In accordance with data from CMM, in 2006 China home appliance market capacity realized about RMB 650 billion, of which mobile phones accounted for 24.1% and IT products accounted for 15.1% with totally annual market capacity of consumer electronic products being about RMB 260 billion. And meantime, growth rate of annual demands is no less than 20%. In 2007-2010, China will be the second largest computer market in the world, just next to USA. Besides, popularity degree of digital products will also further increase; and then China will become major growth point for sales of digital videos and digital cameras in the world. Undoubtedly, such a situation has offered an optimal development opportunity for Suning. 

Comparison of Net Profits Margin between Suning, Gome and Bestbuy

 
 
Source: Annual Report of Suning

With the chance of channel integration, Suning is gradually involved in distribution of China 3C Consumer Electronic Products. It's estimated that in 2007 proportion of 3C products' turnover will increase to 30% with sales revenues approaching RMB 10 billion. And till the end of 2007 number of 3C+ flagship shops in China will increase to 70 units.

Suning gradually upgrades Sales Revenues of 3C Consumer Electronic Products

Source: Annual Report of Suning

Forecast of New-established Shops by Suning

Source: Annual Report of Suning and Shenyin & Wangguo Securities Co., Ltd

The report mainly analyzes orientation transformation and top-quality services on Suning satisfying demands of consumers; and also analyzes competition strategies on upgrading the relationship with suppliers and Brand differentiation. 

Table of content

2 Strategic Transformation Research
2.1 Transformation of Consumer Goods----From Traditional Home Appliances to Consumer Electronics 
2.2 Widening of Operating Mode----3C+ Flagship Shop and Sailing of Digital Suning 
2.3 Strengthening Brand Advantages----Advancing Rallying Point of Suning Brand in Virtue of Celebrity Effects

3 Strategies and Market Review in the First Half of 2007 
3.1 Deepening of Intensive Management 
3.2 Deep Level Strategic Cooperation with Suppliers 
3.3 Information-based Operation bringing low-cost 
3.4 Advancements of Customer Services and Corporate Social Values 

4 Golden Week bringing Growth of Enterprises' Mid-term Achievements
4.1 May Day Holiday enhancing Extension of Flagship Shops 
4.2 Golden Week and Flagship Shops have been Major Driving Factors for Mid-term Achievements 

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