Internet Weekly: The three major levers to reveal the success of red children

One day in early 2004, Jing Rui Hot Spring International Hotel, East Third Ring Road, Beijing.

From 8 o'clock to the next 5 o'clock in the morning, Xu Xianxin, Guotao, Li Yang, Yang Tao, Jinpeng and so on 5 people in order to depict the idea of the "Red Child" embryonic form and here for a whole night. Among them, Xu Xianxin, Guotao, Li Yang almost all just did 1 years of dad. Earlier, the Xu Xianxin of the first father was embarrassed by the fact that it is difficult to easily buy a satisfactory mother and child supplies.

1+3

The original idea of "Red kid" comes from this. But Xu Xianxin's blueprint for red children is more than that, Xu stressed that red children's goal is the home shopping market, "one of the most difficult to do the mother and child products market is only a start." ”

March 2004, the Red Child company was formally established in Beijing. At first, the Red children registered capital of 2 million Yuan: Xu Xianxin and Guotao each contributed 400,000 yuan, Li Yang, Yang Tao each contributed 600,000 yuan. Initially, Xu Xianxin and other 4 people held shares in the Red Children's company to the amount of their respective contributions.

Among the 4 contributors, only Guotao did not participate in the specific management of the Red Child Company: The Xu Xianxin CEO with the least capital contribution, and the most invested Li Yang and Yang Tao as executive general manager. Jinpeng, who owns the investment bank's Bear Stearns Companies Inc., is a financial advisor to red children. Xu Xianxin believes that this is a relatively "stable and reasonable organizational structure."

Guotao was a classmate of Xu Xianxin during his study at Tianjin Business School. Before the founding of the Red Child Company, Guotao, Li Yang, Yang Tao and other three people have been inaugurated Yu Huicong International. June 2004, Red Child website launched, "Magazine + Net" become the main sales model and channel of red children. "Magazine + Net" is also the main mode of Hui-Cong International.

In the 2006, Ma Jianyang, who was also born in HC International, joined the Red children. Ma Jianyang, a 55-Year-old executive general manager of Red children. At this point, the Red Child 1 (CEO) +3 (executive general manager) of the management structure of formal formation.

After graduating from university in 1993, Xu Xianxin's first job was to manage retail business at the Beijing Beichen Shopping Center. After that, Xu Xianxin participated in the founding of Tianjin Wanli Group, mainly to do building materials and other business. Xu Xianxin's experience helped him win the CEO position in red children.

Despite the high level of position, Xu Xianxin still had to squeeze in an office with three executive managers. On the contrary, the general manager of the Red Children's various business departments have their own independent offices. "Our business chain is relatively long, in order to ensure the market reaction speed, we must also form an effective closed-loop management." Xu Xianxin, Li Yang is mainly responsible for the supply, sales and other aspects of the work, Yang Tao is mainly responsible for logistics, call center and other aspects of the work; Ma Jianyang is mainly responsible for administrative work.

Directory + Internet + Call center

A quick response is predicated on finding the right market: Red children usually label potential clients with more than 10 labels and only distribute the product catalogue to customers who meet the label requirements.

"In 2007, we had enough printing for our catalogue to feed two printing plants." Xu Xianxin predicts that the total printing costs of the 2007 Red Child catalogue will exceed 60 million yuan, accounting for nearly 10% of total after-tax sales over the same period.

In fact, catalog sales in China is not a new phenomenon. From the initial acceptance, to the scale of the growing, every successful catalog sales company behind a lot of stories. Catalogue sales are getting better in China from more than 10 years ago, well-to-do family, to the red kids at the moment.

"This is the result of the customer choice and we can't make a choice for the customer." "Red Kids choose a catalog. Another reason for this is that" Internet users are a subset of their target market (middle and high income households), not the other way around. "

But in Xu Xianxin's view, the Internet for household goods retail industry still has its advantages, such as mass information, dynamic, rapid and so on. These characteristics of the Internet in the Red child sales channels in the proportion from the initial 2%, 5%, 7% has been up to 10%.

Over time, the proportion of network sales in the Red Child channel still continues to rise trend.

The Red Children's catalog is sold in 980,000 copies of the country's maternal and child catalogue, nearly 300,000 cosmetics catalogs and more than 200,000 home and health catalogs. Red Kids. The cost of a catalogue is about 7 yuan. But because of the large circulation, the product supplier's advertisement not only covers the Red child's catalogue cost, but also brings the red child the huge profit.

Beyond the catalogue and the Internet, the call center, which has more than 260 seats for red children, not only provides inbound service, but also provides active outbound sales services.

mother + Child

August 6, 2007 one day, the sales of red children reached a record of 2.3 million yuan, of which Beijing's sales of 1.3 million yuan, Shenyang sales of 450,000 yuan, Shanghai's sales also reached 300,000 yuan.

Through 3 years of effort, the red child has grown from the catalog sales field of "newborn" rapid growth for the Beijing Maternal and child supplies catalog sales market leader. Pampers, Wyeth, Abbott, and many other well-known baby supplies and powdered milk in the red Child channel sales have accounted for the total sales of more than 30%.

"The red Child's main competitor is the supermarket and other traditional retail channels." "In Xu Xianxin's view, the 3 main factors that attract users are trust, price, and convenience, so the efforts of red children to divert from supermarkets and existing catalog providers and create new users revolve around these 3 factors."

Even in the hard times of initial hardship, red children have not lowered their demand for supplier quality, insisting on reliable suppliers and their products. At the other end of the supply chain, red children have taken measures to help the people: the sales profit margin of maternal and infant supplies is limited to 15%, while the market on the mother and child products profit margins are mostly over 25%.

The particularity of household goods, especially the mother-child market, is another important reason for the rapid growth of red children. The dispersion and stage of newborn babies (0~3岁) make the traditional physical retail stores face the demand of mother and infant products market often have strong volatility characteristics. and the directory and the Internet will naturally have the mother and child supplies market dispersed unstable demand into a centralized stable demand "instinct".

At present, red children through the colorful product catalogue and the internet has attracted more than 600,000 active members. On the basis of a large number of active members, red children will be the product line from the beginning of the mother and child supplies to the intended cosmetics, home, health and gifts and other fields, began to transform into a real household goods catalog vendors.

Unlike many suppliers who are looking for users with their products, red children are developing new product lines after they have a broad user base. At least from the current trend, red Children's route has shown considerable superiority.

The most effective way to support red children is the wide application of it and communication technology, such as the Internet, which changes the traditional retail industry chain.

restructuring the industrial chain

In fact, the red children and the traditional supermarket things do not have any difference in nature, the only difference is the way to do things. Red Children engaged in the directory and network sales of information technology is more dependent on the requirements of suppliers, logistics, financial settlement, orders, customer service and other systems closer cohesion and cooperation, only so that the advantages of E-commerce can really play out.