Eight views of the electric business industry

Huang Jo

The original Dangdang COO, Cat founder General manager, Warburg Huang Jo investment Advisor, 30 years engaged in retail and E-commerce management experience, organized into "I look at the electricity business" book. In the book to the Electric Business Shopping guide, special selling, luxury goods, mobile power, the cat profit model, the electric business industry misunderstanding, and so on to interpret, Tencent technology for some excerpts, sorted out the electric business industry eight views.

The following excerpt from "I look at the electricity business":

Platform charges exist in the ceiling

Taobao by free mode, occupy the market dominance. Free form, the source of profit can only be advertising revenue. platform depends on the flow of revenue, is a good fee model, simple, effective, but ultimately is a very shallow business behavior.

In the preparation of Taobao Mall, I decided to try a new fee model, platform operators in the way of sales deduction point of Commission. The proportion of the transaction Commission is determined according to the category, and the Commission proportion of different goods is unequal.

Over the years, the Commission has been the main component of the cat's income. So, platform charges in the end there is no "ceiling"?

The answer is yes, the ceiling for platform charges comes from two factors.

One is the cost of the category pain point (bon Threshold). Platform operators have the ability to find the balance between the consumer, the merchant, and you in the various categories you run. If more than the pain point of the business, the other party will either move the position, or raise the price, the cost of passing to the user, the result will naturally lead to the price of the rally.

The second is the substitution. If the charge is too high to break through its pain point, businesses will naturally look for other sales platforms, which are common online under retail. Specific to the platform of many network merchants, they can be replaced to obtain a greater flow of the source of the few places, almost Taobao an exclusive. Therefore, in the case of the substitution is not strong, even if the rate of the platform has touched the pain point of the business, the business is only temporary patience, or a part of the unbearable cost by increasing the price passed on to consumers.

Limited by the supply limit

The main characteristics of special selling mode during limited hours, one is limited, and the other is tail goods special. Operation mode is basically the same: from the major brand companies, distributors, ground retailers there to find special products, updated daily, sold out in the form of the launch of the website.

For special sale, the brand business is loving and misgivings. They have to clean up their tails or past-season goods, and they don't want these discounts to hit their normal price.

Buyers and sellers mixed, is the most important commodity selling logic. As a form of goods, the special sale of limited-price has found a balance point that can be satisfied by the supplier, the seller and the buyer.

While the special sale has a bright spot, but under the line has not become the mainstream of sales, there are several factors restricting its development, these factors in the electric business environment is also a challenge:

One is sourcing. After all, the brand tail goods are limited, can not expect the brand company to deal with the tail goods to survive. In fact, the supply quantity of the special sale is the opposite of the optimal inventory management of the brand company. When the brand company for each of its products in the design, production, marketing, inventory grasp the better, can remain for a limited time to sell the sale of the tail goods quantity is less.

Of course at any time the goods will have tail goods, but as each brand company to upgrade their inventory management capabilities, can not assume that the number of tail goods will continue to increase. In this way, special selling during the limited hours may face the dilemma of "no rice."

Second, the source of commodities. Tail goods are more complicated. There are major shopping malls broken code broken, there are damaged goods, customers returned goods, as well as the involvement of parallel imports channels. Each of the various antecedents, receiving goods inspection control also has many deficiencies, resulting in the quality of the product itself uncertainty.

Third, after-sale protection. For many high price products, through the special selling channels to buy how to protect after-sales service, which has been a gray area. Many goods sold through the limited time, customers often do not enjoy the right after the sale.

Electronic Business Shopping Guide the ceiling is obvious

Web site traffic costs are rising is the objective condition of the rise of the shopping guide website.

The use of social network characteristics for the electricity dealers to transport users, the formation of internet shopping style, which is a major feature of China's e-commerce industry. The reason, mainly because the network marketing cost is too high, Taobao many sellers try to find more targeted market tools. Of course, China's electric business platform model occupies the mainstream position, there are millions of of thousands to network sales of small and medium-sized sellers, they are shopping for the potential of the site's parents.

Shopping Guide site so from here to find the point: the assumption that Taobao has 1 billion kinds of online goods, and a shopping guide site only one out of 10,000 of its merchandise, that is, 100,000 kinds of merchandise display, even if the latter daily user visits only Taobao 1 per thousand, theoretically speaking, goods in the shopping guide site was found, The opportunity to be shown is Taobao 10 times times (one out of 10,000 of the number of goods, 1 per thousand of the user visits), which is the value of its existence.

The Shopping Guide website has the very strong attraction to the locking user group, as well as the high website purchase conversion rate. Beauty said, Mushroom Street has reached 8%-9% of the purchase conversion rate, which is a very high number, Taobao about 2%.

The "ceiling" of this industry is very obvious, this is a major reliance on Taobao environment to survive the industry, its operating soil, all rely on Ali, Taobao's nasal polyps.

As long as the valve is closed, this mode of collective layoffs. Very simple, you 95% of goods and transactions are derived from Taobao, when the scale is not large, Taobao natural happy to see your little brother as a valet, because you are also helping Taobao business, but if your power is too big, actually moved Taobao cheese, the latter must be the side of the couch, do not allow others to sleep.

It is hard to imagine that when a shopping guide site generated daily user access and transaction flow to the Taobao advertising revenue poses a threat, Taobao can also allow you unfettered development.

The two modes of luxury goods electric business can be used for reference

Will the future of luxury electricity dealers, like other electric dealers, the emergence of industry leaders, first of all depends on the ability to obtain the trust of the brand, and ensure adequate supply, and secondly, to ensure that products and services driven, rather than relying on price;

Domestic luxury-goods dealers often violate the sales logic of luxury goods themselves, use promotions and special sales to sprint sales and scale, or to deal with the tail goods and inventories of high-end luxury goods in the form of low-cost discounts.

Therefore, they can not obtain the cooperation and support of the brand, the brand by refusing to provide after-sales service for the sale of electric dealers, or to announce that you are not his authorized distribution channels and other countermeasures, to resist the electric dealer to its high price marketing impact.

Luxury users are roughly divided into three categories: Deep users are luxury brands of fans, for such brands covered by the category of goods are keen to have, middle-level users of the brand loyalty is strong, the performance of a brand-only series. and shallow users usually only have one or two luxury items.

Most luxury users in China are still in the shallow stage, it is difficult for shallow users to produce two of times purchase. Therefore, the electric business platform has to go to supplement the consumption frequency of the two or three-line fashion brand, or to buy the fast elimination mode to stimulate more consumer impulse. This, in turn, has led to a dead end, as luxury brands are not happy to see the same sales with some lower-cost fashion brands.

Where is the development trend of luxury goods dealers? There are two business models that are worth learning from:

One kind is the traditional retailer enters the line to sell the luxury goods, under the line and the brand merchant achieves the cooperation, has the abundant source, may realize the genuine positive price, the line serves as a sales supplement.

Another is the quasi-luxury electric business model, which will be invited by some luxury designers to the site, to sell their design products, with exclusivity, such as the British net-a-porter.com.

Opportunities and challenges for mobile power providers

We might as well use several features from the handset side to share the opportunities and challenges that mobile operators may face:

One is user binding. User's precision marketing, directional analysis has great operating space. But users ' concerns about privacy are much higher than computers.

The second is positioning function. To the region, the time axis as the cut-in point of the network sales have a stronger force, such as mobile end of the local Life service electric business.

The third is the time of fragmentation. For mobile operators, it will be a new business Operation model.

Four is a limited display space. To reduce the number of goods, shorten the shopping path, or simplify the text description, and without affecting the vision of the premise, the use of new technology to compress the picture space, is a new issue of mobile electricity business.

Five is search and push. The most common computer side is the use of search engines. Mobile end of the interface features, so that the majority of users more accustomed to click, push, the overall page design, import, put forward a completely different requirements.

Six is the purchase and collection. At the mobile end, the fragmentation of time to use, the space movement of the network signal instability, more users to use a higher proportion of the collection function, left to do later.

Seven is the traffic entry and app. Computer end several large Internet companies control the vast majority of traffic, all the network promotion of electric companies, most of the cost in the flow of purchase, the mobile end of the current does not show a monopolistic type of traffic entry. Mobile operators of the app, whether there will be one or two shopping guides or comparison of the app into an integrator, have to try.

Now on the market to see the mobile operator app is only its computer side of the reform version, did not really analyze the characteristics of mobile terminals, grasp the user in the mobile use of psychology to develop new products.

Price war is the misunderstanding of electric business industry

The price war is everywhere, but it has not seen such a reckless approach as the Chinese business industry, regardless of cost, without a planned and strategic price war.

This price war of electric dealers is a very boring war of words.

First, not the real price downward, let the consumers, but a gimmick, attract attention.

Second, a limited number of commodity prices may have attracted a number of new customers to buy, but more users in the purchase price after, or simply do not buy things, or commodity prices did not cut, big call fooled.

Third, damage the relationship with suppliers, production enterprises. Suppliers, production enterprises need to consider the price balance of each channel. Need to consider stocking, supply. This kind of whim of the price of words war, said the good point is aggravating, make the supplier unprepared, unable to deal with the pressure of other sales channels, can not meet your order needs, it is likely not to cooperate or even interrupted with your cooperation, the final scene can not be cleaned up.

Four, this is not the real content of the price of war, the destruction of the original more vulnerable to the electrical business industry, so that more people inside and outside the industry to add an integral e-commerce like to fool around, doing things at all not reliable evaluation.

Why the electric business industry has so many irrational madness, crazy burning money to buy traffic, crazy price kill, crazy expansion category ... In an environment where almost no company is profitable, we talk about losses. The reason is actually very simple, spend other people's money, create their own exposure rate, let the enterprise to struggle, we are playing drums of the game.

Win at cost

Wal-Mart, the retail giant, is proposing low prices every day, luring consumers with low prices while maintaining a profit that can continue to expand, with the logic behind it's low-cost operation.

The scale of retail is not the core, the cost optimization based on scale, the unit output maximization is the fundamental.

Cost control is not only the office rent, electricity savings, for the electric business, more important is the market costs.

First, spending money on customers is not the only way. We used to pay special attention to DM, that is, clip page marketing, encourage existing users to recommend the development of new guests, these almost no money to promote the means, most of the electric companies are not fully utilized. As for the online world, more free resources, from micro-blog, micro-letter, to the community forum, as well as the corners of each site, have low cost to promote the value.

Second, the promotion of planning and input-output ratio. Any time period for new users of the market, there will be a ladder-like decline effect, such as next month if you want to introduce 20,000 new customers, the average cost may be 80 yuan, if you want to introduce 40,000, the average cost may double, because the price of each promotion channel, input and output ratio, Low input high output channels in a period of time can only have these outputs, if not careful calculation, blindly demand to reach the short-term new high, the cost must be high frightening.

The third is the user retention rate. Refers to the continued consumption capacity of a new purchaser, and how the website maximizes the retention of its guests. Many electric companies, last year's buyers are still active this year and maintain a similar consumption behavior last year, about 30%-40% of the total number of new users last year. In other words, last year's user marketing input, to find 2/3 users is a passer-by. E-commerce is selling things, no bag rate, no turning heads, and then the high flow of people are surface prosperity.

Investors are profit-driven animals

I usually evaluate the investment possibilities of an electric business enterprise from the following three aspects:

One is the business model of the enterprise. What's the difference between your model and other people? Are you a model of innovation? If so, venture capital first throws in the form of money.

Second, the operation efficiency of the enterprise. If the sales, your unit sales cost is not lower than others? If it is to do the game, your game product development ability is better than others? No matter what industry, your overall operating efficiency will be better than others? Is your per capita output bigger than others?

The third is the customer retention rate. If the first two are not there, then your customer retention rate is better than others? Is it increasing every year?

The vast majority of investment managers, whose assessment angles and methods may be different, are generally the same in their psychological judgments. You always have to remember that investors are profit-seeking animals, pursuing the seemingly risky and rewarding proportions of the investment.