Gome to consolidate online business, striving for larger market share

By Zhang Ye Source:Global Times Published: 2012-12-3 23:40:08

Gome Electrical Appliance Group (Gome Group) will integrate its two B2C e-commerce platform units, Coo8.com and Gome.com.cn, in terms of backstage operation and consumer resources, the Chinese home appliance retailer told the Global Times Monday.

Upon completion of the integration, expected in January, gome.com.cn will remain a B2C website, selling products  from diapers to refrigerators, while coo8.com, acquired by Gome in May, will stop selling products directly and instead become a platform for third-party suppliers to sell their goods, the firm said in a press release sent to the Global Times.

Coo8.com's new business model is known as B2B2C (business to business to consumer).

The internal integration aims to expand Gome Group's product categories to meet the wide-ranging demands of domestic consumers, Wang Junzhou, president of Gome Group, said in the press release. While both websites have traditionally sold mainly electrical appliances, they have been aiming for wider variety in recent years.

 "In January 2013, we're likely to enable domestic consumers to log in to the two platforms with one account," said Han Depeng, CEO of Gome.com.cn.

"Then, consumers can search for merchandise on coo8.com via gome.com.cn, and they can also add products to a single online shopping cart for payment," Peng Liang, vice president of Coo8.com, told the Global Times in an e-mail Monday.

In the second quarter of 2012, Coo8.com accounted for 1.4 percent of the domestic B2C e-commerce market in terms of transaction volume, while Gome.com.cn held less than 1 percent, Analysys International's data showed

The integration of Coo8.com's consumer resources into gome.com.cn will increase the latter's pageview traffic, which may help boost Gome.com.cn's market share to a level at least on a par with Coo8.com's, Su Huiyan, an analyst at iResearch, told the Global Times.

Su noted that this integration is meant to save costs and strengthen Gome's online shopping business amid fierce competition from competitors like Tmall.com and Suning.com.

Gome Group saw a loss of 501 million yuan ($80.4 million) during the first half of 2012, thanks to "higher labor costs and property expenses" as well as its "capital-intensive e-commerce business," the company said in its 2012 interim report in September.

According to iResearch, leading player Tmall.com seized a 57.1 percent market share in the second quarter, while Suning.com's market share jumped to 3.8 percent in the second quarter from 3.1 percent in the first quarter.



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