Shop 1th has just responded to the transfer of controlling power: The logic of burning money is not sustainable

Huang Shanghai reported that the founder of Shop No. 1th Gege a little busy recently.　　After his third year in the business, the company ushered in "unexpected" growth: Operating income grew from the initial 4.16 million in 2008 to 802 million in 2010 and is expected to reach 2.5 billion in 2011.　　Corresponding to the high growth is: Store 1th stores, distribution, personnel and even the continuous expansion of the office. Compared with Jingdong, Taobao, focus on the department store shop No. 1th, whether in financing or operating, are a very special electricity business. Two years after its founding, the founder has conceded control, which is rare in the entire Chinese internet community. In an environment where electricity dealers scramble to raise money, store 1th is a different choice for investors, whether it is ping an or Wal-Mart, and they only choose strategic investors over VCs.　　In addition, in the "first enclosure and then practice" the wind prevailing in the present, Shop No. 1th does not advocate marketing, and the money smashed in the background supply chain system. In this respect, has the multinational company executive Experience Gege has its own logic. "The competitive environment is very brutal, we must understand the nature of E-commerce."　　September 2, Gege in an exclusive interview with this reporter, said, circle money-burning money-loss of money-the logic of the circle money is not sustainable. No. 1th Store Path "30%-40% for warehousing and distribution, more than 30% for it construction, advertising marketing accounted for less than 10% of the investment" compared with other Internet industries, E-commerce The biggest difference is the need for large-scale operations. But how to do the scale, different people have different views.　　The common practice of domestic electricity business is: first hit advertising, through advertising in a short period of time to obtain the number of users, to obtain the scale effect, and then do warehousing, logistics and other construction, commonly known as "first happy enclosure after the internal practice." But shop 1th has chosen a different path from the very beginning of its development. "Our investment, 30%-40% for warehousing and distribution, more than 30% for it construction, advertising marketing accounted for less than 10% of the investment, far below the industry average level of competitors."　　"Gege said. Gege said that the success of E-commerce model to solve five key issues. First of all, whether to have an intelligent, integrated, real-time system and platform, this platform can continue to expand with the increasing volume of transactions. Second, customer relationship management, that is, whether the customer's purchase behavior analysis, to provide targeted personalized services.　　The third is the purchase of goods, that is, whether it can provide customers with a wide range of commodity needs. "Many goods do not actually make money, but our philosophy is to provide one-stop shopping service, so we must constantly expand the product category."　　"At the beginning of the 1th store, there were only 3,000 categories of goods, which reached 120,000 this year, and more than 200,000 were expected by the end of 2011," he said. The third important aspect is warehousing.　　Compared with the competitor's flagship product, positioning in the FMCG, department store products shop 1th is facing greater challenges, because the volume and weight of department stores are difficult to standardize, so warehousing costs are higher. SubsectionFour is the distribution. "China does not have a distribution company that can cover all of China and have a very good customer experience."　　Gege said, the last resort, No. 1th store decided to build their own distribution. "Now it seems to be the right decision. When each distribution site distribution to a certain value, the cost is lower than third-party distribution. "said, whether from the timely distribution rate, distribution success rate, or customer satisfaction, breakage and leakage of less cargo rate, and so on, the index of the self-built distribution is better than the third party distribution company."　　At present, No. 1th store 70% Business by the self-built distribution system distribution. As a result of sticking to the back-end system, when the industry is well capitalised and rivals are investing heavily in advertising, store 1th is feeling the pressure.　　Gege said that because many websites are willing to spend money on advertising, from last year to the beginning of this year, advertising costs doubled, customer acquisition costs increased by 2-3 times. "But by the second half of this year, the cost is down again, because the investment environment has worsened, many group buying sites do not have the funds, in the process of disappearing, the industry is slowly returning to rationality."　　"On the other hand, it's a good thing to shop number 1th," he said. Gege said that E-commerce early investment is very big, especially want to scale. Must form the scale, only then may form the break-even point. Amazon has only been profitable for 7 years. It's only 10 years before it starts to make a profit. Shop 1th hopes to shorten the cycle significantly.　　According to the sales status of commodity category 1th, he roughly estimated that the profit and loss could be realized when the turnover reached 10 billion yuan. To make a big price. "The electric business is a scale game, and if it grows on its own, the process will be very slow." In order to expand, like all electric companies, shop 1th began to seek financial support from outside. The company has carried out two rounds of financing, in 2010, the introduction of investor Ping ' an group, 2011, the introduction of strategic investors Wal-Mart.　　With the announcement of investment, the issue of "Founder's transfer of controlling power" became the focus. It is said that in May 2010 Ping An group to 80 million yuan to the actual amount of capital to hold 1th stores 80% stake.　　A year later, Ping An insurance group transferred its 20% stake to Wal-Mart, a US commercial retailer, at $65 million trillion (about 450 million yuan). Gege denied the main figures in the statement. "Our financing is far more than this number, certainly ranked the first echelon of domestic electricity business, equity ratio is also wrong."　　said that, for confidentiality agreements, he could not disclose the specific amount and shares of the transactions, but it can be explained that Ping an group, Wal-Mart and the founder of the current company is the main shareholder. On the issue of controlling the transfer of power, in just have their own understanding. "You can look at the world's successful internet companies, and no founders are holding them when they are listed," he said. I can hold it, but if it's a small business, even a 100% stake doesn't make sense.　　Gege said that the electric business is a scale game, if all depend on their own ability to grow, the process will be very slow. Gege said, whether it is safe or Wal-Mart, the most important thing to invest in number 1th is to watch the company's team。　　After the entry of two strategic investors, the company's strategic direction, the main management team and the operation of ideas, no changes have taken place. "Money is really important. Gege explained, but in the introduction of investors, the first consideration is not only money, but also strategic value.　　Peace has a lot of customer resources, brand resources, and Wal-Mart in the supplier resources, brand resources, can share. "We quit the work of multinationals to create this company to really start a business." Frankly speaking, my biggest concern right now is growth, whether it's going to be the ideal, not the number of individual shares. Investors give the founder the Absolute trust that the game has just begun.　　"Gege said. Try on the phone "from the business scale, mobile E-commerce is still very small, but it is very promising to become a new channel" despite the confidence in the growth prospects, the electric business industry fierce market competition also let Gege have to think about and layout the future development.　　The virtual supermarket is such a product based on "the Future". The so-called virtual supermarket, is a virtual technology based on the supermarket shopping experience.　　As long as consumers through the relevant mobile phone program, the fancy of the goods with mobile phone camera scan, will soon be able to obtain information about the product, and can be directly on the phone to order. In July this year, shop 1th launched a virtual supermarket, the Infinity 1th store, at more than 70 metro stations in Shanghai and nearly 500 bus stops in Beijing.　　Users simply download the handheld 1th store client, the relevant ads on the product two-dimensional code to scan, that is, through the mobile phone to complete a series of purchases. According to Gege, the idea originated in a small video on the blog.　　Inspired by the video, he made the attempt to use the 1th-store team for three weeks to make the product for a group of users who didn't have time to go shopping and have smartphones. In fact, the growing online shopping market and a large number of mobile phone users, has made E-commerce vendors see the huge potential of the mobile phone market.　　China Internet Network Information Center data show that in 2010, China's online shopping market amounted to 523.1 billion yuan, a huge amount of nearly all by China's 457 million netizens to create, and more than 800 million mobile phone users contribute only 4.1 billion yuan.　　In addition to shop No. 1th, including Jingdong, Taobao, and other electric business enterprises, have set up their own mobile phone shopping platform, including WAP and client mode. However, there are also many factors restricting the development of mobile shopping market, such as consumer concerns about the security of mobile shopping, mobile shopping website connection speed is too slow, shopping site is not easy to operate and retailers do not know how to develop the best mobile marketing strategy.　　In addition, because most mobile phone users are not using smartphones, mobile phone users, businesses to lbs, mobile phone shopping and other mobile internet applications are still in the early stage, far from real application. "The size of the business is now very small, but mobile e-commerce is the future trend, it is very promising to become a new channel." "Gege said. Share to: