New | China’s Sun Art Retail sees e-commerce sales surging over 2-3 years to 10 billion yuan

Mainland China’s largest hypermart operator Sun Art Retail expects its e-commerce platform Feiniu.com to reach 10 billion yuan in sales over the next two to three years, the firm’s executive director Peter Huang Ming-tuan said at a press briefing this morning as the retailer announced yearly profit increased by 4.8 per cent to 2,908 million yuan, falling short of market expectations.

“By April, we should be able to cover the entire nation,” Huang said of its year-old online operations, adding that last January when the site first launched it took in 500 orders but had since grown to 6,000 transactions this month. Feiniu.com currently operates in Shanghai, Zhejiang, Jiangsu and Anhui provinces.

A consensus forecast from 15 analysts expected revenue of 2,954 million yuan for the year ended December. Although turnover rose 6.6 per cent to 91,855 million yuan, same store sales growth fell 1.6 per cent. Management had said they expected same store sales growth to be flat for the year.

Chief financial officer Jean-Patrick Paufichet explained that electronics were the main drag on growth. “If we take away the decrease in electronics, the same stores sales growth would’ve been flat to zero,” he said.

Chief executive Bruno Mercier said food sales were still growing and the decelerating electronics business, even though it was migrating online, would not impact margins too much as the category had lower margins.

The company which sells groceries and home goods under Auchan and RT-Mart on the mainland increased gross profit margin by 1.3 percentage points to 22.9 per cent, helped by an improved product mix and common negotiating for its two brands.