Gome revenue up by 16% in first quarter
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China's second-largest home appliance distributor Gome Electrical Appliances Holdings Ltd released its financial results for the first quarter of 2011 Thursday, with revenue reaching 13.68 billion yuan ($2.11 billion), up 16.08 percent compared with the same period last year.
Hong Kong-listed Gome has begun a program to open 480 new stores to add to its existing 1,400 this year, and has also begun an ambitious expansion in the e-commerce field.
"The company's online sales will account for more than 10 percent of total revenue in the next two to three years,” Han Depeng, general manager of e-commerce with Gome, told the Global Times Thursday.
Last year Beijing-based Gome acquired an 80 percent stake in Kuba Technology (Beijing) Co, which operates online business-to-consumer electronics site Coo8.com. Gome opened its own e-commerce platform this year.
Peng Liang, vice president of Coo8.com, told the Global Times Thursday that the deal with Gome offers a great advantage because they can acquire goods at the lowest price, a reduction of 5 to 10 percent from before.
Gome has recently been involved in a spat related to a price war with its competitor 360buy.com, an online retailer, but Han said there's more to a good company than offering low prices. Logistics, after-sales service and product quality are also important factors in attracting consumers, he said.
"It's very common for e-commerce home appliance companies to use lower prices to attract more consumers, and the phenomenon will last for a while,” Lu Renbo, director of the Consumer Electronic Product Survey Office in the China Electronic Chamber of Commerce, told the Global Times.
