Electric dealers crazy to burn money who: VC/PE was kidnapped mute eat coptis

Beijing East and Su Ning, gome "price war" behind, VC/PE once again plays an important role in the constant input of large sums of money for the electric business, in a sense, VC/PE is one of the initiator of the electric business model; But the death cycle of burning money makes VC/PE difficult to see the hope of return, but unwilling to give up, can only be "Take part in it, and be a tiger.

However, whether the extensive development model of the electric business can still gain the favor of capital? Insiders believe VC/PE is cautious about investing in electricity. In the second half of 2012, China's e-commerce industry investment trend will not rebound, the downward trend will even more obvious.

Crazy to burn the money.

Regardless of the Beijing-east is still a guest, the current domestic e-commerce industry has not relied on a large-scale expansion of the low margin of the model to achieve success, there is no investment in the power of the big guy can confidently say "make money."

"This war is going to cost a lot of cash, what do you think?" said one shareholder, "We have nothing but money!" you can fight it. Jingdong Mall chairman of the board Liu so shouted.

Why does the smart VC/PE agency know that the electricity business industry is burning money? The reason is that there is a saying in the field of electric business investment that a winner can take all; The electric trader must make the scale, this must rely on the low price strategy to snatch the market share. It is this view that encourages the electric business to burn the money madly, in a sense, this kind of VC/PE is also one of the initiator of the electric business model of burning money.

Other market participants, however, expressed concern about the electricity-burning model. Shong, the founding partner of IDG Capital, believes that the electric dealer's model of burning money to enlarge its share cannot succeed.

Recently in the public opinion of the focus of the rich partner Yan Blunt, the current electricity dealers generally have the situation of burning money, investors will soon be spent on the funds, to a certain extent, e-commerce in the main business does not make money, it earns is VC/PE money.

In fact, according to the China e-Commerce Research Center analysis, the electrical business is divided into three categories: one kind is like Shanghai Steel Union (300226, Stock bar), Hui Cong net this kind of business-to-business e-commerce Enterprise, followed by Taobao or has been successful "out of the Amoy" "Network of large sellers"; The third category is differentiated, low-cost operation of the operating footwear, Vertical electrical quotient of cosmetics, garments and other products.

"From the current point of view, the first type of electricity dealers are relatively stable profit, and the second category, the third type of electric operators can make a handful of profits." Lei, director of China e-commerce Research Center, said.

VC/PE "kidnapped" by the tiger

While VC/PE institutions have been wiped out by the electricity industry, good news about the profitability of the electric-business sector has been slow to reach them. On the contrary, just continue to receive the electric business enterprise repeatedly, start financing news.

However, the investment in the end is hoping to gain a smooth exit, once the IPO door is slow to open, investors are deeply stuck. "Electrical business layout has been chess to plate, PE give up the follow-up heart unwilling, but also to gamble a support electric quotient will scale to do up, so as to win the IPO exit." A PE person who declined to be named told the Chinese Securities News reporter.

After the Beijing-east provoked price war, its today's capital, Sequoia Capital, high jianling Capital and other shareholders have refused to stand on the cusp to the media, but the industry has more than once out of the second largest institutional shareholder Tiger Fund in Beijing to withdraw the message. The earlier investment agency is now looking to exit from Beijing, hoping to secure its upfront investment returns. But at present, the Sino-US IPO window has not yet opened, Beijing East also do not want to bleed listed, in this context, the existing VC/PE shareholders in addition to forced to support the Beijing east to do large-scale outside, difficult to have a better choice.

In fact, the "Beijing East" kidnapped VC/PE. At the beginning of August this year, there was news that the management of the handle network was elevated by the capital side, and the fuse behind it was the failure of the internet market. On the June 20, the filing of an application to the SEC to withdraw the listing means the final financing hope is dashed. This undoubtedly to the Jinshajiang venture investment three times before and after the input of 14.61 million U.S. dollars to bring out the pressure.

Sequoia Capital, DCM investment in luxury electric goods will not be optimistic, although the company was listed on the NYSE in March this year, but the share price then fell below the 6.5 U.S. dollar/stock prices. The latest quarterly report shows that the goods will still be in the red.

and Ding Hui Investment Group Purchase 24 coupons, litters group, such as the current situation is not ideal, 24 coupons this year's sales figures have fallen out of a dozen group buying, in addition, the Northern Lights, GGV Capital cast red children have always been "internal friction" of the troubled;

More cautious investment in electricity dealers

The mode of burning money is unsustainable, exit channel is not smooth, VC/PE will be more cautious to the investment of electricity trader.

As we all know, in the beginning of 2010, China's e-commerce industry investment continued to rise. Research center data show that only in the first half of 2011, in group buying, social electricity and vertical online retail and other new models and subdivision areas, China's e-commerce industry investment events in the number of a half-year high, up to 68. But it didn't last long, when most of the online retail enterprises continued to "Burn money", the continuous burst of "huge losses", investor confidence seriously damaged. In the second half of 2011, investment in China's e-commerce sector cooled sharply, with only 39 disclosures of investment events. In the first half of 2012, China's e-commerce industry has a total of 31 investment cases, continue to reduce the trend of cooling.

"VC/PE is now very cautious about investing in E-commerce. Now, the whole industrial environment is not mature, if there is no good profit model, VC/PE generally will not be voted. "Industry analyst Zhangyanan thinks.

Industry is expected that the second half of 2012, China's e-commerce industry investment trend will not be warmer, the downward trend will be even more obvious, there are three main reasons: first, the electric business industry into the self recuperation period, extrusion foam, the fittest is imperative; the second is to flow, user size, customer unit price, It is proved that the investment value of the electric business enterprise is not scientific enough and the value evaluation system of the electric business enterprise needs to be redesigned. Third, the E-commerce industry has realized the IPO enterprise benchmarking is not strong, unlisted leading electric business enterprise IPO prospects are uncertain.