It is true that Gome has survived, but it is only alive.
In recent days, Gome Retail (HK: 00943), a Hong Kong-listed company, has experienced considerable stock price fluctuations.
Since March 30, Gome Retail has shown an upward trend. As of the close of April 7, the company’s share price has reached 1.670 Hong Kong dollars, a daily increase of 10.60%. But on April 8, the stock price situation took a turn for the worse, with a single-day drop of 11.38%. As of the close on April 9, its stock price was reported at 1.410 Hong Kong dollars per share, a daily drop of 4.73%.
It is worth noting that the global investor conference call of Gome Retail was held on the evening of April 7. The founder of Gome who returned for nearly a year and the “Godfather of Business” Huang Guangyu also participated in this meeting. At the meeting, Huang Guangyu talked about the expansion plan of Gome, and also answered the problem of rising debt ratio that the industry is concerned about. “After guiding the market through online and offline, offline stores will enter a profitable state. From the perspective of supply chain alone, Gome is expected to make a profit of 800 million yuan this year.” Huang Guangyu said.
For Gome, which is currently in a period of stock price downturn, Huang Guangyu’s optimistic speech should have brought confidence to the market and stimulated the stock price to rise, but the actual situation was a sharp decline for two consecutive days. With the good news, why do investors choose to “vote with their feet”?
Huang Guangyu has returned for nearly a year, but Gome’s performance has not yet picked up
Nanjing’s Xinjiekou business district was regarded as the core site of retail giant Suning until 2005, and its headquarters is located here. After years of hard work, Suning has already established a good market reputation here-but the arrival of Gome has changed all of this. At midnight on July 22, 2005, nearly 100,000 people gathered at the Gome store in Xinjiekou to snap up low-priced electrical appliances, and even the glass doors were smashed by crowds. Overnight, the price of Nanjing electrical appliances was cut by more than ten percent by the “price butcher” Huang Guangyu.
That year, and the following years, belonged to the golden age of Gome, and also belonged to the golden age of Huang Guangyu. Through a series of mergers and acquisitions and reorganizations, this “business godfather” has expanded his empire to a huge extent in just three years. As of February 2008, the Huang family headed by Huang Guangyu controlled Gome and Zhongguancun. , Shandong Jintai and Sanlian Trading Company are four listed companies. Prior to this, Huang Guangyu himself had been No. 1 on the Hurun China Rich List for many consecutive years.
However, the good days of Gome came to an end at that time. In 2009, Huang Guangyu was imprisoned due to economic problems, and then the senior officials of Gome were caught in a fierce power struggle. What happened after this was the footage that people in the industry have talked about for many years-winning the price war but losing the trend of e-commerce, allowing the rise of JD.com and Taobao, and even being “overtaken” by the old rival Suning. The veterans of Gome who had followed Huang Guangyu to fight in the offline retail era were at a loss in the face of the ever-changing Internet wave.
It is true that Gome survived, butIt’s just alive. Although Huang Guangyu returned in a low-key manner in June last year, Gome’s operating status has not undergone a qualitative change. This can be seen from its platform transaction data during the Double Eleven period-the data shows that Gome’s “Double 11” last year During the period, the overall GMV increased by 166%, of which the sales of department stores on the online platform increased by 237% from the previous month, the sales of offline household appliances increased by 432% year-on-year, and the sales of franchised stores increased by 227% year-on-year.
Judging from this part of the data alone, Gome’s business situation seems to be very good, but in fact Gome has not disclosed specific transaction data. Otherwise, in the face of Tmall’s 498.2 billion GMV and JD’s 271.5 billion GMV, it will only It will appear even weaker.
Gome’s 2020 full-year performance data may be more illustrative. Judging from the financial report, Gome’s annual revenue was 44.19 billion yuan, down 25.83% year-on-year, and the net loss attributable to the parent company reached 6.994 billion yuan, an increase of 63% year-on-year. It is worth noting that this is the fourth consecutive year that Gome has lost money. Over the past four years, the total amount of losses for Gome has reached 14.921 billion yuan.
Recruiting Baidu’s second-in-command, renamed the App… What kind of big game will Gome play in the next?
After a bleak four years, Gome has not completely lost its ambitions in the new era. In fact, since last year, Gome has been making frequent moves on online transformation, trying to regain its position in the business world.
In the first half of 2020, Gome announced the establishment of in-depth strategic cooperation with Pinduoduo and JD.com to connect the supply chain and service system to the two major e-commerce platforms. Pinduoduo and JD.com subscribed to Gome Retail in April and May, respectively. A total of US$300 million in overseas convertible bonds; in August, Gome recruited Xiang Hailong, the former Baidu “second leader”, to serve as the CEO of Gome’s online platform company. Gome said that Xiang Hailong’s joining can encourage the company to “make better use of product technology tools to achieve digital transformation.”
In January this year, Gome made a complete transformation of its online retail platform-the Gome App, which had been in operation for several years, changed its old look to a new look and turned it into a “really happy” App. According to the official introduction, “True Happiness” is positioned as an entertaining and social shopping app that provides interesting and affordable online shopping methods, aiming to make the shopping process of users full of beautiful and happy experiences.
Just before the debut of “True Happiness”, Gome has intensively registered a large number of companies such as “Lehe Box” and “Ouchi”, and they also named them in a convenient and easy-to-remember manner. A Gome executive said that the Real Happiness App is an important step for Gome to focus on building an online platform and a dual online and offline platform. In the future, it will become an important carrier connecting Gome’s online and offline platforms.
The name change of Gome’s official announcement of the App has aroused a strong response from the industry. Some people in the industry are optimistic about this. They believe that Gome’s determination to transform is fully reflected in the name change, and its name also appearsEntertaining and sinking are in line with the direction of transformation; opponents say that the renamed Gome App appears to be indifferent and cannot make people associate with the shopping platform scene.
Betting on social e-commerce, can the mixed reputation of “really happy” help Gome regain its glory?
From a theoretical point of view, the social e-commerce that Gome bet on is indeed popular in the second half of the Internet.
According to the Six Degrees of Separation theory proposed by Frigyes Karinthy, all residents on the earth can be connected by a relationship chain within six layers. The same principle applies in the field of e-commerce-through several times With fission spread, e-commerce platforms can theoretically reach any consumer. Prior to this, Pinduoduo has successfully entered the sinking market based on this theory, surpassing JD and Ali to become the largest e-commerce platform in China. Now that Pinduoduo has proved that this path is feasible, Gome only needs to follow up-this is the best choice it can make at present.
However, it is not Gome that follows in the footsteps of Pinduoduo. Since the former became popular with social e-commerce, e-commerce brands such as Taobao, JD.com, Suning, and even some Internet brands have chosen to follow up. The current market competition is extremely fierce. . However, Pinduoduo still occupies an absolute position by virtue of its first-mover advantage, while the rest of the players are behind.
This can be seen from the financial report data-in the fourth quarter of 2020, the average monthly active users of the Pinduoduo App was 719.9 million. According to the Alibaba financial report, the monthly active users of the Taobao special edition just exceeded the 100 million mark in the same period. . It can be seen that even if the Taobao special edition gets customers through Ali’s huge traffic pool and traffic channels, it still cannot catch up with Pinduoduo in the short term. Taobao is so, not to mention that the monthly life is far inferior to its Gome.
On the other hand, Pinduoduo relied on WeChat for the rise of social e-commerce in the early years, but now it has become more and more difficult to obtain customers through WeChat. In 2019, the WeChat Security Center issued the “Announcement on the Handling of Check-in in the Moments of Friends by Inducing Sharing,” which solemnly stated that “fission marketing is not welcome”.
In addition, after the baptism of Pinduoduo, many consumers have become tired of similar gameplay, and the customer acquisition efficiency of fission marketing has long been lower than before. This is also reflected in the user growth rate of Pinduoduo, 2019 In the fourth quarter of the year, Pinduoduo’s subscriber growth rate was 39.8%, and by the fourth quarter of 2020, this number has become 34.7%.
In the face of the overall unfavorable environment, it is difficult to say that Gome’s socialization strategy is a wise move, but Gome has only this way to go-once, it missed the two major outlets of e-commerce and mobile Internet. Today, even if it only grabs the tail of social e-commerce, Gome will continue to hold on. This old-fashioned retailer, who hasn’t been confused, can no longer afford the price of missing the outlet.