Gome has announced it will invest in TCL's after-sales service platform
Gome has reached agreement with Shifendaojia to invest RMB105m into thelatter. Shifendaojia is a home appliance after-sales service provider that wasincubated by TCL in 2016. The company mainly covers services including homeapplianceinstallation, maintenance and cleaning, mobile repair, CE recycling, andwater and electricity installation. The company estimates the market is wortharound RMB1 trillion. Management also believes its high rating by clients andhigh order growth is mainly backed by its 10-minute response principle.
For now, TCL （000100.SZ） and Gome have both accumulated more than 100mcustomers, which has established a foundation for further development in aftersalesservice. After this partnership, Shifendaojia will become one of the key partsin Gome “Home” O2O ecosystem and will double its orders each year.
Deutsche Bank view
This partnership should help Gome further realize its home-oriented new retailtransformation. Mr Shan Xiaopeng, the CEO of TCL Kuyou Technology andDirector of Shifendaojia, commented that apart from online and offline channels,traditional CE brands/retailers’ edge is terminal customers, given the natureof durable goods. Brands can track terminal customers’ using experience andprovide after-sales service to increase consumer stickiness.