At the same time, GOME entered into the strategic co-operation agreement with Shanghai Xunmeng Information Technology Co., Limited, the subsidiary of Pinduoduo to undertake strategic co-operation in respect of product purchase and sales, resource cooperation and support, joint marketing and other related services. GOME believes that through in-depth co-operation in the above aspects, it will achieve the sharing of advantages resources of two parties and continue to expand new retail model of online and offline integration. It will also further accelerate the implementation of nationwide community retail marketing strategies and seize the transformation and development opportunities of offline stores empowered by social e-commerce platform under the new consumption model, and thus to realize a greater synergy effect.
Keep advancing “Home Living” strategy, build up the new ecosystem of retail in multi-dimension
GOME had the first collaboration with Pinduoduo in 2018. Afterwards, GOME and Pinduoduo develop the cooperation in multi-dimension, including kinds of marketing promotion. In the aspect of logistics, Anxun Logistics, the subsidiary of GOME, also cooperated with Pinduoduo, enabling Pinduoduo improve the capability of delivery of medium to large-sized products. Through the continuous in-depth exploration in recent years, two parties gradually achieved the cooperation of the provision of value-added services to users in different dimensions, and gradually covering integrated home solution, service solution, supply chain service and different areas. In view of Pinduoduo’s strong online sales network and traffic advantages, that can match the Group’s strategy of the active penetration into lower-tier markets. It is believed that, in the future, through the deepen cooperation and expansion in different aspects, both sides will achieve the accelerating progress in the exploration of new retail model, empowering the continuous expansion of GMV and market share, as well as exerting the greater effects of the economies of scale and improving the profitability.
By strengthening the financial co-operation and equity investment, both sides will further move towards to a broader and deeper collaboration areas. GOME will accelerate to provide Pinduoduo with bulk purchasing service covering famous electrical appliances and home appliances brands in domestic and overseas markets, nationwide logistics management service from Anxun Logistics and new house keeping services. At the same time, through the formation of joint bulk procurement, customized products and collaborated marketing campaign, both sides will provide more and higher quality products and services to their users and improve users’ consumption experience. Leverage on the above co-operations, GOME can make good use of strong user traffic from Pinduoduo to accelerate expanding nationwide marketing and sales network. As of 2019, the number of county-level stores was over 1,000, total number of offline retail stores across the country has exceeded 2,600. In addition, the co-operation with Pinduoduo will strengthen the penetration rate of GOME’s online platforms, rapidly and better realize the integration of online and offline new retail ecosystem.
Share user traffic, explore new consumption pattern together
As the main entrance of the user traffic, as of 2019, the number of shop keeper of GOME ME shop has exceeded 1 million, and expects to double to 2 million in 2020. Through the deepen co-operation in the marketing platform between GOME and Pinduoduo, the growth momentum of user traffic in both sides’ e-commerce platforms will be strongly enhanced, which in turn greatly strengthen the effects of the economies of purchasing and selling scale, achieve larger cost effect and operational efficiency, continuously accelerating the expansion of the integration of GOME APP, offline stores and GOME ME shop.
Under the epidemic situation, GOME co-operated with Pinduoduo and quickly converted online visits into incremental consumption through retail model innovation to meet the growing consumer demand and help to restore consumer confidence. GOME, with its strong supply chain strength, nationwide sales network, powerful manufacturer authentic endorsement and great bargaining power, has joined hands with Pinduoduo, a new e-commerce platform with 585 million annual active buyers, to create greater momentum of future growth by leveraging on their high operational and marketing efficiency.
At present, the domestic epidemic situation has steadily moved out of the darkness, with various regions have successively issued policies for resuming production and promoting consumption, leading to accelerate the release of the backlog of consumer demand. Against this backdrop, the deepen co-operation between GOME and Pinduodu has just seized the opportunity of “consumption replenishment” to create new business growth. Furthermore, domestic consumption is one of the main drivers for China’s economic growth, it is expected that conducive policies to revitalize retail consumption will continue to be introduced in the future. GOME will continue to open up its supply chain and logistics services for medium to large-sized products to Pinduoduo to realize the maximum value of supply chain exporter. It will also expand joint procurement and marketing cooperation to enhance the comprehensive competitiveness in the era of new retail and new consumption, in order to promote the Group’s long-term sustainable and stable development.
Mr. Wang Junzhou, Chief Executive Officer of GOME concludes, “We are very pleased to reach a strategic cooperation agreement with Pinduoduo that will accelerate our deepen co-operation in multi-dimensions for the development of new retail model of online and offline integration. With the enhanced co-operation with Pinduoduo to continuously cultivate the market and optimize the layout in the country, GOME will continue to tap the potential of the retail industry. While deep ploughing the ‘Home Living’ transformation strategy, we will capture the opportunities from the consolidation of the retail industry brought by the global public health affairs and speed up the expansion of market share. In the future, GOME will continue to strengthen its all-round co-operation with Pinduoduo in the areas of product purchase and sales, logistics services and other services, in order to integrate the relevant resources of both parties and fully utilize each other’s advantages to achieve a win-win cooperation.”
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