Chinese electronics retailer Suning announced that it has spent RMB730 million on buying two properties in Shanghai and Wuhan, respectively, for flagship store construction.
The two properties that Suning has purchased are located at 1-3F of Shanghai Pudong Yuandong Plaza and 1-5F of the Tower B and Tower C of Gonghang Square at Wuchang in Wuhan. Excluding tax, Suning spent RMB532 million on the Shanghai property and RMB204 million on the Wuhan property.
Sun Weimin, CEO of Suning, says that Suning would use most of the two properties for building flagship stores and lease the rest to other businesses. Sun said that they lease the space to other businesses not to earn money but to form an interactive market with those businesses.
Suning said that they would develop franchise stores and increase their brand awareness in core business areas of key cities in the future through self-building and purchasing properties.
The extensive expansion of the single stores has greatly decreased the profit of each home appliance retailers in China. Starting the end of last year, Gome, Suning and Dazhong have all begun to implement the "big store strategy", that is, to increase the scale of a store instead of opening more new smaller stores.