BUILDING NATIONWIDE CHAIN NETWORK WITH YANGTZE RIVER DELTA AS CORE
Since the opening of our first chain store, Nanjing Xinjiekou Store, nearly 21 years ago, the Group has successfully opened 31 self-owned stores with a total gross floor area of 2,001,643 square meters and a total operating area of 1,360,563 square meters as at 31 March 2017. These stores span four provinces and one municipality, namely Jiangsu, Anhui, Shaanxi, Yunnan and Shanghai, covering 19 cities including Shanghai, Nanjing, Suzhou, Nantong, Yangzhou, Changzhou, Xuzhou, Taizhou, Huai’an, Yancheng, Suqian, Liyang, Danyang, Kunshan, Wuhu, Ma’anshan, Huaibei, Xi’an and Kunming.
Leveraging on our leading position and strong competitive advantages in Jiangsu Province, the Group will continue to reinforce our market leadership and presence in the regions of Jiangsu, Anhui, Shaanxi, Yunnan and Shanghai by establishing comprehensive lifestyle centers which have potential for the Group’s long-term competitive strengths and business growth. Meanwhile, the Group will gradually establish a nationwide retail chain network by actively exploring opportunities in the first- and second-tier cities as well as tapping into the third-tier cities with immense potential for growth.
ADHERING TO THE STRATEGY OF DEVELOPING MAINLY IN SELF-OWNED PROPERTIES WITH ASSET-LIGHT BUSINESS MODEL OF LONG-TERM LEASES AND MANAGED STORES AS ALTERNATIVES
The Group’s chain stores are situated at prime shopping districts in their respective cities and the Group adheres to its core development strategies of developing mainly in self-owned properties. As at 31March 2017, approximately 63.5% of the total gross floor area of our stores are located in self-owned properties. In order to capture opportunities for development, the Group also secured high-quality properties by entering into asset-light arrangements such as long-term leases or management contracts for ten years or longer, hence minimising the impact of rental increase in the operation of our stores.
FOCUSING ON CONTROLLABLE MERCHANDISE RESOURCES, ENHANCING CORE COMPETITIVE STRENGTHS WHILE DEVELOPING COMPREHENSIVE LIFESTYLE CENTERS AND ESTABLISHING A COMMERCIAL RETAIL PLATFORM
Capitalizing on the development trends of the retail industry targeting mid-to-high-end market segments in China, the Group accelerated its strategic transformation from fashion department store to “Comprehensive Lifestyle Center”. To satisfy customers’ demand for high quality lifestyle services and experiences, the Group has brought G•LIFE series into our floor area through various ways including self-operation, co-operation and equity investment. G•LIFE series comprises unique merchandise resources under the Group’s long-term planning and development, thus demonstrates the Group’s strong integration capabilities. It covers high growth merchandise and service categories including premium supermarket, culture and creativity, children’s care, beauty and personal care, pets and healthcare. Together with the Group’s continuous development and enhancement of its merchandise and lifestyle service offerings on fashion shopping, distinctive dining, children’s early education, leisure and entertainment, aquarium, shared offices, wedding photo studio, international cinema and comprehensive automobile service, customer traffic in the Group’s lifestyle centers had shown improvement, driving rapid growth of the Group’s operating results. As at 31March 2017, the Group operated 12 comprehensive lifestyle centers with a total gross floor area of 1,260,741 square meters. The operating area of the comprehensive lifestyle amenities accounted for 29.7% of the Group’s total operating area. With the continuous development and expansion of the Group’s controllable resources, the Group strives to continue to enhance its core competitiveness, reinforce development of its comprehensive lifestyle centers and establish an extensive commercial retail platform.
DEDICATED TO PROVIDING TARGET CUSTOMERS WITH HIGH QUALITY AND INNOVATIVE VALUE-ADDED VIP SERVICES AND OMNI-CHANNEL SHOPPING EXPERIENCE
The Group endeavors to enhance the quality and enrich the content of our VIP customer services. The Group’s VIP membership card covers online and offline comprehensive lifestyle services in various functions including fashion shopping, dining and leisure, hotel services, comprehensive automobile services and “金鷹購Jinying.com”. The Group also fully utilises omni marketing channel through the mobile phone application “goodee mobile App” (掌上金鷹) (the “App”), the WeChat social network platform and the “Electronic VIP Card” to build and develop marketing channels with high efficiency at low cost, so as to effectively deliver real-time information on sales promotion to customers, enhance customers’ shopping experience and allow customers to enjoy various VIP value-added services more easily and thus further stimulate their shopping sentiment. As at 31 December 2016, the App has registered over 6.1 million downloads of which 1.5 million VIP customers connected their VIP membership cards with the App. The App is the most active mobile application in the department store industry in China. At the same time, the Group has successfully secured over 2.7 million loyal VIP customers. During the period under review, spending of the VIP customers accounted for 55.8% of the Group’s total gross sales proceeds.
LOCALISED OPERATIONAL STRATEGIES WITH WORLDWIDE MANAGEMENT PERSPECTIVE
The Group appreciates the dedication and contribution of its employees and fosters their capabilities, competence and worldwide perspectives by conducting regular professional training sessions and overseas study trips for both the management and employees. The Group also implements localised management systems for each local market. For each of its stores, the Group recruits local talents to form a management team such that the Group can utilise their local knowledge on the respective markets. As at 31 December 2016, the Group has approximately 5,730 employees.