Orchid Pavilion Set potential operation characteristics Guo went to the disease and his transnational business

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Orchid Pavilion Set potential chairman and CEO, former Google chief strategy officer Guo to disease

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It seems that in the electric business industry, only "stuffy body" can "get rich", for example, last year's listing of the Dark Horse only, such as just submitted to the IPO prospectus of the Orchid Pavilion set potential LightInTheBox, the former to "sell tail goods" for positioning, and the latter to the overseas business to cut, have avoided the electric business industry ferocious competition and price killing, Found a profitable way to develop.

It is because of low-key, founded in 2007, the Orchid Pavilion is rarely publicity, although the former chief strategy officer Guo to the disease in 2008 after joining several times with the media exchanges, but nearly 2 years also rarely external appearances. When the IPO prospectus enters the silent period, the Orchid Pavilion is silent until the successful IPO has a short publicity period.

So how did the multinational business of the businessman achieve a 4-year total growth rate of 3,075% and 1.115 million dollars in the fourth quarter of last year?

It can only be seen from the media coverage of the past few years, and the following is a comprehensive excerpt from the Chinese entrepreneur, Southern Weekend and the global business Classics on the Orchid Pavilion.

Why do transnational Business-to-consumer

The so-called transnational consumer, is to sell Chinese goods directly to the U.S.-dominated foreign consumers.

2006 China's electric business model has been very clear, not only by the Amazon acquisition of the Network of Excellence, as well as the limelight of Alibaba Business-to-business and Taobao Consumer-to-consumer, then what are the entrepreneurial opportunities?

Guo to disease and the same is the returnees, founded blog China's Wen Xin Exchange, two people began to imagine how to do overseas consumer business, the earliest want to do business-to-business, directly to find small wholesalers overseas. Guo went to the disease also find excellent former vice President Liu, Liu and pull into the outstanding supplier Zhang Liang.

At the end of 2006, their ideas were basically shaped: multinational, Google, PayPal, UPS and DHL. This is the basic model of the Orchid Pavilion set potential (LightInTheBox).

Liu at that time has a website, is the Orchid Pavilion set potential embryonic form, carried on the small-scale test, the effect is good. March 18, 2007, Orchid Pavilion set potential official online operation, at that time to run the company is the Wen Xin and Zhang Liang.

At the end of 2008, Guo, who resigned as chief strategic officer of Google China, officially served as Chairman and CEO of the Orchid Pavilion. Among the four founders, he is responsible for strategy, financing and so on, President Wencen is responsible for marketing, Liu is responsible for the operation, Zhang Liang is responsible for purchasing.

In terms of financing, the Orchid Pavilion is first Xiaoping to 100,000 U.S. dollars to become angel investors (registered capital of 300,000 yuan); In 2008, the source entered, and in 2009 with the Jinsha venture to do a second round of investment, two rounds together to 17 million U.S. dollars. October 2010, received from the Trust capital, joint venture sources and the Jinsha River venture investment of 35 million of dollars in financing.

And in Guo went to the Orchid Pavilion set potential, is catching up with the 2008 financial crisis. This is the chance of the Orchid Pavilion. Because of the economic cold, the shrinking wallets of overseas consumers become stingy, they pay more attention to cost-effective. Using Google and Facebook to find customers, to trade with PayPal, to deliver goods with DHL and UPS, is a light asset company that Guo is looking for, and it serves the world's largest and best companies.

How big is the business? The public disclosure of the prospectus gives a reply:

The company's net turnover in 2008, 2009, 2010, 2011 and 2012 was 6.25 million USD, 26.05 million USD, 58.69 million USD, 116.2 million USD and 200 million USD, with a year-on-year growth rate of 316%, 125%, 98% and 72% respectively. In the fourth quarter of 2012, the net profit of 1.115 million U.S. dollars (last year fourth quarter only goods will net profits of 6.4 million U.S. dollars).

How to be a transnational business-to-consumer

In the above Media description Orchid Pavilion set potential, will use thick text to describe Guo to disease its people. "Sichuan people, not tall, slightly fat body." Although the engineering graduate, but the nature of forthright "is the southern weekend of his evaluation."

If the experience of Guo's disease is briefly described, he is graduated from the University of Science and Technology of China, class at the University of Illinois in Chicago, and is advised to attend an MBA at Stanford University. After graduating, Guo went to Seattle, Microsoft headquarters as a programmer, but also worked in the Amazon, participated in Amazon's acquisition of Excellence Network, and finally entered Google as product manager.

2005 Kai-Fu Lee resigned from Microsoft to join Google, responsible for the development of Google China business, Guo to disease as a "special Assistant president" with the return to China. Li to Guo's evaluation is four words: extremely clever, "Guo went to a round head, often have a strange idea of elves." And he has a very strategic vision. ”

Guo went to the disease that he was inspired by Google during the two points, one is to use data to speak, the second is to simplify. In terms of adaptability, sometimes Guo went to the disease and even forgot that he had ever been out of the country. "If you take yourself very seriously, your career becomes worse." If you don't take yourself seriously, everything will be easy. Said Guo.

Guo went to the disease that Orchid Pavilion set potential represents a class of new e-commerce companies rooted in the supply chain, compared to the Amazon, when the relationship with the supply chain is actually a very simple channel-type relationship, and the Orchid Pavilion is the traditional supply chain reorganization and rewriting.

The Orchid Pavilion dominates the entire industry chain from Chinese manufacturing plants to American consumers, which is quite different from other electric dealers. Traditional transnational electronic commerce, generally includes 6 links: A. China's factories, B. China's exporters, C. Foreign importers, D. Foreign wholesalers, E. Foreign retailers, F. Foreign consumers. Alibaba only completes the link from B to C, at best it only affects the link from a to D. But the Orchid Pavilion collection potential realizes all links from a to E.

Know that real high profits just happen in the D to f link. This is one of the reasons why Chinese manufacturing can only be cheap and profitable, and only by sending goods directly from Chinese factories to American consumers can they get the most profits. LAN Pavilion marketing through Google, Twitter, Facebook and other ways to directly display in front of the U.S. consumer, online orders and payments, and then through the social logistics to deliver the package directly to their hands.

According to the IPO prospectus file, orchid Pavilion revenue mainly from apparel, electronic communications equipment, parts accessories and home gardening (parts accessories mainly refers to video game accessories, computer accessories, auto parts, mobile phone accessories, etc.). Since 2010, apparel sales revenue accounted for a growing, electronic communications equipment sales decline, while part of the share of parts growing, in 2012 became the third camp revenue source. 2012 Apparel sales amounted to 80.27 million U.S. dollars, accounting for more than 40.2%.

Orchid Pavilion Set potential operation characteristics

-Supply chain. Guo is spending a lot of effort to optimize China's supply chain. In the beginning, they found that the big factory flexibility is poor, can not adapt to the Orchid Pavilion set potential customization demand, small factory flexibility, the level is very poor. They finally found the small factories, managers have a strong learning ability, they help such factories to do cost accounting, long-term sustainable development strategy, improve management, production processes, the online for foreign manufacturers to serve the traditional factories, into the needs of e-commerce factories. According to the traditional foreign trade mode, from design to consumer purchase, may need 18 months time, let Orchid Pavilion set potential to do, just 3 months; traditional foreign trade, may order to 100,000 pieces, the Orchid Pavilion set potential next order, just 3,000 pieces, greatly reduce the inventory risk.

Marketing。 Guo to disease very much pay attention to SNS, BBS and other social marketing tools, orchid Pavilion in the foreign promotion of the document mentioned several advantages and characteristics is "leading accurate network marketing technology." This includes Google marketing--Orchid Pavilion is now one of Google's biggest customers in China, that is to say, Guo went from Google to get wages and the main job is to help Google spend money, now is the upside is to send money to Google. In addition, social networking communities such as FACEBOOK, TWITTER and LinkedIn are the marketing weapons that Guo is most adept at. The Beijing company of LAN Pavilion has a large number of foreign staff, whose main job is to "play" in these communities in different languages.

Logistics。 There is also an important aspect of transnational Business-to-consumer logistics. Orchid Pavilion Logistics is still the most common form, the warehouse is rented, express carrier partner is UPS. He does not work with logistics solutions providers such as Borderjump (Borderjump helps us company to solve logistics challenges, suppliers ship to the company's local logistics subsidiaries, subsidiaries arrange air, bulk shipments), and never consider self-built warehouses, " Each has its own play, some to the logistics to win, and some to win the user experience, "Guo said," This is not about the standard of truth of the debate. ”

-Cottage features. Obviously, "The Chinese manufacture" the "shanzhai" characteristic, is the Orchid Pavilion gathering potential difficulty to evade the question. Guo went to the trouble is, such as Lenovo, patriots and other brand manufacturers to their prices are very favorable, but the product sales effect is not ideal. On the contrary, some shanzhai brands, although small, but its sense of smell sensitivity and the ability to customize international demand is often surprising, the latter brought a problem is the quality control, there was a brand Shanzhai machine, orchid Pavilion set potential to return to the supplier's ratio of nearly 20%.

Guo went to the disease, said that the Orchid Pavilion set potential infringement of intellectual property rights is "0 tolerant attitude." But from the historical point of view, the cottage is the inevitable stage of becoming an emerging industrial power, Germany and Japan have experienced this stage, the key is whether in the cottage to learn the spirit of other people's innovation. China's shanzhai is an inevitable phase, but it may quickly turn over this and develop into its own design brand.