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Suning plans expansion in rural China with franchise stores

Chinese electronics retailer Suning.com Co. Ltd. said Aug. 10 that it plans to roll out 12,000 franchise stores in small towns across China by 2020.

Differing from the traditional procurement business model, the so-called "Retail Cloud" stores will leverage Suning's centralized inventory management and sharing.

Suning expects the format to improve the operational efficiency, merchandise selection, supply chain management and technology capabilities of stores in rural areas of China.

So far, Suning's Retail Cloud stores have attracted partners from about 27 Chinese counties and towns, with some of them generating 2 million Chinese yuan in monthly sales from a 200-square-meter store.

The company plans to have 8,000 such stores by 2019 with an aggregate sales scale of 30 billion yuan. Suning also plans to foster at least 1,000 merchants to grow annual sales of 10 million yuan each by 2020.

As of Aug. 10, US$1 was equivalent to 6.85 Chinese yuan.