Late self-help: Dangdang

March 12, Dangdang and Jingdong again in the book field launched a head-to-head price war.

For Dangdang, the nature of the price war is a belated war of self-help. At present, China's consumer electric business to Ali, Beijing-east and other representatives of the seven-male hegemony pattern has been set, as the marginal, Dangdang had to pick up the banner of price war to attract attention, otherwise its only a small site may not be insured.

As the loss of previous price wars, Dangdang this initiative to counterattack, will accelerate the sinking or to achieve self-help?

Market size and share decline

March 12, Dangdang announced from now until March 15, 400,000 kinds of books 50 percent caps, which is following last year's "double 11" since the largest book market promotional activities. The same day, Jingdong Mall launched the "Spring Awakening All Living" books audio-visual promotional session, book audio and video over 300 yuan minus 100 yuan. The price war in a book market has again begun.

It is noteworthy that Dangdang CEO Guoqing has always been a price-fighting fighter.

August 13, 2012, Guoqing said to the media: "They said they still want to play a price war, you said it can be more tragic than now?" have no money to live, the capital after the burning of the merchant's money, it is very dangerous. ”

In fact, Dangdang does not have much capital to fight the price war at present.

Dangdang's latest 2012-year quarterly earnings report showed a net loss of 122.1 million yuan in the quarter, which is already a 8 consecutive quarterly loss. Provoking a price war could further increase the pressure on its losses.

In Ali, Beijing-east and other platforms under the squeeze, the current Dangdang has been increasingly marginalized. According to a study by Analysys International, trading in the Chinese market in 2012 amounted to 479.26 billion yuan, a 99.2% increase from 2011. Only products, Jingdong, cat and other growth rates are more than this number, and Dangdang's growth rate is only 44%, less than half the industry average.

Dangdang 2012 The fourth quarter and the full year earnings figures show that the total revenue in 2012 was 5.1938 billion yuan, a 44% increase in fiscal year 2011, and 2011 and 2010, respectively, the growth rate was 59% and 56.5%. 2012 years, when the year-on-year growth rate fell to 31%, far lower than the same period of 73%. When expected, 2013 first quarter revenue will reach about 1.3 billion yuan. In this calculation, the year-on-year growth rate will fall further to 20%.

And when in stark contrast, the Beijing-east and other electric dealers still maintain high growth. According to the Beijing-East external data, from 2007 to 2012, the annual growth rate of Beijing-east sales reached 350%, 266.67%, 203.03%, 155%, 105% and 185% respectively.

China's E-commerce Research Center, the latest release of the 2012 China Network retail market data Monitoring report, in the consumer market, Dangdang share of only 1.2%, ranked eighth, while the first cat and the second Beijing East, the market share of up to 52.1% and 22.3% respectively.

In the case of market share decline, 2012 Dangdang tried to force category expansion and open platform, but so far not outstanding results.

A person who declined to be named said to the daily economic news reporter, Dangdang current situation is extremely passive, do not take the initiative to provoke price war, will face traffic and sales of further atrophy, but the launch of price war, it may further loss of money.

For the implementation of the price war considerations, when insiders said that the price war from the decision to implement are very fast, choose this time to launch a price war, because March is the electricity dealer price war gap period. Books are not the same as other commodities, and there is no seasonal change, so when you want to create a holiday in March, you plan to do it every year.

The losers who fought passively

For Dangdang, success or failure begins with the "evil" price war.

When it was first listed in the NYSE in DECEMBER 2010, it was once seen as the most likely to become China's Amazon's electric business platform. However, in Dangdang on the day of the listing, Jingdong Mall and the excellent Amazon in when the Stronghold-book field launched a price war, the formation of encirclement and suppression.

At that time, Guoqing Hao said that the Beijing-east and Amazon's provocation "retaliatory retaliation."

The negative effects of the price war are quickly reflected in the earnings figures. Dangdang reported that in the three quarter of 2010, Dangdang's gross margin fell from 25% to 10% in the fourth quarter of 2011. Correspondingly, in December 2010 when the market was still profitable when, in 2011 two-quarter losses, and continued to date.

To this, guoqing extremely sigh. According to him, "my first year in the book when the discount on average 74 percent, the second annual average of 69 percent, now on average 65 percent." No matter how I improve the packaging materials, how to differentiate, but the price war can not be avoided, this is the retail industry. ”

Zong Ning, a commentator on the daily economic news, said the book is a standard product, the customer unit price is relatively low, not too much competitiveness. Jing Dong and Dangdang play book price war, from the beginning is not equal. Jing Dong to 3 C start, Book category small, lose not how much money, and Jing Dong rich loss. And books are the core category of Dangdang.

Data show that from 2010 to 2011, audio-visual books for Dangdang contributed 81.67%, 67.9% of the income, and Jingdong from 2010 to start the preparation of the book business. Jingdong chose to market when Dangdang began to provoke book price war, let Guoqing into a dilemma: not to participate in the price war is likely to be kicked out, and participation is facing the downward pressure of gross profits.

Since then, facing the Beijing-east and other rivals to launch a book price war, Dangdang can only be in the "home door" against. Because in the department stores, 3C and other categories do not have the advantage, Dangdang can not be the war into the east and other rivals of the hinterland.

Dangdang insiders said that the past price war, Dangdang are involved. At the end of March, Dangdang will be in the clothing, mother and child and other major strategic categories have big moves.

Strategic Prudence misses expansion opportunities

Compared with the high performance of the IPO, in 2012, Guoqing and Liu Weibo "challenged" when the Liu ignored.

An industry close to Dangdang said to the daily economic news reporter that when a lot of strategic mistakes, the opponents provide a chance to catch up.

2007 is a watershed year. This year, Jing-Dong won the new capital Xu's favor, get the first round of 10 million U.S. dollars financing, start large-scale logistics construction system. Liu's business logic is that "companies that make money at a time when they shouldn't make money are stupid". From 2008 onwards, Liu the battle plan of "who has the money and who can get a bigger market".

And Dangdang took a completely different path. In the field of platform electric business, Dangdang with the brand into the form of a business model of their own, to "slow and steady" way to expand slowly.

The idea of Liu aggressive expansion runs counter to the philosophy of Guoqing sound management. In the 2009-2010 financial crisis during the winter, Dangdang even compressed the market costs. One into a shrinking, Jing Dong took the opportunity to rise.

Data show that 2009, 2010 two years, when the annual sales growth rate of 90.3%, 56.5%, and the Beijing-East annual growth rate of 203% and 155% respectively. In 2011, Dangdang's total sales remained at 3.619 billion yuan, while the net sales in Jingdong had rushed to 21 billion yuan. 2012, Beijing East sales exceeded 60 billion yuan, and Dangdang only 5.19 billion yuan.

In the 2012, Dangdang put hope on the open platform. In the words of Dangdang President Yu, "we will further enhance the strategic position of the platform business within the company." ”

According to the published data, the 2012-quarter Dangdang Open platform GMV (total turnover) reached 548 million yuan, the 20,123 quarter growth of 60.6%. 2012 Annual Dangdang Open platform GMV 1.373 billion yuan, accounting for its total GMV of 25%.

But compared with other electric operators, Dangdang's open platform pales. 2012 Jingdong Mall pop platform sales in 12 billion ~150 billion, and the sky Cat platform sales of more than 200 billion yuan. Even compared with the newly-acquired Suning, the attractiveness of Dangdang's open platform has been slightly tarnished.

Zong Ning said, "later Dangdang business development of logistics and warehousing caused pressure." With the Beijing-east and other electric quotient than, Dangdang's service is not competitive, the user lost heavy, and open platform to need high popularity to effectively operate. ”

Dangdang's retreat is clearly reflected in the change in share prices. March 13, Dangdang's closing price of 3.82 U.S. dollars, the market value of only 306 million U.S. dollars. On December 8, 2010, Dangdang's closing price was as high as $29.91.

Case

A vacuum Cup marathon replacement trip

November 25, 2012, live in Xiamen Zhaoke (alias) from Dangdang Net bought a "rabbit" 500ml vacuum cup, model for PR-2284, the price of 62.80 yuan. The product of the foreign self-proclaimed "British royal brand, good insulation effect."

Three days later, November 28, when the kettle was sent to Zhaoke's hands, the box had been torn. Because the product is not valuable, also did not investigate, Kaifeng after the box discarded. On the first day of use, the son found the bottle cracked. Zhaoke to the daily economic news reporter that he has since started a marathon negotiation with Dangdang.

November 30, Dangdang accepted the "replacement" application. Zhaoke according to the return procedure request, fills in the reason for returns, and attaches the damaged photograph to submit.

Wait a week, Zhaoke active call Dangdang, be told to send the kettle to its located in Beijing Tongzhou Residual Center, and received a message prompt return goods notice.

December 7, Zhaoke spent 13 yuan postage will be sent after the exchange of products, and soon call Dangdang Customer Service Hotline, and the parcel number, the reply is "will be with the residual center confirmation as soon as possible reply." But after one months, Zhaoke did not receive any phone calls or SMS prompts. Around January 16, 2013, Zhaoke call Customer Service Hotline, only to be told that the goods have been received. But because the outer packing does not send with the piece, therefore cannot handle returns. Zhaoke on the phone, the outside packaging has been discarded, the service staff replied that the next day will give a reply.

On the afternoon of January 18, reply to Zhaoke mobile phone, said that because the goods have no outer packaging, can not handle the return of the business, "please send the goods packaging back when, so as soon as possible for you to return a replacement business."

was rejected, Zhaoke will be the return of the Exchange note to find out, of which the 4th said, "Complete sets of goods for return and replacement, please send the whole package back, if only to send back part of it, we can not handle for you." ”

Finally, Zhaoke chose to give up, but he said, "a kettle fully reflects the many problems of Dangdang after-sales service." ”

For the above consumer experience, when insiders said, when the logistics, distribution and spent a particularly large investment in packaging links. Customer service every day to solve a lot of problems, and strive to prevent the occurrence of the above situation. Complaints about some cases are being resolved as far as possible. (Zhangs)