The death of cotton: Capital Fatten vertical electrical Quotient The body and soul are disconnected

"When a typhoon comes, a pig can fly." After the capital Fatten, the electric business industry experienced the rapid growth. In more than 200% of the industry growth situation, the vertical electric Company's problems are not easy to expose, once the industry growth rate declines, who in the nude swimming will be clear. August 2012, due to a large amount of money owed to the factory, the warehouse has been the law enforcement departments seized, the cotton net all goods have been off the shelf. The cotton net is closed, which is a typical sample of the death of a vertical electric trader.

Crazy Marketing

The death of cotton, the capital chain fracture is only a superficial problem. In fact, the operation of the problem, but also the consequences of anxious. How does the cotton-wool actually do the scale crazily?

In getting the angel investment soon, the cotton will be High-profile launch line ads hit the brand. August 4, 2011, the Cotton and the media in Beijing held a press conference, cotton ads will be on August 8 from the landing of the major media Beijing buildings. The cotton in the media in the focus of the storm plan, then the cotton brand will be ultra-high frequency exposure.

In the audience launched two weeks after the ads, Victoria Cotton million dollars in Sina's "crazy streaming media" ads officially online. Victoria Cotton CEO Lin that, put ads more and more electrical goods, cotton need to find another way, first from the line under the brand promotion channels to start, and then to cooperate with some online advertising.

Then at the beginning of 2012, Lin another brilliant idea of "experience marketing", with multiple platforms to sign up to send socks a pair. Also increase promotional efforts, the introduction of the "Login to send 100 yuan red envelopes gift" activities. These big marketing expenses become the unbearable weight of small socks. The move of the cotton in that crazy electric business era is normal and universal. Almost the electric dealers who get the money get the money to buy the traffic, do the promotion, quickly do large-scale is the goal.

The Electric business enterprise concentrates for "the manufacture concept, takes the financing, the advertisement, the change flow, does the scale refinancing cycle". Most of the vertical electric operators consider the most of the quickest way to the user to do up, to do up the volume, so as to find the next round of financing. Advertising is the simplest and most effective, but because the vertical electric operators to adopt the same strategy, resulting in the final spell is not the difference between the company, but the strength of the company's investors.

The cotton is only one of them, it grows quickly, the scale comes quickly, but as long as a stop advertisement, the effect immediately down. Lin can only constantly look for "optimal" marketing, but all marketing needs cost. Finally, the capital chain broken, leading to the closure of enterprises.

Pure pursuit of scale, not business logic, as the body and soul disjointed, very dangerous.

Poor operation

Lin once told the China Business newspaper reporter, the choice of socks as a notch, because it is in line with Gaumauli, high customer unit price, high repeat purchase rate, high fault tolerance, low replacement cost of the internet shopping characteristics, and its standard is very strong, which makes transportation, design, production, sales costs are relatively low.

can be carefully analyzed and found that although the fault-tolerant rate is high but in the High customer unit price and high repeat purchase rate must two choose one of the case, the cotton in order to improve the customer unit price, socks are a dozen dozen sell, buy a dozen can wear almost one year, how high repeat purchase rate?

More importantly, it is difficult to break the habit of people to buy socks, but also choose a concentration is not too big market, while the product itself has limited profits, it is difficult to high range premium.

"At present, the gross margin of cotton is low, but also in 30% or more." "Lin had said in an interview earlier. But in fact, from the cotton to the foreign advertising and the site itself to convey the message that the cotton has been constantly emphasizing their own cheap, a pair of socks only sell 19 yuan, not only to send gifts, but also send vouchers. In order to promote, in order to users, cotton in the cost and profit between and did not make the best choice, abandoned the profits, so that the more the more the loss of the larger, the door is not accidental cotton.

Of course, the cotton is not a success does not mean that the socks do not do electrical business. Like PPG Clothing after there are visitors, the key is to see the operation.

In a hurry to make the long run into a sprint, not to the end, someone will be exhausted.