Sun Art H1 results: flat revenue

Date : 14 August 2018

Sun Art has posted a 0.3% decline in sales revenue to CNY52.1bn (US$7.6bn) for the first six months ending 30 June 2018.

Growth slowing

For the first half, Sun Art recorded a modest 0.8% increase in profit to CNY1.9bn (US$278.1m), while same store sales growth fell 1.6% compared to -0.9% for the same period last year. This was attributed to increased competition, which has been diversifying how customers shop and therefore impacting the performance of Sun Art's hypermarkets. Growth for the retailer in 2017 also slowed down compared to previous years. 

The Group opened 11 new hypermarkets under the RT-Mart banner during the reported period. Five of the new stores were opened in the eastern part of China, two in the north, three in central and one in the south. As of 30 June 2018, it had a total of 472 hypermarkets in China with a total gross floor area of approximately 12.7m sq m. Approximately 8% of the Group’s stores are in first-tier cities, 17% in second, 45% in third, 22% in fourth and 8% in fifth. The Group has identified and secured 56 sites to open new hypermarket stores, of which 48 were under construction.

Offline and online integration still the key focus

Following the strategic alliance with Alibaba, Sun Art has launched several initiatives. It is also introducing, for example, popular online items in its hypermarkets to provide customers with greater choice. The retailer is committed to accelerating the integration between offline and online to allow customers to switch and shop freely in accordance to their needs.

Sun Art will continue to look for ways to understand its customers better, using technology and data to make it easier and more convenient for them to shop. It is planning to extend the O2O coverage of its brick-and-mortar stores; from a three-kilometre radius that its stores currently service to more than three (but potentially up ten) times the size in the future.

Sign up here for our free newsletter to get the latest updates on Asia.