Click "Read the original text" for details A few days ago, Luo Yonghao, as Suning's "Billions in Subsidies Release Officer," said at Suning.com's Double 11 launch event: "Many people who are not used to online shopping seem to have nothing to do with this national carnival. They have always been a neglected group. Finally, someone remembered them during Double 11, and that is Suning." To be honest, as a "balance payer" who has not been ignored by shopping festivals, I finally remembered during Double 11 that there is also a shopping platform called Suning. The last time I saw Suning was last year at The Place in Beijing, during Suning's offline promotion event. The stage was large, with LED screens for a lottery. Installing the Suning app gave you a chance to win, with the grand prize being a robot vacuum, but most people got two packs of noodles or Suning.com discount coupons. I noticed that Taobao has Suning.com's official flagship store, so I reluctantly gave up the two packs of noodles and did not download the Suning app. On the other side of The Place was a crowded Xiaomi Home, with a bunch of foreign tourists buying Xiaomi bands, and two men with children trying out Xiaomi scooters at the door. It looked livelier than Suning's event, which had a bigger setup. That scene might reflect Suning's survival situation: squeezed by various competitors both online and offline, and in the future story of retail, Suning is about to be left out. According to Suning.com's Q3 2020 performance, in the first three quarters of this year, it achieved operating revenue of 180.862 billion yuan, a year-on-year decrease of 10.02%; net profit attributable to shareholders was 547 million yuan, down 95.40% year-on-year; and non-GAAP net profit was -1.009 billion yuan, compared with -4.152 billion yuan in the same period last year. In 2019, Suning.com also had a huge non-GAAP net loss but a remarkably high net profit attributable to shareholders: non-GAAP net loss was as high as 5.7 billion yuan, while net profit attributable to shareholders was as high as 9.843 billion yuan. In other words, Suning.com's main business is loss-making, and it has been loss-making for six consecutive years. The source of profit is selling assets. Since the beginning of losses in 2014, Suning.com has been disposing of subsidiaries, equity, or stock assets every year. In 2014, it gained nearly 2 billion yuan from selling 11 wholly-owned subsidiaries; in 2015, it gained 1.388 billion yuan from selling 14 stores and 1.447 billion yuan from transferring PPTV equity to Suning Culture Investment Management Company; in 2016, it gained 1.3 billion yuan from transferring "Jingchao Suning" equity to Suning Appliance Group and another 510 million yuan from selling warehouse properties; in 2017, Suning.com sold Alibaba shares for 4.1 billion yuan; in 2018, it cleared its Alibaba holdings for 11.3 billion yuan. In 2019, Suning.com introduced strategic investors for Suning Financial Services, gaining 15.56 billion yuan; and divested Suning Xiaodian for 2.9 billion yuan. The divestiture was done by selling 100% of Suning Xiaodian's equity to Suning Smart Life Holding Limited, whose actual controller is Zhang Kangyang, the son of Suning's chairman Zhang Jindong. "You say Suning Xiaodian is subsidizing money; Suning Xiaodian is meant to subsidize money. It's not a matter of 1 or 2 billion, but 10 or 20 billion. That's just a drop in the bucket," said the wealthy Zhang Jindong in August 2019. Suning Xiaodian is a product Suning launched in 2017 to enter the convenience store market, an important member of Suning's smart retail new business, and is headed by Zhang Kangyang. According to Tencent Securities data, Suning Xiaodian had only 32 stores in 2017, expanded to nearly 4,300 by the end of 2018, and reached 5,400 stores by 2019. But Suning Xiaodian has been loss-making since its birth. As Zhang Jindong implied, losing 1 or 2 billion is still small; it needs to lose 10 or 20 billion. But such huge losses are not good-looking, so divesting Suning Xiaodian from Suning.com also adds a big chunk to Suning's financial report profits. Suning was born in Nanjing in 1990, transformed into a large appliance store in 2000, and listed in 2004. In the year of listing, Taobao and JD.com were both in their infancy. Suning fought a battle with Gome, then found that its biggest threat was actually JD.com, so it started e-commerce in 2009. In 2012, Zhang Jindong said he would become the No.1 in B2C within two years: "In the first half of the year, Suning.com's growth rate was 120%. If JD.com's growth rate is faster than Suning.com's, I'll give Suning to him." The later rhetoric was smart retail. But in the eyes of young people, there is a type of brand that wants to do Internet+ and gives a similar feeling. At the beginning of the year, the strategy is always grand: new retail, smart retail, online-offline linkage, creating new business formats... Every shopping festival, they plaster ads across the subway, with bright and cheerful colors, but it always feels clumsy and trend-chasing, making even consumers who occasionally take advantage of their coupons feel a bit sorry for them. At the end of last year, Zhang Jindong announced at the New Year work deployment meeting that the full-scenario layout of smart retail had been completed, and Suning would be stable in 2020. Please note: Suning's main business has been loss-making for six consecutive years. How can it be stable? As of the third quarter of this year, Suning.com's current liabilities were 109.967 billion yuan, with short-term liabilities due within one year at 32.713 billion yuan. Since 2017, Suning.com's net operating cash flow has been in a net outflow state. The media are worried about Suning's debt repayment ability, especially since Suning Xiaodian is still bleeding money, and Suning is participating in Double 11 subsidies both online and offline. In September this year, standing at the 30-year milestone of Suning, Zhang Jindong looked forward to the next 10 years and said that Suning.com would upgrade from a "retailer" to a "retail service provider," with a new brand proposition of "focus on good service." Good service is still abstract and requires long-term reputation accumulation, but Suning is certainly eager to find more people willing to be served by it. In May this year, JD Retail and Kuaishou announced a strategic cooperation, and in July, Suning.com and Douyin E-commerce announced deep cooperation. According to the 2019 annual report, Suning.com had 555 million registered members, a year-on-year increase of 35.1%; online platform transaction volume was 238.75 billion yuan, up 14.59% year-on-year; among which self-operated product sales were 158.44 billion yuan, up 5.77%; open platform transaction volume was 80.31 billion yuan, up 37.14%. But compared with the previous year, these growth rates have slowed significantly. However, Zhang Jindong often says that retail is a marathon without an end. So no matter how Zhang Jindong uses his financial skills, as long as the Suning brand has not been sold, Suning can continue to chase market hotspots, from Internet+ to O2O, from new retail to livestream e-commerce. Source: Business Figures (ID: biz-leaders) Author: Li Yiru