As the emerging leader of omni-channel smart retailer in China, Suning.com has been committed to building a full-scenarios retail ecosystem both online and offline and from cities to townships, to create diversified shopping experiences visible. Meanwhile, the Chinese retailer is ready to serve consumers anytime, anywhere.
In February 2019, the company announced the acquisition of 37 Wanda department stores nationwide and In June, the company then announced transaction with Carrefour China to acquire 80% of its equity stake, to further improve the full-scenarios ecosystem, expand all-categories merchandise retailing with reinforcing its market competitiveness of fast-moving consumer goods (FMCG) operations.
The consecutive acquisition instantly put Suning under the spot light, as both Wanda and Carrefour enjoys a well established consumer reputation and more well known than the 29-year-old Suning in many aspects. How does the online retailer made up its mind?
Lead The Retail Evolution
On June 26, World Brand Lab released its 16th Rank of “China’s 500 Most Valuable Brands”. Suning.com, the retail subsidiary of Suning Holdings Group was listed on the 13th place for the second consecutive years, and ranked No.1 among retail industry, with a total brand value of 269.198 billion yuan (approximately 55.649 billion AUD), increased by 17% compared to last year.
Founded in 1990, Suning is one of the leading commercial enterprises in China. Evolving from its main business as retail, Suning has strengthened and expanded its core business through eight vertical industries: Suning.com, Logistics, Financial Services, Technology, Real Estate, Media & Entertainment, Sports, and Investment.
Suning.com started its internet transformation in 2009. Until now, Suning has gone from “+ Internet” to “Internet +”, and then to “Smart Retail”. It has completed its unique transition and created a set of retail innovation models that break through theoretical practice in retail industry. Compared to year 2009, the brand value of Suning.com increased by 6 times and counting.
In 2018, Suning.com announced operation revenue of RMB 244.96 billion (52.216 billion AUD), up 30.35%; sales volume of RMB 336 billion (71.8 billion AUD), increased by 38.39%.
By then end of March, the company owns 12,329 offline stores in mainland China, Hong Kong, Macao and Japan, covering diversified consumption scenarios including Suning Retail Cloud Franchise Stores, SuFresh (a fresh food supermarket brand) and Suning Xiaodian (provides neighborhood products and services) and Redbaby (maternal and child supplies stores).
Since last year, Suning.com has accelerated its global supply chain construction. During the first China International Import Expo (CIIE) in 2018, the company announced its “10 billion Euro procurement plan” to bring in quality goods and services from worldwide. As a part of its global strategy, in 2019, it signed strategic agreement with Italy Trade Agency to reinforce the commercial communication with Italian company to help “made in Italy” brands and products to enter Chinese market and serve Chinese customers.
“Digitalization and innovation play vital roles in Suning’s smart retail strategy. In the next years, relying on retail technology evolution, Suning will increase its service efficiency, promote the transformation of retail industry. Suning is willing to join hands with global retail brands to build and improve industry ecosystem worldwide,” Zhang Jindong, chairman of Suning Holding Group, said.—-edited from prnewswire.com
“To join hands with global retail brands”, Suning walked the say through taking over one of the most successful oversea retail brand in China—-the prestigious Carrefour.
The Pullback of Carrefour China Reflects A Global Retail Shuffle
With a multi-format network consisting of more than 12,000 stores in over 30 countries, Carrefour Group is one of the world’s leading food retailers.
The French retailer serves 105 million customers worldwide and posted sales of 84.9 billion Euros (136.49 billion AUD) in 2018. The Group has more than 360,000 employees who contribute to making Carrefour the world leader in the food transition for all, offering quality food every day with competitive prices.
On June 23, Carrefour announced that it will sell an 80% stake of its China business for 4.8 billion yuan (999.12 million AUD) of its China business to Suning.com, the largest Chinese retailer by sales volume.
The French retailer will hold on to a 20% stake of its China business after the transaction, but the sales agreement includes windows for selling the remaining share, signaling the company could be headed for a complete withdrawal from the China market.
The pullback from Carrefour’s operations in China (where it has close to 240 stores since its arrival in China in 1995), comes as the retailer faces increasing competition from American e-commerce giant Amazon, which counts Britain, Germany and France as its three largest markets in Europe. Critics of the French hypermarket chain say it’s been too slow to get going on e-commerce.
To challenge powerful incumbents, such as France’s Carrefour and Leclerc, the American tech player partnered with French retailer Casino recently, launching pick-up lockers for parcel deliveries in over 1,000 Casino locations France, as well as giving the French retailer a bigger presence on Amazon. Elsewhere, in Europe, Amazon is expanding a partnership in the UK with WM Morrison , the smallest local grocery chain.
Carrefour, which saw some $100 billion in sales in 2018—about half of that in France alone—- is trying to push back in the face of the rising challenge from Amazon. Last July the company announced plans to partner with British retailer Tesco, the UK’s biggest grocery chain. The two have formed a global purchasing alliance to demand better terms from major suppliers. Moreover, Carrefour announced in 2018 a five-year plan to cut costs and eventually to develop its own e-commerce business.
The sale of Carrefour’s China business is long in the making. The retailer’s China business has been struggling in recent years due to challenges such as rising rent, food and labor costs in China, as well as the country’s burgeoning e-commerce market that has helped to shift Chinese shoppers and shops online. In 2018, Carrefour China reported a net loss of 578 million yuan (120.24 million AUD), according to a statement from Suning. The company has, meanwhile, also joined a spate of foreign retailers that retreated from China in recent years, including Tesco, Marks and Spencer and Best Buy, among others.—edited from qz.com
Apparently the retail industry in China has farewelled its sweetest year of offline booms. The decision, we believe, could be beneficial for both parties. For Suning, the brand image, operation experience and offline existence of Carrefour China, would accelerate its O2O transition (or say Smart Retail). As Carrefour China plans to spent five long years to establish its E-commerce network, a ‘stop-loss limit’ from China market could tremendously help them financially. Everybody wins but old retail business models.
Edited by Joreal Qian