Despite loss in the margin because of massive expansion in lower income and sparsely populated second-tier cities, the mainland's largest home appliance retailer GOME Electrical Appliances Holdings will continue to extend its footprint, albeit with caution.

The Beijing-based company announced in its annual result yesterday that its profit margin before tax dropped by 4.84 per cent due to expansion into second-tier cities on a big scale.

The Hong Kong-listed retailer achieved unparallel coverage in the market, by adding 143 outlets, bringing the network to 259 traditional stores spreading over 69 cities at the year-end, and closing down 24 stores that featured with digital products in both first and second-tier cities.