Current technology layout in the transition of home appliance chain business model

Since Gome announced to the outside world on December 1st that the ERP information system jointly implemented by ERP software provider SAP and IT service provider HP was successfully launched nationwide, the two companies that dominate the domestic home appliance chain retail structure, Gome and Suning, are in the aspect of enterprise informationization. Take a step deeper.

Why does Gome and Suning invest heavily in ERP information systems? This is just like the home appliance manufacturing enterprises upgrading their products through technological upgrading of their products to achieve enterprise transformation in industrial upgrading. The introduction of ERP information systems is just like the technology layout of home appliance chain business model transformation.

In fact, this important layout, Suning began to focus on construction earlier, and its current ERP system also comes from SAP, implemented by IBM, in April 2006 to achieve the nationwide on-line system. However, five years later, Suning implemented an important step in the technical layout. In the first month of Gome's successful implementation of ERP, Suning formed an e-commerce innovation community with IBM in Suning headquarters in Xuzhuang, Nanjing. The two parties will formulate e-commerce strategy and business models, open system-based advanced system architecture design, and cloud computing. In-depth cooperation with customers' value-added service operations, and the construction of large-scale Internet companies' R&D capabilities.

Both retailers have invested heavily in the application of new technologies. Implementing ERP systems for Gome will effectively reduce corporate management costs. The ultimate goal is to further improve the zero-supply relationship through such cost management; Suning and IBM's Hand in hand is to deepen the e-commerce strategy; but in fact, the commonality between the two in the home appliance chain business model transformation is obvious.

The rise of e-commerce impact on the home appliance chain industry, industry players have such a joke: "In the future, under the impact of e-commerce, home appliance chain stores do not know when the tide began." Perhaps it will not reach this level, but it will be enough to see the deepness of the influence. It can be seen from the urgent attitude of Gome and Suning to develop their own e-commerce platforms.

A new study by the Boston Consulting Group (BCG) stated that China’s e-commerce prospects for 2015 are very attractive. The proportion of e-commerce in total retail sales in China will increase from the current 3.3% to 7.4% in 2015. Firms that fail to quickly grasp this huge window of opportunity will lose a lot of growth potential. The Boston report pointed out that for companies that have not entered the e-commerce strategy for new monks, they cannot exert any control or influence in the process of this rapidly growing channel. "Companies that want to compete must attract consumers through the combined effects of multiple online and offline channels."

“Integral between the online and offline virtual reality” This is the current business model of the two major chain companies of Gome and Suning. After the two companies built their own online shopping platform, they formed the Gome + Gome Online Mall + Kuba shopping. Net, Suning Appliance + Suning Tesco-based two major chain forms, and JD.com and other major e-commerce, regional chain-based channel system to jointly divide the terminal retail pie. Interestingly, in pure e-commerce competition, Gome and Suning are still smaller than Jingdong, and in the competition of physical chain stores, the advantages of Gome and Suning's channel sinking have not been highlighted.

Some analysts pointed out that "the current commercial nature of home appliance chain charging fees to suppliers cannot be changed. What can be changed is to optimize the existing model and consolidate its advantages." Therefore, it is timely that GOME's ERP system will be successfully implemented. Or, Suning and IBM are deepening their e-commerce strategy. The purpose is to make the relationship with suppliers more seamless by leveraging the application of new technologies in business models.