On January 30, Zhang Jindong, Chairman of Suning Group, presided over the 2021 work deployment meeting of Suning, clarifying that Suning will adhere to the two main development keynotes of “focusing” and “creating benefits” in 2021 to promote the steady development of the company.
"Focus is to achieve industry focus with retail as the core and business focus with profit as the core; to create efficiency is to strengthen the priority of benefits, and to pursue efficient scale and scale benefits." Zhang Jindong emphasized at the deployment meeting.
On the eve of the deployment meeting, Suning.com released the fourth phase of its employee shareholding plan announcement. The content showed that Suning.com’s revenue target for 2021 was to increase by no less than 20% year-on-year, and to achieve deductions by 2023. The non-net profit is not less than 3 billion yuan. It can be seen that Suning is speeding up to break through the profit inflection point and will open a new starting point for the development of economies of scale.
Focus on retail and do three things well to improve efficiency and scale in an all-round way
"We must not simply pursue high and rapid sales growth, but to achieve a stable growth level, pursue a substantial improvement in profits, the profitable unit must expand the scale of profit, and the loss-making unit must have a clear loss reduction plan."
Zhang Jindong emphasized that in 2021, we will continue to refine, strengthen, and improve the main retail business. The core of focusing on retail is to do three things: reduce operating costs, expand sales scale, and improve product efficiency.
In terms of cost reduction, we will shut down high-investment and low-value sectors, and will reduce the loss of key business units by means of business transformation and divestment of valueless loss-making businesses. Logistics should focus on the improvement of user experience and merchant experience, focusing on advantageous warehouse and distribution integration, delivery and assembly integration, trade-in, after-sales service business, and cut off valueless businesses with low unit prices and high losses. At the same time, Zhang Jindong emphasized that it is necessary to further optimize the organization to improve human efficiency, and to stimulate the subjective initiative of internal employees through continuous increase in equity incentives and other means, especially to give terminal personnel who "hear the gunfire" a more flexible combat mechanism.
In terms of scale expansion, the most important thing is to focus on user services, focus on the value mining of users and members, and improve the activity and repurchase rate of Suning users in all scenarios by improving service capabilities; at the same time, it should be based on the development of "cloud network Wandian" Accelerate the output of e-commerce capabilities. In terms of offline empowerment, Suning.com has formulated a development plan to add 4,000 retail cloud stores in 2021; in addition, it will continue to optimize the construction of the main website of e-commerce and vigorously develop B2B business. Improve scale and quality.
In terms of improving product efficiency, Suning will establish an S division to improve supply chain efficiency based on data, and develop reverse customized products (C2M) based on data. It plans to achieve a 20% sales share of C2M products within three years. With the accelerated transformation of the supply chain, the development of all categories of independent products, the increase in the scale of home appliances and the increase in profitability are still two important supports for Suning's future benefits.
Take the initiative to change and subtract, boldly cut down low-value businesses
In order to achieve a comprehensive improvement and promotion of benefits, Zhang Jindong clearly requires the two-pronged approach of "slimming and reducing losses" and "improving quality and efficiency". On the one hand, we are doing subtraction to shrink non-retail core businesses that have serious losses. At the same time, we will further grow the long board, expand the advantageous profit segment, and improve operating efficiency.
Earlier at the 30th anniversary celebration ceremony of Suning, Zhang Jindong made it clear that he will focus on the main retail business in the next ten years. “As long as you are not on the retail track, away from products and users, you must make bold adjustments. "
At this deployment meeting, Zhang Jindong further demonstrated Suning’s determination to face the problem head-on, lose weight, and be determined to change: “We must dare to make subtractions, shrink the front, and actively carry out model changes for some loss-making business units. The main line of business must be actively cut off."
It is understood that, including PP Sports and Suning's football clubs are accelerating adjustments. The Suning Tesco announcement issued on January 29 indicated that it will quickly adjust the low-value, high-loss external business order plan undertaken by Tiantian Express.
"Slimming" is to better "fitness". Suning cuts down non-retail-related and severely loss-making businesses in order to concentrate on making greater breakthroughs in the main retail business and amplify the advantages and capabilities of the main business.
"In the new era and opportunities, we must break away from the fiction and return to the essence of the industry, build core competitiveness down-to-earth, and innovate and reform to pursue fairness and efficiency." Zhang Jindong said to all Suning employees that we must continue to strengthen strategic determination and development resilience. Further strengthen the implementation of the ground, plan a good picture for the development of Suning's fourth decade, and create greater return of value for the career of Suning people.