After The Return Of Huang Guangyu, He Announced His Goal Publicly: How Long Will The New Retail Window Last

At 7 p.m. on April 7, Gome retail (0493. HK) held a global investor conference call. Huang Guangyu, founder of the company, chief financial officer Wei and Zhang Jingxing, director of enterprise development and investor relations, attended the meeting, which was also the first public meeting attended by Huang Guangyu after his return to Gome.

Its last appearance was a Gome executive meeting on February 18. At the meeting, Huang Guangyu said: "strive to use the next 18 months to restore the original market position of enterprises." 18 months is Huang Guangyu's time for Gome and a test for himself and his team.

According to the latest 2020 annual performance report released on the evening of March 31, 2020, as of December 31, 2020, the overall operating revenue of Gome retail was 44.119 billion yuan, which was 25.83% lower than that of 59.483 billion yuan in the same period of 2019, and the annual comprehensive gross profit rate was about 12.16%, 5.75% lower than that of 17.91% in 2019, and the annual net loss was 6.994 billion yuan.

Looking at other competitors, Suning e-buy's total revenue in 2020 was 258.459 billion yuan, a year-on-year decrease of 4%, and a loss of 3.913 billion yuan; Jingdong's annual net income was 745.802 billion yuan, with a net profit attributable to its parent company of 49.405 billion yuan. In terms of income scale, Gome is less than 1 / 5 of Suning and 1 / 7 of Jingdong.

"Although we lost a lot of opportunities and time, we also learned a lot." At the conference call, Huang Guangyu believed that the retail market has great potential for future growth. He believes that under the background of consumption upgrading, Gome has expanded from electrical products to all categories, and at the same time, it can seize and improve opportunities through offline empowerment.

At present, it has been one and a half months since the "18 months to restore market position" military order. In the next 17 months, how does Gome want to overtake in a corner and quickly restore market share? At the moment when the major e-commerce giants are separated from each other, can Huang Guangyu lead Gome to revive its momentum? Countless eyes are on the once richest man in China.

Reality and goal

On June 24 last year, Huang Guangyu was released on parole. At that time, it has been nearly 12 years since Huang Guangyu was investigated for the crime of stock price manipulation in November 2008. Affected by the news of the founder's return, Gome retail's share price rose to HK $1.62/share.

However, in the 12 years of Huang Guangyu's absence, earth shaking changes have taken place in the outside world. Jingdong has gone from rental housing to NASDAQ in the United States, and its old rival Suning has been acquired by Ali, and the social e-commerce companies such as pinduoduo have risen rapidly According to the report on China's home appliance market in 2020, Jingdong, Suning and tmall accounted for 60% of China's home appliance retail market last year, while Gome accounted for only 4.9%.

As for Gome, since 2017, the company has suffered losses for four consecutive years. In 2017, Gome had a net loss of 450 million yuan; in 2018, the loss increased sharply to 4.887 billion yuan; in 2019, the situation improved, and the net loss narrowed to 2.59 billion yuan; however, in 2020, it again lost nearly 7 billion yuan, with a total loss of 14.921 billion yuan in four years.

In the first half of last year, Gome's retail sales revenue fell by 44.44% year-on-year. As the sales of large household appliances were greatly affected by the epidemic, Gome's comprehensive gross profit rate fell to 12.16% last year. The reporter noted that by the end of last year, Gome had more than 3400 physical stores nationwide, of which 1263 comparable stores had a total sales revenue of about 37.902 billion yuan, a year-on-year decrease of 21.33%.

In a conference call on the evening of July 7, Huang Guangyu candidly said that Gome had indeed missed a lot of time and opportunities in the past, but he said that after further research and integration over the past few months and establishing a new model, he believed that Gome's success rate could be better than that of its peers.

An institutional person who participated in the teleconference told the 21st century economic report that after listening to the report, he had three feelings: "boss Huang's aura is still very strong, his voice is powerful; although he has lost his freedom for ten years, he seems to have no separation in understanding social changes, and he is very accurate in analyzing the flow and the competition pattern with e-commerce; he is still familiar with business The business logic and relationships of all sectors of the United States are readily available. "

In Huang Guangyu's view, there are eight pain points in the traditional e-commerce platform, which provides Gome with opportunities. These pain points include: users have been educated; traditional e-commerce platforms begin to charge more and more fees; the existing marketing methods are outdated; there is a lack of offline platform scenarios; offline community marketing cannot be carried out; there is no retail gene; only platform operation or traffic operation is the foundation. The head e-commerce platform is unable to realize the strategy of sharing and co construction, and does not provide home and data to businesses. The market space of local life track is huge and growing rapidly. The separation of online and offline operation results in two sets of costs invested by businesses online and offline, forming their own competition and internal friction.

"In the future, I think that the original e-commerce display mode will soon encounter bottlenecks. It should be a combination of live broadcast and short video display modes. This method may make the user experience better, but even if it does, I think it will soon encounter homogeneous competition." For a long time before, Huang Guangyu had been in charge of Gome through "remote control" although he was not there.

On the eve of his release from prison, Gome conducted two important cooperation successively: on the evening of April 19, 2020, Gome retail announced that it had reached a strategic cooperation with pinduoduo, which invested $200 million of convertible bonds in Gome. Then, on May 28 of the same year, Jingdong group announced that it would subscribe for the overseas convertible bonds issued by Gome retail for us $100 million.

After Huang was released from prison, Gome's actions became more frequent. According to media reports, Gome sold Yuexiu City Project in the real estate sector in October last year and obtained about 4 billion yuan of capital, which has played a role in alleviating Gome's shortage of current assets to a certain extent. Subsequently, Gome began to attack online business.

On December 3 last year, Gome holdings invested in the establishment of true happiness (Beijing) Technology Co., Ltd., and also registered a number of companies such as "Lehe box" and "zhentesco". On January 21, this year, the first version of "true happiness" app was launched. According to Gome at that time, "true happiness" app was positioned as an entertainment e-commerce portal. Relying on the entertainment and social retail trend and Gome's advantageous offline service chain, it focused on platform, entertainment and supply chain services to reconstruct Gome's platform ecosystem.

"This time, our business model construction is to comprehensively integrate and optimize the whole supply chain, from the perspective of retailers, and from the perspective of service users." Huang Guangyu said that Gome has made a lot of preparations in terms of scale expansion and cost, and believes that Gome can expand its goals more easily.

Huang Guangyu's new retail exploration

Gome believes that the launch of "true happiness" app is an important layout for Gome to continuously explore new retail mode and comprehensively deepen entertainment marketing mode. The core strategy of Gome is "to build a social transaction for entertainment sales of businesses and platforms, and for consumers and users to buy entertainment". By comprehensively improving and realizing Gome's retail scene experience, content vividness, marketing interest and sharing socialized functions, Gome has formed a unique retail ecosystem.

Financial report disclosed that in the first quarter of this year, Gome retail sales revenue is expected to increase by more than 170%. Gmv of "true happiness" app is expected to grow nearly 4 times compared with the same period of last year. The monthly active users (MAU) are stable at 40 million, and the daily active users (dau) are nearly 10 million.

For this achievement, Huang Guangyu thinks that it is not surprising that "our foundation is almost zero. We can only say that the measures, paths and specific measures we have taken have achieved initial results." In Huang Guangyu's opinion, current users have been educated. This is an opportunity Gome can make good use of. Gome should also do better on this basis. He believes that Gome will have more actions and measures to do these things in the future.

According to Fang Wei, CFO of Gome retail, next, Gome will display all categories, services and SKUs on the "true happiness" app, and use six means (live video, Zao fighting, community operation, one store, one page, event content and video Shopping Guide) to provide all-round online, store and home services.

On the other hand, Gome has more than 3400 offline stores, 39 branches in China, covering more than 500 cities. "We will strive to expand Gome's stores in the form of self operation and franchise in the next 18 months, expand the number to 6000, divert offline to online, and realize monthly life of more than 100 million."

Fang Wei further explained that "true happiness" platform is the first main battlefield of retail, and the online platform is positioned as "online shopping plaza + local life service"; the offline platform is mainly based on "Gome Home" platform, which is the second main battlefield of retail, positioning as "offline display experience + life service platform".

Since August last year, Gome has been translating online according to the mode of "one store, one page". By the end of 2020, all 3421 retail stores under Gome have completed the online translation of "one store, one page". The community operation covers 100 million people, and the total number of online and offline members exceeds 200 million, including more than one million paying members.

At the present stage, Gome focuses on building a commodity purchasing platform for seven categories of household appliances, food and beverage, clothing, shoes and bags, home furnishings, daily necessities, mother and baby toys, and beauty and personal care, striving to break through 500000 SKUs in 18 months (household appliances from 30000 to 100000, and non household appliances from 70000 to 400000).

In terms of channel operation, the supply chain of industrial companies can achieve sales through offline platforms, online "real happiness" platforms and third-party platforms (Jingdong, pinduoduo, Shuo Yin, etc.), and can also cooperate with third-party acting operators. By transforming the acting operators into distributors, they can realize the omni-channel output of the supply chain and increase the market share. "In 18 months, about 200 billion will be formed, with a target of 300 billion. In the next five years, a trillion scale supply chain system will be formed. " Fang Wei is called.

Obviously, competition and cooperation is still the main theme of the retail industry. As for the cooperation between Gome, pinduoduo and Jingdong, Huang Guangyu said that Gome's mentality and strategy are open, "I don't think anyone can destroy anyone. As long as your business path is right, I think it will be temporary and will not really exclude the other party from this market. "

Under this premise, Huang Guangyu said that cooperation with any party will not be ruled out in the future: "we regard them as a sales platform. We will go there to develop, sell and drain. This is what we need to do."

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