The Chinese winter of the electric business

The fundamental difference between the CLP and the Chinese power supplier is that the profit is supreme and the scale is supreme, and the most prominent is the price war.

If you buy goods online, what is your preferred choice? Taobao, when, Jing Dong? In the Internet user's preferred list, Amazon's excellence is usually in the back, and the new Egg network, the electronic product of the veteran, often not in the consumer's memory.

This and Amazon, the United States new eggs in the global business of the influence of a serious asymmetry, especially the new eggs, in the 2011 China Network of TOP20 list, the new egg nets ranked 10th, and even ranked in Xun nets and bowser nets and other Up-and-comer.

Foreign electric enterprises in the Chinese market admission has been for many years, but has not really opened the territory, but showed a gradual contraction of the situation, this is just a acclimatized can be summed up?

A strong backer but not acclimatized?

New Egg Network was founded in 2001, registered users over 9 million, the world has more than 1700 employees, more than 40,000 daily orders, more than 43000 goods sold in the United States is the largest it digital online retailer, 2011 Annual operating income of 2.8 billion U.S. dollars.

Shortly after the opening of the United States, China's new egg net was unveiled, this in the year of China's E-commerce or a desert era, the use of wasteland to call the new egg net is not excessive, but 10 years later, many of the younger brother has been far more than Big brother, from the growth rate, 2011 days cat and Jing Dong are more than 200%, Even the same foreign peers into China produced by the Amazon outstanding also has a growth rate of 100%, but the new eggs is-16.7%, a negative growth, the electric business has become a hot era of very discordant target.

"The sales of the new egg net did not fall as outsiders said, and 2011 sales actually grew by 30% per cent year-on-year, 2.35 billion yuan." Web site traffic than before also growth, the current UV has more than 400,000. Only new eggs and Amazon's entire group are making money in the Chinese mainland. So we can find a way to make money in China as soon as possible. "For the industry's doubts," said Zhou Zhaowu, president of China's new Egg network.

There is a foreign backer, to ensure adequate blood supply, which is outside of the Amazon excellence and China's new egg network, such as the consensus of the Web site, compared with domestic electric enterprises such as Dangdang, Beijing East Network has been relying on financing and VCs to support its big step forward, such a large backer to ensure that even if the continued loss, even if the consumer identity is not high , even if the performance ups and downs, can guarantee its presence in the Chinese market.

But it's all just there. More outside of the criticism is that the foreign electric power business in China's management and marketing still large copy of the U.S. model, taking the new egg net as an example, the industry has pointed out that due to the differences between China and the U.S. business model, it has been subject to the United States New Egg headquarters, the cost of investment, high levels of frequent changes and other issues, the second more important is that The development of the electric business and the Chinese electric business is completely different, the foreign electric power business adhere to the supremacy of profit and the conventional business model, while the Chinese electric business has highlighted the scale first and the price war model.

The idea of different, seems to have caused the foreign electric power business in China's acclimatized.

2003 ebay lost to Taobao in China, a quick exit, April 2012 Lotte and Pepsi joint venture cool days just 1.5 that halberd, and the whole of the Chinese market in the downturn in China, have repeatedly proved the concept of foreign electric power business in China's failure.

Profit first vs scale First

The most prominent presentation of profit supremacy and scale supremacy lies in the price war.

Since the beginning of the 2008 electric business Development, each month, the price war between the dealers will erupt several times. Netizens have developed a habit of waiting for the next price war, then looking at prices, promotions, and rolls, and immediately join the shopping force. The price war is also very positive, the 2012-year double 11 promotion, the major electricity price war with the same, Taobao, Cat, and together to create a record 19.1 billion yuan in a day turnover. But the foreign electric power quotient is basically to this aloof.

This is to some extent caused by the foreign electric power Trader's passivity. Because consumers ' shopping habits have been spoiled by the price wars of domestic electricity dealers, no promotions on the day do not shop, no major price good not to consume, and even in the promotion of irrational blind consumption, to a large extent, so that not mixed with the foreign electric power in the hearts of consumers are positioned to only want to make money, expensive, not considerate consumer image. In addition to the post-war price, consumers ' desire for online shopping will be reduced to varying degrees, all indirectly let the foreign electric power business more dispirited.

Not only in the days of price war, but also on weekdays, because of the investment in the advertising campaign is not high, its brand strength is increasingly weak.

Compared with the domestic electric dealers overwhelming use of a variety of network advertising for their own way to pull the flow, the range of the foreign electric business is surprisingly small, the new egg net only take out less than 1% of sales to do the promotion, and as the electric dealers burned the Internet advertising prices, the advertising of excellence Amazon also in the eyes of the netizens less.

is not the foreign electric power business in China, the key is that most of the foreign power companies are listed, if the same as domestic electricity dealers "lose a yell" to nurture the market, it will be difficult to be accepted by shareholders.

But is it true that the foreign electric dealers can only be passively beaten? Fact。

One of the key factors for domestic electric dealers to use price warfare as the main marketing means is that homogeneity is too serious, Dangdang used to be a book of vertical electricity, Jing Dong Network was once the leader of 3C electric business, and once upon a time, they have chosen to go to the road of integrated electricity quotient, and this is famous from the vertical electric dealers to the integration of the electric business to expand the market way, It can be said that the main road of domestic electricity dealers.

But the problem is whether it is vertical or integrated, the domestic electric dealers in the sale of goods do not have their own real exclusive products. This allows them to expand their size, not rely on the product itself, but only by price to attract.

The flow of this attraction is not as much loyalty as it is for the lowest bidder. This makes domestic electricity business deep in price war mire, cannot expect profit. But once the price war let the capital chain break, then the scale is bigger, also can the instantaneous capsize.

In fact, the reason for this situation is that the domestic electricity dealers did not thoroughly practice the long tail theory, a large number of goods can indeed meet the overall desire of consumers, but all businesses are selling nearly the same commodity, so that prices rather than goods become the first element of consumer choice.

Relatively speaking, this is the foreign electric power business can be proud of the capital, in the outside of the new egg net view, there is a kind of has been not denied that there are many other sites on the new eggs can not buy new exotic products, and profits are high, for example, an unpopular brand of high-end headphones, price 1000 yuan, the new egg net to earn 300 yuan. On this, new eggs can make life more moist. New Egg nets 2011 years of loss accounted for 2.5% of sales, compared to domestic manufacturers, the average loss of the industry is about 7% of the sales are much lower.

But will there really be a chance for the profit-driven electric dealers to pick up the pieces?

The way of the breakthrough of the foreign electric power business

Just wait for no use, foreign electricity dealers have begun to plan breakthrough.

Join the price war. Amazon excellence, China's new egg network successively joined the Chinese electricity Dealer price war, the new egg nets in November 2012 began to launch the 11 anniversary of the month promotion, while playing "Black Friday" brand. China's new egg net in the activity preheating stage is to issue a cash voucher worth 200 million yuan, for November 21 23rd, "Black Friday" snapped up activity, the result is compared to the same period last year retail sales growth 210%. But to enter the price war does not mean that the foreign electric power companies have abandoned their consistent principles, they still have their long tail positioning in the product quality and variety and the difference between the domestic electrical quotient, only so, may not invest in the process of large sums of money, the gradual use of word-of-mouth strength to consolidate their positions.

strengthen internal management. A simple reason why foreign electric dealers have been acclimatized is the goods review, because the domestic electrical manufacturers in the praise has been a large number of false ingredients, foreign electric power companies have been very strict control, the same book may have thousands of comments on the Dangdang, and in the excellent Amazon, but there may be only a few. In the past, netizens generally will be based on praise as the basis for shopping, which also makes no such as the popularity of foreign electric power companies to provide more information to consumers, indirectly resulting in a lower rate of flow conversion, but with the abuse of praise by netizens more profound understanding, Now the more stringent internal management of foreign-owned electric power companies instead have a thick thin hair new opportunities. And this is only a foreign electric dealer strict internal management created by one of the accumulation, it is no wonder that the outside world is always mistaken for the foreign electric dealers in the quality of goods and related Web site management rules on a road to black and pedantry.

Local inaction. Groupon, a group-buying giant, has collaborated with Tencent to create a high net in the cold, reboot, and plan to complete in January and the Group F and QQ group purchase integration, and plan and local media depth of cooperation and resources interoperability; While supermarket giant Wal-Mart succeeded in holding a store, trying to take advantage of China's better development of the electric business platform leap and superior. And in the actions of the two foreign companies, a distinctive feature is the use of local teams, such as high-net-level control of the management of all, and no Groupon seats in the management, Wal-Mart holding shop in the general similar ideas, which is quite similar to the Chinese yellow old doctrine of inaction, Compared with the old mode of excessive control of foreign electric power companies ' entering China market, there is a big difference. Amazon's remarkable and new egg nets have also highlighted similar signs of change.

Foreign electric dealers have to endure a long time in winter in China, but their rivals in spite of the surface scenery, but the days are not necessarily better than the foreign power dealers, in the end is the profit first, gradually expand the scale of the foreign capital Road is more secure, or expand the scale, occupy the market after the consideration of profit in China's electric business thinking more successful, It is also time and practice to test.

But foreign electricity dealers have been changing, and in the brand and Word-of-mouth more and more close to the Chinese taste, has become an indisputable fact.