Fashion Electrical Market Development Deputy Director: Qing-Jun

Dongguan
Suning
Marketing Manager: Lin Lu

Advertisement Promotion Department Manager, Dongguan States United States: Hu Jun

Blink of an eye half years have passed, love has been busy since last appliance stores
Financial
Crisis, has gradually become very low profile. Especially the first half of this year, slowing down the speed shop a lot. It’s statistics, only two new stores during the first half. In an interview, also said home appliance stores, shop at the second half of 2009 is no longer the main theme, heavy equipment, build a new store image and adjust the layout of humanity or the focus of the work throughout the year.

The delayed impact of the crisis still exists, the first half of the three supermarkets
Sell
Whether over the previous year by the amount of “hit”? Three major home appliances chain policy to attack pull effect in the end? Then in the second half, stores, how breakthrough? Two days ago, reporters visited the three major home appliance stores in Dongguan relevant department head.

Overall

Rebound year

Question 1

The delayed impact of the financial crisis has not disappeared, then just past the first half of 2009, the overall store sales have anything better?

Qing-Jun: all of us for the first half of the home appliances market, every day is not an easy one. Especially the weak consumer market town, but the urban market is relatively stable. The same period in 2008, compared with growth, but not much, basically achieved smoothly picked up. Because this year is not out fashion stores in Dongguan, on May 1 last year after we opened two stores. Opening a new store sales performance, enhance the effect, I think the industry is visible.

Lin Lu: the first half of the overall sales growth over last year showed an overall increase of 30%. In the first half, Suning launched a series of large-scale promotions, along with the property market rebound and the marriage market and rigid demand, sales pull big.

Hu Jun: the first half of the whole, Dongguan, China the United States in the quality of single-store operation has improved, this will pull the sales lot.

Under crisis
Is still the backbone of traditional home appliances

Question 2

Tough day, which category do you think of the beam in the lug store? Hu Jun:
Air conditioning
, Color TV and emergency home appliances, especially air-conditioning the most obvious upgrade this year, an increase of nearly 40%, Furthermore, 3C is the category, especially Shucu arrival, we focus on random purchase of 3C products to the discount usually do.

Qing-Jun: total weight of the category is still the traditional home appliances, fashion is that
Black
And reproducing the largest increase. Black is the active force, especially in the audio market downturn, peer-to give up this market situation, the high-end audio sales in the fashion still improve.

Lin Lu: key growth category for the air-conditioning,
Refrigerator
And computers. Accounted for about half of overall sales.

Three policy

Has praised in

Question 3

In the first half, the state introduced
Bringing home appliances
, Energy-saving appliances subsidies and TM to the three policy has not been much movement various stores?

Qing-Jun: the implementation of home appliances to the countryside in just enough time to really lively, attractive enough, but not many consumers and manufacturers are now home to its “cold” the.

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Midea, Gree Electric Appliances, Sichuan Changhong, deep
Konka
Four semi-annual report yesterday, household electrical appliance enterprises in 2009 focused on appearance. Internationally
Financial
Crisis due to falling demand and other factors, four home appliance giant, income has declined during the first half, but the net profit performance is not the same,
Black
(Referring to TV) white (referring to air conditioners, refrigerators, washing machines) once again showed different market situation.

Gree Electric appliances in the first half net profit of U.S. were up 29.18 percent year on year and 18.63%; and Sichuan Changhong net decrease of 22.56% year on year, Shenzhen Konka A meager 0.3% year on year net profit, “two happy Both worry. “

Home appliance giant, mid-year performance profiles of four

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Hi

White giant, eye-catching performance

Midea said in the first half of the international financial crisis and global economic downturn, the situation, though still serious, but the domestic economy gradually recovering and the series active policies to promote economic growth, effectively promoting the growth of domestic consumption appliances.

Semiannual reports show that U.S. appliance 1 to 6 months operating income of 24.901 billion yuan, though decreased 11.33% year on year, although raw material costs as a greater decline than the previous year, the company created in the first half net profit of 1.146 billion yuan, an increase of 18.63%. Air-conditioning and parts of which 18.487 billion yuan in revenue. Aspects of the United States, said after the company into the season, “to stock” of efforts to increase and improve profitability, increase cash flow is the main reason.

At the same time, another industry giant white Gree performance of the same eye-catching. Gree first half revenue 19.99 billion yuan, up 19.89% reduction of net profit 1.231 billion yuan, up 29.18 percent. Said, in the air conditioning market as a whole is weak, the company continues to increase market share, industry leading position further strengthened.

Good news in the performance, while under the influence of the financial crisis, the two companies a serious decline in overseas business. The two companies are also the main reason for reduced revenues. Midea overseas markets where revenue fell 20.58%, Gree decreased by 48.38%.

Securities of that person, in the first half Gree, Midea two listed companies to adjust product structure, the main business to the gross margin of energy-efficient air conditioning tilt higher, gross margins increased, but this year end market prices generally higher than air-conditioning low, the resulting decline in operating income, net profit rising trend. He said the current position, Gree, Midea’s performance has improved over the beginning, great bottoming trend.

Worry
Poor performance of black loss

Compared with white business, Sichuan Changhong, Konka two traditional black performance of the business is not optimistic.

According to semiannual reports, Sichuan Changhong the first half of the total operating income of 13.277 billion yuan, down 6.76%. Among them, the domestic core business revenue dipped 2.58%, the foreign main business income of a substantial decrease of 27.28 percent year on year. Net income was 30,043,300 yuan, up 22.56% year on year greatly reduced.

Changhong said that as traditional TV production companies on domestic in
CRT
Mature industrial chain products, with strong competitiveness, but with the global consumer
Electronic
Upgrade, the company has been gradually weakened the traditional competitive advantages, the company will actively promote industrial upgrading. Industry analysts point out that the times into the flat, Sichuan Changhong has been betting that the plasma industry, 1 in July this year,
Changhong plasma
TV sales rose nearly 300%, but for LCD TV, Changhong’s response and action seemed to be somewhat slow, missed the rapid on the LCD TV market volume of its LCD TVs sales in the domestic market ranked No. 5.

Relative to the sharp drop in profits, Sichuan Changhong, Konka is only slightly deep loss. The first half of the total company operating income of 5.172 billion yuan, down 7.98%; operating profits down 18.30%. Net income was 80.302 million yuan, a decrease of 0.31% over the previous year.

Konka that caused the poor performance of the main reasons the company is
LCD panel
, Due to the shortage of liquid crystal module. In the first half of the financial crisis continued to influence, the LCD panel and module makers have been hard hit by cuts or even stop production, two products of domestic supply significantly, the domestic LCD TV makers are deeply tired. The deep Konka affected, in the first half sales fell 7.98%.

Previously, many companies have issued Pre-losing black warning, Cinda Securities analyst believes that white goods and
Small appliances
Plate in the middle of 2009 net profit will be warmer, and the black appliance industry will face a polarized situation.

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Playback

Best Buy wholly owned five-star news, PR China from Best Buy sent the media an e-mail: “Best Buy Five Star Group has received the remaining shares, wholly owned Five Star.”

Sources at that time, the two sides had agreed to the pricing scheme is: Best Buy in February 21, 2009 to pay about 185 million U.S. dollars in cash.

With the initial acquisition three years ago, compared to the low profile seems a lot of Best Buy. That year, for the completion of this acquisition, Best Buy has frequently visited the world’s top central and local governments of Jiangsu, finally in June 2006 to 184 million U.S. dollars acquisition of 75% stake in Five Star. Sources said that as early as the original signed agreement, both sides have talked about the issue will release the remaining shares, that Best Buy will be the sole control of the final Five Star.

This with Best Buy to enter Canada through a similar. In 2001, it acquired Canada

Home Appliances

Retailer FutureShop, have already been questioned, but four years later it reached 30% market share.

“Does not scale, only a single store selling efforts to increase profit. Therefore, whether to go high-end promoting or pushing its own brand Ye Hao, Best Buy are trying to break through under the current size disadvantage. But the overall performance far from the competition, open more Best Buy stores are not always recognize the ultimate dream. “

This is only many domestic media and industry experts to challenge the move in China, Best Buy, the tip of the iceberg.

Best Buy Five Star

acquisition, a time of many by the Chinese media and many experts questioned the reasons behind what is it? But no matter how high voices of doubt, we have to believe that Best Buy could not make a trading loss, and this sale is at Best Buy after the first five-star investment, re-produced under a wholly-owned acquisitions. So, the industry attracted many voices of doubt it is because it? Perhaps people on Best Buy’s “Chinese overtly” do not agree, perhaps the development of our Best Buy misread the path.

Rational thinking on the no rational competition

Has been developing in China, Best Buy, the slow and weak forces, not only repeatedly mentioned by the media, have become dismissive of the reasons for its competitors.

Suning

Electric Sun Weimin, president, once said that they have not time to consider Best Buy, because the other stores in China, too few, only “cat.”

States United States

Sun, vice president of a small group also believes that Best Buy only from the formal transplant operations in North America model, but limited the number and regional distribution of stores, they simply can not compete GOME.

Proved that this view is not raved. Best Buy into China from the first day until today, Best Buy stores in China to reach the number seven. While on six months ago, Best Buy’s China, “the second store” also has been in a difficult labor conditions. These figures and the Best Buy story twists and turns of China is to let the industry in general question the behavior of the reason Best Buy, and even Best Buy to become the industry’s assertions miss the rapid development in China’s prime-time direct incentive.

However, there is the internal Who better than the Best Buy own solution in which the shamisen it deep?

First of all, since Best Buy had 75% controlling stake in Five Star, after, although in name became as family members, but in fact is not how Best Buy Five Star is regrettable. On the one hand, Best Buy consumer electronics chain in China, the market still remains a new army, on a lot of things to read, not to feel; other hand, the Five Star business also continues to be dominated by veteran Wang Jianguo and the core management of the hands of indeed affect the whole body, therefore, can only be patient with Best Buy. So we see that in the Five Star, Best Buy in addition to import the Management Information System, to do some research and training in addition to, and not as much as the two companies do not sing a song with the centripetal force.

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