An Analysis of China’s Retail Market of White Goods
An Analysis of China’s Retail Market of White Goods ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Highlighting the oligopoly of Suning and Gome
By: Chang Nianzhi, An Baichun Section: 104BA Dec.15, 2012
Oligopoly
1. Share of the market
An obvious development in the retailing market of household appliances in China is the growing oligopoly of Suning Appliance Co and Gome. An oligopoly is a market where only a small number of producers dominate. According to the latest survey by China General Chamber of Commerce, Suning and Gome topped the 2011 list, in terms of sales, of the biggest 100 retailers in white goods. Suning Appliance Co is based in Nanjing, Jiangsu province. As China's largest home appliance retailer by sales volume, it operated in 2011 more than 1720 chain stores worldwide, including 1684 on the mainland. Suning’s business revenue in 2011 reached RMB93.89 billion yuan, and its net profits was 4.82 billion yuan ($766 million). Similarly, Gome operated in 2010 more than 1,080 chain stores in China. Its gross revenue in 2010 was RMB50.9 billion yuan, and was the only appliance company from China that was listed by Fortune as one of the 50 largest Asian retailers, ranking 14th.
2. whether products are differentiated? Both Suning and Gome are highly monopolizing, selling almost the same goods—home appliances. And the operating modes of the two are the same. Both purchase from the manufacturers before selling them in their own stores. Both allow manufacturers to retail in their shop fronts. And both sell products under their own brands. Competition, however, is quite
By: Chang Nianzhi, An Baichun Section: 104BA Dec.15, 2012
Oligopoly
1. Share of the market
An obvious development in the retailing market of household appliances in China is the growing oligopoly of Suning Appliance Co and Gome. An oligopoly is a market where only a small number of producers dominate. According to the latest survey by China General Chamber of Commerce, Suning and Gome topped the 2011 list, in terms of sales, of the biggest 100 retailers in white goods. Suning Appliance Co is based in Nanjing, Jiangsu province. As China's largest home appliance retailer by sales volume, it operated in 2011 more than 1720 chain stores worldwide, including 1684 on the mainland. Suning’s business revenue in 2011 reached RMB93.89 billion yuan, and its net profits was 4.82 billion yuan ($766 million). Similarly, Gome operated in 2010 more than 1,080 chain stores in China. Its gross revenue in 2010 was RMB50.9 billion yuan, and was the only appliance company from China that was listed by Fortune as one of the 50 largest Asian retailers, ranking 14th.
2. whether products are differentiated? Both Suning and Gome are highly monopolizing, selling almost the same goods—home appliances. And the operating modes of the two are the same. Both purchase from the manufacturers before selling them in their own stores. Both allow manufacturers to retail in their shop fronts. And both sell products under their own brands. Competition, however, is quite