Gome Retail restructure ends up disappointing

Gome Retail Holdings has posted a loss attributable to shareholders of RMB457 million for the first half of this year as it continued with implementation of its Home – Living strategic restructure.

The loss was a contrast to the profit of RMB122 million in the same period last year.

Gome Retail chairman Zhang Da Zhong said the group accelerated its transformation into “a one-stop home solution provider. At the same time, it promoted the overall integration of its online to offline businesses, aimed at raising management efficiency and enhancing consumer experience.

Gome is combining its electrical appliances, home decoration, household systems and supermarkets to create sizable “experiential stores” in tier 1 and 2 cities. The group is also optimising its platform to include the Xiaomei Net Café, VR Cinemas and Gome esports.

During the six months, the group’s total gross merchandise volume (GMV) for both online and offline operations increased by 14.94 per cent year on year, with 67.39 per cent growth in the GMV from the marketplace of the e-commerce business.

As a result of the implementation of the strategic transformation plan, the group recorded sales revenue of RMB34.706 million, representing a decrease of 8.84 per cent when compared with RMB38.073 billion for the corresponding period last year.

Gome proposed the ‘Triple New’ initiative of ‘New Business, New Market, New Technology’ to rapidly open county-level stores in tier 3-6 cities, and introduced new service initiatives including the integration of kitchen cabinets and electrical appliances, home furnishing/kitchen cabinet and kitchen interior design services.

“The Triple New initiative proposed by Gome not only represents an operational shift of focus from products to users, but also demonstrates Gome’s determination to attract customers with quality services,” said Zhong.

In the months ahead, he says the group will continue to open county-level stores at a quicker pace and work on merging its online and offline operations.