Chinese sequoia partner Liu Xing interview: Runway and player

　Oral: Sequoia Chinese partner Liu Xing interview, finishing: our correspondent Chaoxiao

The runway and the contestant

Only goods will do discount flash purchase, initially cut into the clothing inventory market. This model of the inventory risk is low, can not sell out of the return;

But only when the goods will go to the U.S. market, the two-tier investors spent a long time entangled a question: "In the end China has not enough inventory, will there be no inventory to sell?" We found in China that inventories are an almost permanent phenomenon in the due diligence survey of the only product a round. Clothing is a trillion-level market, inventory is the tail goods, occupy about 20%, so there are 200 billion. How much will the goods be done? 2013 total turnover of 16 billion, less than 20%, only half of which is clothing, there is enough room to do.

2010 we have completely crossed this psychological threshold, compared to others at least two or three years earlier. If there is such a problem, how dare we add a B-round investment in a year? The only case of the product will be that we are smarter than others, but more in-depth, with the company standing together, so understand more in place.

I remember when due diligence started, the only product would have cooperated with many brands at home and abroad, including Disney. In the interview, we focused on their inventory of tail cargo processing. The clear point is that the traditional tail-delivery channel is inefficient-find someone to pull it off, sell it slowly in your own store, or organize a shopping promotion-not to be processed in a very short time. Only the product will provide such a channel, in a very short period of time, such as a week, the other channels two or three months to do things done.

Until recently to Nanjing Research brand, a well-known offline brand owner, a first thought that this way to do one hundred thousand or two hundred thousand of the inventory processing even great, immediately after the line feel different, "originally can sell so much." Spread, wildfire, everyone in the circle knows. Therefore, the effect of Word-of-mouth is not only on the consumer side, but also on the brand side. It is worth mentioning that only the angel investors of the goods will be brand business origin, so more than the outsiders in place.

The reason for selecting the only product in the Flash-purchase mode is the positioning of the company. They are moving from positioning luxuries to the mass market, very quickly-the first and most correct strategic decision made by the founding team of the product, reflecting its business judgment. Redwoods recognise their existing position.

There are some problems in doing luxury goods, especially the lack of a stable and reliable supply chain, can only rely on eight recount, the goods in this way, the other batch to change the way, can not afford, until today there are still many luxury brands do not want to open to you to buy.

Positioning in the mass market has several advantages: first, in many places, such as the three or four-line city is not easy to buy these goods; For customers, even six months ago, even last year's style did not matter, because in the local market has not yet appeared in this style. Third, the three or four line is Word-of-mouth spread of the city, the place is smaller, the pace of life is slower, simpler, the product of greater attractiveness. North Wide originally have these brand discount shop, buy discount tail goods also involve face problem.

For the only product will, they are mainly facing the female audience has a strong natural propagation attributes. For example, nurses, teachers, aggregation, communication is very strong, there is time to demand, the income is not particularly high. A nurse buys a good thing and it's easy to know around the circle.

Second, the team is really different. Wenzhou People's characteristics, both Jewish and innate business sense of smell, rapid decision-making ability, can find business opportunities, seize business opportunities, immediately execute, this is the characteristics of Wenzhou business culture. At the same time, they are not old-fashioned people, one (Hong Xiaobo) in France for so many years of living, one (Shenya) in Guangzhou for many years of international trade. I learned later that Shenya was born Shuxiang and his brother and father were very educated intellectuals. And he himself before the international trade in Guangzhou, the vision is very open.

Shenya and Hong Xiaobo between two people are full of tacit understanding. The first time in their transparent office to meet, feel very interesting, then meet every day accustomed to, but afterwards, I went to the company, there is no second such as their two founders in the same office office, give us a sense of something special.

Thirdly, as we have seen in our efforts, the performance of the commodities meeting is indeed good. Every month, the growth rate is very fast, the warehouse is always because of too many orders and burst, they also feel a headache.

After the entry of capital

After the B-round investment, as the company's business gradually better, we find that there are many ways to go, everywhere is the temptation: to enter the new market do not discount the normal sales-China has not yet a real online department store, the continued price of selling fashionable goods, this demand is also very large;

Do addition or subtraction, expand to do different things or focus on one thing? Shenya plays a very important role in strategic choice. After many board discussions, we formed a consensus: "Do a special sale of the website." This is a summary of the past, distilled by board members and company executives.

But the sale is also extensible, the beginning of the "special" only refers to special prices, and later can refer to specific goods, special moments, special way. Special characters can evolve, and brand positioning can evolve. We don't mind if everyone understands the specials, let you know me first, then go ahead.

The degree of concentration is a great guarantee. If the first time from the transformation of luxury is a mistake to correct, the second is to do the right thing to carry it out, that is, the so-called "should be left Yong chasing Sanko", spare no effort to adhere to.

After the inventory problem, the level two market again to the only product will raise the question of competition: when as a flash purchase how to do? Jing Dong also do special sale How to do? Shenya replied, "We are dedicated to do this, the company thousands is born for this, do not believe that, can only use performance to prove." In fact, there is no such thing as the only product, with proprietary mode to do flash purchase companies.

With regard to the supply chain of the flash purchase, you can control the two US discount chain, TJX and Ross. The former is worth 40 billion dollars and the latter is much smaller (note: USD 15 billion). One reason is that the former buyer's team is the latter several times, a buyer can buy only boys shoes, shoes fabric, price, supplier channels, manufacturers, upstream industry chain are very clear, what changes are always known. The latter is a short cut in terms of concentration and the number of companies they deal with. Only the goods will be similar to the TJX, buying a team of large and subdivided, they all day with the supplier mix, to their field than anyone knows. Coupled with the data of the electricity quotient, the integration is very deep.

One thing is the most difficult to transcend, that is time. Whether I succeed or not, at least I have done a lot of business attempts, there are data to support the future judgment, and not done people will never understand. To be very extreme, all the wisdom or knowledge that is based on the data is not copied by others.

When it comes to the help of the capital side, there are so many aspects of it that talent may be one of the most important aspects. Along the way, in the introduction of talent, rhythm grasp is relatively good, did not drop the chain. I've talked to many times before, except for the Hong Meijuan vice-president, who joined the company earlier than Sequoia. I am basically involved in the interview in the important senior positions. For example, Tang Tanji, vice president of warehousing and logistics. He used to be in the last time Huitong, originally intended to be the only product will develop into customers. We think he's good. I met him and talked to him as I interviewed him and he interviewed me.

Listing options

Listing is the third right big decision made by the company. The reasons for the choice of listing three, first, the company's development has a capital demand, but itself is still in the loss; second, I hope that through the listing in the brand to improve; Third, the company's model will be welcomed by the capital market.

But have to say, only when the goods will be listed, investment bank has misjudged the capital market. Before that, for a long time there were no Chinese companies listed. To open a window, you must be a very good company. Investment banks feel that the only product will be a good seedling, but underestimate the bad environment of the market, the resistance to the shares. Too many people lose money in the stock, immersed in grief. In our February roadshow, we found that most investors did not devote much effort to looking at the company's specific business and model. Although we meet, but deep inside is not accepted. There is only a little in the list of people who really did research, and a little half of the mentality of holding a bet.

At that time the issue price is eight blocks of five to 10 five, we feel that 12 is reasonable, to the end only six five of the pricing. In the face of such a listing, we are in a bad mood. But on the day of listing, only goods will receive a lot of brand, logistics company sent blessing information. Looking back, these partners have no one to pay attention to the "bloody listing", only the people who engage in capital will pay attention to how much stock price, listed below how much. What the partners are seeing is that first, only the goods will be listed in such a short time, very cattle; second, to the financial, rich, we all like to work with the rich partners, confidence in capital security; third, listed companies are certainly more standardized, better corporate governance.

From this point of view, I think the listing is very positive energy. No matter what kind of partner, brand, logistics, technology, is positive energy. For employees too. Most ordinary employees don't know how much the company is worth, 300 million dollars or 400 million dollars, and that sounds pretty good. And the stock price rises from the bottom, the people holding the original stock are very happy.

When the third quarter of 2012 to achieve break-even, the capital market on the only goods will not be able to make money is not worried about the competition. So I said at that time, I hope that 2013 years can tell you that competition is not a problem, only the product will be able to develop independently. Now the two-tier market investors to the company's understanding, is increasing year by year. I think there will be such a company in the future, after the listing will be accepted after a period of time. For enterprises, the most important thing is to consider the long-term, the business well.

Reality and the future

Only product will be the focus of the current user group to enlarge, 10 million users too little. The category needs to be expanded and strengthened to attract more users. Coming out of your own box and expanding on the category is taking into account your ability to a new stage. When you do subtraction because there is no confidence, now the ship bigger and more stable, can be more confident to do some experiments. At present in several categories may be done more deep, but compared to clothing, skin care products do not enough, need to pull up. The acquisition of the Le Bee is a consideration.

For the merger, the media focus on the "Sequoia Bureau", which is a big misunderstanding. I didn't take part in the merger earlier. The details of the deal are not known until the board on the eve of the deal, and they are not allowed to vote. Because the trading object is Sequoia Investment enterprise, so I want to avoid suspicion.

If the Sequoia has the ability to "do the bureau", it will be very powerful. As a small shareholder, can Sequoia be a good entrepreneur? Who thinks so, can go to try. Shenya is a very mature entrepreneur, very old businessman, won't you say East is east. Li is also a very personal person. She came from the media, can make the retail business of the Le Bee so I admire her, this time to the Le Bee to a more suitable for the partner, can bring the Le Bee to a higher place, I think is very correct decision.

Of course, do redwood trees play a role in the process? Sequoia Annual annual entrepreneur Meeting is organized by us, Shenya and Li have had the opportunity to understand and communicate with each other in an occasion, but later mergers and acquisitions ideas, decisions are made by CEOs themselves.

In addition, the only product will also be through the car and other categories to explore the site of the crowd from the female expansion to the male, rather than migration. Watch the crowd will also look at electronic products, auto parts, male users more. Even if the current conversion rate is still to be increased, but it attracts them to spend time on it, increasing the interaction between the male users and the website is a good phenomenon.

The only thing that will be done now is not to be aggressive and to speak with the result. The result is good, the result is bad, or less, or based on the information of the result, use a more ingenious way to do it. Electric dealers need constant innovation.

For a power company, the biggest risk is whether to keep up with consumer spending habits. Why mobile is so important, because consumer behavior is changing in this direction, mobile electric business is the general trend. Enterprises can keep up with the unexpected changes in the future, Life-and-death.

Second, management is always a challenge to the company. Can you avoid a big business? Can in the high-speed development process, but also can maintain the team's execution and efficiency? After the enterprise to this scale, the competition has evolved into a talent competition. What I am most concerned about now is the question of people: is there enough cattle, is there a suitable person in each position, how to find a more suitable person? Before listing the strength to recruit more cattle, now have this space and platform, there are cards to play, to play well.

After a year on the market, Sequoia has in the gradual orderly reduction of the withdrawal, we quit the principle is to not bring volatility to the company's share price, we can not always in the stock high when the return, complete exit point of time is still not good to say, the company's future is still full of confidence. As to whether I will remain in the board of directors, I would like to see if the company still needs me to recognize my value as a director. (Edit Linkun)