Suning Appliance Co., China’s biggest electronics retailer by market value, said it aims to win market share of more than 25 percent in Hong Kong in the next three years, helped by the opening of 30 outlets.
Nanjing, east China-based Suning will also strengthen its expansion in third and fourth-tier cities on the mainland this year as it opens stores in 31 new cities, the company said in a statement to the Shenzhen stock exchange today.
Premier Wen Jiabao has stepped up measures to boost spending in the world’s most populous nation, offering enticements such as cash subsidies for purchases of washing machines, refrigerators and computers. The government has pledged to continue supporting the retail market as it tries to shift the country’s growth focus away from investment.
China’s “economy is growing steadily and market confidence is improving,” Suning said in a statement today accompanying its full-year earnings report. “Incomes are increasing and individuals’ consumption abilities continue to strengthen. Electronic appliance chains will have considerable scope for development against this backdrop,” the company said.
Suning said Dec. 31 it will buy Citicall Retail Management Ltd. to gain 22 stores in Hong Kong and a platform for expansion overseas.
The company, with 885 stores as of September, competes against rivals including Best Buy Co. and Gome Electrical Appliances Holdings Ltd. for an electronics and appliances market that grew an estimated 9.5 percent to 1.13 trillion yuan ($166 billion) in 2009, according to Euromonitor International.
The retailer, which trails Gome on the mainland, will open 20 “elite” shops in Shanghai, Beijing, Guangzhou and Shenzhen to take advantage of rising consumer spending in cities in the more affluent eastern and southern regions, according to today’s statement.
Net income in 2009 rose 33.2 percent to 2.89 billion yuan, or 0.64 yuan a share, compared with 2.17 billion yuan, or 0.49 yuan a share the previous year, the company said today, confirming preliminary figures released in February. Sales rose 16.8 percent to 58.3 billion yuan.
Suning fell 2.16 percent to 17.7 yuan in Shenzhen today, extending its decline this year to 14.8 percent.
Chairman Zhang Jindong established Suning in Nanjing in 1990 as an air-conditioner wholesaler and opened its first retail chain store six years later. Zhang, a Chinese literature major from Nanjing Normal University, was ranked 176 among the world’s billionaires by Forbes magazine in 2010 with a net worth of $4.5 billion.
The company plans to increase stores by about 34 percent this year, President Sun Weimin said in a Jan. 5 interview.
--Editors: Frank Longid, Nerys Avery