In accordance with data from CMM, in 2006 China home appliance market capacity realized about RMB 650 billion, of which mobile phones accounted for 24.1% and IT products accounted for 15.1% with totally annual market capacity of consumer electronic products being about RMB 260 billion. And meantime, growth rate of annual demands is no less than 20%. In 2007-2010, China will be the second largest computer market in the world, just next to USA. Besides, popularity degree of digital products will also further increase; and then China will become major growth point for sales of digital videos and digital cameras in the world. Undoubtedly, such a situation has offered an optimal development opportunity for Suning.
Comparison of Net Profits Margin between Suning, Gome and Bestbuy
Source: Annual Report of Suning
With the chance of channel integration, Suning is gradually involved in distribution of China 3C Consumer Electronic Products. It's estimated that in 2007 proportion of 3C products' turnover will increase to 30% with sales revenues approaching RMB 10 billion. And till the end of 2007 number of 3C+ flagship shops in China will increase to 70 units.
Suning gradually upgrades Sales Revenues of 3C Consumer Electronic Products
Source: Annual Report of Suning
Forecast of New-established Shops by Suning
Source: Annual Report of Suning and Shenyin & Wangguo Securities Co., Ltd
The report mainly analyzes orientation transformation and top-quality services on Suning satisfying demands of consumers; and also analyzes competition strategies on upgrading the relationship with suppliers and Brand differentiation.
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