Appliance makers don’t support Suning Gome’s expansion in the third or fourth line

In the third and fourth line markets that Gome and Suning are trying to reach, major home appliance manufacturers have been working for years, and in recent years, their self-built channels have also developed rapidly.

Qingdao Haier (600690. SZ) announced in its first half year results that its channel revenue increased by nearly 50% year-on-year, making it its fastest growing business. A relevant person in charge of a well-known household electrical appliance company admitted to the "First Financial Daily" yesterday that the manufacturers did not support Gome and Suning to expand their troops in the third and fourth tier markets.

According to the Qingdao Haier semi-annual report, the company realized operating income of 40.47 billion yuan in the first half of the year, an increase of 6.31%; operating profit of 2.766 billion yuan, an increase of 22.77%; net profit of 1.852 billion yuan, an increase of 21.26%. Among them, the fastest-growing channel integrated service business. The business achieved operating income of 4.803 billion yuan in the first half of this year, an increase of 48.81% year-on-year. In contrast, operating income such as air conditioners, small appliances, washing machines, and water heaters all increased by less than 15% year-on-year, while operating revenues of refrigerators and equipment parts even fell, by 2.34% and 7.42% respectively year-on-year.

Qingdao Haier said that the channel integrated service business is based on Haier Electronics (01169.HK) as a platform, adhering to the integration of virtual and real networks, focusing on improving franchise operation capabilities, increasing the network expansion of non-Haier brand appliances, and achieving distribution, The effective integration of logistics and after-sales services. As of June 30, 2012, Qingdao Haier's county-level market stores reached more than 7,500 outlets, covering nearly 100% of the country's counties; the total number of outlets nationwide reached approximately 35,000.

In the future, Haier will introduce the best-selling mainstream brands in the third- and fourth-tier markets, and distribute them to the daily franchise stores, attracting more retailers to join the company.

Similarly, Midea currently has 30 refrigerator centers, 33 washing machine centers, 34 regional HVAC sales companies, 46 regional refrigeration sales companies, and refrigeration integrated stores totaling approximately 11,000 stores nationwide, including flagship stores in the country. Thousands. Gree Electric Appliances has established more than 30,000 sales outlets throughout the country and has about 10,000 stores. These stores provide Gree with most of its income.

The responsible person of the above-mentioned home appliance company stated that with the changes in the general environment of the home appliance market, there will be less space for mainstream appliance companies to pay “other expenses” such as admission fees to Gome and Suning. “The speed of opening stores in the United States and Suning in the past year is also slowing down. This is related to the fact that the manufacturers do not support it.” The home appliance industry said.

"Especially in the third and fourth tier markets, Gome and Suning can only rely more on their own strength to develop." The above-mentioned sources said, "Our entrance fee is also paid selectively. We will not enter in bad stores." Three or four line market manufacturers have opened a lot of stores, so Gome and Suning have to enter the third and fourth line market is more difficult.