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Author / Shen Yibin Editor / Hao Junhui Kicked Girl
Source: IT Times
Xujiahui in Shanghai is one of the most prosperous commercial centers in the magic capital, and there is never a shortage of people.
At 6:00 p.m. on September 26, during the rush hour, crowds lined up to take the escalator, shopping malls and restaurants were overcrowded, and even the overpass was full of pedestrians coming and going. However, the Gome Xuhui No. 2 store here is exceptionally deserted, with few customers except for the promoters in red Gome uniforms.
“Fight for 18 months to restore Gome’s original market position.” On February 18, 2021, at the Gome Group executive meeting, founder Huang Guangyu put down his rhetoric. Now, 18 months are approaching, and the goal has not been completed, but Gome is in deep trouble of losses, layoffs, and store closures.
In order to turn the tide, Gome, while closing the store, relaunched a new model offline experience store – the True Happiness App Experience Center, in an attempt to return to its familiar old business.
However, the reality may not be as Huang Guangyu wished. Some dealers told the “IT Times” reporter that this is “another big cake” of Gome, and they are not optimistic about this new store directly operated by Gome .
On September 29, Gome Retail closed at HK$0.145, with a total market value of HK$5.179 billion, a drop of nearly 95% from the high point when Huang Guangyu just returned. Hong Kong dollar.
Twenty years ago, it was the most glorious period of the two major home appliance chain giants, Suning and Gome, with stores all over the country. Last year, Suning suffered a sudden crisis, Ali and state-owned assets took over, and founder Zhang Jindong withdrew. Now, in the face of a series of crises, will anyone take over Gome?
1
Various ways to cut pay
On September 26, “Gome’s salary arrears” rushed to Weibo’s hot search. The home appliance chain giant that once dominated one side has now become the object of collective complaints from employees.
“Some departments are directly disbanded.” Hu Mengxi (pseudonym), a former employee of Gome’s product department who resigned in August, told the IT Times reporter that the layoffs have been carried out in batches since April this year. The 60% layoff is not completely fictional. At the same time, Gome is still closing stores, mainly closing some unprofitable small stores, or transforming them into new model stores.
The data shows that Gome’s nationwide stores have decreased from 4,195 at the end of 2021 to 3,895 at the end of June 2022, with a total of 300 stores closed; Gome’s employees have also decreased from 32,278 at the end of 2021 to 25,701 at the end of June 2022. In half a year, 6577 people were reduced.
“The salary arrears are full of tricks.” Hu Mengxi told reporters that starting from May, performance will no longer be calculated by each department, but will be assessed by the company, and the performance obtained may be deducted by 50%~70%; in July , Gome adjusted the pay-performance ratio of 8:2 to 7:3, and required employees to sign the adjustment agreement, and employees who did not sign were also enforced.
In the Maimai community, many Gome employees also complained similarly. A Gome Online employee named “I’m so bad” also posted a complaint on July 26. The salary-performance ratio became 7:3, which was reduced in disguise. fixed salary income. Another netizen who is labeled as a Gome employee also said that there is a situation where 30% of the performance is not paid. For example, if the salary is 30,000 yuan, only 21,000 yuan is left after deducting performance.
Hu Mengxi, who resigned in August, has yet to receive his salary for the month. Gome HR told her that it may not be completed until October 25. Originally, Gome paid wages on the 15th of each month, but starting from the second half of this year, it has been delayed month by month. For unpaid wages, some departments force employees to write a petition for delayed payment, and some departments just give a verbal notice.
“The Paper” previously reported that Gome’s annual performance bonus is distributed twice during the Mid-Autumn Festival and at the end of the year. It was received normally at the end of last year, but this year’s half-year performance has not been received, and there is no notice when it will be issued, and it is still waiting. middle.
On September 26, Gome responded to Jiemian News saying that in order to ensure the normal operation of the company, the company did make temporary and emergency adjustments to salary distribution this month. At the same time, the company does not rule out that it will continue to implement staff reduction plans to further reduce operating costs. However, are the employees who are owed wages willing to share weal and woe with the company and tide over the difficulties together?
“Here, I can’t see the future.” Hu Mengxi (pseudonym) said.
2
Growing “holes”
Wages arrears, layoffs, and store closures cannot prevent Gome from losing money, and the “holes” are getting bigger and bigger.
The financial report shows that since 2017, Gome Retail has been losing money for 6 consecutive years, with a loss of 22.289 billion yuan. Among them, in the first half of 2022, Gome’s retail revenue was 12.109 billion yuan, a year-on-year decrease of 53.5%, and a net loss of 2.966 billion yuan, a year-on-year increase. 50.24%; on September 27, Gome Retail’s share price fell to HK$0.143, a drop of nearly 8%, and it once again hit a record low. At the same time, Gome is also burdened with heavy loans. At the end of the first half of 2022, Gome’s total retail debt was 58.6 billion; of which, interest-bearing liabilities were 28.1 billion, and accounts payable and bills payable were 14.4 billion.
In this regard, the Gome side issued an announcement admitting that: Gome has indeed encountered unprecedented huge difficulties and severe challenges, the process of corporate transformation has been hindered, and the cash flow has been under obvious pressure. Although we have made great efforts, the high operating cost is still the heaviest burden at present.
With the rise of Internet e-commerce, the former chain giants are facing a huge impact, and they have started a new retail model that integrates online and offline. However, so far, few have succeeded. Suning was once close to success, but fell into a complicated capital bureau, and Gome may not have been able to enter the game from the beginning.
Under the full attack of JD.com and Taobao, Gome Online has always been tepid, and its existence is almost invisible on Double 11 and 618 every year. After Huang Guangyu’s return, he renamed it “Really Happy”, which is a difficult move for people to understand – abandoning the existing national brand and re-creating an IP.
In recent days, there have been rumors of the departure of Gome executives. Wang Wei, CEO of Gome Electric Appliances, and He Yangqing, CEO of Gome Investment Company, have both left Gome. Hu Mengxi felt that Gome was becoming more and more out of touch with the times, and the managers were still operating in the old way. It was difficult for some people with new ideas to promote the change, so the executives would change like a beacon.
“Gome’s current difficulty may be higher than the outside world’s imagination.” Liu Buchen, the former chief consultant of Kuafu Enterprise Management Consulting Agency, believes that the frequent turnover of executives shows that the management has insufficient confidence in the future of Gome, and has shown a lack of confidence in Huang Guangyu’s development strategy and management style. Out of disagreement.
Wang Wei and He Yangqing are both GOME veterans. They joined GOME in 2001 and 2003 respectively. Unexpectedly, the two people who had stood by Huang Guangyu’s 10-year prison term for GOME, but only a few months after his return, left.
Ten years in the rivers and lakes, I don’t know if Huang Guangyu remembered the years when the veterans sued.
Liu Buchen believes that Huang Guangyu did not recognize the current problems of Gome, but blamed the strategic error on the epidemic, and had illusions about the “spring” after the epidemic, and when Gome was in a predicament, Huang Guangyu still used the pre-development strategy of Gome. Ten years of experience, as long as the revenue lags behind competitors for a period of time, large-scale store openings will begin, which will not only increase operating costs, but also lead to the emergence of many ineffective stores, followed by a wave of store closures. In the first half of this year, Gome only closed 300 stores, and plans to add 160 new exhibition halls and new model stores in key cities.
3
Self-help: Dealers ‘unhappy’
The new store mentioned by Liu Buchen is the “Really Happy App Experience Center” that has been opened intensively in various places recently. This new model offline store featuring “display experience + home extension + home entertainment + home service” is opening in Guangzhou, Chongqing, Shenzhen and other places opened.
After 18 months of shouting rhetoric, Gome has retreated from home appliance retailing again. The home improvement business that has been promoted in the past few years has basically been abandoned. After going around for 10 years, Gome has returned to the original point again. But the rivers and lakes are no longer the rivers and lakes they used to be.
“Now who still buys appliances offline, there are even fewer people coming in to shop.” A Midea air-conditioning salesman from Gome told reporters that offline sales are basically impossible, and the real price is only two or three hundred yuan cheaper. Some people will take a closer look. Now the salesperson’s commission for selling an air conditioner is 30~50 yuan, and some special products have less or even no commission. The income has shrunk by 50% compared with before the epidemic, and everyone has no incentive to promote.
Perhaps because of this, Gome has high hopes for the “Really Happy App Experience Center”. According to Gome’s official introduction, the offline experience center will open a new stage of Gome’s upgrading and development, and will also become an innovative model for the integration of digital and real and high-quality development in the retail industry.
A Gome store manager, Li Wei (pseudonym), told reporters that the difference between the real happy offline experience store and ordinary physical retail stores is that six functional areas such as exhibition, life, and brand are set up, as well as holographic projection area and game interaction area. and leisure area, which can meet consumers’ shopping, play and social needs in one stop. In terms of personnel, Gome will replace the employees of major brands with its own employees who have received relevant training.
But for the new model opened by Gome, brand dealers do not seem to buy it.
“We are definitely not happy to replace the employees of brand dealers with Gome’s own employees.” Xing Yan (pseudonym), a Daikin air conditioner dealer, told the IT Times reporter. On the one hand, Gome employees are definitely not as good as their own employees in sales The pros and cons will not be as hard as selling its own brand. Gome’s self-operated seems fair, but in fact, it is only beneficial to big brands such as Gree and Midea. given to others. In addition, after all offline stores are replaced by Gome employees, what will happen to the employees of the brand side? In the end, layoffs may also be expected.
Xing Yan said frankly that the real happy offline experience store model is also O2O. Although the so-called functional areas and interactive areas can increase the user experience, most of them are just gimmicks. There is no problem with Gome wanting to learn the Jingdong model. The main problem is that it is too late to enter the game, and the cakes are all divided.
Online, Gome is a far cry from other e-commerce companies. According to official data, in 2021, there will be only 16.84 million active buyers in Really Beautiful Year, compared with 580 million on JD.com and 869 million on Pinduoduo. Offline, Gome is no longer a leader. According to the “2021 China Home Appliance Market Report” released by the China Electronics and Information Industry Development Research Institute, in terms of home appliance sales channels, JD.com ranks first with a market share of 32.5%; Suning and Tmall occupy 16.3% and 14.8% of the market share respectively. Ranked second and third respectively; while Gome’s retail market share is only 5.12%, less than one-sixth of Jingdong’s.
The Internet has always liked the new and disliked the old. Even Suning, who did not miss the Internet, failed to win the dividends of the new era, let alone Huang Guangyu, who did not enter the game. The “snobbery” of the Internet always keeps tearing open the wounds of old people.
4
Powerless? who will take over
On September 26, the interim report released by Gome Retail showed that the net profit loss in the first half of the year was 2.966 billion yuan, which was 150% of the same period last year. At the same time, Huang Guangyu and his wife, who are the major shareholders of Gome Retail, continue to reduce their holdings. On September 14, Huang Guangyu, Du Juan (Huang Guangyu’s wife), Henghai Investment Co., Ltd. and Gome Management Co., Ltd. reduced their holdings by 2.737 billion shares, cashing in a total of HK$531 million; on the 15th, Huang Guangyu and Du Juan again reduced their holdings by 88.925 million shares , totaling approximately HK$16.8068 million.
Rumors such as “Is Huang Guangyu about to quit?” are rampant. “Reducing holdings does not mean abandoning. So far, Huang Guangyu has not shown signs of abandoning Gome.” However, Liu Buchen also believes that Gome is powerless, and Huang Guangyu is a wise choice to abandon Gome.
If Huang Guangyu abandoned Gome and faced such a “hot potato”, who would be willing to take over? Who can take over?
“Compared to Suning, Gome’s current situation is even more severe.” Liu Buchen analyzed that in the era of the rise of e-commerce, Suning has a better vertical e-commerce foundation than Gome, and it is impossible to escape the crisis. Today, Gome is basically giving up its online self-rescue strategy. , will only make the follow-up takers face greater problems; secondly, Suning had a close cooperative relationship with Ali before, and at the same time, it was backed by the Jiangsu State-owned Assets Supervision and Administration Commission, while Gome, on the other hand, was somewhat isolated and helpless.
More importantly, who will take over. There are no more than a few large-scale e-commerce platforms that are capable of taking over, but Liu Buchen believes that JD.com has its own offline self-operated stores, and online is also booming, so why take over? Ali has just taken over Suning, and he has no relationship with Gome before, and he should not have any thoughts.
However, judging from the financial report, Gome still has nearly 4,000 offline retail stores, which are its most valuable asset and the most attractive asset for “Panxia”. Liu Buchen believes that there should be companies interested, even if In the worst case, Gome can also sell or sublease these stores, and it can also have good results, but this means that Gome will only be a “rent collector”, and the “home appliance dream” may be shattered.
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