Article | AI Finance and Economics Agency Liu Xueer
Editor | Sun Jing
This article was originally produced by AI Finance and Economics Agency. Please do not reprint it on any channel or platform without permission. Offenders must be investigated.
Gome is a bit sought after recently. On the evening of May 28, JD.com announced its strategic investment in Gome Retail and subscribed for the overseas convertible bonds issued by Gome for US$100 million. Just over a month ago, Pinduoduo had just subscribed for Gome’s US$200 million convertible bonds.
is now paying special attention to Jingdong’s investment, perhaps Pinduoduo and Gome’s former rival Suning. The battle in the field of home appliances has virtually returned to the battle between Tencent and Ali. Why does
sign a convertible bond?
convertible bonds are a special kind of corporate bonds. If the bondholders do not want to convert, they can collect principal and interest at maturity. If they are optimistic about the stock appreciation potential of the issuing company, they can be converted into equity at a predetermined price and tied to the company’s interests.
Some investors have analyzed to AI Finance and Economics that the prerequisite for the conversion is that the current price of the stock is higher than the conversion price. The buyer of this bond has a greater say, and it is up to the buyer to decide whether to convert.
Meng Qingbin, a professor at the School of Business of Renmin University of China, told AI Finance and Economics that convertible bonds are a bit of a gambling, but not exactly a gambling. Many PE/VC investment projects will sign the gambling agreement, but by the agreed date, a large part of the projects have difficulty recovering the gambling rights, and the repayment priority of convertible bonds is higher than the gambling agreement, which is more secure than the gambling agreement.
Jingdong and Pinduoduo invest in Gome, both of which use convertible bonds. It can be seen from the side that there is a test and wait-and-see attitude in cooperation. "In this way, you can slowly run in, and there is still room for leeway."
Looking at this cooperative project again, it is inseparable from the supply chain and logistics. Gome will provide JD.com with home appliances and overall solutions to expand JD’s home appliances category, and JD.com will provide Gome with non-home appliances and promote the reform of the entire category. In addition, Anxun Logistics, a subsidiary of Gome, will provide JD.com with solutions for delivering large home appliances.
Shangguan Qingyun, who once worked in the investment department of Gome, told AI Finance and Economics that although Gome has lost its past glory, it has obvious advantages in four aspects: the first is high-quality offline store assets, with a long lease of 20-30 years of 2,600 offline stores ; The second is the ability to cover the entire supply chain of large appliances at the high, middle and low ends; the third is the ability of Anxun Logistics to build transportation and installation, integrated warehouse delivery and assembly, and occasionally synchronize delivery and assembly; fourth is recognized by high-end users Corporate tonality.
(the picture shows the former helm of Gome Huang Guangyu ) why
will marry?
Pinduoduo's cooperation with Gome is similar to JD.com. Pinduoduo’s investment is easy to understand. Merchants are faced with choosing one of two options. Even with tens of billions of subsidies, Pinduoduo’s brand investment is very difficult. The supply chain capabilities urgently need external assistance. Moreover, Pinduoduo’s logistics layout is almost blank, complementing Gome Strong sex. Jingdong has obvious advantages in supply chain and logistics. It is nothing more than an online strong and an offline strong. Why is it still cooperating with Gome?
Shangguan Qingyun revealed that the coverage effect of JD’s new channel on the low-tier market is not satisfactory, while Gome is vigorously laying out county franchise stores, which is very complementary. Gome has set a "Hundred Cities Plan" in 2020 and wants to seize the county market share. The 2019 financial report shows that its county market has 1,026 stores, accounting for 39%, and its contribution to total revenue is also increasing.
In addition, Shangguan Qingyun also added that in terms of product abundance, procurement methods, transportation network, and delivery links in the supply chain, Gome has a deeper accumulation than JD.com. "Especially in the important link of logistics and assembly, JD’s delivery and installation cannot be said It’s done very well because it is introducing many localization service providers, but I think, for example, Casarte users are more inclined to go to the store to buy refrigerators with more than 10,000 yuan."
On the other hand, Jingdong also has demand. A person close to JD.com told AI Finance and Economics, “This is the logic of creating 3C home appliances that integrate online and offline, and it is strengthening JD’s 3C home appliance moat.” JD.com has invested for more than a year.Five-star Electric, Dixintong, Lenovo Laiku and other companies.
However, Li Chengdong, an e-commerce analyst, gives another understanding, which he believes is related to Pinduoduo. “Pinduoduo’s cooperation with Gome poses a threat to JD. This is also a consideration, otherwise it is of little significance.” He told AI Finance and Economics that in 2015, Ali bought Suning to fight JD. Gome went to JD, but JD did not invest. , May think it is of little value, but now, JD has to beware of Pinduoduo’s expansion in 3C appliances. What is the impact of
on Suning?
Another player that needs attention in this cooperation is Suning. According to industry insiders, although Suning has fewer allies, including the cooperation with Alibaba that did not exert much value, and is more limited to the Tmall flagship store, after the head of Gome Huang Guangyu has been imprisoned these years, Suning has left Gome behind. far away. It not only broke through the home appliance circle , and tried to build a full-category retail layout, it also challenged Jingdong price comparison before 618 this year.
In February this year, the China Household Electrical Appliances Research Institute and the National Household Electrical Appliance Industry Information Center jointly released the "Annual Report on China's Household Appliances Industry in 2019", showing that the retail scale of the domestic household appliance market in 2019 was 803.2 billion yuan, and Suning’s omni-channel share accounted for 22.8% Ranked first, Jingdong 14.4% ranked second, Tmall 8.8% ranked third, and Gome 5.8% ranked fourth.
Meng Qingbin said that the cooperation between Gome and Suning is more directional, at least I hope that he will not be left behind. "Gome has fallen a lot before, and now it is estimated that it can recover some of its lost ground, but I find it more difficult to suppress Suning or even split the balance."
Observing Ali and Suning, JD.com and Gome, it is not difficult to find that they are all online and offline cooperation, which is related to the greater emphasis on experience in the home appliance category. Meng Qingbin explained that in the past online and offline fights, they found that they couldn't kill each other, and neither had the other's Internet genes or offline genes. Now it is better to strengthen cooperation based on their respective advantages.
But the current trend of cooperation, will one day return to competition? Meng Qingbin believes that this depends on the development of technology. "If AI technology is sufficiently developed and various details can be experienced online, then online platforms will expand or even digest offline platforms, but it will not be possible for a while. This kind of modeling requires Higher transmission speed and resolution speed depends on whether it can be achieved in the 5G era."
(at the request of interviewees, Shangguan Qingyun is a pseudonym in the text)
