Only goods will be the first to achieve profitability

In other electric dealers are still in the maze of burning money trek, clothing electric trader will be the first to achieve the profit--according to the report, only the fourth quarter 2012 net revenue of 299.6 million U.S. dollars, an increase of 184.8%, net profit of 6.3 million U.S. dollars, the year before the completion of the loss. A year ago it was a famous bleeding listing (broken on the day of the listing, a 30% decline in market value of 3rd), now its market capitalisation is equivalent to four Dangdang, a breakthrough of 1.2 billion U.S. dollars.

As the recent stock price has risen more than 5 times times than the IPO, some people call it "the first demon stock of the electric Dealer". --This claim has led to the strong dissatisfaction of CEO Shenya. "High-profile people die fast, low-key people live a little longer." "In the office of the Shenya in Guangzhou, he said meaningfully to the Chinese entrepreneur." He is Wenzhou people, entrepreneurship has been doing foreign trade business, with Wenzhou people low-key down-to-earth character.

The fighting in the electric business industry has been brutal. Alibaba has got half, Jing Dong still continue to burn money, Su Ning Jindong bet on the entire gambling online, and where the customer and when still struggling to find the vertical electric business development, the future of the seat, only the goods will have sat five-looking four. More importantly, only when the goods will be profitable, it is China's vertical electric business aihongbianye. In the past 2012, a large number of vertical electric dealers have fallen.

Why is that the lucky one who didn't fall? 2012 only goods will net revenue of 692.1 million U.S. dollars, than the 2011 230 million dollars more than doubled, before the media also on the only product will be so high-speed growth reasons for the analysis, the conclusion is somewhat unexpected--only the product will "burst" Mainly thanks to the serious inventory problem of Chinese clothing manufacturers this year. "China's apparel industry in hundreds of millions of of the inventory, our sales only billions of yuan, in fact, there is no relationship at all." Yangdonghao, the CFO, said to reporters. He pointed out that clothing is the most personalized, most complex, but also the highest margin of a category. Only product will gross profit margin of 22.3%, while the Beijing-east gross margin of about 16%, so to achieve profitability has its natural advantages. But clothing has its own threshold. "You see why like Suning, Gome, such as home appliances stores do not sell clothing? Because selling clothes has very professional skills. "Shangxiang, the electric business personage explains.

However, according to Shenya, the only special business model is related to the high inventory of the service industry: it is a special channel for Chinese apparel manufacturers to digest part of the inventory through a professional packaging technique. "This model is actually very clever, it is two to please, consumers are eager to buy cheap goods, and inventory digestion in fact for the manufacturer is 0 cost, sell out is profit." "Guangzhou Shang DAO female marketing chairman Heng to reporter analysis said."

There is no doubt that the garment industry is a big deal, and so is online. Clothing is the first major category of online shopping, has maintained rapid growth in recent years. According to the number published by the Eric Advisory, 2011 This market to achieve sales of 204.9 billion yuan, an increase of 94.7%, accounting for the overall turnover of net purchase nearly 30%. "If in accordance with the overall social retail sales of the standard, the total number of electrical appliances are still below the clothing category, Jingdong volume is so large, because the electrical appliances are the most easily standardized goods, it is also the most easily copied to the line of the category." But from the entire electrical business category, clothing is still the most, from Taobao can also be seen. "Yangdonghao to China entrepreneur" analysis said. Only products will be the main category is clothing shoes and hats, accounted for more than 55%.

In general, keeping a certain "stock" is the norm in the apparel industry. In the United States, a mature and well-developed clothing brand, sold after a quarter, generally have 20% of the inventory. Moreover, a brand from the design, procurement, production, to circulate time is very long, generally need 12-18 months, cycle so long, also means that inventory will always exist. If it is simply to clean up the inventory model, the threshold is not high, why not like the Thousand-Regiment war, springing up the general only product will imitate?

Only Product website homepage

Only products will focus on the previous industry giants do not see "dirty" and "dirty", there are a lot of technical hurdles: first, it has a highly sensitive buying team, picking out the popular category from inventory, which is more difficult than picking the new season. At present only goods will have 200 people's buying team, many of them are the editor of the clothing magazine; second, warehousing and logistics are more efficient. Because it is a flash-buy mode, its inventory turnover rate is very fast, the average 5 days in the Warehouse SKU (inventory unit) will occur 100% of the change, while the traditional electric dealer is a long-term sales model, high logistics standardization. In the flash-buy mode, there is a peak every day, and the site page is also based on the special design of the business model, such as no search bar, and the display of every day show the brand will change, so that consumers develop a "stroll" habit.

Shenya and partner Hong Xiaobo, who started their business 5 years ago, modeled American online discount dealers TJ Maxx and Ross, which totaled two last year at 30 billion dollars. What attracted them at the time was a woman's fondness for a timed snapping pattern. Hong Xiaobo's wife 10 o'clock on time every day in front of the computer, in order to TJ Maxx buy usually not even breakfast. Shenya found that the limited time to buy, because there is a limit, but to allow consumers to discount goods have a sense of scarcity, will not make customers feel very cheap. "This is a marketing of hunger. "Shenya said.

Shenya TJ Maxx model copied to China, also walked a detour. He first made luxuries, and later did a few months to find blocked. "In China to do luxury sites, will fall into the" high-end is not the embarrassment. Yangdonghao told reporters an interesting data, in the only goods will be sold in the price of more than 3000 yuan in goods, return rate will reach 50%, and only the average return rate of goods will be 20%. "Consumer psychology is the more picky you are about the more expensive things, and the less likely you are to buy them online." "Only goods will quickly adjust their strategy to become a popular brand discount products, which is in line with China's current consumption status."

Shenya told reporters that only the main consumer groups are currently in the two or three-line city, consumption accounted for more than 50%. And that's the key to success: targeting the huge purchasing power of the two or three-line city. Because these cities under the line of the department store industry is underdeveloped, the brand is not complete, and customer demand for branded goods only to meet online. "Only product will actually play a line and the time difference on the line." Yangdonghao told reporters, "If a store goes online, the speed is limited, and the expansion is almost limitless." Only last year's growth rate of more than 200% was evident. ”

In addition, customer repeat purchase also for the only product will make a great contribution to the growth. "Only goods will be in similar sites of consumers repeat the purchase rate is the best." "Shangxiang thinks. Now, if according to the level of sales, only the goods will already be ranked among the electric business level channel. 2012 Taobao Women's brand top 1 brand sales of 15 million, the only product will be a single brand to achieve the highest 30 million sales, its channel digestion capacity is very strong.

While the earnings have been bright, the continuity of the business model has yet to be tested, but it is not the time to sing the praises of the only product.

Only goods will be the proportion of revenue

"The only thing that succeeds before it is because it does rely on its small, beautiful pattern. "The retail industry senior personage Zhen Yuan to the reporter analysis," The clothing commodity does not resemble the 3C home appliance high degree of homogeneity, but is the product extremely personalized, the massive SKU as well as the relatively high gross margin, thus does not fall into the electricity merchant price war circle. "But he pointed out that the only product will be the model of the consumer in the eyes of the positioning is not high, and too many cooperative brands, the attractiveness of a single brand is limited." And one U.S. stock market investors told reporters that only the goods will be the current share price has a great investment risk. "The stock price is now rising relative to real growth. If there is a giant, such as the days of the cat Jingdong joined, the only product will be easy to copy the model. ”

However, for the Shenya of traditional industry origin, the competition is not enough to fear. "The essence of electricity is not electricity, but business." That's why it industry people tend to be bad at electricity dealers. "A person in the electrical industry said. Few people know that only the early adopters of the goods will have a lot of senior in the apparel industry, one is the first brand of Chinese women, the founder of the European Time Force. This is one of the secrets that will stand out from the clothes dealers.