This is also the first time Huang Guangyu has attended a public meeting since he was released from prison.

Editor’s note: This article from the micro-channel public number “Prism” (ID: lengjing_qqfinance), of: Xiaobai.

At 7 pm on April 7, Gome Retail (0493.HK) held a global investor conference call. The company’s founder Huang Guangyu attended the meeting with Chief Financial Officer Wei Wei and Director of Corporate Development and Investor Relations Zhang Jingxing. This is also the first time Huang Guangyu has attended a public meeting since he was released from prison.

Fang Wei first disclosed several key business figures and strategic expectations:

1. At present, Gome has more than 3,400 offline stores. In the future, Gome plans to expand to more than 6,000 stores in 18 months through a “self-operated + franchise” model.

2. Since the first quarter of this year, the GMV of Gome’s online platform “True Happiness” APP has increased nearly 4 times year-on-year, and monthly active users have reached about 40 million. In the next 18 months, Gome hopes to achieve more than 100 million monthly active users by diverting traffic from offline to online.

3. At this stage, Gome mainly promotes seven categories of commodity procurement platforms, including home appliances, food and beverages, clothing, shoes and bags, home furnishings, daily necessities, maternal and child toys, beauty and personal care, and strives to exceed the number of SKUs within 18 months. 500,000 (home appliances expanded from 3W to 10W, and non-home appliances expanded from 7W to 40W).

Four. On the supply chain platform, Gome will sell 10% of home appliances in China and Africa in 2020, and 90% will be home appliances. In 2021, it is planned to increase the proportion of non-household appliances sales to 30%.

After that, investors and brokerage representatives asked Gome management questions, and Huang Guangyu answered the questions accordingly. The author summarized Huang Guangyu’s core views.

Question 1: What is your overall view on the current development of the traditional retail industry?

Huang Guangyu: Regardless of consumption upgrade or internal circulation, the retail market has a lot of room for growth in the future. Gome expanded from the electrical category to the entire category, and at the same time carried out offline empowerment. Gome lost a lot of opportunities and time on this road, and also learned a lot, with success and failure. After several months of research, Gome will expand its supply chain in the future, combined with online platforms and entertainment models, and is expected to achieve the set goals within the next 18 months.

Question 2:How to understand the development path, entertainment marketing and operation of the True Happy APP?

Huang Guangyu: True Happiness will start with standardized products offline, and then guide merchants to display experience. In the future, the traditional e-commerce display platform model will encounter bottlenecks. Although the live broadcast and short video model experience is better, it will soon be homogenized. True entertainment marketingIt is to let everyone participate, use the existing e-commerce model and entertainment marketing to bring goods, and then develop service and low prices as the basic ability of the bottom layer. Gome will stand on the C side, make requests to merchants, serve consumers, and jointly sell goods with merchants.

Question 3: Will Gome’s offline layout have sufficient resources to support it in the future? What is the profit model?

Huang Guangyu: Gome stores will be divided into self-operated and franchised stores, adopting a light asset model. In the future, it will adopt a direct operating system, offline platforms, combined with a model of investment promotion and leasing plus commissions, and the operating pressure will be relatively small. In the future, the offline is expected to attract about 100 million online traffic. At the same time, this will also solve the problem of declining operating performance of many offline stores and establish social marketing. Gome will cooperate with more professional organizations, taking low prices, punctual delivery, entertainment marketing, and high-quality services as its core advantages.

Question 4: How will Gome expand from home appliances to all categories?

Huang Guangyu: We will divide the supply chain into three parts: investment promotion, self-operation, and customization. Through the separation of online and offline platforms to enhance platform competitiveness, it is not entirely supported by its own supply chain.

Like Pinduoduo, JD.com, Tmall, Douyin, and opening stores, we will also do the output of co-construction of the supply chain, or expand the way through the joint establishment of companies. At the purchase end, everyone can work together to explore self-procurement and customization capabilities. We have established a professional team and will continue to recruit professionals from the community to join us. In the future, it is also possible to liberalize equity cooperation and enhance supply chain capabilities.

Question 5: How do you understand the competitive and cooperative relationship with Pinduoduo and Jingdong?

Huang Guangyu: Our mindset and strategy are open, and no one can kill anyone. As long as the business path and strategy are right, whoever restricts others is temporary. Under this premise, we do not rule out cooperation with any party. We regard them (Pinduoduo and JD.com) as mature sales platforms, we can go to them to sell and drain traffic; they also cooperate with us with an open mind.

They have advantages in scale, and they have encountered bottlenecks and shortcomings in their development. In the future, the most important competition for everyone in the retail industry is whether there are advantages in online and offline, supply chain, and distribution, whether a closed loop can be formed, and there will be differences in marketing, experience, and positioning.

Gome is engaged in entertainment marketing. Our model is not only to bring goods, but to encourage more people to participate, share in the entertainment process, think of playing when buying goods, and experience it in the nearest store, not just for cheap. This will become a reason for consumers to store APP on their mobile phones.

Question 6: Gome’s current debt ratio is relatively high, how to plan the future debt reduction plan?

Huang Guangyu: I am so happy that I may lose some money next, and the input cost will be higher than the income. Gome will try its best to achieve positive cash flow in the future. After accurate positioning online and offline, offline stores may be profitable. I hope that some of the store’s profits will exceed 800 million this year.

Gome’s supply chain platform focuses on small profits but quick turnover, high market share, and fast capital turnover. This area also strives to achieve positive returns. From the perspective of debt ratio, there should not be too much in the future. While building the network, we will also increase some assets and increase capital to reduce the debt ratio. The debt-to-loss ratio in recent years is relatively high, and we will resolve it as soon as possible.