Analysis On Retail Financing Strategy In O2O Transformation Model

In the development process of Enterprise,capital plays a decisive position.As the rapid development of online retail and e-commerce business in the Internet era,the traditional retail industry encountered Waterloo,of which the overall growth slowed down in recent years.The entity + electric retail enterprises are reaching faster growth rate than pure physical stores,which provides a new way of thinking for the development of the physical retail industry: o2 o transition.However,the construction of channels need the support of funds,financing has become a major problem faced by retail enterprises.Traditional retail enterprises have a higher overall debt ratio,averaging around61%,as retailers are biased towards current liabilities.So the capital structure form a state of imbalance,containing higher financial risk.In the absence of an effective long-term external financing mechanism,sustaining expansion will bring more financial pressure to retailers.Cash flow management is the key problem to the development of traditional retail industry.In order to accurately grasp the fund raising and financing strategy of listed retail companies in China,this paper chooses Wangfujing International Group as an example to analyze the financing opportunity and mode Wangfujing Group chose,and how to maintain a dynamic balance of capital structure to reduce financial risk.starting by capital structure,using case study method and related financing theory to explore which financing strategy the company can take in the future,with a view to provide reference ideas and solutions for other retail companies in the aspect of raise funds.This will provide a a certain guiding significance for strategic transformation company,especially to the o2 o transformation of retail enterprises.Through two targeted placements in 2010 and 2016,corporate bonds issued in2009 and 2012(for the shopping center layout and O2 O full channel construction),Wangfujing Group formated structured Financing strategy in the perspect of raising funds towards O2 O model.In the early stages of enterprise development,enterprises need a lot of money,and their own lack of funds lead to needs for bank loans,which is fast and easy to get.However,this type of financing is financially risky and has limited funding.With the expansion of the scale of enterprises and the strength of the enterprise financing channels gradually widened,enterprises can gradually give upthis high-risk debt financing.In conclusion,first of all,the internal financing is mainly retained earnings,reducing the company's capital costs.Second,as for the characteristics--high asset-liability ratio of retail industry,the formation of equity funds as the main source of incremental funds maintain the balance of debt and equity structure.Thirdly,the debt financing strategy based on financial liabilities within debt funds changed the structural characteristics of current operating liabilities as the absolute advantage while the financial liabilities with little or even zero,which will help play the role of financial leverage and enhance the value of enterprises.Finally,interest-bearing debt focusing on long-term bond financing strategy matches with the similar financial pattern of high operating current liabilities,which balanced the debt structure and reduced financial risk.