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China’s former richest man vows 2022 comeback after release from prison

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Josh Ye, South China Morning Post

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img src="https://sa.kapamilya.com/absnews/abscbnnews/media/2019/reuters/12/16/china.jpg"/><figcaption>The Chinese flag is raised in front of the China Pavilion during a flag raising ceremony at the Shanghai World Expo site in Shanghai. <em>Alfred Jin, Reuters/File</em></figcaption></figure></div><p>Huang Guangyu, founder of electronics retail chain Gome Retail Holdings and formerly China’s richest man, has pledged to return his company to its former glory within 18 months after finishing parole this week.</p><p>One of China’s most influential entrepreneurs before the country’s rich list came to be dominated by tech founders and property developers, Huang was arrested in late 2008 on suspicion of “economic crimes”, and convicted in 2010 for insider trading and corporate bribery. He was originally sentenced to 14 years in jail, but his term was shortened for good behaviour. He was released from prison last year.</p><p>While Huang’s wife, Du Juan, has been managing Gome’s operation during his imprisonment, China’s retail environment has undergone massive changes. As online shopping replaced bricks-and-mortar stores as the main channel for home appliance purchases, Gome’s business came to be dwarfed by the country’s rising e-commerce giants.</p><p>“We will try to resume our original market position within the next 18 months,” said Huang, 52, in his latest speech to Gome’s management, published by the company on WeChat on Tuesday.</p><p>He said that Gome’s basic strategy is to offer customers “low price for carefully selected products”, along with timely delivery and a happy shopping experience.</p><p>Revealingly, Huang did not mention whether Gome plans on becoming the leader of the entire electrical-appliance retail market, or simply the top player in the bricks-and-mortar space, said Ding Daoshi, director of the Beijing-based internet consultancy Sootoo.</p><p>If Gome merely wants to become the leader in physical retail, Ding said, it only needs to take on its main competitor, Suning. If it is eyeing the entire market, however, it will also need to compete with Alibaba, JD.com and others.</p><p>Alibaba owns the South China Morning Post.</p><p>On Friday, investors delivered a vote of confidence to Gome, whose stock price in Hong Kong surged nearly 20 per cent to HK$1.96 at market close. The price has more than doubled since the start of the year, although it is still a far cry from its peak of HK$5.51 in early 2008.</p><p>Gome’s bid to return to its glorious past, however, will be an uphill battle.</p><p>According to Gome’s own data, its sales rose just around 22 per cent over the course of a decade, from 49 billion yuan (US$7.6 billion) in 2008 to 60 billion yuan in 2019. In contrast, Suning, increased its revenue from a similar base of 50 billion yuan in 2008 to 269 billion yuan in 2019.</p><p>Gome has struggled to compete with rival appliance retailers, as well as new e-commerce platforms, during Huang’s time behind bars. Since 2017, the company has reported losses every year.</p><p>The challenges posed by Gome’s limited online presence became especially stark during the coronavirus pandemic, which prevented consumers from shopping in physical stores. In its latest interim report, Gome reported a 44 per cent plunge in revenue in the first half of 2020 to 19 billion yuan – about one-sixth of Suning’s revenue in the same period.</p><p>Gome’s online﻿ presence accounts for only 1.7 per cent of China’s e-commerce market, according to market research platform 100EC.</p><p>Huang, a high school dropout from the city of Shantou in southern Guangdong province, built his retail empire from scratch in 1987, starting with a street-side stall. Known formerly as Gome Electrical Appliances, the company later grew into China’s largest electronic appliance vendor with more than 1,000 stores.</p><p>The company debuted on the Hong Kong stock market in 2004. The following year, Huang, who was 35 at the time, led the Hurun China Rich List, setting a record for being the youngest man in the country to attain that honour. He remained at the top of the list between 2006 and 2008.</p><p>Today, Huang and his wife remain Gome’s largest shareholders with a 50.26 per cent stake. In 2014, the couple paid HK$420.6 million (US$54 million) as compensation for misconduct in a 2008 share repurchase deal.</p><div><strong>RELATED STORIES:</strong></div><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/overseas/11/27/18/china-bars-us-citizens-from-leaving-over-economic-crimes">China bars US citizens from leaving over &#x27;economic crimes&#x27;</a></li>	<li><a href="https://news.abs-cbn.com/overseas/01/30/21/china-executes-former-top-banker-over-bribery-bigamy">China executes former top banker over bribery, bigamy</a></li>	<li><a href="https://news.abs-cbn.com/business/10/30/08/forbes-rich-list-financial-turmoil-hits-chinas-super-wealthy ">Forbes rich list: Financial turmoil hits China&#x27;s super-wealthy</a></li></ul><div><strong>RELATED VIDEO: </strong></div><figure class="op-interactive"><iframe height="315" src="https://www.youtube.com/embed/qPV0J9Swtgo?enablejsapi=1" width="560"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

<p>One of China’s most influential entrepreneurs before the country’s rich list came to be dominated by tech founders and property developers, Huang Guangyu was arrested in late 2008 on suspicion of “economic crimes,” and convicted in 2010 for insider trading and corporate bribery. He was originally sentenced to 14 years in jail, but his term was shortened for good behavior. He was released from prison last year.</p>

One of China’s most influential entrepreneurs before the country’s rich list came to be dominated by tech founders and property developers, Huang Guangyu was arrested in late 2008 on suspicion of “economic crimes,” and convicted in 2010 for insider trading and corporate bribery. He was originally sentenced to 14 years in jail, but his term was shortened for good behavior. He was released from prison last year.

China’s former richest man vows 2022 comeback after release from prison

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China’s former richest man vows 2022 comeback after release from prison

Josh Ye,

South China Morning Post

Published Feb 20, 2021 01:26 PM PHT

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