Revenue 2006: $3.2 BILLION
Profit 2006: $95 MILLION
Average Rev. Growth 2004-2006: 61%
When Sun Weimin, president of Chinese consumer-electronics retailer Suning Appliance, joined the company in 1998, he brought with him an unusual background: 10 years as a university psychology professor. When he speaks, it is in the warm tones of a trusted counselor rather than those of a brash titan of commerce. Take his view on Suning's biggest adversary, Gome, China's top electronics chain. Sun says he appreciates them. "When you're developing, what you need most is to cultivate good competition," he says. "That means a competitor who is fostering a good model of long-term development."
Just because Suning is No. 2 doesn't mean Sun is a pushover, though. Since starting as a single 200-sq-m air-conditioner shop in 1990, Suning has ballooned into a chain of 500 retail outlets (Gome has 654). Last year Suning added 136 new stores in China and 140 the year before; the company plans to raise its expansion pace to 150-180 new stores a year. There's plenty of room for more. Gome and Suning together control less than 20% of a $75 billion consumer-appliance market that is expected to reach $100 billion by 2010.
That's a lot of headroom, but Sun can't afford complacency in the face of competition that is growing more fierce. Others are muscling into the market, most notably U.S. retailer Best Buy, which last year purchased Jiangsu Five Star, China's fourth-largest appliance-and-electronics chain. "Best Buy is not a paper tiger," says Sun. But he adds that the outsider will have to get better at catering to Chinese consumers and understanding regional differences. "They're a real tiger," Sun says. But in China, "they're still a little tiger."
Little tigers can bite, too. And if Sun steps outside Suning's headquarters in downtown Nanjing, he's surrounded by man-eaters. A few blocks away is a Five Star outlet. A Wal-Mart store is nearby. And just down the block is a Gome store. Can Suning ever surpass them? "It's like a bicycle race. Whoever is at the front is under the most pressure," Sun says. "I thank our competitors for easing that pressure for us. If we can help them with that pressure in the future, we should do it." Like a good shrink, he's always happy to help.
Next LDK Solar