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Chairman's Statement

Dear Shareholders,

Looking back on 2021, General Secretary Xi pointed out that “developing digital economy is a strategic choice to grasp new opportunities arising from the new round of technological revolution and industrial transformation”. As the development of the new round of technological revolution and industrial transformation deepened, digital transformation has become a general trend. From a macro perspective, the development of the digital economy will accelerate economic transformation and high quality advancement. Promoting consumption growth and increasing the proportion of consumption in economy will be the major tasks of national economic development in the near future.

To align with the trend of technology-driven development and evolving consumption models, GOME launched its strategy of establishing a full retail ecological sharing platform. Focusing on the retail and home service industry, GOME capitalised on its industry innovation and technology-enabled online and offline channels to establish and integrate its six business platforms, including online platform, offline platform, supply chain platform, logistics platform, big data & cloud platform and sharing and joint development platform. Through these six platforms which complement, support and empower each other, a GOME ecological system has been created to cover the entire range of products, scenarios, channels and linkages as well as product full life cycle management.

In 2021, we accelerated the implementation of the second phase of our “Home • Living” strategy and the critical moment for the establishment of GOME modern retail platform. Adhering to our mission of “Better home and lifestyle through GOME”, we aim to meet people’s pursuit of quality of life. It is essential for us to pave the future development of our retail business through capturing opportunities arising from the improvement of household quality of living and favourable policies. Our “Home • Living” strategy entirely focuses on household consumption and aims to improve our household oriented consumer service portfolio which covers product selection for households and precise assembly services, and enhance our operation which targets household consumption. The aforesaid initiatives will become the core values of GOME Retail and the key elements attributing to our success in the “Home • Living” market. Our “full retail ecological sharing platform” has laid a solid foundation for the quality improvement and high-quality development of GOME and also represented a breakthrough in its development. Last year, we put great efforts in our supply-side, consumer-oriented and technology-empowered segments and drew up a strategy for “integrated & centralised, interconnected and sharing and joint development”. Committed to creating an effective and comprehensive procurement process with lower cost, we have established an integration online and offline consumption scenario and an empowerment platform for product digitisation and continuous integration and expansion of our partners.

In October 2021, GOME Retail announced its provision of three-year management services for five subsidiaries of GOME, including GOME Home (國美家), Sharing and Joint Development (共享共建), Home Decoration (打扮家), Anxun Logistics (安迅物流) and GOME Collections (國美窖藏), which will not only generate revenue with the minimum amount guaranteed, but will also enhance the synergy effect among different business segments and integrate different industries. As such, a solid foundation will be laid for the development of GOME’s platform based business strategy.

As a results of our efforts in the past year, GOME has successfully captured the first mover advantage and tapped into the “Home • Living” market with extensive strategic values, and transformed from an appliances retail chain into a omni-scenario operation model encompassing scenes of in-store, in-home, online and to-home and covering entire range of products including electrical appliances, household items, home decoration, home furnishing and home services. In addition, we have constructed the “omni-retail” platform under the “Home • Living” strategy as our core system and business moat and a full retail ecosystem sharing platform based on the six platforms of integrated & centralised, interconnected and sharing and joint development to create a closed loop value chain. In 2021, we also upgraded and transformed our entertainment platform. Serving as a driver integrating the development of our “omni-retail” and “Home • Living” platforms, the platform will be a significant element for our “Home • Living” concept and also our major strategic direction in the next two to three years.

2022 marks a meaningful year for GOME as it ushers in its 35th anniversary. These 35 years of challenges have never impeded GOME’s pursuit of exploration and innovation. As a longstanding market leader in the retail industry for 35 years, we have always strived for achieve breakthroughs in traditional retail business and embraced new technologies. In our effort to keep abreast of industry development, one of our goals in 2022 is to “innovate”. In 2022, GOME will continue to focus on the development of full retail ecosystem by tackling the obstacles in the traditional retail industry, inviting more business partners to join our ecosystem and attracting consumers on different entertainment and social platforms. We will also continue to improve our standard of “genuine products provided by selected merchants” through offering in-store demonstration to customers. Our service ability for omni-linkages, scenarios and patterns will be enhanced according to our customer-orientated approach, setting a new standard for the industry.

Finally, I would like to express my heartfelt appreciation on behalf of the Board to our shareholders for their support and trust, and my sincere gratitude to the community for their recognition and support of GOME. We will strive continuously to create value for our shareholders, employees, customers, suppliers, partners and other stakeholders, and attach new meanings to GOME ecosystem primarily based on the overall development of the Group. In response to the trust and support from society, we will continue to improve the culture and operating results to create a new and valuable GOME under the Group’s mission of “enhancing efficiency with the support of technology and wisdom for good” and its philosophy of “integration of all businesses through mutual interaction, reliance and support”.

Zhang Da Zhong