Suning and Auchan reached a strategic cooperation to seize the offline home appliance market

On October 26th, Suning and Auchan have reached a strategic cooperation recently, and the two sides will conduct in-depth cooperation in the field of home appliances 3C. According to reports, Suning Tesco will upgrade 75 stores in Auchan China to further seize the domestic offline home appliance market and lay the foundation for future international supply chain construction.

According to public information, Auchan Retail was established in France and is now the 13th largest food retailer in the world. It has settled in 17 countries and regions and entered the Chinese mainland market in 1999. As of October 2018, Auchan opened 75 large stores in 10 provinces (cities) including Beijing, Shanghai, Jiangsu and Guangdong. The cooperation between Suning and Auchan is mainly to undertake the upgrading and renovation of home appliances 3C in Auchan’s store in mainland China. The cooperation results mainly focus on the “Double 11” front display.

Previously, in June, Suning had reached a strategic cooperation with another retail giant, RT-Mart, which is part of Gaoxin Retail. For the first time in the 818 big promotion of RT-Mart, a total of 282 cooperative stores and Suning various types of business sharing big promotion efforts and gameplay, sales growth of up to 1067%. Whether it is the speed of the renovation of the store, or the increase in the operating efficiency of the store, it shows that Suning Tesco wants to seize the ambition of the domestic offline home appliance market.

According to the monitoring data of the home appliance market released by the Gfk data organization in the first half of 2018, the omni-channel market of the home appliance market in the first half of 2018 exceeded 200 billion yuan, and the offline channel retail sales accounted for 70%, far exceeding the online channel. In the 2018 China Household Appliance Industry Semi-annual Report, the report also showed that in the first half of 2018, the market size of the home wire reached 280.4 billion yuan, still occupying an absolute weight in the overall home appliance market. The value of offline physical stores has regained recognition and attention from home appliance companies, and offline channels will become the dominant channel for consumption upgrades.

With the rise of home power grid sales, in the strong period of online sales channels in the home appliance industry, there have been views that the future sales channels under the home wire will accelerate its demise. However, as household appliances enter the intelligent stage, the experiential demand for home appliances will increase, which will increase the necessity of physical stores. In the future, the home appliance channel will develop towards online transactions and offline experiences.

The E-Commerce channel is no longer just a supplement to the traditional offline channels, and home appliance companies are beginning to re-examine their positioning of E-Commerce channels. According to the GfK report, the omni-channel retail sales of the main home appliance market in the first half of the year exceeded 200 billion yuan, and it is estimated that Suning’s sales will be about 45 billion. According to the report of the CCID Research Institute of the Ministry of Industry and Information Technology, the total retail sales of the domestic grid purchase market in the first half of the year exceeded 264.1 billion yuan, and Jingdong accounted for 60.5%. Among them, the main sales of home appliances category was 96.1 billion yuan, which estimated that Jingdong‘s sales were about 58.1 billion yuan. The influence of Suning’s online E-Commerce platform is obviously not as good as that of JD. However, according to the semi-annual report of China’s household electrical appliance industry in 2018, Suning achieved the first position in the market with the market share of 17%. The cooperation between Suning and Auchan, in addition to continuing to strengthen the layout of the blank business circle, is also to expand the advantages of Suning’s offline home appliance market.

As the trend of consumption upgrading continues to develop, consumers’ consumption concepts are also constantly improving. At present, is actively cooperating with offline entities to make up for the shortcomings of E-Commerce experience. Gome is also setting up flagship stores on many platforms to make up for short-term online traffic. The integration of online and offline markets will definitely become the future development trend. In addition to grabbing the offline home appliance market, Suning should also expand its online and offline channels. With the entry of major E-Commerce giants, traditional home appliance companies are also constantly transforming into digital, and the future home appliance market will usher in a new change.