Suning to Boost Online, Offline Retail

By Scott Baltic

Suning Holdings Group, of Nanjing, China, has completed an approximately $3 billion investment agreement with Evergrande Real Estate Group, a subsidiary of the Evergrande Group, a Fortune Global 500 company.

Evergrande, China’s leading property developer, will provide commercial facilities to Suning, which is planning to add 5,000 physical stores with connections to its online presence by 2018. The partners will also explore smart home design, property management and other priorities.

Separately, Suning also cemented an extensive retail cooperation, worth at least $8 billion, with Hon Hai Technology Group, which trades as Foxconn Technology Group. A Taiwanese company, Hon Hai has extensive production capacity in China and is the world’s largest contract electronics manufacturer.

The initiative between Suning and Hon Hai will focus on big data analytics to optimize strategies and products from manufacturing to marketing.

The two partnerships reportedly are part of Suning’s efforts to integrate online and offline channels. As Suning noted, the announcement took place on the eve of Nov. 11, or 11/11, also known as Singles’ Day, China’s—and reportedly the world’s—biggest day for online shopping.

A multichannel giant

Suning Commerce, one of Suning Holdings’ six verticals, is both an internet retailer emphasizing the O2O (online-to-offline) model and the operator of 1,600 chain stores in more than 600 cities in China, Hong Kong and Japan, according to Suning’s website. Suning reportedly sells 20 million SKUs, encompassing appliances, consumer electronics, supermarket, mother-and-baby care, general merchandise, recreational and financial products, via four user interfaces: brick-and-mortar stores, PCs, mobile devices or home TVs.

The company has high expectations for the mom-and-baby sector. Effective Jan. 1, 2016, China officially adopted a two-children-per-couple policy, reversing the one-child policy that had been in place since the 1970s. In May 2016, Suning Commerce COO Hou Enlong predicted that the new policy would generate RMB 30 billion to 45 billion ($4.5 billion to $6.8 billion) annually in mom-and-baby consumption.