Problems existing in the retail business under Suning line

This article extracts from the author's article "On the Su Ning Group line Business analysis and the suggestion"

A, Suning line

Problems in the retail business under Suning line:

1, these years suning Gome and other large-scale expansion, crazy open shop enclosure, why? Where did the money come from? Analysis of their model: in the same time as cash transactions with consumers, the extension of 3-4 months to pay upstream suppliers, so that the book on the long-term existence of large amount of floating cash (Gome 2011 financial Statements show that its accounts payable and notes payable, the age of 3 months in 48.3%, 3 months to 6 months of 49.96%, more than 6 months, 1.73%, indicating that at least half of the payment is not achieved within 60 days of payment, Suning should also be similar to, and formed a "scale expansion-sales of the size of the increase to bring on the floating cash-the use of vendor funds for expansion or transfer to use- Further expansion of the scale increases the value of retail channels to bring in more paper floating cash "such a fund in vivo circulation system." On the one hand, by expanding the size of the network and maintaining the consumer's low-cost preferential market strategy, and continuously improve the market influence of channel terminals, on this basis by increasing sales scale, improve product absolute sales and procurement, coerce suppliers to increase the strength of rebate and pay more channel fees. On the other hand, part of the money into the real estate, such as Suning home. By catching up with the real estate boom, the model gained a lot of profits and provided the money needed for a massive expansion. But can this model continue? First of all, according to the law of diminishing marginal effect, continue to expand the scale of the income has been reduced; second, the price has reached a high level can continue to rise? If not, where does the money continue to expand? Finally, expand the scale in order to seize the market, through the scale effect to reduce costs to fight the price war to crush opponents, but now the main opponents only gome, through price war to defeat Gome will only lose the last. According to Gome six months, Gome's first half of the income from suppliers only 376 million yuan, and the same period in 2011 was 1.088 billion yuan. Su Ning (Gome is also the same) the biggest problem is that this type of "financial" model can not play.

2, in the face of the competition from the online Su Ning line under the counter measures are online below the same price, although in fact only about 40% of the goods are online under the line, the same price, but after all, lower the line part of the profit. This can promote offline sales but will reduce profit margins, equivalent to profit for size, the advantage is that the United States can cause trouble, forcing Gome also line the same price.

3, Offline real store function is limited, with the development and popularization of E-commerce, electrical sales will inevitably turn to the line, that line of the entity shop should be how from? is to become the experience shop of other electric business website or to close down directly.

Suggestions on the retail business under Suning line:

1, the long-term view of the electrical appliance retail business will be all the direction of the line, Suning should also think so before the transformation cloud, to be an internet company. What about the physical stores under the line? Are these physical stores really the burden of Su Ning's e-commerce development? I don't think so. I think the future O2O will be the best customer experience model, and Suning's offline entity store is the development of O2O carrier. Customers looking for goods online, if you want to experience the delivery to the offline entity shop, customers to the physical shop experience, if the experience satisfaction can be directly online under the store payment, credit card or net silver or Alipay ... Offline if you don't need to place a product without experiencing a requirement, you can lower your inventory to reduce costs. The key of O2O is the connection and interaction under line, this model still needs groping.

2, to timely delivery to the nearest customer experience shop This requires a perfect logistics system. It is said that Suning's land reserves will only be less than Wanda, which can be used to build logistics centers, and some physical stores can also be transferred to warehousing or transit.

3. The customer experience is very important. Face-to-face service compared to online QQ, want to be more realistic and more flexible, suning should improve the line shop staff service level, and should require staff data collection and feedback, thus constantly improve the quality of service.

4, in order to centralize funds to develop e-commerce should be streamlined offline entity shop staff, eliminate some bad location of the entity shop, in the future has the potential to create a new area of small-scale experience shop.

5, it is said that Suning plan in 2014-2015, relying on the Hong Kong market to enter Vietnam, Thailand, Indonesia, Malaysia, the Philippines and other Southeast Asian markets, from 2016 onwards, through industry mergers and acquisitions, industry cooperation, industry strategic alliances, etc. as the main means to enter the European and American markets. 2020, Suning will eventually achieve the overseas market 15% of total operating income accounted for. In the overseas expansion plan I think compared to Europe and the United States fierce competition in the mature market, African South America and other emerging markets more suitable for suning.

6, in research and development to increase investment efforts. Smart home appliances In the future is a major trend, if suning can be developed and mastered the core technology, Suning will have the opportunity to dominate this market, think about the size of the home appliance market, the investment is now worthwhile.

Second, Suning online business and competitor analysis

Consumer-to-consumer market, Taobao status is solid, as of June 2013 Taobao accounted for the entire Consumer-to-consumer market 95.1%. Pat NET accounted for 4.7%, ebay accounted for 0.2%. As of June 2013, the number of personal shops amounted to 12.46 million, down 27.8% year-on-year. Taobao's position in the Consumer-to-consumer market has been unshakable. Obviously, Suning does not need to take any measures to Taobao. Here, by the way, Taobao status quo.

Taobao to do is to maintain the status of the Consumer-to-consumer market, the problem is now facing the individual small businesses in Taobao more and more difficult to survive. Taobao is the Consumer-to-consumer platform, the first C is actually those small businesses, those big business is actually B, when the small business disappeared, Taobao became a platform for a trader. So Taobao in time to the large business to establish the day Cat Mall to do the platform is quite sensible, but now Taobao traffic is attributed to some medium-sized shops, these medium-sized shops are willing to spend money to participate in Taobao activities, buy traffic, their own promotion and so on, so that enough traffic to drive the sales, forming a virtuous circle, And those real C points are in a vicious circle, which can be said to be a model of Matthew's effect, but let this development go on, will no longer have C in Taobao open shop, Taobao also from a Consumer-to-consumer platform into a platform for business, above are some medium-sized shops, because small shops are not run down, and large shops have gone to the day cat. Taobao's profit is really mainly from those who can afford the flow of medium-sized shops, but if the personal business is lost too fast, there is likely to be another site through the free shop and other ways to attract personal shops, rob Traffic, in the Consumer-to-consumer field and Taobao competition. I think Taobao should take measures to ensure that most of the individual shops profitable, maintain the supremacy in the Consumer-to-consumer field, stable for Ali other projects to provide support.

The Business-to-consumer market is the main market for Suning's participation. According to China's E-commerce research Center monitoring data showed that the first half of 2013, the Chinese online shopping market, the cat relies on its influence firmly occupy the first seat, accounted for 50.4%, followed by Beijing East followed by the second, Occupy 20.7%; , in the third place, Suning Tesco reached 5.7%, a 54% increase compared with the first half of 2012. The following 4-10-digit ranking is: Tencent Electric Power (5.4%), only goods Will (2.6%), Amazon China (2.3%), Dangdang (1.9%), Gome Electric (1.7%), 1th Shop (1.6%), where customer Prudential products (0.8%). Above the top ten market share is Suning's competitors, in this to each of the advantages and disadvantages of analysis:

1, Day Cat Mall:

Cat is the leader in the field of business, is a pure open platform, the profit from the flow, advertising and technical service fees.

Advantages: ① Scale Large ② commodity types ③ Flow ④ Pure platform low cost ⑤ well-known high ⑥ have the support of various aspects of Alibaba

Inferior position: ① to the commodity control ability Limited ② logistics relies on the third party

2, Jingdong Mall

Beijing East is an open platform, Liu claims 90% of the category, Jingdong will never do it himself. But now Beijing east sales of about 80% are from the self-employed, to do the open platform for a long way.

Advantages: ① Self-built logistics services and controllable ②3C products ③ have built a third-party payment system although the volume of small ④ businesses into low-cost ⑤ self-employed goods have manufacturers rebate ⑥ can be paid through the loan account period ⑦ home appliances large scale to the supplier bargaining power

Disadvantage: ① not enough kinds of goods ② settled in business than the cat to less ③ gross margin low only 5.5%④ the higher cost of proprietary goods, contain funds ⑤ no other areas of business support

3, Suning easy to buy

Su Ning and Jingdong claimed to be open platform, but the platform is not everyone can do, especially in the case of the existence of the cat already. Suning's latest platform strategy is to settle in free, provide low-cost services, profits mainly from advertising and business and consumer use easy pay income.

Advantages: ① Appliance Commodity to the supplier bargaining power, so the purchase cost relative to low 15%-20%② line store support ③ brand quality reputation is good ④ brand awareness of high ⑤ has since the establishment of pay ⑥ some areas have self-built logistics

Disadvantage: ① not enough kinds of goods ② settled in the merchant less ③ high flow cost ④ brand image is still limited in the household electrical appliances industry ⑤ electrical business talent Shortage

4, Tencent Electric business

As the boss of China's internet industry, Tencent has Xun network and QQ network to buy two companies, but the share of the shares is only 5%, this is because Tencent electric business started late, by Ali and so on, After all, Ali as one of the three giants certainly do not want to be rich in their own e-commerce industry has another giant exists, on the other hand, Tencent itself is not good at E-commerce, support is also limited. Tencent is not developing well, but the heat of the micro-letter and the rise of the mobile electricity business has brought hope.

Advantages: ① Tencent in all aspects of support ② has a third-party payment in the field of the second largest tenpay ③qq the flow of ④ funds abundant ⑤ have a large number of social data ⑥ have a large number of QQ registered users ⑦ Mobile QQ, micro-letter and other support

Disadvantage: ① e-commerce lack of talent ② enter the time late ③ small ④ commodity types less ⑤ Tencent development focus is not in the electricity business ⑥ no self-built logistics

5, only product will

The only product will be vertical business, its positioning is online 234 line brand discount retailer, in other words, for the brand to do inventory on the line, the only product will take is the flash-buy mode, also is limited discount. Although the two most important factors to attract consumers are brand and discount products, but in fact, most brands in the days of the cat and jingdong shops are basically doing inventory clean-up, and online there are many distributors, agents and other businesses open the B shop and C stores in the sale of brand enterprise products, This caused the goods will be on the merchandise than the cat, Jing Dong and not too much price advantage, more ponderation Taobao. The goods will be listed in 2012 and is valued at about 1.8 billion.

Advantages: ① Discount Low ② commodity varieties more ③ self-built logistics ④ to buy low-cost gimmicks among young female consumers have a certain influence ⑤ although the return rate in 20%, higher than the General Electric, but the remaining inventory can be returned to the supplier ⑥ through the listing of funds more adequate ⑦ large

Disadvantage: ① margin growth space is limited, the goal 25% but never achieve ② unique goods less ③ logistics and distribution services is not good ④ logistics cost higher ⑤ the relatively high point

6. Amazon China

Amazon China is the world's largest e-commerce company in China's Web site, is also an open platform, which is part of the goods from the Amazon procurement, the other part from its settled businesses, profits from the price difference, store rent, logistics, storage and advertising costs. Amazon's development in China is vastly different from that of the US, for policy reasons as well as Amazon's own lack of attention to China's business.

Advantages: ① Amazon funds to support ② well-known ③ genuine books have advantages ④ self-built logistics controllable

Disadvantage: ① scale small ② commodity type less ③ self-built logistics cost high ④ flow small ⑤ gross profit margin low ⑥ competition, fierce competition ⑦ and supplier relationship instability