Group Purchase website Development Analysis of the United States Regiment 100 billion behind the emboldened and bullish

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24th, Wang founder of the United States set up a satellite: The United States Regiment 2015 sales target is 100 billion, and 2012 has reached 5.55 billion sales scale. Some people say bragging, some people say that see this number is not surprised.

I am still more optimistic about the United States Regiment, his basic skills is very solid.

I have talked to an executive of the United States Regiment many times, the most impressive is the Wang of an internal culture: User first, merchant second, employee third. To do O2O, the user and merchant is a very difficult problem, in the early days, the United States Regiment also for many internal contradictions, but also caused a lot of management conflicts. Later they identified such a culture, and in order to deal with all contradictions, for example, two sales fights, a sign early, a sign of the low price, in the "User first" culture, the price of the sale of the lower prices won.

In other words, relying on the "user first, merchant second", the U.S. regiment played a product differentiation. And the public comments, such as "merchant first, user second" form the partition.

The so-called: a thief to eat meat, no thief beaten. This is how the rest of the king is practiced.

This article is written by the Vice lord of Forbes Chinese version, "American Mission Network CEO Wang: Group purchase is like Marathon," although it was published in June 2012, but some of the fundamental mining of Wang in place, for example, through the accumulation of data, analysis and optimization to solve the problem. Well worth looking at:

Everything seems to be developing in a predetermined direction and way: When rivals were driven by a glut of capital to get their speed, the group was strong but not the best (though it was never the first three, but not the other), but when capital for the Chinese Internet began to shrink in the second half of last year, The group's system dominance suddenly became apparent – it was fast beating its followers since it first took the lead in the group buying industry in February this year.

"I've been doing this since March 2010, and I believe it's a very big thing in the long run, but eventually you have to be a winner, and you have to be able to keep going a little bit, not a surprise, a very strong one, and a complete rest in a moment." It's a marathon. Wang, CEO of the American Mission Network.

Initially, the American network was just a replica of Groupon in China, which provided only one service per day. But then, as users and businesses grew, he began to deviate from Groupon, increasing the number of group-buying items per day, like a naturally evolving system.

"Consumers are not just looking for more, they want to be fine, and they want a big margin." "It was not long before he established the basic business logic for the United States: to provide consumers with low price and high quality service options."

Sounds an impossible paradox, because high quality also means higher costs. But Wang believes that this may not be possible in the physical product area because the variable cost of the physical product cannot be squeezed all the time, but it is possible in the service category because, for the service provider, the marginal cost of the service is close to zero when its service capacity is surplus.

His first decision was to devote almost all of his energy to service group buying. At present, the volume of service group deals accounted for 95% of the total turnover of the United States, which is among the best in the group buying site.

Focus on Service group purchase, but also to avoid the physical type of goods distribution links, this part of the cost is a drag on a lot of physical e-commerce Web site profitability of one of the main baggage, but also to circumvent the traditional internet giants like Taobao, Tencent, because the local business is very low level of it, which requires a strong offline team, This is what they don't have.

"People spend more and more money on services and repeat consumption every moment, and in the case of a fully market economy, most of the industry, most of the time, is oversupply, and this is our long-term opportunity." ”

The question is how to establish a precise match between consumer demand and the remaining service capacity of the merchant. Wang chose the way he was good at solving problems by accumulating, analyzing and optimizing data. This means increasing investment in it, building robust information systems, analyzing accumulated data, and ultimately finding the best match.

At present, the United States team in the IT department has more than 100 employees engaged in this work, their main task is the company-wide search for the establishment of the United States Mission data optimization capabilities. Merchants have been able to see their products at any time sales, consumer evaluation, and can be the actual consumption of consumers automatically get the corresponding money transfer, and in many group buying sites where this is done by artificial.

"We're still only reaching 5%-10% of our target," he said. He hopes that one day the information system of the United States will be fully docked with the merchant.

However, a truly perfect match may exist in the mobile Internet environment, which also allows a large number of start-ups to focus on the local services of the U.S. mission. Last March, the US group launched iOS and Android clients and launched specialized clients for the film market. But in the number of mobile phone installed, it is ranked fourth in the current turnover of the public comment on nearly 20 million of the figure still some distance.

Wang does not intend to build a closed business system, like Wintel, preferring to build a business similar to that based on Linux. In this way, Tencent, Taobao, Baidu and other companies customers can be used for the United States Group. "You must know that there is nothing to do." "he explained.

For example, he never allows companies to be in the business of the competition in order to be in a favorable position, and in the order of the purchase items on the page to give certain businesses special care, on the contrary, all the rules are transparent, are determined by the same set of algorithms.

When and how to achieve profitability, this is all the group buying site every moment to face the problem. Even the group's teacher, Groupon, is no exception, although the site has been IPO last November, but so far is still in a loss, the site in China's joint venture website Gao Peng also very failed.

Some websites want to make profits from the rise in gross profit margins, such as buying or distributing goods that are likely to be higher in the margins. At present, the gross margin of Chinese group buying websites is almost below 10%, more is about 5%, and they think these new businesses will provide higher gross profit. However, Wang not think so, he insisted that the United States should be "low price high quality" to the end.

"Group buying was supposed to be a low margin thing, if it is too high, there will be endless people to kill in, on the contrary, the low margin of things, stable things to build competitive barriers, like Wal-Mart, Amazon, Gross margin is not high, but can do a very large scale, service very many people, very stable, Competition barriers are also very high. "he said.

He was relentless in carrying it out. So far, the United States in many ways has shown the characteristics of low margin operations, such as according to group buying navigation site group 800 of the statistics, 2011 United States Regiment turnover of 1.45 billion yuan, in all group buying site ranked second, but the customer unit price is only 32.9 Yuan, ranked seventh in the top 10 sites, at the same time according to the United States Group of data provided, its current gross margin for 5%~6%, also not outstanding.

But in other indicators, the U.S. group is ahead of peers, such as the average turnover of employees and individual merchant turnover. According to the Regiment 800 data, the United States network of March this year's turnover of more than 300 million yuan, the quarter-on-quarter growth of more than 30% per cent is the highest of the top four sites, but the site has fewer than 3,000 employees and is quite or even less than some of the other top sites; Several other major sites have reached hundreds of thousands of or even millions.

"To achieve low prices, we have to be efficient internally." Wang realized.

To this end, unlike many websites that are relatively decentralized, but more motivating city managers to adopt aggressive expansion strategies, the group quickly turns to centralized management, from information systems, to contracts for every merchant, to content editors, to finance, all controlled by headquarters. At the end of last year, he invited the former Alibaba vice president Canga Wei as the United States Regiment COO, coupled with his pioneering market vice President Wang Huiwen, sales Vice President Yang and other people, let him in control.

On the other side of low cost and high quality, it is the accumulation of the number and data of the user and the merchant, because the data optimization is built on the massive data, on the other hand the massive user makes the small profits but quick turnover become possible. So far, the number of registered users in the United States has reached 30 million, twice the turnover followed by the litters regiment, but compared to the establishment of 7 years earlier than it is a public comment less than 1,000 million.

He believes that attracting more consumers and partners is still the top priority, after all, whether the eventual profitability, mainly depends on the size of its turnover. If the United States to maintain the past period of 20% or so of the monthly growth rate, the end of this year, the monthly turnover may even exceed 1 billion yuan, but in fact at the current level of personnel, facilities and other costs, may be more than 500 million yuan per month turnover, there is a chance to achieve monthly break-even.

The main cost of similar companies is marketing and personnel, which is the main reason for the drag on Groupon, which almost eats up all of its gross profit. But in China there are a large number of marketing channels to choose from, such as the United States such a high profile of the site's marketing costs accounted for the proportion of the turnover will be much lower, the current site from the external import of the flow has fallen to 50%, this year it for marketing spending may not be 100 million yuan.

In addition, the local market is closely related to the population density, China's large population base and the dense urban population also makes the Chinese group buying sites in the unit turnover of human and marketing costs.