Xun network accelerates the expansion of South China market

After the independence of Tencent, the expansion of proprietary business and open platform was accelerated.

Tencent Holdings of 3C Digital Power Shang Network CEO Bu Guangzi said recently, starting from September, Xun will invest more than 300 million yuan in marketing resources to make services, and in the South China market launched in Beijing east of the price of action, and a high-profile claim to overtake the end of next year or even beyond the Beijing-east in southern China orders.

"The goal of the Xun network is to develop into a nationwide integrated electrical business." Song, assistant general manager of Tencent Electric Company Holding Co., said to the investor newspaper. In the layout of Tencent's "self-affiliated-open platform", the Xun Network undertakes the role of its proprietary business.

Song also disclosed that Tencent Electric business open platform upgrade is nearing completion, upgraded QQ online shopping will be "infinitely close to the experience of the Web site."

Industry insiders said that Xun network as a regional vertical electric business, to develop into a nationwide integrated electric business platform, there is still a long way to go. At present, the competition of electric dealers is more and more fierce, new market development, category expansion are faced with greater difficulty.

"Tencent in the sales, operating team, executive power, etc., from the historical trajectory can not see the factors that let us rest assured." "Senior Internet analyst, Hope Consulting Co., Ltd. CEO Luebbe to the investor newspaper reporter said."

Exerting force of South China

"First from the Xun network of their own layout, has been east and North China, South China has Guangzhou, Shenzhen, the consumption capacity is strong, it is necessary to do." Secondly, South China is a relatively weak place in the east of Beijing, and it is easy to establish the advantages and cognitive degree. "E-commerce analyst Li Chengdong in the interview with this reporter, so read the Xun network Select the reasons for exerting force in South China.

From the region to gradually expand to the whole country, but also a lot of electric operators choose the expansion path. For example, Jingdong Mall first started in Beijing, and then gradually spread to Shanghai and other places.

"A large scale, user experience will be reduced, so now take the vitalize way." Song to this newspaper reporter said.

Data show that the Xun network by the Bu Guangzi 2006 funded 500,000 Yuan founder. Xun Network was acquired by Tencent in 2010, and the South China regional headquarters was established in Shenzhen in June 2011. The electric dealer has previously focused on the East China market, the biggest feature is "lightning delivery service."

2007, Xun in the industry first launched a day two send service, initially decided to serve only in Shanghai. When Jingdong Mall began to follow the "day two send", Xun network is the first and continue to do a "day three send", and accordingly in the Shanghai area and Beijing East war became a tie. Xun this advantage to Guangdong.

"The permeability of Jingdong in South China is lower than that in Beijing and Shanghai, and Taobao is relatively mainly concentrated in the Yangtze River Delta and the Midwest." This is the opportunity of Xun network in South China. "Lubberg said.

Xun Network Storm South China, directly aiming at the Big Boss Jingdong Mall. Bu Guangzi said, "in the second half, we will be in the South China market to target the price of Beijing-East action." If consumers find that our price is higher than Jingdong, we can directly ask for price reduction. ”

Tencent will also support the infrastructure and marketing promotion. Song told our correspondent, infrastructure, Xun nets now only 13,000 square meters of storage, can only accept about 10,000 single daily quantity, this year will be built in South China 40,000 square meters of storage, the next 5 years to 100,000 square meters. And in marketing, Tencent Guangdong region of the flow will be poured into the Xun network, to help its end of the year to reach 1.5 million daily average UV, the current Xun net daily average UV 200,000-300,000. Offline will also be verified in September with low price marketing.

Tencent has several troops, but has no experience in the forefront. Xun Network has been dealing with businesses, will be in the organization, customer service and operations, Tencent's overall led to the electronic business. Luebbe said to reporters.

Expansion challenges

As its proprietary business, Tencent expects to make the network a nationwide platform for electricity. Xun initially business has been lingering in eastern China, with the 2010 Tencent shares, Xun launched the national layout last year. June 2011, the establishment of warehousing Logistics Base in South China, September, North China Logistics Base drop Hebei; At the beginning of this year, also in southwest and central China to build logistics base, at the end of October this year, Xun in XI ' an logistics base will also be put into use.

Xun Network in the field of 3C vertical electric business can be counted as the oldest company, the current Xun network ranked 3C electric dealer third, last year, sales exceed 2.3 billion yuan.

However, Xun network in east China and other regions outside the visibility of the lower, marketing will become its layout of the country a major challenge. Luebbe hope that: "Xun network in Beijing and other regions have no influence, now so many Web site competition, to enter a new region, to quickly get new users, has been much more difficult than before." ”

From the cat, Beijing-east and other more mature electric dealers in the hands of other businesses are also more difficult. "From the vertical field of electrical development to the integrated platform, to obtain the corresponding industry status, it will take a certain amount of time." To do a comprehensive electric business platform, need an industry to develop. The first thing to conquer is the apparel industry, clothing accounted for 30% of the net purchase ratio. Cat's clothing industry is so strong, accounting for 85% of the market share. and easy immediately then developed the corresponding clothing business, the actual production of sales can not, businesses will not be on your platform to put too much business effort. "Lubberg said.

The expansion of proprietary business will inevitably lead to the expansion of losses. In addition to huge marketing costs, self-built warehousing, logistics also requires a lot of capital investment.

Luebbe hope that, Xun current main electrical products, such goods distribution more need to master in their own hands. The service of Express Company is more savage, the thing that damage, lose bag exists. Jingdong since the construction of Logistics Express Company, that is, the need for express companies to the east to pay a high amount of deposit, not many express companies can meet this standard, and meet the Express company Price is high.

Tencent's first-quarter earnings report, Tencent's income of more than 750 million yuan, accounted for the first quarter of total revenue of 7.8%. Wen Tianli, managing director of future Asset Securities, said: Tencent 1 Quarterly electricity quotient income 700,000,005, of which platform income 60 million, the rest is Xun, which platform income if we calculate profit margin 50%, then Xun is actually gross margin loss.

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