Seven-star shopping the sales myth created over the past few years is dashed

Absrtact: "Super long Standby 62 days", "a broken mobile phone" ... The sales myths that these seven-star shopping has created over the past few years are dashed.

"Super long Standby 62 days", "a broken mobile phone" ... The sales myths that these seven-star shopping has created over the past few years are dashed.

China seven-star shopping (00245.HK) The first half of the report has not yet been released, but the company August 12 issued a profit warning that the medium-term will record losses. This newspaper from China seven-Star Shopping Co., Ltd. (hereinafter referred to as "seven-star shopping") insiders learned that seven-star shopping from the second half of 2007 to date the continuous loss, because of its main business satellite TV shopping by the external environment squeeze serious, profit decline, and its extension of the emerging business family shopping,

Looking at earnings, seven-star shopping in 2009 the annual profit of about HK $5 million, and 2010 annual loss of about HK $250 million.

Seven star shopping a staff member at the Shanghai headquarters said a senior company executive said at a monthly meeting of all employees at the end of 2010 that the Jubilee shopping (the 2010 seven-star shopping and the joint venture of Fuzhou TV station) had been steadily losing its place since its inception. Try to make a profit in 2011 of October.

This sentence by the seven-star staff widely circulated as "sustained stability of the deficit, is success."

The employee said that in the seven-star shopping in Shanghai headquarters, the staff turnover is very serious, its just entered the seven Stars work, the company four floors almost full, to now has lost a lot, plus the business unit split adjustment, some executives were squeezed, a wave to take away hundreds of people.

Seven star shopping Shanghai headquarters staff said the relevant responsible leader is not in, declined the reporter to interview.

Loss

November 2006, seven-star shopping backdoor Hong Kong listed company Blue Dayton International, successfully listed. In the first half of 2007, seven-star shopping sales revenue amounted to HK $414 million. As a result, seven-star shopping and May 2007 successful in the United States Nasdaq listed ACORN International, as the Chinese television shopping industry leader. A senior professional manager of TV marketing who has participated in the restructuring of seven-star shopping, said Acorn International and seven-star shopping once occupied the domestic TV shopping market 30%~40% market share.

But since 2008, Acorn International has suddenly been frustrated, the NYSE shares plummeted, the 2008 net operating loss of more than 140 million yuan, is the Acorn International established 10 years of the first net loss.

Seven-star shopping since the second half of 2007 has been mired in losses, to 2008 losses amounted to HK $380 million.

Wangbo, Secretary General of the China Business Federation's media-shopping professional committee, said the main reason for the losses was the high cost. Among them, the cost of the media of the TV shopping is increasing year by year, or even more than 20%. In addition, satellite TV shopping face serious integrity problems.

In recent years, the advertising costs of domestic television stations have increased sharply, and a provincial television station advertising fees have soared 10 times times more than a few years ago. The senior professional managers said that the Acorn International purchase advertising period of the cost of 35% of sales revenue, plus logistics distribution, marketing costs, management fees accounted for about 20% of the income, sales of products to more than 55% gross margin is likely to be profitable.

Seven-star shopping 2010-year earnings show that the 2009-year sales and service cost was HK $268 million, and rose to HK $617 million in 2010.

The seven-star employees told this newspaper, these years with a large number of funds into the television shopping industry, in addition to Acorn International and seven-star shopping, and the emergence of Hunan TV happy to buy, CCTV, as shopping channels, the whole industry intensified competition, TV station advertising time become scarce resources.

TV shopping is divided into two kinds: satellite TV and family shopping. TV shopping in the form of television shows, generally selected in the higher ratings channels and time slots. Seven-star shopping and Acorn International is the use of this form. And home shopping can be on a certain channel rolling broadcast. such as happy to buy, Oriental CJ, excellent shopping, good enjoy the purchase and so on.

Home shopping from the major shareholder radio and television group rented TV channels, the cost is significantly lower than the TV shopping.

It is understood that the use of Oriental Shopping channel 3% of the annual income, significantly lower than Acorn 35% of the advertising costs accounted for, and home shopping channels backed by local radio and television groups, with independent TV channels, by attracting a large number of products for sale, and to income sharing, earning the poor way to achieve income.

Because SARFT encourages all levels of television to run the television shopping channel, these shopping channels from the brand degree to the promotion channel and the cost, compared to the television shopping enterprise more has the superiority.

Wangbo said, according to the Chinese Business Association of the Media Shopping professional committee estimates, Jiangsu Taiwan's good to enjoy the purchase, the day's sales have reached 6 million, net profit up to 20%~30%, and Hunan Taiwan's happy purchase is not less than this level.

And seven-star shopping represents the private television shopping enterprises, are being affected by these "national team" impact.

Way

Wangbo said that TV shopping has been in China for nearly 20 years, but the state of the industry now feels like an emerging industry. This is because industry standards are missing. The TV shopping industry should be a complete industry to establish sound industry standards, from call centers, logistics to suppliers, television shopping companies should be in control, in fact, many companies are missing in these areas.

Wangbo said Acorn International from 2009 onwards to the plane and network and other media development, and the country has established a broad ground distribution network, covering almost all of the domestic and county-level cities, at present, the total sales income of more than 25% of the offline income has become one of the main sources of profits.

Nearly half of the income from Acorn International comes from the ground distribution business, seven-star shopping is the next strategic transformation aimed at E-commerce, specifically online video shopping. In order to reduce costs, seven-star shopping launched the "interactive concept" of e-commerce sites.

2010, seven-star shopping and Fuzhou television set up a professional shopping channel "Home Jubilee Shopping", dabbling in the field of home shopping. "Home Shopping" 24 hours a day to broadcast TV shopping programs, the current landing provinces and cities in Fuzhou, Shanghai Pudong, Yancheng and so on.

Seven-star shopping also with the Fuzhou TV joint venture "Xing Live Pavilion", is by the family TV shopping, network purchase and store business entity experience store.

But because the related emerging business is still in the development phase, the household shopping business in 2010 accounted for seven-star shopping goods sales of 16%.

Moreover, according to seven-star shopping staff, the company executives at the internal meeting revealed that "' home shopping ' since its inception, has been a constant loss of stability."

In addition, seven-star shopping recently also acquired Fujian million stars Film Development Co., Ltd. 35% of the shares, the final acquisition of equity can be increased to not less than 60%. The investment trend in May was once the seven-star shopping stock rally momentum.

But the seven-star shopping to the network video shopping transformation, also faces the new E-commerce website strong competition. There have been news that the seven-star shopping was planned to 0.68 Hong Kong dollars per share, placing 500 million new shares, to raise 340 million yuan, but the deterioration of the market environment so that the financing plan has not been completed, which to the seven-star Shopping Network video shopping transformation has caused a certain impact.

At present, the Korean TV shopping sales accounted for the total retail volume of 12%, the United States for 8%, and China's less than 1%, Wangbo that China's TV shopping industry still has a lot of market space, the market has not shrunk. But the industry turnover is too fast, because the lack of industry standards, many enterprises, including the listed, its real performance is not accurate textual research.