Guiven: We are sure to be one of the first to profit

Absrtact: Perhaps there is no more difficult to buy goods online, but the Beijing East reported losses, when the newspaper losses, this industry seems difficult to have the company to dig gold.

Dialogue Guiven: Electricity business competition is to burn money competition, no one dares to profit

"In fact, now want to profit can also be achieved immediately, as long as the cost of advertising to minimize, but this is not meaningful profit." ”

Financial weekly reporter Ouyang Dream Snow/Wen

may have no more difficult to buy goods online, but the Beijing East reported losses, when the newspaper losses, this industry seems difficult to have the company to dig gold.

Walking the net from doing luxury goods, CEO Guiven said this year's sales are expected to be 1 billion, but the loss as the predecessor. He said the truth, no one dared to make money.

On the Internet, the price of each item is public and is compared. If the price increases, if the reduction of advertising, the outcome is likely to be no end.

So a lot of money came in, trying to burn through this difficult period, soberly the final light.

August 17, catwalk network announced that the United States 100 million U.S. dollars in Warburg investment, but also to enter the next stage of the competition qualification.

Sold over 2 billion next year.

The basic valuation method is also in accordance with the market rate, but more we will consider the growth of the company's expectations, that is, the number of users, repeat purchase rate, customer unit price, gross margin of these data

Financial Weekly: Is this 100 million dollar figure true?

Guiven: Some smaller companies need to create news to boost the confidence of their clients and investors. But our company this round of financing and other companies are somewhat different, because this time the investors are PE. PE and VC are different, in comparison, VC size will be smaller, they entered in the early, hoping to get a great return, so the risk is very high. But for PE, not necessarily need to earn so many multiples of money, but must invest enough money to determine the project must be successful.

We have made a big concession to this round of financing because we want to ensure our success at this stage. Most of the existing financing in the industry is not from PE, because PE does not understand this type of project very much. Our round of PE financing actually excludes anyone.

Financial Weekly: What does it mean to exclude anyone?

Guiven: This round of financing does not bring any other institutions, only the Warburg. The first round of investor KP had the right to vote, so we did not accept any new entrants except KP. Of these 100 million dollars, KP occupies a relatively small proportion.

Financial Weekly: Do you think the process of financing negotiation is difficult?

Guiven: It's no hard for us. We used the main energy to negotiate with Warburg, making this decision easy for Warburg.

Financial Weekly: How long has it been in contact?

Guiven: Time is not long, mainly March and April.

Financial Weekly: Are you the initiative to find Warburg?

Guiven: We have been friends with Warburg for many years and have had intercourse before. After the Spring Festival, we began to talk with Warburg, we were doing a round of financing. It was not until May that we began to talk seriously about the project.

Financial Weekly: How to value without profit?

Guiven: There are two methods of valuation in this industry. VC-born people tend to use sales to judge. In order to achieve rapid growth in sales, many companies advertise heavily to pull traffic and sales. But I think the valuation in this way is problematic because it becomes a work of data. We are more inclined to become an organic existence, that is, what we bring to our customers, we can see the cost structure on each of our list, and what we can get when we enlarge the future. This is a different place than most companies.

Financial Weekly: According to your opinion, the company's valuation did not use the market rate?

Guiven: Our basic valuation method is also in accordance with the market rate, but more we will consider the growth of the company's expectations, that is, the number of users, repeat the purchase rate, customer unit price, gross margin of these data. In the past, some companies pay more attention to reference sales.

Financial Weekly: This round of financing is based on several times the market rate to valuation?

Guiven: Similar to the level of the industry.

Financial Weekly: What is the estimated sales this year?

Guiven: 1 billion RMB.

Financial Weekly: Next year?

Guiven: About 2 billion to 2.5 billion.

Focus on the development of international apparel brands

These brands are actually very excited. But in fact they don't know how to get into the market and how to sell their goods.

Financial Weekly: In the process of communicating with you, you are the most touched by the Hua-ping or the most touched by you?

Guiven: I think Warburg Pincus has two points: one is the pattern

Financial Weekly: What mode?

Guiven: The first is the product line, we are more high-end positioning. From 2006 onwards, our company's customer unit Price is one of the highest.

Financial Weekly: How much is the customer price?

Guiven: About 550 to 600.

Financial Weekly: Are there any other companies that are close to the price?

Guiven: Jing Dong is closer. Offline purchase behavior for all users is gradually ported to the line. Customers may buy a 30-dollar T-shirt on the line, but they will gradually buy more expensive items. This does not mean that everyone will buy LV online, but the purchase of Zara, seven wolves and other brands are certainly a lot.

We believe that the purchase of brands must be more than the purchase of brand, we want to do is to put the brand of goods online to sell. 2nd, we

The focus will be on the apparel field. Now in the E-commerce industry, standard products such as 3C digital, book audio and video do better, but non-standard products such as clothing is not standard.

Third, we are aware that a large number of international brands, including some Taiwanese brands, have not entered the mainland market. Let's take the show. The core competitive advantage is here to introduce competitive international brands into China. What we have to do is keep talking to these brands, and in the face of such a large market in China, these brands are actually very excited. But in fact they do not know how to enter the market, how to sell their goods.

Financial Weekly: What are your favorite brands?

Guiven: We classify these brands roughly into three categories: the first big category is already large, but not the Chinese market brand, such as Uniqlo, GAP. The second category is regional brands, such as the east coast of the United States or the West Bank, Italy's brands, their global influence is not big enough. The third category is the designer brand, or some star brand. Roughly these three categories, in addition to clothing, we will introduce carpets and other furniture supplies.

Financial Weekly: How do high-end brands get the goods?

Guiven: To put it simply, we have several different channels for overseas sourcing: The brand itself, the brand's distributor and the department store. We have more in-depth cooperation with department stores, especially in Europe we have some very good department stores.

Financial Weekly: Is the department store the largest in the sourcing?

Guiven: At present, compare average, the dealer will be a little higher, about 40%.

Financial Weekly: If you talk to the luxury brand headquarters, the price is the same as the counter?

Guiven: The price depends mainly on the amount of purchase. Sometimes we talk to luxury brands on our own, and sometimes we buy them together with other companies, in order to reach a high enough amount. Luxury goods in our products is a supplement, at present our company's luxury goods accounted for 30%. We prefer some popular fashion brands because of the low repeat purchase rate of luxury goods.

Be the first to be a profitable electric dealer

Because our cost structure is better. Our customer unit price is higher, each send out the goods will share the cost of a part of the company

Financial Weekly: High-end positioning is not meant to be higher than the gross margin? What is the loss of 1 billion of sales this year?

Guiven: Should be a billion or so.

Financial Weekly: How to calculate cost structure and gross profit margin in case of loss?

Guiven: This needs to look at future changes. The scale of the present is not large enough to that stage. In terms of cost, the cost rate is higher because the sales are not big enough. Once that point is reached, the rate will start to fall.

Financial Weekly: Do you expect to be flat next year?

Guiven: It will be possible next 7 August.

Financial Weekly: Jing Dong, when all are still in the loss, walk show will become one of the first profit?

Guiven: There is no doubt that we will be one of the first to profit because our cost structure is better. Our customer unit price is higher, each send out the goods will share the cost of a part of the company.

Our customer unit price is more than 500, the gross margin is about 25%. The electricity company does not make money one because gross margin is very small, the second is the market promotion cost is very high. Under the condition that the gross margin is invariable, the electricity merchant needs to do continuously large-scale. For companies with higher margins, there is little difficulty in this regard. The cost of marketing is the problem that every E-commerce company needs to face.

Financial Weekly: What are the main channels for your marketing promotion?

Guiven: We are also a very traditional e-business channel. We vote for Baidu, keywords, and some email ads. Our company also has some ground advertisement.

Financial Weekly: If you must say that only one is the core competitiveness of the company, what do you think?

Guiven: There is no doubt that procurement.

Financial Weekly: How is this core competitiveness formed?

Guiven: We spend a lot of time on the construction of commodities. But for external consumers or investors, the power of goods can be seen. If my advertising ability is very strong, then the overwhelming is my advertisement, everyone can see. and commodity procurement is a more need to accumulate, more need to invest time construction. We think our commodity department is the best team for cooperation.

Financial Weekly: Fake problem, what do you think?

Guiven: We don't think it's a problem because we're involved in the entire procurement process. But now the domestic environment is not too standard, fake too much, so that consumers distrust. In fact, in the mass fashion brand this aspect, our purchase price is very cheap, the forgery is not worth, because the forgery also needs the cost.

Keep an eye on Jing Dong's Excellence when

These three companies are of scale, and the vast majority of companies are not. Mass sales is an experience

Financial Weekly: Do you have a benchmark for catching up now?

Guiven: Objectively speaking, we will respect the current domestic leader, such as Jing Dong, Excellence, when. In fact, every company has its own place to learn, but we are more closely focused on the top three.

Financial Weekly: What are the top three places you can learn from?

Guiven: These three companies have scale, and most of them are of no size. Mass sales is an experience.

Financial Weekly: Are you satisfied with the 25% margin?

Guiven: In our minds, we certainly want to make gross margin higher. But now the competition is so fierce, the price of selling on the internet is too transparent, I do not think the margin can be raised higher.

Financial Weekly: Now Jing Dong, when all began to do department stores, if there is a price war, will affect your profit plan?

Guiven: The price war is sure to come, because the Chinese are used to it. I think this may affect the company's profitability. But in fact we are ready. The price of the company's goods has been very low. We all want to play the price war without waiting for the price war to be waged by others.

Financial Weekly: There is a saying that e-commerce industry is to burn money and live longer than who?

Guiven: Sure. Today I personally see that the competition in the industry is intensified.

Financial Weekly: On the one hand, some people in the industry optimistic about the business, that this is the general trend. But on the other hand, the industry shows impetuous chaos, more money, more people, but not a few profit.

Guiven: People's needs are diverse, as long as the power provider can provide the value of people will need. Cheaper, more convenient, no need to go out, these are the undoubted value of the electricity business.

To buy clothes For example, the electrical business in the constant resolution of returns and other aspects of the problem, so the electrical business has been emphasizing logistics, distribution, close to users, until the ground shopping with no big difference. So I think the big trend of the electric business must be win. But the timing of this trend is unpredictable and may be long.

This industry needs money to support, need time to exchange for growth. I do not think that the future of the electricity business will also be a loss-losing model. In fact, now want to profit can also be achieved immediately, as long as the advertising costs to minimize. Just such a profit is meaningless, because next year there may be an opponent willing to play a price war, once this, I will not have next year.

The Internet is not subject to geographical restrictions and competition is too transparent. So everyone is afraid to make a profit. I think that one day this state will end.

Financial Weekly: Electric dealers are now killing each other, the future is not on the ground stores, such as the supermarket, the counter impact is very large?

Guiven: Maybe, but we want to do is to achieve incremental, pull more customers, so we have more choice to do foreign brands.