Business Intelligence on Retailing, Franchising, and Consumerism in China

Suning Becomes Direct Supply Channel For HP In China

Chinese electronics retailer Suning has signed a direct supply agreement with HP, making it the only direct supply channel provider for HP in China.

Under the agreement, the two parties are expected to achieve annual sales of CNY1.5 billion in 2009 and total sales of over CNY5 billion over the next three years.

Sun Weimin, the president of Suning, told local media that the establishment of a direct supply model with manufacturers will be a focus of the future development of home appliances channel providers.

According to HP, the direct supply model will shorten the supply chain, and lower the retail prices of its products. In Europe and the United States, HP adopted the direct supply model long ago and supplies its products directly to major retailers. With the gradual maturing of the Chinese consumer market and channels, the company hopes to launch this direct supply cooperation in this marketplace to optimize its supply chain.

Prior to the signing of this agreement with Suning, HP distributed products through its nationwide general agencies in China.

To date several other technology companies, including Lenovo, Dell, Hasee, and Tongfang, have also reached direct supply cooperation with Suning.

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