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Suning hopes motherly care may expand revenue
By Ding Yining |
September 26, 2012, Wednesday
|
Print Edition
Print Edition
SUNING Appliance Co has acquired independent online retailer Redbaby for US$66 million to expand its e-commerce business as it diversifies revenue.
Suning, one of China's leading appliance retailers, has been shifting its focus to rely less on electric appliances and turning to general merchandise where profit margin is higher.
The change of strategy came amid weak domestic appliance sales due to the expiration of several government-backed subsidy schemes.
Li Bin, executive vice president of Yigou, the online shopping unit of Suning, said the acquisition is key for the retailer to become a comprehensive online shopping platform.
Chen Shousong, an analyst with research firm Analysys International, said: "The acquisition could allow Suning to significantly grow its presence in non-consumer electronics categories but the two companies could take a relatively long time to integrate their resources and management teams.''
Sun Weimin, Suning's vice president, said the company will continue to look out for potential acquisition targets and explore other forms of industry alliances to fuel its online unit's sales in the future. He said the acquisition will allow Suning to have an experienced team in the e-commerce business and attract more female buyers.
Beijing-based Redbaby, founded eight years ago, specializes in infant and mother products. A recent report by Internet consultant iResearch Inc said online sales of infant related products may surge 86 percent annually to 61 billion yuan (US$9.7 billion) in 2012.
Suning, one of China's leading appliance retailers, has been shifting its focus to rely less on electric appliances and turning to general merchandise where profit margin is higher.
The change of strategy came amid weak domestic appliance sales due to the expiration of several government-backed subsidy schemes.
Li Bin, executive vice president of Yigou, the online shopping unit of Suning, said the acquisition is key for the retailer to become a comprehensive online shopping platform.
Chen Shousong, an analyst with research firm Analysys International, said: "The acquisition could allow Suning to significantly grow its presence in non-consumer electronics categories but the two companies could take a relatively long time to integrate their resources and management teams.''
Sun Weimin, Suning's vice president, said the company will continue to look out for potential acquisition targets and explore other forms of industry alliances to fuel its online unit's sales in the future. He said the acquisition will allow Suning to have an experienced team in the e-commerce business and attract more female buyers.
Beijing-based Redbaby, founded eight years ago, specializes in infant and mother products. A recent report by Internet consultant iResearch Inc said online sales of infant related products may surge 86 percent annually to 61 billion yuan (US$9.7 billion) in 2012.
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