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File photo/Zhang Jian (NBD)

Feb. 12 (NBD) -- Chinese retail giant Suning.com will take over all the 37 department stores under Wanda Department Store. 

The retailer's Chairman Zhang Jindong announced the deal at the New Year's greeting party on Tuesday. Financial terms of the deal weren't disclosed. 

According to information at the industrial and commercial bureau, Wanda Department Store was founded in April, 2007, with a registered capital of 800 million yuan (118.1 million U.S. dollars). The company was once the largest department store chain in China and one of the most important businesses of Wanda Group, a leading real estate developer led by billionaire Wang Jianlin.

It seems Wanda Group has been continuing divesting its non-core assets. Once one of China's most active international investors, the property developer in the past two years sold off real estate and entertainment industry assets to businesses that also include Guangzhou R&F Properties, led by billionaire Zhang Li, Forbes reported. 

The new deal only involves Wanda Department Store, and resources of Wanda Commercial, Wanda Group's main real estate holding company, aren't included, a person-in-charge at Suning.com told Beijing Business Today. 

The 37 Wanda Department Store outlets are mostly located at central business districts or downtown areas of first- and second-tier cities of China, and have more than 4 million members. 

Through the latest move, Suning.com could get more offline customer resources and accelerate the online-to-offline integration of retailing, being able to create a retail format that covers all consumption scenarios, as data shows 80 percent of purchases were completed offline in China despite the vigorous growth of e-commerce in the past five years.

Suning.com will leverage advanced technologies such as big data and artificial intelligence to digitalize traditional department stores and bring smart retail to more retail scenarios, so as to provide more digitalized and greater shopping experience to customers. 

The acquisition of Wanda Department Store chains constitutes part of Suning.com's smart retail strategy, which was announced in December, 2017. 

Pursuant to the strategy, the retailer aims to open 20,000 online stores as well as commercial complexes covering more than 20 million square meters in total by 2020. Building interconnected scenarios stands at the core of the strategy, the above-mentioned person-in-charge said. 

As of September 30, 2018, the company had 6,292 self-owned stores, 104 Dia Market franchised stores, and 1,453 Retail Cloud franchised stores. The membership in its retail system has amounted to 382 million till then. 

Regarding Suning.com's newest purchase, one media professional said the retailer will undoubtedly face a great challenge as the department store industry is gradually sinking, which is absolutely not a short-term phenomenon. 

In the first nine months of 2018, Suning.com pocketed approximately 172.97 billion yuan (25.52 billion U.S. dollars) in operating revenue, up 31.15 percent from a year ago. Net profit attributable to parent company soared 812.11 percent year over year to around 6.13 billion yuan (904.60 million U.S. dollars).

 

Email: lansuying@nbd.com.cn

Editor: Lan Suying