Focusing on the development, Suning.com’s online sales accounted for nearly 70% in 2020
Nanjing, China, Apr 23, 2021 – Today Suning.com released its 2020 annual financial report. According to the report, Suning.com’s merchandise sales volume in 2020 was 416.315 billion yuan, a year-on-year increase of 9.92%, of which online platform merchandise sales were RMB 290.335 billion, a year-on-year increase of 21.60%, and online sales accounted for nearly 70%.
Accelerate the development of Yunwang Wandian to probe independent listing
In 2020, Suning.com will actively respond, focusing on retail and service businesses, and speeding up opening up. On the whole, Suning.com’s business strategy has brought significant market effects. In 2020, the company will achieve operating income of 252.296 billion yuan.
With the gradual maturity of Suning’s smart retail capabilities, the company determined the independent development strategy of Yunwang Wandian, fully benchmarked the Internet retail platform, integrated online business and introduced strategic investment, planned to increase employee equity incentives, and explore independent listing. Prior to this, Yunwang Wandian introduced strategists and enhanced financial strength and external cooperation resources, which helped to improve service capabilities for users, merchants, and small, medium and micro retailers. Revenue from self-operated retail and logistics businesses is expected to achieve rapid growth.
Especially in the fourth quarter, Suning.com increased its investment in user operation subsidies and commodity operation subsidies. User activity increased significantly. In the fourth quarter, the number of active buyers increased by 52% year-on-year. In December, the number of Suning.com’s monthly active users increased year-on-year. 68%. In the fourth quarter, the scale of product sales on the Yunwang Wandian platform increased by 33.67% year-on-year, of which the company’s self-operated product sales increased by 45.28% year-on-year.
At the same time, in 2020, Suning.com’s Suning Retail Cloud business maintained rapid growth, and retail cloud franchise stores expanded rapidly, with 3,201 new stores opened throughout the year, strengthening its market leading foothold in the third and fourth tier markets, and more and more brands are choosing to strengthen cooperation with Retail Cloud cooperation to tap the rural markets.
Take multiple measures to reduce costs and increase efficiency, highlighting the scale effect
In 2020, Suning clearly put forward the development requirements of focusing on the main retail business, actively implementing cost reduction and efficiency enhancement, and the total expense ratio decreased by 2.61% over the same period. Among them, sales expenses dropped by 23.43%, financial expenses dropped by 12.16%, and administrative expenses dropped by 5.77%.
Specifically, Suning.com has strengthened cost control, accelerated store structure adjustments, strengthened Internet operation capabilities, and improved store operating efficiency; through streamlining the organization, promoting the partner mechanism of stores and logistics, improving the level of human efficiency; strengthening member operations and precision marketing by paying more attention to the efficiency of input and output; the company strengthened the control of financial expenses, and the financial expense rate decreased year-on-year.
At the same time, by improving the efficiency of operating capital turnover, optimizing the accounting period and payment methods, and strengthening cooperation with suppliers, Suning.com has improved its operating cash flow in 2020 year-on-year.
The product and service advantages of the company’s self-operated business have also effectively promoted the growth of user scale and helped the company’s open platform to enhance the value of merchant services. In 2020, the scale of open platform merchandise sales will increase by 44.42% year-on-year. With the rapid growth of the scale of open platforms, the profit model of Internet platforms will gradually be reflected.
In addition, the performance of a number of businesses is also remarkable. Through the development of social marketing such as Suning tweets, store live broadcasts, and Su Xiaotuan, Suning.com stores increased online sales by 145.70% year-on-year in 2020 due to store socialized operations. Carrefour’s home-to-door business continues to expand the scope of distribution. In 2020, the number of home-to-home business orders increased by 139% year-on-year.
In 2021, Suning.com clarified the development strategy of comprehensively upgrading from a “retailer” to a “retail service provider” in the next ten years. From the perspective of corporate management, Suning will fully drive on the momentum of industry development from virtual to reality, return to the essence of the industry, cultivate core capabilities, and focus on value benefits, so as to realize the transformation from a business model to a profit model, from a retailer to a retail service provider.