Advertisement

E-commerce sales seen picking up at loss-making Gome Electrical

Reading Time:2 minutes
Why you can trust SCMP
Gome says its shops give it an edge over web vendors. Photo: Xinhua

Gome Electrical Appliances, the second-largest home appliances chain on the mainland, expects its loss-making e-commerce business to turn a profit within the next two years - after posting an interim loss of 502 million yuan (HK$614.07 million) for the six months ended June.

Advertisement

The Beijing-based company reported yesterday that sales fell 22 per cent to 23.1 billion yuan.

The fall in revenues, combined with rising costs for rent and labour, tipped the retailer into the red for the reporting period, compared with a net profit of 1.25 billion yuan a year earlier.

However, Gome said trading conditions were improving. On a same-store basis, sales declines narrowed to 18.7 per cent in the second quarter from 34 per cent in the first quarter, and the July and August figures were better than results from the first half of the year.

E-commerce, which contributed 8.2 per cent in total sales revenue, recorded a loss of more than 260 million yuan, about half of the company's total loss during the period.

Advertisement
Gome has been engaged in an internet price war with its major competitors - Nanjing-based Suning Appliance and 360buy.com the largest business-to-consumer online operator on the mainland.
Advertisement