Chain stores and suppliers engage in a war of words; retailer-supplier relations intensify again
This station's report (by reporter Xinu Liu): The contradiction issue between chain businesses and suppliers that this station has previously paid attention to continues to ferment. Yesterday, there were messages circulating that suppliers have exposed the new policy implemented by Gome Electrical Appliances after it was re-controlled by the Huang family, which is internally planning to increase the monthly rebate percentage for suppliers from last year's 16% to 19%.
This claim was strongly protested by Gome yesterday. If it could truly be increased by 3%, which supplier would still do business? A high-level official of Gome told this station's reporter that, for Chinese chain enterprises with net profit levels at only around 4%, the additional 3% rebate would undoubtedly form a substantial benefit for stock prices. Unfortunately, this benefit is just a castle in the air.
Complaining about the annual price increase of rebates
Behind the sharp increase in the number of outlets, conflicts in retailer-supplier relationships are becoming increasingly intense. The conflict between Gree and Gome remains a topic of interest in the industry. Recently, the leading company in black goods electronics, Skyworth, also openly challenged Gome. Henan Gome and Suning's promotional measures led Skyworth to withdraw all its manufacturer sales personnel from all Gome and Suning stores in Henan and stopped supplying goods to Gome and Suning. The result was still that the supplier had to give in.
Yesterday, many supplier executives ultimately repeatedly emphasized to the reporter that it couldn't be said that they said it, nor could their company names be mentioned, and the details shouldn't be discussed too finely. The mixed feelings of love and hate that suppliers have towards chain enterprises are evident.
The latest message claims that after Dujuan took control, she required Gome to change the practices of the Chen Xiao era and adopt new policies towards suppliers to gain greater profit space, exclusively interviewing Microsoft's CIO: cloud computing brings three changes, enhancing shareholders' confidence. Some suppliers revealed that this year's rebate will increase by 3%.
Regarding this, most suppliers said yesterday that negotiations with Gome are still ongoing without final results. However, regarding the increase in rebates, suppliers unanimously believe that chain retailers exert such pressure every year.
A senior executive of a black goods electronics company told the reporter that increasing rebates is not just an issue with Gome alone, vob file converter. After some venue contracts for chain retailers expire this year, rents have more than doubled. Chain retailers hope to pass on this pressure by increasing rebates, David Kongwei: Sina Weibo will integrate real-time search and localized information.
Another head of a home appliance company revealed that based on the quotations he currently receives from chain retailers, the highest increase is 2%. This is just a quotation; suppliers cannot agree to it. An increase of 0.5% to 1% should be the level that most companies can accept.
Gome Senior Management
Rebate Increase, Stock Price Surge?
Yesterday, Vice President of Gome Electrical Appliances, Yangqing He, told reporters that according to annual report data, Gome and Suning's gross profit margin is around 18.5%, relatively lower compared to international chain enterprises like Best Buy and Yamada Denki at 25%. This means that for suppliers, Gome and Suning are still the lowest-cost platforms.
Regarding the claim of a 3% increase in rebates, Yangqing He stated it's nonsense. Gome's net profit level is only around 4.5%. If it increases by 3%, it would significantly benefit Gome's profits, and the stock price should surge!
Additionally, regarding the claim that Gome's expansion of 480 stores this year imposes heavy burdens on suppliers, Yangqing He responded that if distributed across the network platform of 300 cities nationwide, each city only needs to open 1.6 new stores, and 60% will come from second- and third-tier markets.
Regulatory Authorities: Drafting Regulations to Standardize Retailer-Supplier Relations
In fact, the contradictions in retailer-supplier relations have always been an open secret within the industry and have become an old ailment troubling the electrical appliance retail chain industry for over ten years. In the second half of 2009, Gome once initiated a movement to cancel entry fees, making the industry cheer for the arrival of a new model, but the business model did not undergo fundamental breakthroughs, as everyone submits corrected files for average unique user visits per month.
Regulatory authorities also have a clear understanding of the contradictions between retailers and suppliers. On the 17th, Yao Jian, spokesperson for the Ministry of Commerce, stated that retail enterprises charging entry fees have long existed in China's retail industry, being a phenomenon that appeared during marketization and having a certain degree of rationality. The Ministry of Commerce has formulated two regulatory management methods, standardizing six types of unreasonable charges. However, from the perspective of implementation effects, some areas still experience poor execution.
He revealed that regarding issues such as retail enterprises charging entry fees, the Ministry of Commerce is drafting the "Opinions on Regulating the Transaction Behavior of Retailers and Suppliers" and the "Norms for Retailer-Supplier Goods Supply Contracts," currently soliciting opinions from trade associations and all parties involved.