Gome Retail released its first half performance report and built an online and offline dual platform ecosystem

Gome Retail (stock code: 00493.HK) released its unaudited performance report for the first half of 2019. During the period, Gome Retail benefited from the rapid expansion of the community, the precise positioning of the Gome APP in digital local retail, and the strategic collaboration with partners, and Gome Retail's overall operation was stable.

In the first half of 2020, the total transaction volume (GMV) of the community + GOME APP increased by more than 70%, and the daily GMV exceeded RMB 1 billion. In the second quarter, Gome Retail's sales revenue increased by 103% month-on-month, and Gome Retail's comprehensive gross profit margin rebounded rapidly and has returned to the pre-epidemic level of 16%. In the first half of the year, Gome Retail introduced JD.com and Pinduoduo as strategic partners, and Gome Retail's sales revenue on various e-commerce platforms increased by more than 100 times.

At present, the product system, retail channels, and marketing service models of the home appliance industry are constantly innovating and upgrading. Based on public information from all aspects, since the first half of the year, Gome Retail has been accelerating its efforts to break boundaries, expanding from electrical appliances, home furnishings, home furnishings, and department stores to a wider range, and building an online and offline dual-platform ecosystem.

In terms of online platforms, Gome Retail is developing in a coordinated manner with models such as "one store one page", "one group one page", and "one thousand faces for one thousand people", providing digital tools and community operations for offline merchants that do not have online operation capabilities, significantly reducing the merchant cost rate and accurately directing traffic to offline. Through various big data means and social media methods, the platform has smart office functions such as traffic distribution, online transactions, and smart logistics warehousing tracking, and further assists enterprise management to form an intelligent decision-making system.

In terms of offline platforms, Gome Retail leverages the advantages of its own store network to selectively provide online merchants that do not have offline entities with boutique displays and showroom experience scenarios, helping merchants to significantly improve supply chain efficiency and achieve the effect of diverting traffic from offline to online, forming a traffic interactive alliance; relying on offline scenarios, it gives home services a new business model and business connotation, providing users with a full range of services such as catering, entertainment, shopping, and leisure, meeting the differentiated service needs of community families of different ages and income levels.

In terms of self-operation, Gome Retail will reorganize the supply chain and create a home appliance system with maximized product richness and price advantages with a high-efficiency and low-cost operation model. At the same time, it will expand all non-home appliance categories with the Yanxuan+ model. Currently, Gome has completed the trials of self-operated vertical businesses such as fresh supermarkets, hot pot and barbecue ingredients, and home decoration design with transparency across the entire industry chain, and will gradually and vigorously promote them to enrich the Gome ecosystem with the highest quality products and services.

In terms of customization, Gome Retail will continue to strengthen its differentiated customization capabilities through the best price + high-standard service, extend the scope of digital product selection from home appliances to non-home appliances, give full play to the advantages of strong control of the upstream supply chain, and further expand the categories and scale of customization. The interim report data shows that in the first half of the year, Gome Retail has vigorously improved its C2M reverse customization capabilities and digital product selection capabilities, and the proportion of customized differentiated products has increased again from 37% to 45%.

Wang Junzhou, President of Gome Retail, said that in the first half of 2020, in the face of the challenges brought by the epidemic, Gome continued to improve and enhance its operating and service capabilities with its advantages accumulated over the years. In the future, Gome will give full play to the "multiplier effect" of existing resources and leverage more resources to transform from a self-operated retailer into a Gome ecosystem covering all online and offline platforms. As a full-category online and offline dual-platform enterprise positioned as "social + business + sharing", it focuses on local retail and creates a new Gome guided by user thinking, platform thinking and technology thinking.