Number 1th shop behind the hurricane: The target of the first three Wal-Mart or additional capital

Four years ago, when store 1th was established, almost everyone was not optimistic about the online Wal-Mart business, which sells daily necessities. Obviously, what they want to do is a bitter business: The fast Consumer product's customer unit price is low, each contribution margin is thin, moreover, many goods are apt to leak, is easy to damage, the shelf life is short, to the warehousing logistics request extremely high.

However, four years later, it is not the performance of the original look at the unexpected: rapid growth for many years, in the user has accumulated a good reputation, 2011 sales of more than 2.7 billion, among China's top ten electric dealers. Sales of Store No. 1th in 2012 will exceed 5 billion.

More importantly, store 1th is now tightly tied to global retail giants Wal-Mart. Since Wal-Mart invested in shop No. 1th last year, store 1th has branded Wal-Mart, and Wal-Mart has increased its stake to 51% since the end of October, when Wal-Mart officially announced its completion of its holdings of shop number 1th. This also means that, with Wal-Mart's strong product resources and supply chain system, store 1th will have more room for imagination.

The integration of Wal-Mart and shop 1th has begun. At present, the original financial deputy Guo Dongdong, No. 1th, former human resources deputy Liang Yong's position by the previous Wal-Mart E-commerce team members Song Jinwen and Dai Qing successor. In addition, Wal-Mart Electric Corps team more than 60 people have entered shop 1th. At the business level, Wal-Mart's two private-label brands, Mingting and Tesco, have also settled in shop 1th.

"Wal-Mart's corps team has not had much impact on the overall staffing structure by entering store No. 1th. In addition, Wal-Mart has brought me a lot of supplier resources, procurement resources, Wal-Mart's own brand. Wal-Mart has a large volume of intercity transportation, we can use it to reduce costs and improve efficiency. "December 3, 1th store chairman Gege in his Shanghai office to accept Tencent Technology exclusive interview, said.

However, the future of shop 1th still faces many challenges: how to expand to the two or three-line city, how to increase customer unit price and margin, how to compress the supply chain costs, a series of problems need to be answered.

"Shop number 1th is in the back, it's a line business." "NOP founder Liu Yan said. Due to the problem of commodity property of FMCG products, 1th Shop's customer unit price is not high, the margin value is not high, the commodity exists certain loss problem, such as parcel heavy, has the shelf life limit, the temperature limit and so on, this is a request very high, the troublesome category, also is not a very lucrative category. In addition, 1th stores also have regional nature, other goods such as books can be shipped off-site, but the rapid elimination of goods may be damaged in different places, so open to where to build warehouses in the local procurement, can not fully play a ' one warehouse covering the country ' advantage.

But this is where the moat of shop 1th is located: Once the threshold is established through the supply chain, outsiders are hard pressed to do so. Gege believes that store 1th will eventually be able to achieve its "online Wal-Mart" original intention: "This (dream) does not change." In the future, No. 1th store will sell millions, tens of thousands of species, a huge amount of merchandise. Customers really stay indoors, one-stop purchase. ”

Four years of rooting

No. 1th store two co-founder Gege and Liu Majestic met Udel company, and at the same time from Dell, set up shop 1th. Prior to this, Gege was a professor at the University of Texas, a pioneer in aviation management software, and vice president of the Amazon global supply chain, with over more than 10 years of experience in supply chain management. Liu Junling has served as the president of Dell China and is good at marketing and data.

The background of the two founders solves the most difficult problem of the FMCG supplier-supply chain management. In the past, the big warehouses, after the number of fast-mart and other categories of electrical companies have fallen, all in the supply chain management fell. "Shop 1th is developing fast because we do supply chain management in place." "Gege said.

"FMCG Supply chain management There are a lot of difficulties: the rapid elimination of bulk package volume, heavy, and some easy to leak, easy to damage, short shelf life, temperature milk shelf life only more than 40 days." Gege said, "supply chain management needs to spend a lot of time, including how to manage the rapid turnover in the warehouse, the larger volume of fast products, how to distribute perishable, perishable goods, how to manage the short shelf life of goods." ”

He introduced, commodity warehousing first to sweep code, input shelf life, with the system to monitor every commodity, once the remaining one-third shelf life, the system will automatically alarm. Next, the commodity management personnel uses the promotion, the return goods and so on the method processing these goods. "These need to rely on the system rather than manual management, so many goods, each commodity has a different shelf life, different batches, the management process to be very clear, simple, strict only." "Gege said.

This means that if the supply chain management is not in place, may result in "The sale of good goods are not goods, not sell goods squeeze backlog, outdated" situation, the user lost, unable to control costs, may cause sustained losses.

July 2008 on the line, 1th stores first from the fast, positioning in the platform, and developed a set of extendable background system and supporting management system. Gege to the supply chain management details of the importance and strong implementation, so that 1th stores well blocked the loopholes in the warehousing and logistics, control the supply chain costs, which became the store 1th can survive a basic guarantee.

Store number 1th is also patient enough. Its first foothold in Shanghai and east China, rather than eager to expand to the country. This has laid the foundation for the survival of store 1th.

However, a year after the establishment, the growing number 1th shop faces the most common problems of electric dealers: insufficient funds.

Shop 1th was started by the founding team of millions of funds, and then funded 20 million yuan, the funds in the support of the 1th store walked to October 2009. At the end of 2009, it was a hurdle for shop 1th, according to old employees. If there is no money to enter, entrepreneurship will be broken.

Luckily, Gege found peace to support the plate. Ping An 80 million yuan to win 1th stores 80% stake.

A former vice-president of shop No. 1th believes that Ping An's valuation of shop number 1th is low. "In 2009, the size of Shop No. 1th was small, with only hundreds of orders per day." The 2009 anniversary, the Order of Shop No. 1th soared. Although the value of store 1th has been done, the agreement has been signed before, and it is too late to change valuations. This is a little bit of a pity in the history of store No. 1th. ”

Anyway, it's a life-saving money. At the time of the environment, No. 1th Shop has no better choice. At the end of 2009, the financial tsunami, VC no longer invest in electricity. Safe entry, so that shop 1th through the winter a robbery.

With capital promotion and resource support, store 1th enters a period of rapid development:

First of all, the start of scale, system marketing. At the beginning of 2010, number 1th store recruitment, from the electric business industry to dig a group of people, the formation of marketing team, vigorously promote.

Second, category expansion. From the food and beverage, expansion to 3C digital, clothing, health care products, mother and child, cosmetics and other fields, from the on-line 3,000 SKU development to the current hundreds of thousands of SKUs.

Third, the geographical expansion began in 2010 to expand to Beijing, Guangzhou, expanding the various regions of the national warehouse.

In the resource docking, Ping An to establish a one-stop life service platform, will be online supermarkets, medical nets, drug network "triple network integration." And through the Ping an integral Wanritong and 1th shop docking, through the internal cycle. Ping-an users can use points to shop at a store, and the number 1th store points can also be exchanged for insurance.

No. 1th store official data show that 2008-2011, 1th stores turnover of 4.17 million, 46 million, 805 million, 2.72 billion yuan, showing an outbreak of growth, 2011 year-on-year growth of nearly 300%, 2011 second quarter growth of 336%, 609% , 268%.

However, store 1th is still at a loss, and business integration between the two sides is not as simple as expected.

"After safe entry, it is found that the electric quotient and the traditional electric business route are not the same." None of the top electric dealers made any money, and there was no sign of profit. But the traditional idea of the company is not to make money. "Peace inside the saying is:" So cast down, when is the head ah. ”

Since then, the 1th Medical Network project has been closed down, in 2010, the number of 1th stores, several major directors have left. There was a rumor that the strategic thinking between Ping An and shop No. 1th had diverged.

In this context, Wal-Mart has entered the sight of Store No. 1th.

Wal-Mart has been the investor it has just expected. As early as 2009, shop 1th had contacted Wal-Mart, allegedly stranded because of low valuations. Before Wal-Mart entered, shop No. 1th had contacted Tencent. There is a joke inside, Gege that Tencent's traffic can be bought, and the supply chain of Shop No. 1th is not available, and the core of the electricity business is supply chain. Wal-Mart can undoubtedly become a strong backing of the No. 1th store, in logistics, warehousing, procurement, Wal-Mart can help shop 1th solve a lot of problems.

Gege in an interview with Tencent, said that shop No. 1th will not use Wal-Mart's "last kilometer", mainly the use of its inter-city transport. "Wal-Mart has a relatively large inter-city transport volume. We can use Wal-Mart to carry out the allocation between the five warehouses to reduce our costs and improve efficiency. ”