Chinese appliance chain integration of vertical and horizontal alliances to accelerate the pace – chain, Gome, Yongle – HC Network Appliance Industry
With Best Buy Five Star Holdings, entered the Chinese market, China's electric chain integration is accelerating the pace!
The recent news that this year
(2006) end
States United States
, Suning, Yongle three channels of predators may be cross-holding, the current ratio of equity participation is unclear. Three possible nominal shares of 10% to 15%. Purpose is to establish communities of interest, together control the market.
Electrical chain and this means that vertical and horizontal alliances to accelerate the pace of integration, in order to survive fierce competition!
Gome, Suning, Yongle why the cross-holding
Fact, Gome, Suning, Yongle mutual equity participation should be a major cause of the world's largest
Home Appliances
Chain Best Buy, Five Star Holdings, entered the Chinese market.
After Best Buy announced; Jiangsu Five Star Appliance to inject 180 million U.S. dollars to gain a controlling 51% of the latter. Best Buy will use 180 million U.S. dollars of investment were 51% stake in Five Star, of which 120 million U.S. dollars into the Five Star to about 060 million U.S. dollars to buy the shares held by Five Star level, the merger will be the end of June ago, Best Buy to 360 million U.S. dollars will eventually get 75% stake in Five Star.
As the world's largest home appliance chain, Best Buy, the Group's total sales in 2005 up to 30.8 billion U.S. dollars, compared with GOME, Suning, Yongle total sales have more, with its huge global procurement system, and Excellent supply chain management capability, such a giant to enter the Chinese market Gome, Suning, Yongle's threat is not small;
Another reason should be that formed by the interests of cross-holding alliance hopes to avoid excessive price competition. After Gome, Suning, Yongle to seek to enhance the scale, crazy shop; in early 2005, Su Ning announced to open 150?? 170 stores, and the country followed by the United States announced it would open 300, and announced plans to open 200 Wing Lok stores, although the behavior of this crazy shop makes Gome, Suning, Yongle greatly expand the overall sales, but due to a regional market concentration in too many stores, so price competition continued, rapid single-store sales decline diminishing marginal benefit, and therefore profits fell, so if the industry claimed, in fact, more and more intense competition in the Big Three have to feel the pressure. Best Buy 1 billion yuan with the acquisition of Five Star heavily, increasing competition squeezed profit of the three local giants do not want to continue intense confrontation, ended up "dogs fight, play off," so that Best Buy reap the blessing. Therefore, competition will be a sudden change in attitude, I hope not "caught up" vicious price competition, started to seek cooperation and win-win situation.
Wing-lok, vice chairman and vice president of beam to the proven, industry consolidation is a trend, the key is in what way is the capital of cooperation, mutual ownership, or joint purchasing, exchange stores management, or other forms of . Many ways, was not yet determined the final program, we are still negotiating. The introduction of specific programs, so fast this year, then slow next year.
I am China Manufacturers writer, reports some information about folding clothes rack , shelf with pegs.
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