Suning to slash prices and add stores
Suning Appliance Co will slash prices up to 50 percent this month due to tumbling raw material prices and lackluster demand among consumers, the company said.
The consumer-electronics retailer, based in Nanjing, capital of Jiangsu Province, will also open 50 more outlets by the end of this year and fulfill this year’s goal of adding 200 stores, it said in an e-mailed statement.
“There is much room for price drops in electronics products due to falling raw material prices,” Jin Ming, executive president for marketing at Suning Appliance Co, said.
He expected prices of white goods including air-conditioners and refrigerators to fall up to 30 percent while television sets, mobile phones and computers will also decline a minimum of 15 percent.
According to the Nonferrous Metal Industry Association, prices of major nonferrous metals including steel and aluminum, the major raw materials for electronics products, plummeted about 20 percent last month.
Besides, transportation fees to deliver raw materials also fell. Freight fees from Brazil and Australia, major exporters of metals, eased an average 10 percent.
The retailer also reiterated it would add 50 more stores before the end of this year and make its presence felt in third- and fourth-tier cities in a bid to snap up a bigger market share.
“The current economic turmoil enhanced our determination and confidence to expand,” said Sun Weimin, president of Suning Appliance Co,.
Sun said many small retailers in third- and fourth-tier cities have been forced out of business due to the twin forces of declining consumer demand and the credit crunch. This presented and opportunity for Suning.
Suning said it is a good time to expand as rent and lease expenses have decreased about 20 percent as a result of the adjustment in the property market and it will show more obvious drops in the forth quarter.
The pace of Suning’s expansion will not slow and is more likely to accelerate in the coming year, company officials said.
“The affluent capital flow and reserves assure the company of continuing development even during a deteriorating business environment,” Huang Zhigang, an analyst from Everbright Securities Co said.
Suning operated 784 outlets in 173 cities across the country by the end of September. Profit for the first nine months rose 65.03 percent to 1.71 billion yuan while revenue was up 39.94 percent to 39.11 billion yuan, almost the same as for 2007.
Tags: Property