The CMO of Gome attended our Access China and delivered a presentation relatedto Gome’s new retail strategy. As mentioned in 3Q results meeting, the companylaunched “Home + Living” strategy in 3Q17. The key highlights of this strategyare as below.
　　It targets to extend its business scope from CE retailer to a home-related retailer,i.e. its market potential will extend from RMB1.4tri CE products to RMB10trihome-related products market （including home appliance, home decoration,household, home service, etc）。 For now, decoration business is seeing the bestgrowth due to better synergy.
　　Its new business will expand to 400 cities including all country-level stores.
　　It is mainly technology that empowered this new strategy. It integrated differentshopping scenarios, supply chain and full circle after-sales service.
　　Supply chain: Differentiated products contributed 47% of sales for Gome,which is much than peer and helped to lift its GPM from 16.1% in 2016to 17.8% in 1H17.
　　Integrated Omni-Channel retail: Gome fully integrated its offline andonline channel with different roles.
　　After-sales service: Big data, cloud computing and other technologiescreated a “five- in-one” platforms （i.e. physical retail, ecommerce, serviceplatforms, social platform such meimei, Meixin and Circle, and sharingplatform, such as ME shop） to improve consumers’ shopping experience.
　　Among all, ME shop is what it is focusing on and it tried to reduce trafficacquisition via this platform as it is a C2C platform. The GMV generatedfrom this shared platform amounted to RMB1bn during 9M17. It alsotargets to serve 100m households in three years.