GOME Retail : Revenue on the Rise with Steady Improvement in Operations New Businesses Drive New Growth under “Home · Living” Strategy

For Immediate Release

GOME's Revenue on the Rise with Steady Improvement in Operations

New Businesses Drive New Growth under "Home · Living" Strategy

(Hong Kong, 24 May 2019) GOME Retail Holdings Limited (HKEX stock code: 493, "GOME" or "the Company", together with its subsidiaries, "the Group") today announced its results for the three months ended 31 March 2019. The Company extended its efforts in establishing a new retail pathway with GOME's iconic characteristics. Its transformation to become a "Home · Living" provider of one-stop home solution, service solution and supply chain is seeing promising developments.

During the Reporting Period, the total Gross Merchandise Volume ("GMV") of the Group for both online and offline operations grew by 4.6% as compared with the corresponding period last year. Sales revenue rose by 1.3% year-on-year thanks to the satisfactory performance of new businesses, while consolidated gross profit margin maintained at a high level of 17.3%. Total operating expenses ratio remained stable as compared with the same period last year, while financial costs were relatively high. Taking into account the above factors, the Group's loss attributable to owners of the parent during the Reporting Period was RMB 87 million, a sharp reduction as compared with the forth quarter of 2018. Capital reserve remained ample, with cash and cash equivalents at about RMB 10.5 billion as of 31 March 2019, enabling the Company to accelerate in implementing its "Home · Living" strategy.

Actively Building a "Home · Living" Store Network and Deepening the Sales Channel Penetration

One core manifestation of GOME's "Home · Living" strategy is the integrated flagship store that combines "home appliance zone, home furnishing zone, one stop home solution and scenario supermarkets" in a single venue, while New Retail Stores (franchise stores) are an exemplar of the Company's supply chain capability. GOME takes heed to speed up the opening of county-level stores and New Retail Stores to deepen its sales channel penetration. With a in-store-shops model, GOME established partnership with Carrefour to strengthen its coverage of bulk appliances, 3C and smart products and reach even more customers with its strong supply chain and service ecosystem. During the

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Reporting Period, the nationwide footprint of GOME stores reached 630 cities.

ME Shop: The New Traffic Aquisition Driving Force of Social Retail

Positioned as GOME's hub to attract internet traffic and active usage, the ME Shop is expanding in an enormous pace. The social retail model connects shop owners directly with consumers through the social network, thus simplifying the sale process and raising operational efficiency. The shop owners are supported by GOME's edges in supply chain, logistics and services. ME Shop's three core features of "group purchase," "discount" and "rebate" create a widespread group-buying phenomenon which demonstrates its ability to attract customers. The social e-commerce platform grows quickly upon sharing between friends, while ME Shop's commission and rebate policies further amplify the viral effect. During the Reporting Period, ME Shop's GMV rose 206% year-on-year.

One-Stop Home Solution Business Has an over 100% YOY Growth

From products to services, GOME offers One-stop home solution by way of a variety of new businesses such as integrated kitchen cabinets and electrical appliances, cozy home (central air-conditioning, heating and ventilation, and fresh air system), kitchen space solutions and home furnishing. The kitchen space solutions business boasts a lineup of 120-plushigh-quality brands from Europe, Japan and mainland China, covering more than 15,000 kitchen products in 10 categories and 30-plussub-categories, and including independent brands such as ZWILLING J.A. Henckels, WMF and De'Longhi. GOME's self-operating integrated kitchen cabinets and electrical appliances business, in collaboration with Europe's top cabinet chain brand IXINA, saw the soft opening of two stores in Beijing and Shanghai. Cozy home, the home hardware integration solutions, is also developing at full speed. Dedicated showrooms were launched in more than 20 provinces and cities such as Beijing, Shanghai, Nanjing, Ningbo, Jiaxing, Wuhan, Chengdu and Shenzhen in the first quarter of this year. During the Reporting Period, integrated kitchen cabinets and electrical appliances business has a 110% year-on-year

growth.

Speeding up Smart Ecology Development with Technology

Along with the advance in consumption upgrade and smart technology, smart home integrated solutions is becoming the choice for more and more families. Leveraging its strength in supply chain and data, GOME is building an open ecosystem for smart home solution upon the "product + data operation + IoT cloud platform" model. More than 70 brands were plugged in to the platform that contains products in 50-plus categories. Users gain full connection and control of smart items in a single GOME Smart APP, regardless of

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the brand and categories of the products. Furthermore, GOME is proactive in developing its own brand of smart products, with more than 200 models already released. The Company showcased its own brand smart products in the recently held World Intelligence Congress and earned overwhelmingly positive feedback. In another front, GOME has entered partnerships with various organizations to capture new growth, including a deep collaboration accord with Iflytek, and Tsinghua New H3C Group to explore the 5G retail ecosystem. During the Reporting Period, GMV of smart products rose by 51% as compared with the same period last year.

GOME's value Reflected with All-round Services

User experience and service lie at the core of creating deep connections with consumers, therefore GOME has always insisted in providing impeccable services. GOME's House Manager offers a full set of aftersale services by efficiently integrating resources of upper- and lower-streams of the industry: supported by logistics and warehouse strength at the back end, creating an integrated platform for aftersale services through scale, socialization, commoditization and professionalization and providing consumers with full product lifecycle services. During the Reporting Period, service GMV rose by 32%.

WANG Junzhou, President of GOME, concludes: "A year since the launch and refinement of GOME's "Home · Living" strategy, the new businesses are gaining new momentum. The Company will align to customers' needs to accelerate the construction of new scenarios and the introduction and promotion of new businesses with an aim to create new growth stories. GOME will break the boundaries of retailing with a hope to bring satisfactory return to shareholders as well as to provide better life to our customers."

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About GOME Retail Holdings Limited

Founded in China in 1987, GOME Retail Holdings Limited has been listed on the Hong Kong Stock Exchange since July 2004 (stock code: 00493) and is engaged in the retail business of electrical appliances and consumer electronics in China. It is a well-known electrical appliances and consumer electronics retail chain enterprise in China. GOME is transforming from traditional "home appliances retailer" to become a one-stop home solution, a service solution and a supply chain provider, to provide customers with quality goods and services covering home appliances, home decorations, home accessories and home services. Please visit our website for more information: www.gome.com.hk

For further enquiries, please contact:

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Hong Kong
Instinctif Partners
Victor Cheung	Pauline Wong
Tel: [phone]	Tel: [phone]
Email: [e-mail]	Email: [e-mail]
Beijing
Maggie Zhang
Tel: [phone]
Email: [e-mail]

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