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BEIJING, August 3 (TMTPOST) -- GOME, China"s largest nation-wide retail chain of home appliances and consumer electronics, laid off workers in several departments, including ,Zhenkuile, one of the core strategies of the e-commerce platform ZhenKuaile.
GOME’s e-commerce platform ZhenKuaile executive vice president Ding Wei,has been removed from the position, and many members of her team were also laid off. The layoffs were part of GOME"s overall business adjustments. GOME was a newcomer in the market of e-commerce, which made it hard to compete with existing e-commerce giants.
In February 2022, GOMEz Retail disclosed in its global investor conference call on "Home • Living" strategic business progress that the monthly active users of ZhenKuaile platform reached 70 million while the average daily active users hit 3.5 million. Douyin, the Chinese version of TikTok, which ZhenKuaile is trying to catch up with, has more than 600 million active daily users in 2021.
GOME started as a home appliance chain store. However, after the e-commerce price war in 2012, GOME suffered a setback in its online transformation and eventually experienced losses in five consecutive years because it could not get back consumers lost to online retailing, with a cumulative loss of 19.3 billion yuan by the end of 2021.
During the pandemic, brick-and-mortar retail was hit hard, and GOME was not an exception. According to GOME, since the onset of the pandemic in early 2020, the physical retail industry has been greatly affected, with many stores in cities with the presence of the Group being shutdown. GOME"s cash flows decreased mainly due to the suspension of operations of the stores during the lockdowns. As of the end of 2021, GOME held cash and cash equivalents of RMB4,378 million, down from RMB9,597 million at the end of 2020. Its net cash flow from operating activities was RMB649 million, compared with RMB1,851 million at the end of 2020.
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