Suning 2-Month Sales Post Fast Growth, Chairman Zhang Says
Suning Appliance Co. (002024), China’s biggest electronics retailer, posted fast growth in sales in the first two months of the year amid signs of improving consumer demand, Chairman Zhang Jindong said.
“China’s new government will put in place measures to bolster economic growth,” Zhang said in an interview outside the Chinese People’s Political Consultative Conference in Beijing yesterday. “We are confident about the future.” He didn’t specify how much sales increased in January and February.
Sales are gaining following a 44 percent profit drop at Suning last year. The retailer, based in the eastern province of Jiangsu, is tapping online shoppers and adding new products to diversify after earnings were hurt by the weakest expansion in China’s economy in 13 years and price battles with rivals Gome Electrical Appliances Holding Ltd. (493) and 360buy Jingdong Inc.
China can’t merely focus on putting in policies to stimulate domestic demand, Zhang said. The country also needs to introduce measures to bolster related industries such as logistics and e-commerce, he said.
The company, which is changing its name to Suning Commerce Group Co., will invest 22 billion yuan ($3.5 billion) in logistics by the end of 2015 to move toward a model similar to U.S. retailers Wal-Mart Stores Inc. (WMT) and Amazon.com Inc. The retailer is also looking to expand after-sales services and financing to customers.
Zhang is the largest shareholder in Suning, according to data compiled by Bloomberg. Suning shares fell 2.4 percent as of 11:11 a.m. in Shenzhen trading, compared with a 3.3 percent slump in the CSI 300 Index. The stock has retreated 3.9 percent in 2013, extending three years of losses.
China’s economy expanded 7.9 percent in the final three months of 2012 from a year earlier, the first pickup in eight quarters. Growth may accelerate to 8.2 percent in the three months through March, according to the median estimate of 23 analysts surveyed by Bloomberg News.
To contact Bloomberg News staff for this story: Liza Lin in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Anjali Cordeiro at email@example.com