Flash purchase or squeeze traditional electric business model

Absrtact: "Editor's note" The future of business is certainly in the network retail, and in the numerous and diverse network sales, the fastest development is also a Flash purchase mode. Look at the flash buyers zulily and the only product will be compared with the traditional electric business Amazon and Jingdong, etc.

"Editor's note" The future of business is certainly in the network retail, and in the numerous and diverse network sales, the fastest development is also a "flash purchase mode." Look at the flash purchase electric zulily and the only product will be compared with the traditional Amazon and Beijing-east, such as the comparison can be learned that the current flash mode has been a lightning-like occupation of the network shopping market.

Traditional electric dealers grow fast but profit is a problem

World-wide E-commerce sales will grow by 20.1% in 2014 to $1.5 trillion trillion, according to research institute emarketer, and are expected to reach $2.35 trillion trillion in 2017 years.

Amazon and Jingdong are similar in their business models to the sales category, with sales of more than 10 million dollars and all at a growth stage. But the problem with both sites is not growth, but infrastructure and high spending. Both sites maintain a high level of inventory and spend a lot of money in the operations center to handle a large number of daily orders.

It is understood that Jingdong needs to carry 70% of its own orders, but also to maintain 1620 delivery points and 214 from the point, and Amazon is the use of outsourced transport companies. Based on these conditions, the current operating margin of Amazon and Beijing east is very low, Amazon only reached 1%, and Jingdong even 5.6%.

The flash-purchase model solves the profit problem

Unlike traditional electric-business models that sell many categories and have large inventories, the flash-purchase business concentrates on selling only one commodity over a period of time. The buyer buys a large quantity of goods at a low price and then sells it at a low price, then the bulk of the shipment, which does not put money on the goods, and can also achieve higher profits.

We can see that the zulily and the only goods that use the flash-purchase model are much better than those of the big electric dealers. Excluding those infrastructure costs, the price advantage and low inventory of the flash-buy model have greatly increased the profits of the buyers. However, the reason why consumers choose to buy electricity is mainly because of the low price.

Is it worth the investment?

How much the flash-purchase model can make in a year is not a certainty, but it is a new model in the E-commerce industry. But judging from the profitability of Zulily and the only commodities meeting, this model is worth long-term investment.

The difference can be traced to the difference between the US electric quotient and the Chinese electric business, emarketer's survey shows that the U.S. electricity sales are expected to grow by 11.8% this year, while China can grow by 63.8%. Industry insiders believe that China's e-commerce in the next few years will maintain more than 30% growth rate, and the United States to maintain double-digit growth is more difficult.

On the basis of these forecasts, the growth of the commodities market will be even more rapid, even though it has risen by 3,200% since its IPO in 2012, but it will certainly go much further.

Amazon and Zulily still have room to rise, but the US electricity market is still evolving, and there is bound to be more business to feed their profits. As for the BoE and the only goods will, in the next 4 years will not gain more market share, but will maintain a high growth rate. But given the profitability of the product, the buyer is clearly a more worthy investor.