Power Business Enterprise Savage growth Malady: collective trapped layoffs

Can layoffs be contagious?

In the last two months, domestic internet companies have fallen into layoffs. In July this year, the litters regiment was exposed to layoffs of more than 100 people, August 18, high net began to the Shanghai branch of the editorial department layoffs, the day of nearly 60 people were abolished, the current total number of layoffs more than 400 people; at the end of August, the upstart customers were exposed to layoffs 5%, and on There is also news that small foreign trade E-commerce Platform company Dunhuang net overall layoffs 30%.

Although everyone to the layoffs of the incident did not respond, Yu Lihong, vice president of the Dunhuang network to reporters also denied that 30%, but the reporter confirmed by various parties, the company's downsizing action is indeed underway. Several big electric business enterprises at this moment invariably attrition, really worth scrutiny.

"These are the strategic results of the enterprise," said Xie, a well-known internet critic, "to expand the market as soon as possible, many group buying companies in the opening six months to increase the size of one thousand or two thousand people, but the backstage management ability simply can't keep up with the expansion of the enterprise." After putting the cart before the horse, they cannot avoid the pain of growth. ”

In Mai Lin, general manager of E-commerce Pustie View, these layoffs have one thing in common, that is, the phased goals are too high, the expansion too quickly lead to a tight capital chain, and these enterprises have used fast way to obtain temporary funds "untie."

The ongoing "layoffs", but also "net business Winter" argument further push higher. However, monitor group partner Chen Xiaoffeng that there are common problems in the profit model of the enterprises, that is, "marketing costs, higher sales costs, may have exceeded the return of investment", the long term, unsustainable. In other words, the precarious nature of the industry is, on the face of it, a matter of capital, which reflects the fragility of its own profit model and the chaos of its management. And this intensive adjustment, hiring and cutting the time interval and reasons for the confusion, it fully exposes the blind expansion of e-commerce industry, barbaric growth of the ills.

Cut off the relay race

At the beginning of the year, where the CEO of the old (micro-blog) also said this year will be smashed 1 billion yuan to promote the market, and the annual sales target set to 10 billion yuan. But after the spread of information about layoffs, a "three questions old" in the Mail, wrote, "each department must be 5% (layoffs) quota, what is the purpose of the crazy recruit at the beginning?" ”

In Pustie's view, every customer is likely "the fourth quarter of last year to make a higher sales plan, then the capital market is good, so there is a great leap forward in this year mentality", reflected in the recruitment plan, every guest's staff expansion is also bound by the growth of sales plan to complete.

"The second half of the economic environment in the United States to tighten the risk of venture capital, at the same time, investors believe that China's e-commerce, although the menacing, but this model how to go, how far it is not clear." In this case, e-commerce companies are hard to get into the money, to continue to survive, layoffs have become a detour. Pus said.

In the home Building materials Group Purchase website Qi Jia Net CEO Deng Huaqin observation, the NASDAQ and China concept stocks honeymoon period has passed, the VC market now to domestic electric business industry has been quite cautious, "this July after the enterprise did not get the investment is now very painful." Given the tightening of capital, the price of the financing that has been quoted by the company is now lower than the previous round. "By the beginning of next year, I feel the risk of a group of companies will be very high and there will probably be a collapse." ”

Established in October 2007, the van has now become one of the top four earners in China's online business sector. Before July 2008, the company created 10 months to complete the rounds of financing. May 2010, where the customer completed the fourth round of 50 million U.S. dollars of financing, last December, the company completed the fifth round of up to 100 million U.S. dollars of financing. From 2007-2010, every guest's sales nearly reached 300 times times the growth rate.

Although the establishment has followed the logic of high-speed expansion, but "again this way, a few shareholders are not willing to let every customer to do a round of IPO financing," a person close to the visitors said, "because the dilution of equity, everyone's control will be weaker." In order to quickly make the financial statements on the profit, to achieve the listing, contraction of the front is very normal.

In the Internet field, this "Great leap forward" thinking is not uncommon. In 2006-2009, the growth rate of the Dunhuang net was also as high as 1771%, becoming one of the fastest growing companies in the field of electrical business. Established this year, the Litters Regiment in the first 3 months, has developed into a large plate of 5500 people, and in July to obtain about 120 million yuan in the national sales, leaped to buy the second site. High-PEER network this year at the beginning of the line, its "high-paying to dig people" and the astonishing expansion of the strategy is uproar. According to a senior staff member, the most crazy time, the number of new employees to enter the company more than 50 people each day.

Deng Huaqin A real case: a rich and rich company, set up at the beginning from Baidu recruit search, from Taobao recruit operators, from Tencent recruit products, and then to Wal-Mart recruitment system. "They thought it would be possible to build the best electric Company in China, but in the end they found that their strategic framework was not good enough and corporate culture was not working", so just a few months later, the company closed down after burning hundreds of millions of of dollars.

Out of control and braking

Too easy to replicate the pattern of near-blind followers, so that all electric dealers, group buying companies frantically pursue scale expansion. And when the tide receded, litters Regiment, high net of layoffs and boldness is almost the same as when the enclosure, like 2008 years of video industry. The current layoffs are reminiscent of the dotcom bubble of the 2000, when the Nasdaq Composite index plunged from its peak of 5132.52 on March 10 in 2000, and its market capitalisation evaporated 5 trillion dollars in the next two years. After a lapse of 11 years, will electronic commerce repeat itself?

In this regard, Xie that the internet business of the winter and 2000 has a fundamental difference. 2000, Internet companies in the "collective ignorance" stage, a variety of ancillary facilities development is extremely imperfect, and now, the Internet industry's profit model is clearer than ever before, the overall environment is normal, only in the local area of overheating phenomenon. In these areas, VC excessive excitement, the pattern of a large number of similarities, "use a word to describe is more haste."

In the eyes of many analysts, "every customer before the rush, now is the time to put on the brakes." Admittedly, for the expansion of high-speed expansion of E-commerce enterprises, the biggest problem is often internal management problems, because the growth too fast to optimize the team and management. Staff redundancy is a typical representation.

In fact, it is very common for internet companies to have a "reserve talent" like this. "We all know that people are the most important, but how to use them is not good." When cash is plentiful, many companies grab people first to create pressure on their competitors. Pustie says companies like Tencent and Ali are in this situation.

However, the disadvantage of this approach is that enterprises in the mass absorption of new employees did not give them specific functions, employees are often very idle, unable to find direction, there is no output. And the company will feel that the new people do not produce the expected benefits, and then give negative feedback, leading to a vicious circle. After a period of time, it is not far from job-hopping or layoffs. ”

In addition to the extensive management of personnel, excessive pursuit of large-scale growth also allows enterprises to operate and control a little less.

This may be evidenced by the example of Zhang Xin, a v platform supplier. "Our sales on the V platform did not have a significant growth trend, traffic, conversion is not particularly good," Zhang said, "V constantly asking for discounts, it is very high point, partners become unprofitable." In other words, the scale of the platform is bigger, but the business is feeling less power.

On this basis, Van Gogh's growth model of mass advertising has now appeared to face challenges. Although the sea investment advertising and low-cost strategy can easily bring to the customer order growth, but with the rising cost of advertising, conversion rate has not changed much, the ROI of advertising (ROI) than previously it is difficult to achieve the desired return. Alexa data show that the user at the moment, the number of page visits and other data almost half a year ago flat.

"It costs a lot of money, but advertising and inviting spokesmen are not a big boost to sales," Ms Zhang said. "The core consumer group is price-sensitive, and the company's products do not increase the unit price because of celebrity endorsement." In other words, each dozen rounds of advertising products can sell more expensive, you are successful, the contrary is failure. ”

Now, as the overall environment of the electric business is increasingly white-hot, the advertising unit price of the year, the new entrants more frequent, "every small vertical growth rate is difficult to ensure". For every guest, layoffs are only

is a passive process, the problem is likely to be a bottleneck in the development of enterprises-for example, in terms of scale growth, margin level problems, resulting in cost and cash flow can not meet the growth of the team.

In this case, the foresight of every guest to do a subtraction in advance-in addition to layoffs, but also to reduce the network Union cooperation Commission, the proportion from 16% to 10%. It is reported that the move can at least bring 20 million of the profits of the visitors.

If everyone's "aggressive" reflected in the advertising and personnel recruitment, so high-peer in China to face the problem is more "naïve" some. After all, group buying is a service based on localized living that requires policymakers to be familiar with the habits of the local consumer. At this point, the senior friends who are completely managed by foreigners are obviously not doing their very well.

In Pustie's words, Gao Peng is eager to achieve professionalism in the Chinese market, "but finally found that 10 things before thinking of only two pieces, these two failed, the next 8 do not want to do." And the company's hiring rhythm is based on the previous thought of doing 10 things to recruit. ”

For example, high-net hope that the site's products are all by themselves to take photos, which requires professional photographers, but the transfer speed of group purchase products is very fast, many such as food and beverage groups do not need a dedicated site to shoot. On this basis, the high-peer network in the promotion of specific business, must first be built around the structure, which led to the company in the case of a low income, the cost of a sharp rise, and quickly make ends meet.

In Xie view, the growth of Internet enterprises can be divided into several stages, 100 of people following the scale is "painless operation", and the development of 100 to 500 person, there will be formalized level, the interests of the Department and communication problems, then the company is very vulnerable to the challenges of management. From 500 to 1000 people, the general internet companies have to go through 35 years to transition better, and from 1000 to 10,000 people, internet companies can be very smooth across. For young group buying enterprises, the establishment of a large structure in the short term is obviously irrational, and, moreover, "Group buying Enterprise is a major feature in the local branch, compared to the general internet companies, they also face the problem of standardization and efficiency, which is more difficult."