August 6, 2013, 10:49 AM

A big Chinese retail chain doubles its online sales in the first half of 2013

Appliance retailer Suning reports $1.73 billion in web sales, $294 million from a recent acquisition.

Frank Tong

Senior editor, China

Lead Photo

One of China’s leading consumer appliance retail chains says its online sales doubled in the first half of the year and accounted for more than 60% of the company’s total growth. Suning Commerce Group Co. Ltd. says it plans to invite other merchants to sell on its e-commerce site, following the lead of several other Chinese retailers that augment their own online product catalogs with items sold by other companies.

Of the $1.73 billion in online sales Suning reported last week in its preliminary report for the first half of the year, $296.3 million came from Redbaby.com, which sells baby and maternity products. Suning acquired Redbaby in December 2012 for $66 million.

“Since the acquisition of Redbaby produced successful results, Suning may buy another vertical e-retailing company to further consolidation,” says Bin Li, deputy president of Suning.com. By the end of 2013, the company aims to be offering 5 million SKUs on its e-commerce sites and to reach 5 billion yuan ($820million) in annualized marketplace sales. Suning had over 1.5 million SKUs on its site at the end of 2012 and Redbaby around 150,000 SKUs, according to the China E-Commerce Research Center, a research firm based in Hangzhou, China.

However, Li expressed concern that moving from selling appliances to a broader range of merchandise may create a disconnect between the company’s online and offline businesses and that “customers won’t come back to make repeat purchases even though we increase our brand awareness through marketing.”

Suning, No. 5 in the Internet Retailer Asia 500 also disclosed in the preliminary earnings report that it is reducing its store count, opening 28 stores in the first half of 2013 while closing 120. As of June 30, Suning operated 1,614 stores, including 1,572 in China, 32 in Hong Kong and 10 in Japan. Suning plans to release its official first-half financial report Aug. 30. The company does not break out its results by quarter.

For the first half of 2013, Suning reported:

  • E-retail sales of 10.6 billion yuan ($1.73 billion), up 101% from 5.28 billion yuan ($861.3 million) in the first half of 2012. That includes sales on Suning.com and Redbaby.com. Redbaby alone generated sales of 1.8 billion yuan ($293.6 million.)
  • Total sales of 55.5 billion yuan ($9.05 billion), an increase of 17.51% from 47.2 billion yuan ($7.70 billion) during the first half of last year.
  • Net profit declined 58.24% from 1.75 billion yuan ($285.48 million) to 732.5 million yuan ($119.5 million) during the same period last year.
  • The company operates 15 distribution centers in China, and plans to expand deliveries to more cities in China.

Read more about Chinese retailers selling directly to U.S. consumers via the web in the August cover story of Internet Retailer magazine. For a free subscription, click here.

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