Business Intelligence on Retailing, Franchising, and Consumerism in China

Gome To Invest CNY1 Billion To Explore TV Direct Sales Market

According to reports in local media, the Chinese home appliances retail giant Gome plans to invest CNY1 billion to enter China's TV direct sales sector and the business is expected to start at the beginning of 2009.

With regard to the business range and operating model of Gome's TV direct sales business, Zheng Jichong, president of the newly established Gome Online, stated that those details are currently not available. However, he said that the entry of large retail companies into the online shopping business is a trend. Gome owns 1,300 retail stores and a nationwide distribution and service system in China. The company can take advantage of these resources to enter the TV direct sales market.

A senior representative from Gome said that as the sales of appliances chain channel declines Gome is looking for new channels; and e-commerce and TV direct sales are important elements in building these new channels. Currently sales through Gome's online store has reached more than CNY400 million per year.

Commenting on this new move Gome's competitor, Sunning, says they are not interested in TV direct sales. According to Suning's president Sun Weimin, the company has never considered entering the TV direct sales market and will always focus on the development of bricks and mortar stores.

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