Only the stock price jumped 4 times times the back: Electricity dealers also profit

After three quarters, the story of Nyse:vips's "bloodshed" was rewritten as a "myth" of profitability.

As of press, the only high-profile share price has climbed to 22 U.S. dollars, and on the day that break, the lowest fall to 4 U.S. dollars in stark contrast to the horror.

Q3 earnings reported November 13 last year showed net revenue growth of 197% per cent to $156 million trillion, while net losses were reduced from 1.754 to 1.456 million dollars over the same period last year, excluding option incentives, and the third-quarter earnings of the goods will be at $640,000 trillion in real terms.

This is the first profitable company in China's vertical electric business.

In 2012, the clothing industry under the pressure of widespread overcapacity, the market look back to the only product will assess the value of its "flash-buy" model.

The early only products, has borrowed French vente privee and the United States gilt luxury discount sales model, but the luxury market is not mature enough, orders, few months after the line, only the goods will be in time to change the rudder, the business adjustment for the two or three line clothing brand sales, located in the two or three-line market crowd.

Taking advantage of the counter-cyclical approach, it will be better for clothing brands that have a huge inventory pressure, and for consumers who want to enjoy higher discounts, to benefit.

However, after the ebb of the cycle, the only product will be the follow-up power and development of space and geometry?

Anti-economic cycle inventory solution platform

Only after the product will Q3 earnings, a trader on Weibo wrote, "South China's traditional clothing inventory of more than 50% are sold through the vipshop."

Investors in the secondary market have been to the CFO Yangdonghao to verify. In an interview with this reporter, he said, "South China has a large number of clothing brands and we have cooperation, but we discount sales of clothing inventory can not account for 50% of southern China, that is a day volume." ”

Data show that the domestic women's market probably has 1 trillion yuan in volume, menswear about 500 billion yuan, in addition, children's wear and other categories also have 500 billion yuan. And inventory is the core issue of the apparel industry: Even in the United States, the mature clothing brand sold after a quarter, there are 20% of the inventory. And, a brand from the design, procurement, production, circulation time is very long, generally need 12-18 months, the long cycle means that the inventory continues.

Yangdonghao calculates that if 20% is in stock, then the entire clothing discount retail market has 400 billion yuan. Only goods will be nearly two years of sales, but one of the bucket.

To seek inventory dumping channels of clothing brands, the only product will be a good partner. Shenzhen, a well-known women's market communications director told the newspaper reporter, the company will usually be a year ago in the inventory of similar only products such as electronic Business platform sales, the sale of the new network with the cat, and then by the Silver Thai Network and other department stores to solve the other part of the clothing online sales accounted for about 20% of its total inventory.

Although the only products in the reduction of inventory pressure on clothing brands do help, but the depth of cooperation between the two sides also depends on the brand's own inventory characteristics, such as the above-mentioned women's brand, as a result of a lot of small quantity, inventory dispersion, not conducive to do the only goods will flash the dumping form. In addition, if the Commission is too high or the discount is too low, making the brand profit space narrow, will also affect the enthusiasm of cooperation.

Only products will be defined as the first-line city for the North Canton Deep, the four cities sales of about 13%, two or three lines for provincial and prefecture-level cities, accounting for 60%, county and township are the fourth lines, accounting for more than 20%.

Q3 earnings, the only product will disclose the cooperation brand has more than 5,000, Yangdonghao told reporters, through the internal brand rating and channel settings, only the products will be layered on these brands. By sales, all the brands are divided into a + to D of several levels. Most low-end small brands through the group buy channel digestion, the main channel of the special sale is concentrated on more than 3,000 brands, including more than 900 B + above the good brand.

Only the product will be with the majority of brand partners in the framework of the contract one year to sign, at the beginning of the year to plan the number of online. Usually can sell more than 50%, the remaining part is returned to the merchant, effectively reducing the only product will bear the risk. But this strategy is more effective for small and medium brands. Yangdonghao said, Nike, Adidas and other strong brands can not return, luxury is more so, "This is one of the reasons we do not sell luxury goods."

Warehousing and Logistics: Sword of Damocles

"For the only product will be long-term attention to sales growth, gross profit margin improvement and logistics cost rate improvement three", two-level market investors, Sapient (Nasdaq:sape) Former China regional electricity business manager Wenzhe in the Snowball Forum wrote.

The improvement of logistics cost rate comes from two aspects of warehousing and distribution. Only the practice of the goods will be rented warehouses, and the use of Third-party logistics for distribution. In the industry's view, the only thing will improve the logistics of the milestone is the new warehousing system and the introduction of distribution methods.

On the one hand, Dangdang former senior vice President Tang Tanji joined in the second half of 2010, for the only product will bring the world's leading Manhattan logistics system. The only commodities Council is planning to expand the storage area from the current 200,000 sq m to 400,000 sq m by the end of 2013. According to the contract, only the warehouse rent of the goods will have a small increase every year, Yangdonghao that, compared to the real estate industry, especially commercial real estate, only the current rental has been quite affordable, "of course, from the cost of calculation, self-built warehouse is certainly cheaper, but first to take out a few billion cash construction, followed by not strong liquidity, greater risk ”。

In addition, the only goods will adhere to the rental warehouse unified delivery, and not the use of brand direct shipping, the root cause is not a single. "In a customer order, there are often a number of goods, and these goods belong to different regions of the brand," Yangdonghao said, although several manufacturers need to send goods to the only goods warehouse, but the truck transport relatively cheap, thousands of clothing diluted down, each with only a few cents of the cost. " But a single can save a significant amount of expensive courier costs.

When the electrical business site reached hundreds of thousands of daily orders, the logistics structure is not very different, Wenzhe told reporters, flash mode of "Fast forward fast out" will only increase the logistics of 10% to 20% of the difficulty.

On the other hand, in the Tang Tanji-led design of the "trunk + Logistics" distribution mode, the same area of the order by the bulk logistics companies packaged into the target city, and then select the Local Express company to do two times distribution. Large-scale transportation on the main line brings huge cost savings.

This is when the successful validation of the program, in the only product will also be significant: according to the only product will be reported, the average per single logistics costs from the highest 46 blocks to the third quarter of 2012, the 25.32 yuan. The share of logistics costs in revenue fell from 18.4% in the fourth quarter of 2011 to the current 13.9%. Wenzhe expected that only the goods will be a single logistics costs and a certain space to touch 18 of the low line, "logistics improve the investment value is quite large, at least to the Logistics VP Dozen 90 points."

Chinese Sequoia China's managing director, Liu Xing, said that only after the sale of goods will increase the logistics control system input, including the introduction of former ebay Executive Daniel Gao as CTO, the company's IT system further optimization.

However, their own distribution is still the only product will not chew the "tough".

In order to verify the feasibility of the self-built logistics, the only product in Shanghai with a small team for nearly two years of experiments. Experimental results are not ideal: each shipping cost is still higher than the cost of Third-party professional logistics, far from cost-effective.

"We are not professional, certainly do not professional express company, in order to density such a large city can not earn money, don't say to order less small place, the effect is conceivable." Yangdonghao said that in accordance with the only product will always be prudent style, the distribution of outsourcing to the third party Express Company, suspend the investment is a timely choice.

Wenzhe that the only product will be "short board", both the need for more suitable candidates to make up, but also to reach a certain level of sales scale.

However, for how large "scale" is suitable for the construction of the logistics of the proposition, the industry said many. In Wenzhe's view, the only thing will be built from the time is nearing maturity. I the U.S. stock analyst Lee that only the goods will still be in a high speed growth stage, distance from the mature electricity business still has a certain gap, the current focus is to expand the warehouse, so that the size of the revenue to keep up with the growth of orders. "It is unclear when it will be possible to reach the tipping point of the cost of building a logistics budget."

A well-known PE investors in the interview with this reporter more radical, clothing electric business enterprises in the scale did not reach the situation, the establishment of logistics and distribution is a "dead" word, where customers build "such as the Wind Tatsu" initiative can be used as one of the supporting.

How big is the space of the product?

"If the capital of the Beijing-east also open a discount channel, huge sums of money to buy clothing, the only product will be living space?" "In an internal communication, only the product staff questioned.

Only products will be with the Beijing-east and other large electric platform competition situation for the market attention, but the company's top brass is not very worried. Yangdonghao pointed out that home appliances and clothing are two kinds of goods. "High level of standardization of home appliances, Jing Dong buy and Suning bought Samsung color TV no difference." Clothing is different, if the style is not good-looking, pay to others will not necessarily wear.

As with other electric dealers who specialize in the field of apparel, the product will emphasize its competitiveness in the selection of commodities. Yangdonghao Introduction, the only product will have a team of more than 200 people, divided into women's clothing, men's, men's shoes, bags and other 12 professional groups. Most of the members are buying from traditional channels. They are led by the company's senior vice President Maggie, a Taiwanese senior executive, who has displayed hundreds of pairs of shoes in her room alone.

"With her 20 years of purchasing experience, fashion is a very delicate thing, perhaps a lot of money, bought back into inventory, the risk is too big." "Yangdonghao said.

In addition, in the face of Taobao 11.11 promotional offensive, only products will maintain a welcome attitude. The daily use of the flash-purchase mode of the only product will not be in the 11 11 also achieved considerable sales growth, however, Yangdonghao optimistic that the electricity market accounted for only 5% of the total retail sales in China, "Taobao has done a good thing for the industry, so that more people to go online, the electric business cake bigger, all the platform will benefit."

The remaining problems can be incorporated into the "difficulty of making profits for the electricity dealers". The PE investors pointed out that the pressure from the supply chain control, low customer unit prices and expensive flow costs, so that the power of the business of the model is difficult. "Only when the repeat purchase rate of the old client reaches around 50% can we barely maintain the balance," he said. According to the IRIS advisory statistics, only the goods will have reached 82% of the data.

Another inventor, who specialises in the field of luxury goods, said that the only way to avoid the pressure of inventory is to flash the purchase model, but the average customer price of 200 yuan is not high, "even if the momentum of growth, but it is difficult to really make a lot of money."

Wenzhe, however, that the normal retail business is "meager profit", "Wal-Mart to four points of net profit is normal", so that the real profit of the retail business is not by net profits, but by return on net assets. "Although a single time to make less money, but earn fast, if the Electricity business site inventory update cycle is 30-40 days, can make 10 times a year; In addition, the retail industry is usually based on suppliers of money to supply, do not spend their own capital to do business, so the rate of return on equity is generally higher. ”

"While the entire electrical industry's ceiling is far from being matched," Wenzhe said, "Even when there is still a 40% annual growth rate, not to mention the high growth of the only products, to mature electricity business is still 35 years away."

Liu said, listed for the only product will, more like admitted to the university, now is about to hand over the first grade of learning transcripts, whether the successful graduation, on the society to be tested.