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Suning.com Announces Open Platform Policies

Sina Tech, 9/12/13

Chinese consumer electronics and home appliances retailer Suning's (002024.SZ) e-commerce platform Suning.com has announced merchant policies regarding its newly launched third-party open platform site:

Fees:

Instead of collecting a yearly platform use and technical support fee from merchants, Suning will only collect a RMB 10,000-50,000 deposit, while collecting revenue through commission fees and value-added services, and through providing merchants with low-cost services such as financing and logistics.

Offline Service:

Merchants from the open platform will be able to sell products within Suning's physical stores. In Q4 2013, a portion of merchants from the open platform will be able to set up displays within retail stores. The retail stores will use an electronic labeling system, QR codes, and videos to showcase products.

Suning retail stores will also provide in-store pick-up, payment, and delivery services for purchases made on the open platform. These retail store services will be first offered to merchants in Q4 2013 at 100 Suning retail stores nationwide.

Financing:

Suning will provide micro-financing for suppliers and merchants, as well as establish a RMB 1 bln credit fund. Suning will launch financing operations at the end of September.

Logistics:

Starting in Q4 2013, merchants will be able to use Suning logistics operations for storage and shipping, canvassing, and cash-on-delivery services. Suning currently has 12 automated sorting centers, 60 large scale distribution bases, 10,000 self-owned delivery vehicles, and 50,000 delivery personnel.

Store Design:

Suning will provide product categorization, user interface design, instant messaging (IM), Suning approved product quality certification, third-party transaction guarantee, and payment services for merchants online stores free-of-charge.

Commission:

Commissions will vary based on product category. For PCs, Suning will take a 2% commission on sales, as compared to a 2% commission on Alibaba Group's B2C e-commerce site TMall, while Beijing-based B2C e-commerce platform Jingdong does not offer third-party PC computer sales. As for bedding, Suning will take a 5% commission, as compared to 5% on TMall, and 5% on Jingdong. As for cosmetics, Suning will take a 4% commission, as compared to 4% on TMall, and 4% on Jingdong.

Merchant Payment:

Suning will verify that customers have received their products and then pay its open platform merchants. Once merchants accrue a high enough service reputation rating, Suning will pay merchants as soon as customers complete payment.

Other:

Suning will limit the number of merchants the company invites to its open platform to 10,000 in 2013. This number will increase to 50,000 in 2014 and 100,000 in 2015. Merchants on the platform will primarily be made up of a combination of original brands, authorized resellers, and retail merchants. Suning will only allow 5 merchants from the same city that sell the same product on the open-platform.

Editor's Note: For more information on this topic, please see "Suning.com Launches Third-Party Merchant Open Platform," MD 9/12/13 issue.

Keywords: e-commerce Internet B2C Suning 002024.SZ open platform Suning Yigou

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