Sun Art Retail rolls out fresh formats

With the trend of O2O business integration accelerating last year, Chinese hypermarket/e-commerce retailer Sun Art Retail Group introduced new formats to offer customers more choices.

Continued expansion including new stores saw total sales revenue grow 1.7 per cent to RMB98.7 billion (US$15.6 billion) for the year ended December 31.

Revenue from rental income for the year was RMB3.5 billion, up 6 per cent and primarily attributable to increased rentable area from new stores and growth in rental income from existing stores as a result of the tenant mix being better managed.

Profit for the year was RMB30.2 billion, representing 14.9 per cent growth.

As well as income of RMB345 million from unused aged prepaid cards after income tax, the increase in profit for the year was also attributable to reduced loss from the group’s e-commerce platforms.

New stores

During the year, the group opened 18 stores throughout China. Same-store sales growth for the period eased 0.98 per cent compared to a drop of 0.34 per cent the previous year.

“The group has been making efforts to satisfy the increasingly diversified needs of the customers by continuously developing its O2O business and deploying multi-formats,” says Sun Art. As part of this strategy, the group entered into a business co-operation agreement with a subsidiary of Alibaba Group Holding in November to draw on the online and offline advantages of both parties to provide customers with an integrated shopping experience.

“The alliance with Alibaba Group brings a win-win to the long-term development of the group, the stakeholders, the employees and consumers,” says Sun Art. “The integration of online and offline will be realised while striding forward to the new retail era.”

A standalone RT-Mart Fresh app has been rolled out to all RT-Mart stores. Consumers can use the app to order commodities, with the nearest stores providing a one-hour delivery service.

In September, the group launched its first unmanned convenience box, Auchan Minute, in Shanghai. This is an 18sqm box with 500 SKUs. At the end of December, the group had 67 of these units, in Shanghai and in the Anhui, Guangdong, Jiangsu, Sichuan and Zhejiang Provinces.

Beauty shops

Also, the group opened five Llabeau beauty shops last year in Shanghai, Suzhou, Kunshan and Ningbo. Ranging in size between 60 and 160sqm, these mainly sell skincare and make-up products.

The group opened 18 hypermarket complexes last year, of which one was under the Auchan banner. One RT-Mart store in Shanghai was closed as well as two Auchan stores, in Shenyang and Qingdao respectively.

At December 31, the group had a total of 461 hypermarket complexes in China with a total gross floor area (GFA) of about 12.46 million square metres. About 69.5 per cent of the GFA was leased space, 30.3 per cent was in self-owned properties and 0.2 per cent was in contracted stores.

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