The difference between us and the merchants in the electric business

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Electric business meeting, the first part of the new Egg boss Anthony and Max talk about the U.S. online shopping situation analysis, I sit back and listen not too clearly, and I hear that on the same scale, the American Business-to-consumer has been able to profit from the Chinese, but not the same, the same profit China is more than the United States to see the same size. I am very sympathetic to this point of view, can analyze:

1. Profit margin:

It is also the same as it, the United States can achieve 10% of the gross profit, the Chinese to the highest only 5%, the difference is one-fold. Why, because the U.S. industry sound market norms, we are profit-oriented, and in China, whether online or offline price war hand-to-hand, you want to profit-oriented will be killed on the scale, can only have fat without grease to skim.

2. Marketing Channel/market cost:

This is related to the overall maturity of the Internet, the American 50% orders from the various comparison shopping/alliances, that is, the effect of marketing, and in China compared to shopping/alliances are too weak, and can not be a great help to the business. Of course, the comparison shopping/alliance's rise must be based on netizen/Internet maturity, this China is still poor far. The portal/network characteristics of their advertising attributes are typically high IP low conversion, advertising prices and international standards. To look at the community, China's community is full of "Red Guards" (gunmen) "Angry Youth" (negative) and so on, most of the hard ads are against disgust, the response to soft ads is limited, even if the ads are indeed in line with the community theme (plus the Chinese level of advertising is indeed almost) I know China's best new customers to get the cost is also about 30 yuan, basically this is more than the order of profit (even more than the customer unit price) and the United States, Amazon attaches importance to marketing companies, the market cost does not exceed the total cost of 15%, I believe that the Chinese market will cost more than 20% of the total cost.

3. Logistics Cost/distribution cost:

American consumer warehousing management has long been the use of automated assembly line technology, the demand for manpower is small, the inventory error/loss is smaller, and the Chinese consumer of the warehouse is basically relying on human flesh to prop up, resulting in high logistics costs (seemingly when/excellence are useless to the conveyor belt manipulator).

Delivery costs, the United States is to make money for business, very little subsidies, basically and express company to negotiate a discount, and then accept the user. No cod (fast return of funds), and users are not picky, able to accept the speed of N genius sent. At this point, the Chinese users are still very picky, but also the delivery of goods to the payment and free shipping speed, and refused to reject the return, the consumer in this piece of the loss accounted for a large proportion.

4. Operating costs:

Due to the maturity of the American online buyers, the habit of self-help under the single, customer service dependence is also relatively small, is to ask the order situation, do not ask product knowledge and so on, customer service efficiency, the same scale, the United States customer service is less than China. There is also a Chinese characteristic is independent logistics, self-built distribution team, when/excellent/Jingdong distribution team are more than hundred people, mainly out of cod/service/speed/cost considerations, and the United States will be sent to the delivery of UPS/FEDEX/DHL, one is the level of service is enough, and the other is the relative requirements of the United States low. In China, limited by a variety of objective conditions and basis, not showing the advantages of Low-cost E-commerce, but most of the cost of the consumer than offline retail business is much higher.

5. Non-operating Income:

There are many sources of non-operating income: advertising fees, emarketing revenue for manufacturers, rental income from systems and logistics, and so on. In China, in addition to the largest number of those outside, want to tube the main point of the advertising fee is not to think, can give some gifts on the good, I know also when/excellent monthly fixed a certain amount of advertising revenue ...

Based on the above and other factors, China's profitability is much more difficult than in the US. will lead to a vicious circle, all day thinking is how to survive, bigger point to melt VC money. Chinese consumers present two extremes: either the thieves or the thieves, while the American consumer spends money on the IT system and the user experience, perfecting the service after the sale, and expanding the merger strategy forward.

In short, in the not-so-mature social environment and objective conditions, China's Business-to-consumer, the road long its repair far.

PS: I am writing this article when someone in the Im/sns to disturb me, from time to time by the idea of an article written two hours, there are people in the IM urged me to find something, hasty end, may be some express not clear nonsense, but also please forgive me.