Burn the money to buy market share: The life gate of Chinese electric Dealer

To buy as the representative of the electricity dealers began to lay off, can be called http://www.aliyun.com/zixun/aggregation/34734.html "> Domestic electric dealers typical of the customers also began to lay off 5% ... Although it is not known whether Beijing and Tokyo will lay off staff, the electric-business bubble has been revealed. From the reaction of the capital market, China's electric business has arrived in winter.

September 5, "Economic Observer," a "domestic buy net half a year to increase nearly 3,000: The top ten total losses," the article makes people see three points. In fact, in addition to group buying enterprises, such as Jingdong, where guests, when the famous electric business enterprises, the same in the loss. When the financial results showed that the second quarter of 2011 when the losses amounted to 4.4 million U.S. dollars, the unlisted Jingdong and van, the loss is higher than when.

China's top ten group buying sites in the loss, the top ten online shopping platform also in the loss. China's electric dealers, blindly losses, is it swollen? Although the domestic electrical business has entered a subdivision of the era, but the domestic electric business enterprises have a common feature: burn money to buy market share!

If only from the sales performance, the top ten domestic electricity dealers or the top ten group buying performance are very good, Jingdong annual sales have been calculated with tens of billions of, where the sales performance of customers with billions of to calculate. However, why are such high sales not profitable?

Look at the company's financial results will find that its high operating costs are the source of the delay in the profits of the electricity business. For example, the 2010-year advertising volume of about 400 million yuan, sales of about 3 billion yuan. At the beginning of this year, every customer Prudential products CEO aged claims, 2011 marketing costs will reach 1 billion yuan, sales to 10 billion yuan. Jing Dong and when, its marketing expense is also very high. As the CEO of a well-known web site says: 30% of domestic electricity sales are used in marketing.

Since the birth of the first electric business enterprise, every appliance business enterprise is burning money to buy market share, Taobao is no exception. Think of that year, Taobao in order to compete with the superior, at any cost to pick up the "free" this artifact, finally did a remarkable job. Strictly speaking, Taobao sacrificed the performance talent is very remarkable.

Have to admit, Taobao is the leader of the Consumer-to-consumer platform, excellent beats. However, outstanding profit, Taobao did not profit. Taobao burned money to gain market share, but did not change the pattern of loss. The most important point is that Taobao free users to form a habit of unwilling to pay, Taobao now has its own bitter fruit. In the last year or two, Taobao has been trying to charge, but has not been successful. In order to profit, Taobao had to push Taobao Mall, to pave the ground for profitability.

Look back to see the next Jingdong and van these electric dealers, is also burning money to buy market share. Through the search engine promotion, the outdoor advertisement, the promotion and so on various modes, obtains the user, obtains the traffic. As a result, domestic electricity dealers have a new vocabulary: the cost of obtaining an order. It is reported that the cost of a customer to obtain an order of about 300 yuan, Jingdong to obtain an order of the cost of about 200 yuan. Such a high cost of promotion, undoubtedly become a fatal weakness of the electric business.

Looking around, whether it is the consumer-to-consumer, or the Chinese electric business enterprises have formed a formula: to burn money to buy market share, and then consider profit. From a commercial point of view, this way of burning money to buy market share is abnormal and morbid. With a morbid pattern to develop, this is just as dangerous to the survival of China's electric dealers life gate! How to go beyond, China's electricity dealers have to think twice.