Electric Business Industry: VC support for the big business losses + burning money

The recent e-commerce is very hot, the website of the business is very warm, constantly have different players into the electricity quotient, constantly have the news of the venture. E-commerce is also in the rapid development of the State, this fiery situation has no need to describe more, but in fact, what is the real status of the current industry?

The real cause of the loss

Why the current e-commerce situation, the whole business of the real operation results are still in the loss of the state, it is worth pondering.

First of all, from the general trend analysis, according to the 28 principle, currently the entire business is still in a very small market: at present, the total population of China, about 20% of the people online. Of these 20% of the Internet, about 20% of the people will be online shopping, and the net purchase of about 80% people in Taobao shopping; The entire business is a small niche market, equal to eight out of 10,000 of the population, and 80% of the offline population has never shopped online.

Therefore, China's e-commerce in the current background, many of the Big C Taobao is profitable, because they targeted at 80% of the online shopping crowd, and the majority of consumers are losing, because the business is still only for eight out of 10,000 of the small crowd, difficult to profit is very easy to understand.

The second reason is that many of the business people who fail or are not profitable are the problems of the operating rhythm. If you can understand the above mentioned e-commerce or the status quo and the fact of the business, the operator should use small steps to run faster than fast running pace. Because China's e-commerce is only the initial stage of rapid development, rather than the mature stage of rapid development. Many electrical business failures such as PPG, are running too fast and lead to the result of the pace.

The third reason and lesson: cash flow is the blood of the entrepreneur. The cash flow is the blood of the company's Web site in a context where the current industry is generally not profitable. "World Network Business" This issue of the cover of the example of the electricity business site, many have lost their ability to hematopoiesis, failure or decline is inevitable. Deep understanding of cash flow, there is no experience, is the measurement of a Business-to-consumer electric chamber will not do business, can do business in one of the most important standards, and good cash flow requirements must have a good supply chain as a prerequisite.

Many of the martyrs of the future to us, the lesson of the latter is: the initial stage of the electric business start-up is to do the cash flow is positive. In China, the general still does not have the profitability of the situation, in the supply chain management level, if the site sales of 1 million yuan per month, suppliers have 2 months of time, logistics 1 months to settle, then the 1-month difference can be used to 1 million yuan sales cash flow turnover to survive. Therefore, the electric business should pay attention to the operation of the rhythm, there are 2 million yuan in accordance with the amount of funds to match resources, small run development, but also in the cash flow is the case of the map development.

To sum up, the first fall of the followers to give us the lesson is profound, do not underestimate the difficulty of the electrical business start-up, not to be a thriving surface of the business and confusion, should be down-to-earth development.

Compared with the traditional marketing concept, marketing 2.0 is not parasitic advertising, its main body is based on people's "interaction, Word-of-mouth and community relations" on the spread. Everyone, each community, may become a channel of communication, from active interest to interactive experience, to widespread diffusion, and its channels of communication are almost limitless.

As these communications and interactive channels are being combined with the growing community of E-commerce, there will be unlimited shelves. Unlimited personal communication, unlimited community interaction, unlimited shelves, these three infinite stacking, is the Marketing 2.0 of the future value.

Electric Business Industry

The listed companies are in trouble

Currently listed two companies, in fact, are not comfortable: Mai Lin was sued by U.S. investors, Dangdang Guoqing recently and Morgan Stanley on Sina Weibo on the fight, but also exposed a lot of Dangdang's insider, and even the suspicion of false performance. In fact, two of the listed companies are the loss of nearly 10 years of electronic business enterprises, are listed only because of "being profitable", the listed company's real operating situation is likely to be a loss.

VC support for the big red Losses + burning money

This type of consumer to Beijing East, Fank as the representative, is not only in a huge loss, but also in the support of venture capital to burn money enclosure. This type of consumer also includes the Massamasso, Amoy, and so on, almost all of China to obtain VC capital of the keywords are "loss" and "burn money", those who claim to have been profitable to the boss, is only "wishful" and no one believes that the PR rhetoric.

When a small entrepreneurial business goes bankrupt

The current small entrepreneurial type of business has been the failure of the news. Previously, I attended a Shenzhen Electric Business forum Statistics that last year, there were thousands of small companies closed the door.

The current line of business is recognized as the starting threshold for the start of the enterprise is 20 million yuan, no 20 million yuan do not touch the platform, this has become a real operational and operational experience of the electric firm within the consensus. This year, the cost of the network promotion of the electric business is no suspense to increase the background of 2 to 3 times times, no doubt for small businessmen even worse.

The Stones of traditional enterprises

At present, the traditional enterprise online sales of more than 50% of the basic from Taobao, most of the traditional enterprise's own platform is still in the "device" stage, basically no sales and influence.

Alibaba China Business Department general manager Xiaofeng recently also said, electronic commerce wants to play very hard, he before "cheat" the ceibs EMBA classmate do electric quotient, many traditional enterprise bosses all wasted tens of millions of yuan and nothing, currently only a success. "Marketing may be one of the most important skills in e-commerce," he says. Marketing must not be more than who spends more money, but can effectively use the capital invested. ”

Vertical Industry No success stories

Many categories of industries, Taobao on the wind, but the application to the company does not really have a successful case. This is true of many industries: such as cosmetics industry, there is no sales of billions of vertical consumer appearance, the mother and the child, even red children also appeared business problems, other mother and child to make life more difficult; household industry, in addition to Taobao can be successful sales, the current Taobao outside the success of the precedent; Toys class, Baidu Department of Business entrepreneurs have just begun to invest in this industry, but then all give up, so far the toy electric dealer has no success examples ... There are almost no vertical categories of business day sales of thousands of orders of the Electronic business site, and these industries under the traditional line of the annual sales of billions of dollars abound.

Community-Electronic commerce looks beautiful.

Although the community of E-commerce prospects are very good, but the current community e-commerce can not really continue to produce sales. On the whole, the community is still in the sales of direct promotion of the role of zero, the tomato tree is only one of the failure cases.

An internal data show that last year, a good buy sales One-third from SNS category site, but almost 100% through the way of advertising, the so-called Marketing 2.0 model has not produced an order.

E-commerce marketing model, in China currently only group buying and limited-time snapping, can be proven to be the actual performance of sales. Almost all other modes of business, such as community-based E-commerce, have not been proven to be big and produce results.

Retail industry in the search for business

In the United States, the top 10 in addition to Amazon, the other is the retail industry background of the business, while China's top 20 of the consumer, none of the traditional retail industry.

The author of Shenzhen 30 to 50 electronic Commerce limited CEO