Gome, who was once China’s largest retailer but lagged behind in its digital transformation, finally opened a flagship store on Tmall, Alibaba’s business-to-customer platform, to sell home appliances, 36kr reported Sunday.
The retailer chose Tmall as a channel to premiere a new product line under its own brand Gome Zhineng (Zhineng means smart), indicating its high hopes that this online channel can activate new customers.
Gome made a RMB 4.89 billion (USD 725.6 million) loss in 2018, more than ten times what it lost in 2017, according to its annual report. Its management attributed this widening loss to a sluggish macro-economy.
By end-2018, The company had more than 2,000 bricks-and-mortar stores, 70% of which were located in China’s first and second-tier cities. It opened a total of 602 new stores last year.
The stores that were already in operation for two years or more made RMB 53.2 billion in revenue last year, down 13.78% from 2017.
The offline store revenue accounted for more than 80% of the company’s entire revenue of RMB 64.4 billion, indicating that the company, although it has its own e-commerce site and app, relies heavily on offline sales.
Gome’s rival Suning made bolder moves to transform digitally when in 2015, it bought a 1.1% stake in Alibaba and granted the e-commerce giant a 20% stake in Suning‘s online arm. As part of the deal, Suning agreed to open a flagship store on Tmall.
Gome fell behind in the internet and mobile era after its founder Huang Guangyu was sentenced to 14 years in prison in 2010 for manipulating the stock market.
36kr is KrAsia’s parent company.
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Editor: Nadine Freischlad