NANJING, China, Aug. 1, 2020 /PRNewswire/ -- On the evening of July 30, Suning.com (002024.SZ), China's leading O2O smart retailer owned by Suning Holdings Group, released its mid-year performance preview report for the first half of 2020. According to the report, Suning.com's sales volume reached RMB 194.155 billion for the period between January and June 2020, which was a year-on-year increase of 5.40%. Online sales volume grew significantly by 20.19% year-on-year and now accounts for 69.43% of the total business.
In H1, the domestic economy has faced significant challenges as a result of the COVID-19 pandemic. During these unprecedented times, Suning.com leveraged both its online and offline capabilities, pivoted its business strategy and focused on improving business quality and efficiency — all whilst improving its profitability. Thanks to its swift response, Suning.com achieved a marked improvement in its operating income, which increased 76.74% year-on-year to RMB 118.24 billion.
Online Sales Volume Grew Fast
The offline retail environment faced immense pressure in the wake of the pandemic and was one of the key industries affected in H1. However, the stay-at-home economy drove a surge in online sales, with data revealing that online sales in China increased by 7.3% year-on-year. Suning.com focused on ensuring seamless operation across online platforms, while also promoting sales for offline stores through digital means using community marketing, off-site sales and home delivery. As a result, Suning.com recorded a 20.19% increase in online sales year-on-year — and in Q2 alone, online sales saw the highest surge in six quarters with a year-on-year increase of 27.11%.
In addition, Suning.com accelerated the transformation of its offline outlets into retail cloud stores during the pandemic. At the end of June, Suning.com's push orders from offline stores increased by 113.80% year-on-year.
In H1, Suning.com made rapid breakthroughs in the FMCG category through its core partnership with Carrefour China. Between January and June, sales volume for general merchandise increased by 106.70% year-on-year, and this number is only expected to grow as a result of 818. Carrefour's online operation capabilities have also improved significantly in H1, and the company has seen marked growth in its door-to-door business, as well as the proportion of traffic from Suning.com's ecosystem.
Recognizing the trends in online shopping, Suning.com has actively generated consumer demand across its member base through strengthened social media marketing and partnerships with micro-video platforms. The business acquired an additional 46.83 million registered users in the first half of the year, as well as an uptick in the number of active users in June, which grew 22.37% increase year-on-year. As of June 30, Suning.com had 602 million registered members.
From Retailer to Retail Service Provider
Further to this, Suning.com accelerated its expansion plans and strategically upgraded its retail service providers. In addition to actively responding to the challenges of the pandemic, Suning.com harnessed the opportunity to fast-track the expansion of its retail infrastructure and accelerate its ambitions to shift from being a retailer to a retail service provider.
Suning.com deepened its open digital platform capabilities to allow for personalized recommendations, data marketing tools, and logistics and warehousing services. These capabilities empower merchants to improve traffic distribution and conversion efficiency, and enhance the product experience for users. The preview reports reveal that the proportion of non-electrical product merchants on the platform increased to 87% in H1. The volume of merchants and merchant activity also increased significantly in this period. Furthermore, commodity transactions on the open platform grew 63.71% year-on-year to reach RMB 53.133 billion.
Through the power of digital, Suning.com's retail cloud franchise stores broke down the distinction between online and offline stores to create a new business model that combines the supply chain with offline stores and social eCommerce. As a result, Suning.com's retail cloud franchise stores went against the downward trend of the pandemic, with 1,563 new retail cloud franchises opening in H1. To support the rapid deployment of these stores, Suning.com also enhanced its logistics and after-sales service capabilities in rural markets.
On the logistics infrastructure front, Suning.com put 58 logistics bases into operation in 44 cities across the country as of June 2020. In the first half of the year, Suning Logistics promoted its partner mechanism for terminal outlets, empowered terminal logistics nodes and improved operational efficiency. The company also focused on the ongoing integration of warehousing and distribution services, and increased its openness to external partners. At the end of June 2020, Suning Logistics had increased its total capacity for external partners by 77% year-on-year.
On July 27th, during its 818 conference, Suning.com reinforced its strategic plans to upgrade to a retail service provider in the next ten years. In addition, the business announced it will further consolidate and export its five service capabilities spanning supply chain, logistics, user scenarios, finance and technology; while simultaneously broadening its small, medium and micro enterprises in the energy industry ecosystem to better meet the needs of users.
About Suning Holdings Group
Founded in 1990, Suning is one of the leading commercial enterprises in China with two public companies in China and Japan. In 2019, Suning Holdings Group ranked as the top three brands among the top 500 non-state-owned enterprises in China with annual revenues of RMB 602.5 billion (approximately EURO 77.24 billion) and continued to top the list of Internet retailing category. Adhering to the enterprise mission of "Leading the Ecosystem across Industries by Creating Elite Quality of Life for All", Suning has strengthened and expanded its core business as retail through a corporate ecosystem comprised by multiple vertical industries, including commercial real estate, financial services and sports. Suning.com, the main subsidiary pioneering in online and offline retailing, has been listed in the Fortune Global 500 for three successive years from 2017 to 2019.
