Le Bee Network CEO Wang Licheng: Selling other people's brand does not make money

Le Bee Network CEO Wang Licheng 5 years did not for the Wang Licheng, in the past two or three years did not feel the ups and downs of the electricity industry, until the second half of last year began to do the next round of financing, from the cautious attitude of investors, only to feel the electric business industry in the winter. Throughout the investment negotiation process, Wang into the investor's cautious, uneasy and confused, investors even told him that if a group of investors sitting together chatting, there will be a tacit understanding: talk about what can be just don't talk about electricity, because in the past two or three years after the rapid expansion of the electrical business boom burst bubble, Investors are more fearful of electricity dealers. The parent company of Lok Bee Net is good luck in the east, catch up with the last bus of electric trader Investment, obtain 40 million dollars investment from CICC and broadband fund. Impress investors, on the surface is a Lok Bee founder Li "Chinese local beauty brand" dream, behind is the Oriental Popular program resources, consumer platform and the original brand of three mutually integrated development of operability. If the brand is Li Perceptual thinking, do the retail origin of the Wang Licheng with data and case for this argument: competition is always homogeneous competition is difficult to make money, only shorten the supply chain to improve efficiency, to obtain an additional 2%-3% of the profit, and this seemingly insignificant profit, It is likely to promote a company to become China's top 500 or even the world's top 500 companies, and this in the retail industry is reflected, the company developed to a certain scale must have its own brand. This train of thought in the peak after six months more intense, because Li and Wang Licheng found that selling other people's products do not make money, or need to do a "more long-term things." Why does selling other beauty skincare brands not make money? The explanation given by Wang Licheng is that at present, the whole Chinese cosmetics a year total retail sales of about 180 billion yuan, of which only more than 30 billion are local brands, means that 80%-85% of the share of foreign brands occupy, if they produce a product cost is 30 yuan, sold to the channel is about 300 yuan, channel operators only 10% About the gross margin, it's hard to make money. It is even more difficult for cosmetics manufacturers to make electricity. Electric dealers also as distributors of cosmetics distribution, whether it is from the authorized brand to take the goods directly, or from the official agent of the channel to take the goods, the profit itself has been very impersonal, coupled with such as 8%-10% logistics costs, or regardless of the cost of investment in advertising costs and price wars, cosmetics dealers can not see the hope of making money. The only way out is to do the local brand, in the past few years, in addition to Bai Cao set, affordable Herbal limited several brands, domestic in this field is almost a blank, Wang Licheng all think that the industry needs at least 30-50 local brands, the prospect of very large can make people "very excited", So Le Feng give up the data report that has been able to balance the profit, and put more financial resources into the Shanghai original brand research and development center. But this is not an easy thing, Chinese consumers in the cosmetics habits are not easy to change, cosmetics is a need for users to experience the supremacy of Word-of-mouth industry, it takes 10 years or even decades"Slow work out of the malt", however, in the electric business this fast and impetuous industry, the team of the Lok Bee network can not be affected at all? Background data: Online time: August 2008 Financing: 2008 Shen Millions of U.S. dollars, 2012-year gold and broadband funds 40 million U.S. dollar customer unit Price: 200 Yuan about gross margin: 10% or so (agent brand) Employees: about 1000 (including call center and warehousing) Sales: 2009 76 million Yuan, 2010, about 300 million yuan, 2011 years less than 1 billion yuan, the target of 203 billion yuan this year. Sales composition: Private brands accounted for about 40% of static good brand expectations are 10 years at least 3 billion profit forecast: 2009, 2010 Profit and loss balance, large-scale profit hope in 2014, 2015 years or so in the next 2-3 years will have a large number of enterprises fall SINA Technology: You felt the electric business of the cold winter? Wang Licheng: In fact, the first two or three years did not feel the winter, in the second half of last year's financing from investors that feel the cold winter mood. Before this financing, we only in the early 2008 Shennan Peng Investment millions of U.S. dollars, and has been doing their own cosmetics industry foundation work, so did not see outside is spring or summer, now get the second money will think, the industry in what role, we think is at the turning point. I personally expect that in the next two to three years, a large number of enterprises will fall down. Sina Science and Technology: le Bee net before especially low-key, even large-scale promotion did not do, that these 5 years concrete what thing to do? Wang Licheng: le Bee net August 2008 on-line, although did not invest a penny promotion expense, but by that year December we had already break-even. 2008 for us to work two, one is the introduction of Lok Bee nets, the second is to mainstream the east into the operating system. 2009 we completed 76 million of the sales, but also completed the logistics system, supply chain system, upgrade the Network page, at the end of the year began to do their own good static cosmetics and health products. 2010 we started advertising, but not much also about 10 million, because when we do the independent makeup brand, from research and development packaging to sales, found that many aspects we do not know, so do not have the courage and guts to promote large-scale. 2011 we tried to make some investments, such as investing in the Shanghai warehouse and a cosmetic development team. At the same time in the Lok Bee brand We also do a nationwide 20 million yuan of hard to promote, this money may be less than some of the one-month promotion of One-third. Not because there is no money, but we do not think that when the delivery can not be done, perhaps relatively conservative, but we want to try not to be affected by others according to their own ideas to do. Sina technology: Close to the first investment of tens of millions of dollars, as well as only the profit and loss of flat revenue, why do they have to do their own brand? Wang Licheng: We have been the capital of our own rolling, because 2009 and 2010 we are profitable, last year to adjust, is the basis of profit and loss to expand the scale, of course, is not the way to fire. LiQuiet from 2000 own business to today has been 12 years, she has a dream, such as Japan has tree planting show, the United States has Lauder, Paris has L ' oreal, then China can have a Li brand cosmetics, can be Chinese women like. I also have to do their own brand dream, so I met with Li after the coincide. According to their own rhythm to do differentiated Sina technology: Consumers prefer foreign brands, how can local brands quickly open the market? Wang Licheng: Don't worry about sales and profits when you look at original brands general look at several links: one is each series, each product suitable for what kind of crowd, the brand story is very important, but not the most important, girls use a cosmetics is because of good, so be sure to subdivide the crowd, which has a lot of logic behind, it may need to accumulate a few years, Decades of experience can be a deeper understanding of Chinese consumers. When you know the consumer, you step into the second phase of the product, the third stage of packaging promotion, when your vision, touch, smell, feeling are combined is the perfect brand, the future we still have a long way to go, I try to persuade the team every day do not be affected by the impact of the brand, do not be affected by skin care brands, Try to do the right thing with the consumer as the center. Sina Science and technology: How to grasp the original brand and the business platform of the two businesses rhythm? Wang Licheng: This is the two paths of total division, and the pursuit of speed by the Business-to-consumer, the pursuit of the brand is precipitation, do the site people and do brand people are completely two types of people, so frankly speaking, in fact, sometimes I and Li very split, when we jump to the business of the industry, we found that we are pursuing sales speed, logistics, code and so on, When jumping to the cosmetics industry to find the pursuit of the ultimate, is to enjoy, is a dream. So the company is currently three teams, one is in Beijing's Oriental popular media company, the second is Beijing's Lok Bee Network team, the third is in Shanghai's own brand static cosmetics team. So space and time we deliberately separate, let different teams do their own things. But the three teams are highly integrated, such as how to assist the talent brand, how to help brand exposure waiting, our company although the scale is small, but it is more complex than other electrical business, but we try to do a little, try to do some differentiation, when the day of the outbreak, I believe that only we can experience the sadness and achievement behind. Sina technology: If the dream is the original brand, and the business of selling foreign brands does not make money, that Le Peak do the meaning of the platform and expectations of what? Wang Licheng: As a local brand that has only been established for 2-3 years, where do we go to sell without a platform for a business? And a weak local brand is also difficult to the Friends department stores, Starlight World such places to sell, the Internet can travel through space and time, which is the cause of passivity, as a platform for the business is the last resort. The second aspect, the Lok Bee Network to provide static good brand is not only a sales channel, or a marketing channel, users in the Lok Bee before buying products, you can see a lot of lottery, brand registration, brand packaging, you can also participate in some productsTrial, product buy gift, blind test and so on, the development of own brand is a very good marketing role. Third, now China's cosmetics industry 80% are foreign brands, if Le Bee online only static good products, consumers may come to this site, but will be very few. Now it's hard for consumers to be loyal to a brand, more demand is a combination, when we find the original brand and other brands there is friction, we turn the heart to zero, if consumers need to provide, we hope is a complementary relationship rather than competition. Electric business enterprises are betting against the first fall Sina technology: But the agent brand does not make money, may be the original brand will bring income, but at present it seems to invest more than income, this will not form a dead cycle, resulting in less revenue? Wang Licheng: I think everyone is betting that competitors will be able to dump their own good profits, including other businesses in the industry, who can survive, or by Providence. Now to see the sale of other brands of cosmetics is difficult to profit, even if the profit will soon be chased, when you make money immediately have competitors cut in, the profit pressure down, for the Lok Bee Network we are an important channel. Sina technology: What do you think is the problem of the current business of the cosmetics industry? Wang Licheng: This industry problem is still very obvious, the first is to mass hit advertising, hungry fruit is to push high advertising prices. The second is a price war, but the gory reality of the industry is that consumers will go without a price war. The third is the bubble, such as staff wages if I out 5,000 yuan, immediately someone gave him 8,000 yuan, accelerate the irrational competition in the industry. In these cases the longer the longer the stronger the enterprise, and the next years after the electricity business structure will be met.