Suning plans massive expansion

Suning Appliance Co Ltd, China's largest electrical appliance retailer by sales volume, is planning rapid expansion in both its traditional outlets and online business this year.

The Nanjing-based retailer is aiming to add more than 400 outlets this year, including in Hong Kong and Japan. At present, the company has more than 1,700 stores at home and abroad.

"The volume of China's home appliance market will grow to 3.1 trillion yuan ($475 billion) by 2020. Suning intends to occupy around 20 percent of China's home appliance market by then," said Suning's Chairman, Zhang Jindong, on Monday. Zhang is also a member of the Chinese People's Political Consultative Conference National Committee, which is currently meeting.

In addition to expanding its traditional stores, the home appliance giant also has plans for online sales.

"Our 2012 target for online sales is 30 billion yuan. The site will sell daily necessities, clocks, musical instruments and other goods besides electrical appliances," said Zhang.

In order to achieve the online boom, Suning will add five major procurement and sales centers to support the rapid development of its new channels, including items such as books and "virtual goods" in 2012. Last year, the company's sales revenue was 93.89 billion yuan, an increase of 24.35 percent on the previous year. Online sales contributed 5.9 billion yuan of the total, one-fifth of this year's target. The company said it aims to expand online sales by 50 percent annually in the next 10 years. Last month, Chinese press reported Dangdang Inc, a major Chinese online retailer, joined hands with Gome Electrical Appliances Holding Ltd, Suning's major domestic rival and the country's second-largest electronics retailer.

The two companies may cooperate in sales of electronic devices and home appliances, which will be a win-win situation for both Gome and Dangdang, according to China Business News.

"Chinese online retailing market will have growth of between 30 to 50 percent year-on-year in the next few years, which is much bigger than the traditional retail market," said Guo Hongchi, chief executive officer of Xijie.com and an industry expert. "An increasing number of companies are willing to expand their online market share."

"The booming industry will definitely attract more competitors," said Guo. "I believe that in the next three to five years, Suning's online business will be very experienced and competitive."