West Street Network founder Guo Hongjing: Internet veterans ' re-entrepreneurship

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West Street Network founder Guo Hongjing

Introduction: In such a capital is hot hair hot, entrepreneurs can not conceal the excitement of the impetuous era, who will eventually become the next E-commerce industry's broken cocoon and out? Sina Technology launched the "New Power E-commerce" series of interviews, will focus on the development of diversified e-commerce environment, new entrepreneurial opportunities, The new business model and the mentality of these entrepreneurs, please pay attention to.

SINA Technology @ Tracy Letters Open, welcome entrepreneurs to contact us, and welcome everyone to give valuable advice and suggestions.

Sixth issue: Founder Guo Hongjing of West Street Network

Wonderful ideas:

-What is the competitiveness of a big brand? The first is a nationwide E-commerce warehousing system that controls the most sporting goods. The second has the best merchandise circulation efficiency, last year West Street net whole promotion ratio is 1.6, the fund turnover rate is very fast, this is our professional place. At the same time West Street in the national supply chain has done a lot of e-commerce infrastructure systems and help to exchange products and rights, which form a back-end barrier.

-We made a profit last year because there was very little money invested. 2009 we registered 1 million yuan, last July to add to 3 million yuan. Such an E-commerce company would have lost it if it had not been able to balance it. Last year we did 80 million yuan sales scale, this year we plan to do 300 million, this month should be able to complete about 25 million of the sales scale.

-Chihiro can only say that it is a pity, there are two reasons, the first is in the design model of the Chihiro network, South Korean investors they care about the so-called light e-commerce, not willing to establish the entire supply chain and warehousing system in the country. West Street today to get the money is similar to the money, we put most of the money on the back, but Chihiro put most of the money on the front.

-There is a word on the market, there may be failure of the enterprise, there will be no failure of the individual. An individual may have a chance if he does not give up. The most important reason to search easily is that the time window is not very right. We have a lot of people to start a business, at that time I think the doing is pretty good. But today these enterprises, in addition to two books to do business in, the rest of the enterprise is largely gone. Not to say no, that time is actually not a particularly right time

The following is a transcript of the interview:

Opportunities in the field of sports e-commerce

Sina Science and Technology Tracy: We are not too familiar with the West Street network, first to the user to introduce the West Street network about the situation?

Guo Hongjing: First introduce me, I do e-commerce, mainly concentrated in 3c,05 years ago 3C should be the largest e-commerce investors, the level is very high. This is my first start-up company, 05 we began to encounter a lot of competition, Taobao and Baidu, to small and medium-sized enterprises, especially it enterprises, to provide a low threshold of access to the platform, so, when the competition, there are many imperfect places, the entire user habits, payments, credit, logistics, Including venture capital has no recognition of the industry. So we were at that time and I thought there was no real ecommerce company to build. Although the scale was very large at that time. At the end of 05 I withdrew from the company, and during my second venture, I went to Chihiro. 09 June, I left Chihiro, I was the first CEO of Chihiro Network, after leaving Chihiro, I was thinking, must start their own business, not to say and foreign investment, or to do professional managers, I may not be suitable, I was also a distraction, to Guilin, Guangxi Yangshuo, Yangshuo very beautiful, spent a period of time , riding a bike every day, mountains and lakes. I probably have an idea to do a campaign for E-commerce. Yangshuo is surrounded by a West street line, the town's most important street called West Street, I think this name is good, I bought this name.

Why do you want to do exercise? I think, I am doing this, the second venture I was very cautious, I have done a lot of understanding and investigation, the industry is very large, 04 I am ready to do when the annual growth rate of 32%. The second, I think sports in this industry, there is no strong company exists, that is, if you choose clothing or 3C, you have found that there are some companies ahead, they have been very strong, difficult, there are many opportunities in this industry, the most important point, I have done for nearly 10 years of E-commerce, My feeling is to be able to make a little different e-commerce. We would like to, West Street network, our direction want to reach a professional vertical based on motion demand of one-stop shopping site.

Sina Science and Technology: had done 3C before, did the dress, now do sports, these three which kind of gross profit margin is higher?

Guo Hongjing: 3C may be the lowest, we see today, if said as a brand of women and sports, gross margin is close.

Sina technology: How many?

Guo Hongjing: On the internet sales, gross profit margin of more than 20%.

Sina Science and Technology: Before the report said, women's clothing in the entire industry profit margin is relatively high, you have done Chihiro network, why did not continue to do clothing class site.

Guo Hongjing: You're not talking about E-commerce, today's E-commerce development has several models, the first Taobao and Beijing-east as the representative of the model of the large platform, the second model is to dream Basha for the representative of the package, including the wheat bag, is actually the brand, and women's, men do not matter, Massa Masso sell men, the profit is not low. Because the brand is his own, his core is in its research and development, production, design, this ability. Brand building capacity, so said relatively high.

The ultimate cost of a brand is not increased, in the control of production links, raw material links are very complex, the cost will be very high. So, it's not stable, but gross profit is really high. How old can you say today, make money? Is there a net profit? This is a problem. Or that I'm sure I didn't.

What we do today is a well-known brand of vertical, what we call is not their own brand, I sell Nike, Adi and so on well-known brands, I do not need to be responsible for production design, do not need to be responsible for the quality of the brand, this is not what I do. So I as a channel, just like Haier and Gome, whose price is more difficult to tell.

Sina technology: You will buy goods?

Guo Hongjing: Of course. I have 7 e-commerce warehouses across the country. I think the control of goods is a core value we need to build.

Sina Science and technology: This piece like Jingdong, this kind of big brand, they also can have vertical kind of movement, include like good music buys, Amoy also specializes in selling shoes, shoes are also well-known brands, these to our impact is also will be very big?

Guo Hongjing: Just now you talk about this problem is a big platform for vertical platform impact, is actually facing competition how to correspond. What is your competitiveness, from the scale of today's West Street network, whether the vertical category of these companies, we still do not have so much impact and interference, because the internet is not very bad.

What is your core value? This is a very critical question, what is your core value, today West Street based on sports goods on the supply chain of the relationship of cooperation, then, based on the national E-commerce Warehousing goods control capacity, than the big brand is still good, we spent a great deal of time to do. Or West Street, last year, many big brands come, West Street is their main sports brand suppliers, today we basically have no wholesale and supply relationship, West Street has started from the back end, from the goods and warehousing lines start to the front end, the user experience and the entire site walk, so we are more users.

To us, we and the big brand, our competitiveness is what? is two, the first, I need to build in this special field above, the National E-commerce warehousing system, control the largest number of sporting goods, can support e-commerce goods. Then, there is the efficiency of the best goods in circulation, Last year our whole promotion ratio is 1.6, the fund turnover rate is very fast, this is our professional place, we get the discount is very good, we get the condition is big brand can not get, we have to pay a lot of things, we in the national light supply chain do a lot of e-commerce based system and help to exchange our products and rights. This is the formation of a so-called back-end barrier, the back-end of the barrier is not short-term can be formed, the completion of investment and financing, financing the main money is placed in the supply chain, warehousing, this will form a competitive barrier, my capital operation efficiency is what kind of, these big brand is difficult to do.

Vertical branding is the direction of development

Sina Technology: West Street net April get 80 million yuan, now E-commerce is not only a light asset, must have an electronic warehouse, we will not feel the funds a little keep up?

Guo Hongjing: Enterprises have different development process, single from sports, we last year the entire shoe accounted for 18% of the sales, good music to buy more than 90%, this is completely different. The whole is the movement for the demand, today you see our website or a sports sales site, now we have in the human, the whole planning a lot of work, technical level began to do, made professional sports website.

Sina Technology: Decathlon also has an online mall, of course, online shopping malls now do or the continuation of the store, they have to make up their minds to do, his channels, sourcing, all kinds of sports equipment configuration, will affect the West street?

Guo Hongjing: You know decathlon, its history, of course, we want to make the online decathlon. But just say we like the state, this way, a form, not that we really have to make decathlon.

Decathlon and West Street is very similar to the demand for sports, there are many well-known brand structure, after the establishment of their own brand, now own brand sales must exceed 95%. In fact, to what kind of people with what kind of people use? On the lower end of the point, people's income is very high, but it is very cheap, it is very professional, very cheap, high cost performance. For the West Street network, our positioning today, we are the integration of well-known brands at home and abroad, the formation of such a technical system, this is not the same, in the long run, the way is good, its profit is controllable, to demand as the center to locate, this is our future want to pursue. But what they can offer today is far richer than theirs.

Sina Technology: If we do now, the future is not also want to do own brand?

Guo Hongjing: Of course. Vertical brand diversification or to the brand to do.

Sina Technology: We have done 1.5 income how many, can achieve break-even?

Guo Hongjing: Last year we were profitable because we had a very small investment, and the unprofitable company was already dead.

Sina Technology: The investment is very small is said that the market, the advertisement invests very little?

Guo Hongjing: Little money was invested in 09 when we registered 1 million yuan, which was added to 3 million yuan in July last year. Such an e-commerce company if not able to balance the words have already lost, it is impossible to exist. We did 80 million of sales last year, we plan to do 300 million this year, this month should be able to complete about 25 million of the sales scale.

Sina technology: How to do?

Guo Hongjing: This market is a high-speed development and growth of the market, in the outside people will see how much investment in the market, brand how big, can lead to how much input. In fact, we found that our core thing was goods. Market demand is much stronger than supply, which means that when there is sufficient and adequate supply of goods, in fact your sales are very fast and natural growth. Of course you will have some total users inside. Our goods are actually growing very fast, and with the construction of our warehouses, let's say we can supply the goods to consumers today, including the total number of SPU, and the total amount is quite large.

Sina technology: SKU, user number and customer unit price is how much?

Guo Hongjing: We have 8,000 SKUs. Number of registered users more than 1 million, registered users we basically do not see, the number of registered users for us does not have much significance. The average guest price is more than 300.

Sina technology: How much of our staff now?

Guo Hongjing: More than 100.

Sina Science and technology: actually still relatively small team.

Guo Hongjing: Yes, it's very small.

Chihiro missed the best time

Sina Science and Technology: How do you look back to how to evaluate Chihiro net? Thousand seek nets at that time focus on doing women's day, do relatively early, like Jiapin net, only product will, Chihiro network to now in the east of Beijing also do not feel very good.

Guo Hongjing: I chose Chihiro also made a lot of determination. I think the timing is very good, the point of view is very good, fashion department stores, mainly women, in 08 into the market, and have a huge investment, then the investment is very large.

Sina technology: At that time is very big.

Guo Hongjing: I can only say that it is a pity, there are two big reasons, the first is in the design model of the Chihiro network, South Korean investors they care about the so-called light e-commerce, not willing to establish the entire supply chain and warehousing system in the country. The same money, West Street today to get the money is similar to the money, we put most of the money on the back end, but Chihiro put most of the money on the front.

Sina Science and technology: Front end refers to?

Guo Hongjing: Market promotion. Chihiro soon has a certain reputation, but the competitiveness of the products and service experience is very poor. If the continuous does not improve, it will lead to this site can not be done. I was at home after the establishment, this may be I and investors have a big disagreement.

Second, we look at foreign large enterprises, international enterprises in China to do Internet-related industry investment is basically unsuccessful, because the industry changes too fast, there is no particularly sophisticated process. The change in the industry is very flexible and quick to react. But international corporations, whose mechanisms do not allow you to react quickly, have the processes they have formed over the years, and the process is clear. So, both have led to the Chihiro low price sold to Beijing east.

Sina technology: How low is this low price?

Guo Hongjing: I don't know exactly, because I was already gone. The two aspects of my actual and investors are quite different, I used to start a business, accustomed to their own decisions, and they are not too integrated, and then it is difficult to change the left. After I left, the business walked along their lines.

Sina Science and Technology: Do you think now in thousand seek net in Jingdong brand exerting force, still optimistic its development?

Guo Hongjing: Not to mention, Beijing East today we are optimistic. The fact that Jingdong will establish its historical position in this industry is a bit of a big saying. Why is it called "Historical status"? In China need some people to invest in doing the foundation to build standards, Taobao did the first wave of action this year in doing a second wave. Whether the company is unsuccessful or not, what he does has a huge impact on the industry if it succeeds is a great company. In the Beijing-east such a system, the BoE will develop very well, the past positioning of the Jing-dong is biased masculine, or biased rationalization. Chihiro integrates it with the value of female users, on fashion, on perceptual goods. So, it will be a supplement to it, it will be a supplement to the whole system of Jing Dong. If used well, of course they also have contradictions between the place, after all, brand integration.

E-commerce insists there is a chance

Sina technology: For example, Jingdong Liu (micro bo) think that the current e-commerce in the winter, how do you think of this view?

Guo Hongjing: I agree. There have been several representatives in the past, first, the market is still expanding today, in the past five years the entire network retail market growth rate of 100%, this year will be lower than 100%, but also will be very high speed, we believe that the next five years, the average growth rate is still very high. Although it has changed from such an increase to a slight slowdown, it is still a very high growth rate. This could be a trillions of market.

Sina Technology: He means may be the capital of winter, financing of the winter.

Guo Hongjing: Does the whole market need some enterprises to provide? As long as you have a market, there must be a chance? Therefore, this market is not blown out, is real, it has trillions of of the market, at least hundreds of millions of of the value, or even tens of millions of value in the inside, will accommodate a lot of companies. Second, in the past we talk about Bubbles, the 2000 when the concept of bubble is the strongest, often heavily invested companies do nothing, Bubbles did not hit out, soon there is no. We look at 2007 years after the rapid development of e-commerce in China, the capital market to get investment after the rapid intervention of the company, we have to count what is not particularly bad? One cannot lift it. Is it because everyone is doing well?

Sina Science and technology: to the opportunity of electronic commerce.

Guo Hongjing: This is the right trend, with the help of external forces. Of course, now we choose the enterprise's vision is stronger than the original. So, everyone is developing healthily.

Third, the entire industry can not be a two-all, the whole market open-minded is very high. In many vertical areas, brand areas, a large platform I think may now intervene is not small, Taobao, Jingdong, including all the guests back again, when to do come in, Amazon, on these few. But the vertical domain, specialized subdivision, including such as wheat bag, Masomaso Such brand enterprises will also be a large number of appearance, in China will exist a lot of enterprises, really form a considerable scale, will be hundreds or even hundreds of home. So, in this area of winter, it is not a particularly right to mention this. But what he said, from another perspective, makes sense. Because in the past two years, the company in this industry has spent a lot of money, everyone will say that Amazon has been holding for 9 years, spent a huge amount of money, in fact, we look at what Amazon is doing? Where does Amazon's money go?

Sina technology: Hardware and technology.

Guo Hongjing: Its infrastructure, its entire supply chain changes, its entire technical system changes, its warehousing changes. Where are our financing flowers? Street stop, car body, building, subway, Internet, an eyeful of e-commerce companies Advertising, what do you do behind? When the media conversion rate even piled up when there are so many companies silly to spend money, these enterprises are going to problem. So, there will be some business problems, the industry will be a problem, there will be some business problems. As for the investment winter is not here, I think two points will be supported, one is a certain scale of e-commerce enterprises, it is in the process of development, such as Amoy, good music to buy and so on these enterprises, in fact, has established a certain industry position, a certain foundation construction, in the forward, some enterprises will be eliminated, There may be scale, or smaller. A newly created enterprise, small in size, is a small investment.

Another type of enterprise, traditional retail industry, traditional brand industry into E-commerce will be supported, the introduction of many backend is available, need new means to form new strategies, new team to support this.

Sina technology: is not that the next competition will be more intense, because now more and more traditional enterprises to understand e-commerce, and to come in?

Guo Hongjing: Just like we opened two hotels in a small town, we all went to the two restaurants to eat, eat more people, we all live very well. This year is probably 1 trillion market, the future may be 5 trillion, 10 trillion of the market. This market has become big, it is impossible to one or two, and everyone to the professional subdivision requirements are getting higher. I think that the current E-commerce in the consumer services, not only from the goods, from the meticulous service to do much worse, there are a lot of work can be done fine, and then do better. There are still a lot of opportunities. Competition will be more and more strong, really uncompetitive enterprises will be beaten down sooner or later, no matter how you are today. But it will still hold a large number of companies in it.

Sina technology: The last question, you have done in the field of electronic commerce for ten years, there are many opportunities to do a search easily 3C started, including clothing, there is no regret, some did not do it?

Guo Hongjing: There is a chance of persistence. In fact there is a word on the market, there may be failure of the enterprise, there will be no failure of the individual. If you don't give up, you may have a chance. The most important reason to search easily is that the time window is not very right. We have a lot of people to start a business, at that time I think the doing is pretty good. But today these enterprises, in addition to two books to do business in, the rest of the enterprise is largely gone. It's not that I can't, it's our time. Actually not a particularly right time, although we have been brilliant at that time. Chihiro is a pity, Chihiro is not able to take my personal will for the transfer of a company, it is more regrettable. I decided to do West Street, and in this process I have rejected some opportunities, but also rejected the idea of some angel investment, that is, I think if I can not control the development of the enterprise, or I can not master the development of the enterprise, it in good time, the situation does not necessarily succeed.

Regret is certainly there, but I think these are normal, is to insist that we in 2000 years of entrepreneurship, a lot of people today still insist, I used to do is search easy, today is the West Street. For example, Guo (Micro bo) originally made of Sarah, this year is to do is the diamond net. Lei used to do is 18900, today is hing-long letter Tatsu. There are a lot of people who are still stuck in this business today, but a lot of people are giving up, and today it seems like these people may have a better chance because the problems we've been in are probably not going to go down again.