Sino-US Electric quotient comparison: Where are we? What are we going to do

According to China's Ministry of Commerce data, in 2011, nearly 200 million users in China online consumption, a total of 85.2 billion people. However, China's e-commerce, accurately speaking, from the last four or five years only to start exerting force, but has a lot of results. Now people are used to online consumption, buying everyday electronic products, clothing, books, and some services. However, a closer look at E-commerce retailers operating in China can find another reality that has to be avoided: e-commerce looks beautiful but hard to profit. September Suning Easy to purchase 60 million U.S. dollars to buy mother and child supplies electricity Shanghong children, once again let people look to China this is booming and difficult to move ahead of the industry. Compared with the development of electric business between China and America, can we get some enlightenment?

The rapid development of electronic commerce

According to 2011 sales, China's largest 10 e-commerce retailers and their sales (in millions of dollars) in order: Days Cat (15,625), Jingdong Mall (4,787), Suning easy to buy (914), Dangdang (561), Amazon Excellence (510), Gome (488), Shop number 1th (418), Xun Net (367), Red Children (232).

Founded in 2008, Taobao accounts for nearly 2/3 of the top 11 electricity dealers. The electronic retailer claims to sell all the legitimate products. It is thanks to the founding of its parent company Alibaba to pay system, so that the business of Consumer-to-consumer and the trade has been guaranteed to promote the development of this industry. The past payment problem has been resolved, online commentary to the electronic shopping has yet to be observed customers first-hand market feedback, indirect let the voice of the customer in the network circulated, electronic platform Word-of-mouth, so that once under the line to rely on Word-of-mouth brand communication, become an instant thing. However, the payment of electric dealers is only the first step, more challenges, from online and offline integration.

Online, the major shopping platforms and websites, although some dozen physical stores can not buy products, or imported products, edition and other dazzling aura, but cannot avoid a reality: online products, is gradually homogenization. The products sold by each electric dealer are already very difficult to differentiate between the operators. and accurate promotion, often by the price war for the name of the clearance activities replaced, it is difficult to obtain consumer real recognition. Refined classification and accurate pricing, but also because of pressure from investors, not timely launch of the market. This August, Jingdong Mall and Suning easy to buy price war, but also because the government's intervention hastily ended, failed to show customers the unique advantages of electricity. The essence of the Beijing-East price war is the pressure of investors: the electronics retailer is seeking a listing.

Compared to the physical retailer, the advantages of the electric business is convenient, whether it is to pay or return goods. All this allows consumers in China's fringe areas to enjoy the same level of consumption and services as the first-tier cities. But from the point of view of the electricity quotient, this has caused a great challenge to the logistics. Today's electricity dealers, none of them have enough scale to reduce the cost of delivery, and ultimately profitable. Big electric dealers such as Jingdong Mall, have begun to set up their own distribution centers and warehouses, and smaller electric dealers can only rely on Third-party logistics. For those who are in urgent need of profit, it is obviously difficult to control the cost effectively depending on the third party logistics. and relying on their own logistics system, it is necessary to long-term capital injection and in the short term it is difficult to see returns. Such as van Goods has been his network of more than 30 cities nationwide distribution system to reduce to 4 major core cities.

Compared to the challenges of logistics and the difficulty of managing online products and promotions, the dealers also face the challenge of "cross-border" of physical retailers. Suning easy to buy red children and enter the mother and child supplies of electrical business channels, by the media for the next 10 years of strategic deployment. Such a physical retailer of electronic business, is not simple as the outside interpretation of Suning is going to the electrical. More should be seen as the integration under line, and the diversification of services, channels. The challenge to the logistics is the same as the nature of the electronic business and the physical retailer, but the competition is different. Therefore, crossing the line is but a step in the path of pluralism.

The revelation of American Electric Commerce

But how can a more successful American electric trader overcome these challenges compared to China's electricity dealers? What are the implications for China's electricity dealers in contrast to the development of American electric dealers?

Internet shopping in the United States accounts for 7% of the total retail sales, which is lower than in some countries in northwest Europe (for example, Britain is 12%, Germany is 9%), and China is roughly close to the ratio. This is because the U.S. households have a higher proportion of cars, so that the choice of physical store shopping is more likely, but this does not mean that the United States E-commerce development is not successful. In fact, no matter from the total amount of consumption, e-commerce technology, consumption concepts and other aspects, the United States are in the forefront of the world.

According to the 2011 data, the largest 11 e-commerce retailers in the United States and their sales (in millions of dollars) were Amazon (48,080), Staples (10,600), Apple (6660), Wal-Mart (4900), Dell (4610), Office Depot (4100), Liberty Interactive (3760), Sears (3604), Netflix (3205), CDW (3,000) and Best Buy (2950).

If the performance of the top 100 E-commerce retailer is integrated, we will find the following:

1. Amazon is a well-deserved e-commerce hegemon. Its own sales platform, provided to the small business platform, plus its own credit card a variety of ways to combine the cat can learn from.

2. Standardized and customized products, such as home appliances, office supplies, computer electronics products are the traditional e-commerce sales of the main force. They started early and had huge sales.

3. The same products, network sales have begun to stabilise, growth is mostly in single-digit digits, such as Dell also has a negative growth. And in China, not long ago, Jingdong Mall and Suning easy to buy price war, showing that the domestic e-commerce is also in the standardization of the product burst phase of customization. This part of the product is less profitable.

4. Traditional supermarkets and department stores such as Wal-Mart and Macy's have shown rapid performance in recent years. Wal-Mart, for example, increased online sales by 20% in 2011. After the 2008 financial crisis, Wal-Mart's intention to reduce its offline entity store business area, the inevitable result is a reduction in inventory. On the one hand, they actively expand the variety of online stores, on the other hand, the introduction of mail to store their own way to save freight for customers. This model is very popular.

5. The growth of traditional supermarkets and department stores has benefited from the development of cloud supply chain technology. With the help of the cloud supply chain, businesses are effectively reducing inventories and speeding up circulation. This technology is owned by a professional e-commerce company like Amazon, where traditional retail businesses can benefit from the popularity of technology. This is important for some domestic department stores that want to do online sales.

6. The development of costume jewellery is equally rapid. Especially when entering a new country market, such products usually open online shopping, and then consider the physical store. Recently, the two largest luxury department stores in the United States, sax Fifth Avenue (Saks Fifth Avenue) and Neiman (Neiman Marcus) (they separated 38 and 41 on the list), are in the form of cooperative E-commerce to enter the Chinese market. This will allow for a small price to be learned about domestic market performance. This contrasts with the establishment of some Western European brands in China. This has a positive reference meaning for domestic apparel and jewellery retailers.

Another topic worth discussing is the logistics problem in e-commerce. And China's situation is different, because the United States nationwide consumption level is more uniform, so the establishment of a logistics system is relatively simple. The American electric Business enterprise generally is to outsource the logistics business. Domestic electricity dealers may still be grappling with the problem of logistics outsourcing to third parties, the following facts may be a bit of a notice, Amazon in the logistics of this link is a loss, almost every delivery is in the pay customers, but it is their 25 dollars above the free shipping policy, attracted a large number of customers, In the hearts of customers firmly established the world's first name.

Source: China Business newspaper Supermarket Weekly | Author: Chen Shaofei Xiongjie