NANJING – In the winter of 1990, Zhang Jindong quit his stable job, raised funds and opened a 200-square-meter store selling air-conditioners, to compete with the state-run shopping malls dominating at that time.
At the start, Zhang’s decision won little support from his family and friends, who thought it difficult to survive in the then market environment. But the country’s support for developing the market economy boosted Zhang’s confidence in his business.
Zhang soon alleviated any worries his family had. He innovated business models and took the lead in offering conglomerative services such as delivery, installation, repair and maintenance. This helped Suning to occupy a 70-percent share in the local air-conditioner sale market in Nanjing in just one year after its operation.
Almost thirty years on, the Suning store in Nanjing, capital of east China’s Jiangsu Province, has grown into a retail giant and one of the top private enterprises in China, through its continuous innovation and reform in the Internet era, as well as cooperation with both domestic and foreign firms.
Now boasting 13,000 stores, the retail company has been included among the Fortune Global 500 companies for the past three years. Suning.com, the e-commerce platform of Suning, saw its omnichannel sales volume of commodities increase 21.8 percent year on year to 184.22 billion yuan (about 26 billion U.S. dollars) in the first half of this year.
“The reform and opening-up policies opened the door to the rapid growth of the private sector,” Zhang explained. “Suning was founded in 1990 and expanded rapidly after the remarks made by Comrade Deng Xiaoping during his southern inspection tour in 1992,” said Zhang, 56, founder and chairman of Suning Holdings Group. During the landmark trip, Deng urged further emancipation of the mind and acceleration of reform, opening up and economic development.
After the year 2000, the rapid development of the real estate sector boosted demand for home appliances. Again, Zhang seized the opportunity, decisively cut down the company’s air-conditioner wholesale business, and focused on developing home appliance chains nationwide. In 2009, Suning had more than 1,000 stores, with its sales revenue surpassing 100 billion yuan.
“The huge market of our country is the reason for the successful transformation of Suning,” said Zhang. “We should always integrate the growth of enterprises with the big development of our nation.”
SMART RETAIL PROMOTER
With the boom of e-commerce, Suning’s online platform Suning.com was put into use in 2010, marking the Internet-based transition of home appliance chains, although some employees did not quite understand the step at first.
“The most dangerous thing is to stay within our comfort zone without seeking change,” Zhang said.
According to Zhang, Suning is not an e-commerce company, but a smart retailer. Future retail enterprises must adopt an integrated model of both online and offline services, he said, calling for efficient management based on data applications.
In 2015, the company reached a multi-billion dollar deal on platforms, logistics and payments with Chinese e-commerce giant Alibaba. Two years later, Suning opened its first unmanned store.
Smart retailing includes the use of cloud computing, big data and IoT technologies to realize intelligent purchasing, sales and services, according to Zhang.
Hou Enlong, president of Suning.com, attributed the development of the company to the chairman’s preparedness to new challenges and continuous innovation.
“He has always made the right decision in each transformation of the retail industry. We choose to understand and implement it. Suning has never been left behind,” Hou said.
Earlier this year, Suning acquired the 37 nationwide stores of Wanda Department Store. In June, the company announced it reached a deal to buy an 80 percent equity interest in Carrefour China. The transaction is expected to integrate Suning.com’s online-to-offline retail model and logistics network with Carrefour China’s strong supply chain and experience in retailing fast-moving consumer goods.
These measures have improved the smart retail layout of Suning and enhanced its market competitiveness in big and fast-moving consumer goods, which will provide a more valuable shopping experience to users, Zhang said.
According to the entrepreneur, Suning’s plan is ultimately designed to improve the core competitiveness of retail and better meet the needs of users. “Four capabilities — stores, logistics, technology and finance — have helped Suning strengthen its retail business.”
Suning is also involved in sports, including investment in two football clubs.
“Sports culture represents an uplifting force and a ray of sunshine, much like Suning’s positioning, making it easier to establish emotional ties with consumers,” Zhang said. Enditem