| Informatization gets recognition in retailing firms |
| Friday,April 04,2008 Posted: 14:59 BJT(0659 GMT) CE.cn |
By Chen Jing During the International Consumer Electronics Exhibition that came to an end recently, Huang Guangyu, Chairman of Gome Electrical Appliances Group stressed on that Gome would continue to stick to the development pattern of "saving money for users" for retail chains - consumers' requirements in terms of price and function would be added up and fed back to suppliers on the informatization platform, and then manufacturers would conduct product designing and price determination on such a basis. That is the first time for China's household electrical appliance enterprise to strike a pose on the stage of the largest consumer electronics exhibition in the world, and advanced informatization means have become the best "business card" for the local retailing industry to exhibit its strength. Almost at the same time, Suning Appliance Co., which has become the largest client of SAP -the internationally famous manufacturer of enterprise management software with investment funds amounting to over RMB100 million yuan, announced that it started using its logistic base in Beijing, which adopts an advanced inventory management system to conduct management and has every vehicle used for purpose of distribution equipped with a GPRS global positioning system. Suning Appliance Co. noted that in doing that, logistic costs would be cut down by more than a half. The strong enthusiasm of the two magnates in the retailing industry is the very miniature that at present, the local retailing industry is implementing its strategy of informatization. China's total volume of retail sales of social consumers' goods increased from RMB 4.8 trillion yuan in 2002 to RMB 8.9 trillion yuan in 2007 with a yearly average growth rate of 13.1 percent, and the massive driving force of consumption is providing unprecedented opportunities for the retail industry. Yet, on the other hand, more and more enterprises have begun to discover the huge efficacy of informatization means exhibit in tapping potentials and improving efficiency as well as flow control since the retail industry were open to foreign funds by the end of 2004. Data from the Internet Data Center (IDC) show that in 2006, China's total investment in the informatization of the retail industry amounted to about RMB4.42 billion yuan; but in 2011, such a scale will reach RMB8.25 billion yuan. Solutions of informatization with local features that can meet enterprises' individualized needs are becoming the local retail industry's pivot for competition. In contrary to the fact that the manufacturing industry manufacture products with raw materials of limited categories, enterprises in the retail industry have various kinds of commodities from extensive sources and each kind of commodity tends to have various suppliers while having to conducting distribution among different customers. "As enterprises in China's retail industry expand in terms of scale, it is sure that a great volume of data on the 'goods stocking, distribution, transportation, and storage' of commodities falling into tens of thousands of categories in a mid-sized department store. In face of data of such a great volume, it is impossible to get them managed with manpower in terms of either accuracy or efficiency. The informatization means emerge as the times require." introduced Song Qing. Advanced consciousness does not necessarily mean that the implementation of informatization will go smooth since then. Gradually, local retail enterprises find that mature informatization solutions from the retail industry abroad seem to be far from their demands and it is impossible to simply have them transplanted. Zhang Zhiliang, Operation Director of Beijing EASYHOME Investment Holding Group Co., Ltd., signed with feelings that "We have realized surprisingly that it is actually impossible to find a mature system that can fully satisfy our needs." Notable differences between the competition patterns for the retail industry at home and abroad is the very reason that has led to such a case. Just take the USA as an example. "Giant chain retailers" play a leading role in the retail industry: Barnes & Noble, Borders, Books-A-Million as the three major bookstore chains contribute 30 percent of the daily sale of books in the USA. But in China, regional retail enterprises are playing the dominant role. "Domestic retail enterprises have a stronger desire to combine some local consumption habits into the informatization system. For instance, in some regions customers are used to bargaining in the market places; so retail enterprises wish that the software and service providers can add such a function to the system ad get the bargaining degree of each kind of commodity under control with technical means." Introduced Song Qing, "if we say that the core competitiveness of overseas retailers comes from the pressure of scale on suppliers, and then the core competitiveness of local manufacturers mainly comes from their consideration of local details." Such a kind of difference has led to different requirements on informatization. On the other hand, the limited scale of regional retail enterprises also makes it difficult for them to accept overseas software and service providers like SAP and ORACLE in terms of price. "When Cuiwei Mansion started its business in 1997, we had altogether 2,000 staff members; 11 years later, we have had three outlets each of which has only over 200 staff members." Gao Guangmin, Director of Beijing Cuiwei Mansion Co., Ltd.'s Department of Information Management, exhibited the notable function of informatization means to control costs and improve efficiency with the huge difference in terms of numbers. Yet, the implementation of local retail enterprises' informatization does not stop to date; instead, it is extending towards the upper end and the lower end of the supply chain. And its local features have determined the direction for its development. On the one hand, retail enterprises are still competing intensively in the subdivided markets in various regions. "So the informatization platform suitable for local retail enterprises must be easy to develop and can be developed rapidly. Even chain outlets under the headquarter in various regions must be able to respond in time to various marketing activities of competitors." noted Liu Changxin, Director of the Department of Information Technology of Beijing Wangfujing Department Store (Group) Co., Ltd. On the other hand, it has also become the direction for the development of informatization to deal with the relation between domestic retail enterprises and suppliers. "Wal-Mart has 2,200 outlets and any supplier will be very small against it; yet domestic suppliers are more equal to retailers. Even though Suning has launched its ERP project, the fundamental objective is to solve its relation with suppliers." said Song Qing. In such a case, the management over the supply chains will make it possible for suppliers to conduct real time monitoring over the distribution, sales ranking, and repertory of their own commodities. Online settlement, which will make it easier for suppliers to conduct settlement, has strengthened the partnership with retail enterprises. |
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