During the reporting period, Suning.com achieved a revenue of 12.579 billion yuan, a year-on-year decrease of 20.68%; The net profit was -0.68 billion yuan, a year-on-year decrease of 62.26%.
In the new quarter, struggling Suning.com is still on the eve of turning losses into profits.
On the evening of April 29th, Suning Yigou Group Co., Ltd. (ST Yigou) released its Q1 2024 report. During the reporting period, Suning.com achieved a revenue of 12.579 billion yuan, a year-on-year decrease of 20.68%; Net profit was -0.68 billion yuan, a year-on-year decrease of 62.26% in losses; The net profit attributable to the parent company was RMB 0.97 billion, a year-on-year decrease of 3.75%.
From the first quarter financial report, it can be seen that Suning has continued its momentum of continuous loss reduction. According to the financial report, Suning’s omnichannel exclusive product sales accounted for 29% in the first quarter, with a year-on-year improvement in gross profit margin. At the same time, while strictly controlling various expenses and improving floor and personnel efficiency, the company’s total expenses in the first quarter decreased by 21.59% year-on-year.
However, a year-on-year decrease of 20.68% in operating revenue is not optimistic for Suning. Suning said in the financial report that on the one hand, the decline in operating revenue was due to the downsizing adjustment of Carrefour’s business since the end of the second quarter of 2023, with a high base in the same period. On the other hand, the consumption prosperity in the first quarter still needs to be improved, and the impact of the market environment, coupled with the seasonal disturbance of home appliance promotions during the Spring Festival holiday, has also caused a year-on-year decline in its operating revenue.
How to overcome the dilemma of declining income is one of the issues that Suning needs to consider in the next step. Suning stated in its financial report that although its revenue declined year-on-year in the first quarter, it accelerated the development and reserve of core stores in key cities, laying a good foundation for the company’s annual business goals.
“Big Store Strategy” is one of the strategies currently being promoted by Suning. On April 18th, Suning announced that the first Suning Yijia Max store in Beijing will be located in the CCTV Tower, with a business area of over 20000 square meters. Meanwhile, Suning has revealed that from April 26th to May 1st, Suning will densely open 17 large stores in 13 cities across the country, officially launching new business formats – Suning Yijia Max and Suning Yigou Pro. To promote the upgrading of Suning’s store scene, product structure, and service experience in the form of larger scale stores, and to find ways to break through from offline experiences, has become Suning’s ambition.
It is worth noting that behind the attempt to break through with a “big store”, Suning’s cash flow will be further tested. Previously released financial reports showed that in 2023, Suning’s net cash flow from operating activities was 2.91 billion yuan, a year-on-year increase of 561.37%. However, in the first quarter of 2024, Suning’s cash flow growth was once again tested. During the reporting period, Suning achieved a net cash flow of 1.407 billion yuan from operating activities, a year-on-year decrease of -27.71%. This also means that Suning may still face a crisis of “ammunition” supply on the road to seizing the market through offline experience.
Recently, the Ministry of Commerce and 14 other departments jointly released the Action Plan to Promote the Exchange of Old for New Consumer Goods. With market demand and policy support, “Exchange of Old for New” is regarded as an important growth point in the home appliance industry. Previously, Yang Daoling, Director of the Big Data Analysis Department of the National Information Center’s Big Data Development Department, disclosed that there is huge consumer space for home appliance replacement. A survey on the consumer demand for household appliances replacement showed that nearly 30% of households own “older” appliances, with 31.9%, 29.4%, and 28.1% of respondents using televisions, washing machines, and range hoods for 8 years or more, respectively. The proportion of households using refrigerators and air conditioners for 10 years or more is 16.3% and 14.7%, respectively. The proportion of “four major items” exceeding the age limit in rural households is higher, with 35% and 32.3% of respondents using televisions and washing machines for more than 8 years, and 19.7% and 16.6% of respondents using refrigerators and air conditioners for more than 10 years, respectively.
Recent data disclosed by Suning shows that in the first quarter, the order volume of Suning Retail Cloud’s trade in orders increased by 247% year-on-year, and the sales amount increased by 138% year-on-year, with a cumulative collection of over 40000 units. It is worth observing whether Suning can leverage its “trade in” business to drive revenue growth in the second quarter.
According to the financial report, as of the end of the first quarter, Suning.com has opened 415 new retail cloud franchise stores, bringing the total number to 10756.