Electric dealer or pull up the big curtain: The vertical electric trader faces the difficult choice

Suning 66 million Dollar "adopt" red child

Start to transform or trigger the integration of the electric business

Suning Easy to buy executive Vice President Li Bin last night released a "quiz micro Bo" Yesterday revealed the answer, not out of the industry, bin Li said "shocked the electric business industry event" is Su Ning to purchase the vertical category of electric dealer website Red Children. This is Suning's first acquisition in the field of electrical business, Suning hopes to carry out "super electrical" operation, to the department store retail area, and for the electric business industry, this move or will open up the industry integration screen.

Event

Red children defected to Su Ning

Early yesterday, in a shares listed Suning appliance issued temporary suspension notice. In the afternoon, Suning Appliance announced that it intends to invest 66 million U.S. dollars or equivalent renminbi acquisition of red children, to undertake the red children Han purchase two brands and the company's assets, business, a comprehensive upgrade of Suning Appliance's Electronic business site Suning easy to buy operations.

According to the agreement between the two sides, after the acquisition, the Red children and Plantronics brand will be the son of Suning brand, in the marketing, customer marketing to maintain a certain independence, and stationed in Suning line below the channel. Suning said, relying on the above integration Synergy Advantage, Suning line under the mother and child product sales will achieve high-speed growth, and strive for 2015 overall sales scale reached 10 billion yuan.

From the beginning of the first half, Suning has frequently put words, said it is contacting several vertical electric dealer website and consider acquisition matters, Massamasso, red children at that time and suning "outgoing gossip." Suning Electric Appliance Vice Chairman Weimin yesterday said, Suning easy to buy category expansion on the one hand rely on open platform construction, on the other hand through the acquisition of vertical electric dealers. After the acquisition of Red children, Suning will also be through a variety of means to carry out the integration of the field of electrical business. But Weimin did not disclose the next acquisition target.

In the last 5 trading days, suning appliance stock price all the way down, many times to go low, from September 19 of 6.70 yuan fell to the minimum of 6.01 yuan. But September 24, suning appliance stock began to rebound, the day to 6.16 yuan Close, the whole day Rose 1.81%.

Interpretation

Why does suning buy red children?

Complementary advantage is the preferred acquisition object

Weimin said, red children with maternal and infant supplies, cosmetics business professional and leadership, with strong supply chain and operational capabilities, and customer loyalty, high degree of activity, Suning is easy to purchase and acquisition of vertical electric dealer preferred object. In addition, the complementarity of the two sides is also a major reason for mergers and acquisitions, red child customers mainly female consumers, this will be with suning easy to buy existing customer groups to form customer resources complementary; with Suning leading national warehousing and distribution network and high penetration of the market to promote resources, can significantly reduce the red children before and after the operating costs of Taiwan, And Red Child's professional team and supply chain advantage, can enhance Suning's category fine management ability and product expansion ability, form operation complement each other.

Weimin also believes that the current red children encounter the main problem is high operating costs, weak financial capacity, Su Ning can be in these two areas to give red children help.

Why do red kids sell

Corporate loss investor forced to cut meat

Red Child chief executive Xu Xianxin has disclosed that 2010 red Children's sales of 1.5 billion yuan, 2009 sales of 2 billion yuan, but in the last two years to Sheng decline. Its 2011 sales were 1.5 billion yuan, although it was flat with 2010, but it fell 25% from 2009 and the company was in a loss state.

Previously, red children had completed 4 rounds, more than 100 million U.S. dollars of financing.

But with the admission of VC (venture capital), the company management have left, 4 founder only CEO Xu Xianxin, controlled equity fell into the hands of VC. Coupled with red children to cosmetics, clothing and other categories of expansion, resulting in increased losses, finally VC decided to cut the meat out. The 66 million dollar sale price, means that VC lost nearly half of the investment.

E-commerce industry has been in the financing, loss, expand the pace of scale, which is weimin known as the "Capital propulsion model", he believes that the current electronic business to the "retail-driven model" development opportunities. In the context of the bad listing environment, focus on the vertical type of electricity dealers but no more funds to expand the category of development model has not been investors bullish, investors have to be forced to cut meat.

66 million dollars is worth it.

It's worth something but don't expand blindly

Red CHILD BD (business Development) department a person who declined to be named said with 66 million dollars to buy red children for Su Ning, the value of things, "red child is the domestic mother and child supplies online shopping field of the largest vertical type of electricity quotient, our most valuable place lies in the mother and child online shopping concept and experience, there is a mature operation team." ”

New seven days electrical network brand Director of Pastoral also said that reference to 2010 years another electric chain giant to buy 48 million yuan for an electrical appliance business enterprise 80% Equity, Suning This acquisition price is worthwhile, because the red child's sales scale and influence placed there, "Suning first acquisition of electric business enterprises, A model price must be set up to attract other bids. ”

Liu Buzhong, a senior observer in the household appliance industry, believes that any deal, if the two sides finally reach a conclusion, will not be worth the trouble. But he personally believes that this year's home appliances industry sales environment, Suning needs to spend a lot of places, such as the physical store in the shape of the store, the online part of the strengthening of it backstage, line on the same price sales of investment, which seems more urgent.

China Electronic Chamber of Commerce Deputy Secretary-General Lu Xianbo said that Su Ning has been home appliance chain industry boss, enterprises in the industry at the first time more cautious, to avoid blind expansion, especially in a new field.