Li: The key to success is not the competition of capital

The report of China online retail market Trend forecast 2009-2012, published by Analysys International, shows that China's online retail market will reach 252.6 billion yuan in 2009 and the consumer market is growing faster than Consumer-to-consumer. At the same time, the platform for the purchase of Business-to-consumer network has been increasing, and a lot of venture capital.





media reports like this, "venture capitalists are frantically throwing money at the website of the consumer, not afraid of their own mistakes, fearing they won't get a chance to smash." "However, while the enthusiasm of investors is soaring, the bottleneck of the development of the Business-to-consumer website is also obvious." So far, the reputation of the VANCL, such as Jingdong, is far from the scale of profitability, when the continuous loss of 9 years, until last year only announced profits.





current domestic Business-to-consumer has entered the peak of burning money, some sites hit the cost of advertising as a desperate fight. According to the media statistics, some of the current Web site in the promotion of the investment has been nearly 80% cost. On the face of it, the business community is thriving, and entrepreneurs who play the business are lavish. In Li's view, domestic e-commerce is not as we see the flourishing prosperity, but has been biased to the development of the track. In the current domestic E-commerce market controlled by a small number of enterprises in the situation, most of the operation cost of electric operators increased significantly, the poor profit has been the consensus of all parties.


　


across the big platform, they need to inject a lot of money into their development, and in order to get more money injected, it needs a good revenue plan, beautiful financial statements. For the IPO, for a beautiful earnings of the crazy enclosure, to increase revenue items, will become the inevitable choice of these companies. However, these are forced through a variety of ways to absorb this part of the cost of consumers, once the consumer into buying not buy into the tangle, the whole chain will be disorderly, and eventually the entire industry into the mire.




The massive influx of capitalists who
the cost of creating a high-cost mess, backed by online shopping platforms, is the mastermind behind the cost of the entire e-commerce industry. "China's internet companies are mostly dead in the hands of investors," the biography of investors to the "executioner." All this shows that China has a wealth of capital investors, but drought lack of patience, and forward-looking experts of the helpless reality. Finally, a small number of enterprises that occupy the initiative or have the backing of the investment consortium first became rich, and most of the innovative and ideal small enterprises were slowly squeezed to death.





more and more of the company's Web site, the big market cake also raised the industry threshold, competition is increasingly fierce. Li believes that the founder of a successful corporate web site, they need not only the money, but more importantly is full of patience and the development of their own business model.　 At the same time for any one enterprise, profit is the kingly way, the enterprise once operating costs out of control, into a profit or loss, no amount of scenery flattery that is false.





if venture capital continues to invest in E-commerce as a traditional Internet project, it requires sales performance and profits to multiply; it can be foreseen that the investment of the enterprise enterprises due to the short-term difficult to realize large-scale profits, while in the crazy capital investment, some enterprises will face the capital chain Broken, Then there will be a number of failed enterprises (such as the Martyrs PPG, Chihiro Network). This is because China's e-commerce industry is still in the breeding stage, the families are still in the stage of the food-eating phase; compared with China's huge traditional retail industry, China's e-commerce is only a very small part.


　


industry insiders generally believe that a brand new brand and domain name, if not enough capital strength to launch, is not too many users know. However, China's thousands companies, mostly small and medium-sized enterprises, like Wal-Mart's store giants, the community's convenience stores still have a lot of room for development (typical case is 7-11 convenience stores). Therefore, it is impossible for large enterprises to monopolize a certain market, and small companies will have broad market development space in the future.





Small consumer website positioning is mainly to subdivide the target customer base, focus on the division of services and products to do well. Li is responsible for the operation of the website of the Business of Tea (www.evtea.com) and love to buy tea (www.aimaicha.com) start-up capital only 100,000, but relying on local wholesale market, monthly sales can reach hundreds of thousands of yuan. Blindly tea city in the beginning to completely avoid the positioning of retail customers, focus on entity shop Wholesale customers, so that effectively reduce the risk of capital use, cash flow can also be fully protected (wholesale customer orders less, but the sales amount is larger). and love to buy tea although located in retail customers, but focus on the sale of tea and tea products Boutique (market sales less product, inventory pressure is small), the site only a small amount of advertising, can effectively aggregate target customer base, and rely on customer word-of-mouth dissemination. The target customer base is the customer resources that are not available to the large consumer mall.





successful business enterprise, not rely entirely on the power of capital, should abandon large business enterprises to market money for the purpose of business thinking. Li suggested that innovative small and medium-sized enterprises as far as possible to consider Angel investment, rather than the traditional VC. Li recently contacted the Qing Branch and Jingwei Venture VC, others first asked you how much of the sales, the number of customers, the future can meet the requirements of the listing, but these requirements are not generally entrepreneurial enterprises can accept. Like tea city such enterprises, although the need for a long process of growth, but through the enterprise's own differentiation competition, the operation mode and the direction accurate localization, may anticipate, along with the customer resources accumulation, the product quality promotion and the brand word of mouth dissemination, the enterprise risk-resisting ability will strengthen gradually, the development process will be more stable.





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