Suning is currently the largest retailer in China with over 600 million customers. The number one position has been contested by the likes of Alibaba, Jingdong and Suning but the reason behind Suning coming out on top has been its efforts put in to satisfy its customers. There are several factors that come into play such as the logistics, cloud support, spread of high speed internet and the overall growth of the Chinese economy that has also added to the growth of Suning with yearly revenue of more than $150 billion.
Nanjing holds a special place in the history of China. It has served as the capital to several Chinese dynasties in the past and it has witnessed China’s ups and downs like no other city. It has also played a major part in China’s economic growth by allowing companies to grow within its boundaries. Suning being one of the largest companies founded in Nanjing has shone bright for the past 3 decades. It has not only changed the face of Nanjing but also uplifted the Chinese economy and the Chinese consumer sector in many ways.
Suning’s Initial Days
Suning was started by Mr. Zhang Jindong in 1990 in Nanjing. He opened the first store as an air conditioner retailer on the conjunction of Suzhou Road and Ninghai Road. The initials of the roads Su and Ning is where the name ‘Suning’ comes from. The initial business plan of Mr. Zhang was to sell ACs from the manufacturers to the public institutions that needed large consignments of ACs for their offices and price was not a big deal for them. This helped Suning to get a lot of contracts as they offered door to door service at a less cost by reducing the middlemen in the business.
Growth as a Retailer
Suning grew rapidly in the then changing Chinese economy with the consumer market on the brink of the great explosion. Internet was still a thing of future for the common people and the home appliance sector was taking shape of the modern era. Suning entered the market just at the right time to understand the market and act accordingly right before the wave of the internet era hit in the mid to late 90s. It soon became the talk of the town with their launch of the online shopping platform in 2007 and the rest in history. It also grew into a multidimensional organisation with cloud services, financial services and many others to truly become a technology giant in China.
Smart Logistics: Key Driver of the Growth
E-commerce platforms have revolutionised the way consumers purchase. The reason behind the change is the convenience. E-commerce allowed people to order a product from the comfort of their homes and in a couple of days (more or less), it was delivered to their doorsteps. Moreover, the prices were cheaper on the online stores as compared to the offline stores and also the varieties were far more than the offline stores. These had an addictive effect on the consumers and rapidly the demand for e-commerce grew like a forest fire. Currently, the delivery speeds have reached as fast as a mere 30 minutes in some stores in the cities.
Suning has incorporated a smart system in its businesses to reach the top of the ladder. Their state of the art logistics facility in Nanjing city reveals the truth behind the speed and accuracy of the brand.
The whole logistics centre is divided into various parts meant to perform a specific set of tasks. The storage of goods in the centre is also divided into various segments that segregate the products according to their size and the type. The goods are separated as large boxes, small to medium size boxes, very small boxes, fragile products, liquids and food products. They also have a separate stack for sports equipment in their sports store as this department gets high order volume. The reason behind the segregation is to easily store and retrieve them with the use of the Schafer ASRS system.
The goods are stored in 22 metres high racks. These blue racks are designed to contain the separate smart pallets for large products or the yellow boxes for medium to small products. One such hall contains around 10,000 large boxes or over 200,000 small products. The numbers are just overwhelming and the smart system handles the heavy orders and delivery very efficiently. This also makes them the largest logistics centre not only in China but also in all of Asia.
Schafer is a German automation technology brand in the field for several years now. Suning are using Schafer technologies in their smart logistics centre. The ASRS system developed by Schafer expands to Automated Storage and Retrieval System. The Suning smart logistics centre is almost fully automated with less human intervention that makes the storage process and retrieval process for delivery extremely easy, fast and reliable. They have a lot of data to play with as well, which can be clearly seen in the centre’s computer monitoring room.
The system monitoring room has a huge screen with around 20 people working together for keeping the whole process as seamless as possible. This room has the feeds of the multiple cctv cameras placed all over the store as well as the feeds from the various ASRS systems and manual feeds of the workers for a holistic approach to the whole logistics of Suning.
The workers in the logistics centre segregate the products after receiving from the vendors. The products get stored in the stacks as discussed above in the small medium or large boxes and pallets. The workers need to scan the RFID code and then it goes for the final packaging before it can be delivered to the customers. The point that needs to be highlighted is the speed of the process because so many steps are covered in a flash and that too very accurately.
Suning currently has half day delivery where a user can get the products within just 12 hours from the time of the order. For instance, if a user places an order before 11 am in the morning, the product will be delivered by 11pm night. If the order is placed before 11pm night, then the product will be delivered by 11am next day. This has gained a lot of popularity especially in the cities where this is actually possible. The users of the e-commerce platform have shown their love for this service by placing record number of orders in the high-speed half day delivery at Suning.
The centre in Nanjing runs 24 hours and 7 days a week to meet the huge demands made by the consumers. This creates employment for a huge number of workers who work in 3 shifts working an average of 8 hours daily. Some people might argue regarding the job cuts that are happening due to the heavy automation that is mentioned above. However, it should be seen from a different perspective. Although there are some job cuts in the smart logistics centre, same number of even more jobs have been created in the delivery segment where Suning, now employs more people than ever before to meet the delivery requirements. Moreover, the smart logistics centre has improved the efficiency of the company as a whole that in return benefits the employees, new and old alike.
Suning currently has around 5 warehouses just for the smooth deliveries in East China. The warehouse in Nanjing covers more than 200,000 sq. mts. which is around the size of 30 professional football fields. Moreover, the total area of the warehousing facility in China by Suing exceeds a staggering 9.64 million sq. mts. The sheer size of the facilities justifies their Numero Uno position in the Chinese retail industry. Along with the size, if you add the smart technology used by the brand, the performance boost becomes quite obvious.
Interestingly, adjoined to the Suning Smart Logistics centre, there is also a call centre that deals with the issue of the consumers that they are facing with their purchases. It improves the overall quality of the service provided by Suning.