidiaries), its total gross merchandise volume (GMV) for both online and offline is expected to grow by more than 15 per cent, with that of the eCommerce business expected to more than double.
Sales revenue during the period is expected to grow by about 10 per cent, with a more than 60 per cent boost in revenue from the B2C sector of its online business. Revenue from offline stores is expected to grow by about 5 per cent.
As some of the group’s major stores were under renovation, sales revenue is expected to decrease fall about 10 per cent.
“The consolidated gross profit margin was lowered as a result of the continuing high-speed growth of the eCommerce business and the transformation of stores in the first-tier market,” says the group. This is expected to be about 16 per cent.
Questions & Answers
Q.Why is Gome Electrical Appliances predicting a drop in profit?
Why is Gome Electrical Appliances predicting a drop in profit?
The predicted drop in profit is a result of implementing a strategic transformation plan. The group expects its financial results to improve once this 'Omni-Channel, New Scenario, Strong Linkage' transformation is fully completed.
Q.What is the expected growth for Gome's overall GMV and e-commerce business?
What is the expected growth for Gome's overall GMV and e-commerce business?
The group anticipates its total gross merchandise volume (GMV) for both online and offline will grow by over 15 per cent. Specifically, the e-commerce business's GMV is expected to more than double.
Q.What is causing the consolidated gross profit margin to be lower?
What is causing the consolidated gross profit margin to be lower?
The consolidated gross profit margin has been lowered due to the rapid growth of the e-commerce business. Also, the ongoing transformation of major stores within first-tier markets has contributed to this decrease.
Q.How do sales revenue expectations differ between online and offline operations?
How do sales revenue expectations differ between online and offline operations?
Overall sales revenue is expected to grow by about 10 per cent. The B2C online business anticipates a revenue boost of over 60 per cent. Offline store revenue is projected to grow by about 5 per cent, despite some major store renovations.
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