Overall inventory: China's electricity dealers "rob three" war

Lead: Ma Yun, Liu, Jindong, horse and other people are robbing three tickets, window period is the red line of the home appliance business, who will be beaten. Alibaba Group, Jingdong, Suning is expected to purchase the total amount of three-party financing "will certainly exceed 10 billion U.S. dollars." It will be the worst war in China's internet sector in three years.

September 25, Suning appliances announced the purchase of red children, the price of 66 million U.S. dollars. This is Suning's first acquisition in the field of electrical business.

Why does Su ning rush to merge the Red children in the declining channel? To the power of the Forces nouvelles suning easy to buy, this is the most critical lesson. Not only means that the category SKU (stock keeping units, inventory unit) The rapid expansion of the number, but also conducive to suning easy to buy users and the expansion of the user structure optimization, and will break the entire electrical industry competition pattern.

Suning is currently good at the category is home appliances, 3C (computer, communication & Comsumer electronic), the user mainly male, while the mother and child type of users mainly female. Comparatively speaking, the mother and child type user stickiness is good, duplicate purchase rate is high. According to the data provided by Suning, red children currently have 7.5 million registered users, the 2011 repeat purchase rate of 50%. Even with a 66 million dollar purchase of this part of the complementary users, the single user acquisition cost of only 8.8 U.S. dollars, equivalent to about 55 yuan. Domestic well-known electric business person, electric shock CEO Shangxiang revealed that the Chinese E-commerce site of the cost of the conversion of users in general 80 yuan to 150 yuan.

For E-commerce business in the ambitious Jindong, hit more than 300 million yuan if it really can let Suning in E-commerce layout on speed, is undoubtedly a good deal. In July this year in Suning's directional additional issue, Jindong had a gambling power from his own pocket, it bought a new 3.7 billion suning appliances in Jiangsu, one of the funds from the stock mortgage. Not to mention the 66 million dollar to the frequent financing of billions of dollars, the large amount of capital precipitation of suning is not a big number.

The acquisition of red children, including Li Bin, suning executives, investment banking institutions ecapital Capital CEO ran, and other market people think, but opened up the integration of suning big curtain. The current low tide of vertical electric dealers offers the possibility of such acquisitions.

Since 2010, vertical E-commerce in China has been extremely popular. At the time, as long as it was a former IT company executives pulled a brand to do the electric business, there will be institutions willing to invest, which also led to China's vertical electricity dealers price war and profitability problems. The essence of online shopping is still the retail industry, investors ' money can not solve the inherent problems of retailing: such as scale growth, refinement management of the process, and so on.

Red Child once the mother and infant industry leading position has been Beijing-east, when the platform-level electrical business beyond. May 2010, Jingdong Mall involved in the mother and child business, this May, Beijing East said its mother and child channel this March single month sales breakthrough 100 million yuan, the Chinese mother and infant industry to take the first. 2011 Dangdang Focus on the development of maternal and child business, by its founder, Chairman Yu, this June when also announced that its baby child platform has become only after the book category platform, the monthly sales broke 100 million yuan.

During the period, the vertical electric operators began to encounter the capital market cold. Where the IPO was sniper, small electric dealers began to die, medium-sized electric dealers were merged. Last May, Shenzhen Electronic Commerce Association secretary General Kao San Han in the media interview, said in 2010, closed or no longer set foot in the field of E-commerce Shenzhen Enterprises have at least 400-500. In the past year, the frenzied market began to calm down, there have been such as "electric Business scam", "smashing logistics" and other remarks, but also reflects the collective reflection of Chinese electric businessmen.

Compared with the vertical electricity quotient, the platform level electric trader is obviously more favored. According to public reports, last April, Jingdong Mall completed the C round of financing, the amount of up to 1.5 billion U.S. dollars. The official information from Alibaba Group shows that the amount of mergers and acquisitions has been as high as $12 billion in the past year. The acquisition of vertical electric dealers, not only suning, the acquisition of red children just fired the first shot. At the beginning of this year, the industry once reported that all visitors will be Beijing-east mergers and acquisitions. It is revealed that Jingdong is purchasing other vertical electric operators.

These platforms are the reason why the via mergers and acquisitions of speed-increasing power distribution, the deep reason is that China is ushered in large-scale integration, in addition to its own speed up development, only the integration of good mergers and acquisitions can be as soon as possible until "too big to fail." So the tens of billions of dollars platform between the power of the "Rob three"--to seize the first three segments of the industry-the war has been jianzaixianshang. According to its C round of 1.5 billion U.S. dollars of financing, the outside estimates Jingdong Mall's market value of about 10 billion U.S. dollars, and take its recent share price, Suning Appliance's market value is currently about 45 billion yuan; The current market for Alibaba Group's overall valuation of about 40 billion U.S. dollars.

In the Internet industry, a normal vertical market is basically the top three game. This is especially true in the search Engine field, where Baidu is a big one. Therefore in the video field, Youku potatoes, Sohu Video, Baidu Archie Art and Tencent video are also vying for the top three.

I foresee that China's electric business will also be the world's three-point pattern, and these three will be platform-level companies. One of the most solid industrial chain of Alibaba has no doubt booked a seat, from Business-to-business transactions, Consumer-to-consumer Bazaar Taobao, business platform Day Cat, network payment Alipay, group buy cost, data mining Aliyun, its strategic layout of the electric business almost covered the entire industrial chain. Compared with Alibaba, Jingdong, Suning in the industrial chain layout there is still a gap. A thorough solution to Yahoo's equity problem, Ma's ambitions, has been in the yard will be the overall listing in two years. September 18, Alibaba Group announced that the Yahoo 7.6 billion dollar share repurchase plan complete.

Liu and Jindong are vying for a second seat. The household appliances industry's consumer contacts and habits are the deepest, they have accumulated a large number of traditional users can be used to convert to commercial households, and the price war over the ages, making it in the logistics, IT systems and teams are experienced. In addition to the whole network onlookers "8 15 electric Business War", both are also in more radical expansion of the target category, follow-up mergers and acquisitions are also expected.

The first three positions are not the only two. In May this year, Tencent set up Tencent Electric Power company, and has invested in Xun, good music and other enterprises. Wu Guangguang, senior vice president of Tencent, who is in charge of the business, said in March this year that it hopes to achieve 200 billion yuan in 5 years. The opponents also have low-key stealth of the Amazon China.

This is a competition for China's E-commerce market "Rob three" war. China is the most populous market, and online shopping is one of the fastest growing areas. A report released late last year in Boston found that China has 145 million online shoppers, after the US 170 million. Analysys International comparison data show that from the beginning of 2008 to the second half of 2010, China's online retail turnover rate of six months to maintain more than 40%.

At the same time, this is also a tens of billions of dollars in financing war. Scott Cutler, executive vice president and executive director of U.S. listed and cash transactions in New York's pan-European Exchange Group (NYSE Euronext), September 14, said publicly that for Chinese companies ready to go public in the United States, The new Market window will appear as soon as 2013 two.

This window period is the home appliance merchant's Red Line, who falls behind who will be beaten. Believe that the electricity dealers will learn the lesson of the potato defeat. There are many reasons for the potato defeat, such as founder marriage, Operation Strategy, copyright, etc., but it is later than the Youku listed cause capital market to squeeze, the brand effect is severely weakened, the road performance and the cool issue of the financing amount is considered to be a more direct reason for its backwardness.

According to the current valuation of the market, Alibaba's overall listing, the Beijing-East IPO and Suning easy to buy separately listed, the total amount of three-party financing is expected to be more than 10 billion U.S. dollars. In terms of size and impact on the real economy, it will be the worst war in China's internet sector within three years.

PostScript: After the publication of this article October 25, Liu in the "Beijing Business newspaper" interview, said: "The Internet has a feature, every emergence of a new industry, to the end can only accommodate three large enterprises to survive." The industry is changing quickly and will be at risk of being out of business if you don't work hard. The faster the industry develops, the faster the water flows, and only the companies that are rushing into the rapids will not be eliminated. The same principle applies to jingdong. ”