The diversified development direction and new business model of e-commerce

News and science and technology: E-commerce in this year by the capital of hot, experience a round of big development, industry enterprises from small to large, from big to strong, e-commerce market development is hottest, to the second half of this year, E-commerce industry capital Cooling, in response to the current E-commerce market changes, Invite the West Street Network CEO Guo Hongjing to talk about the development direction and new business models of diversified e-business, and the latest ideas of these entrepreneurs. The following is an interview record: Five years network channel will occupy 20% sales share

News Science and Technology: now E-commerce development is very fast, and its price has a great relationship, many commodities one to E-commerce site is very cheap, such as cheap 20%, or even 30%. How do you value the impact of this price war on E-commerce? If this low price competition for a long time, is it really beneficial to the industry?

Guo Hongjing: About your low price is relative, there is no absolute low price. We know that E-commerce is based on the traditional retail industry, it has some obvious advantages, I conclude. First, it can provide people with scale. Traditional retailing If a person's sales volume is 500,000 a year, then the E-commerce sector can be at least one times more efficient, and the proportion of such manpower in the cost of sales will decline. Secondly, we know that in the past few years, the traditional retail industry has experienced a substantial increase in the cost of commercial real estate, which has led to a substantial increase in rents of shops, so their costs are very high. But the difference between the core retail business is that E-commerce can effectively utilize a relatively centralized warehousing service for all users. We know that the traditional retail industry, you have to put the goods in the shop, if there are 1000 shops, you have to shop in 1000 shops to say enough goods, when the consumer in this shop can not buy the goods he wants, in fact, the deal will fail. So, for the traditional retail, there is a number called the stock ratio, I have how many goods, can support the number of business, which is very important.

The traditional retail industry, we see clothing This field, especially West Street This belongs to the sports field, often in more than 1:5, you want to sell 1 million of the goods, your whole plate quantity must have at least 5 million. E-commerce can basically refer to 1:3, West Street The entire level is 1:2, that is to say 2 million can support 1 million of sales. The premise is that I am a relatively centralized warehouse to solve this problem.

Based on such three advantages, the cost of electronic commerce is reasonable to compress the cost of traditional retail industry is no problem. But you talk about price war, today we see many enterprises are vicious price war. Very low profit, remove its manpower, remove its logistics, and then remove its marketing, it does not have the opportunity to make money, especially if we do not consider the situation of marketing, it does not have the opportunity to make money, such a business is obviously a benign operation, no matter how large the scale, are problematic.

Therefore, the first, E-commerce retail in the future price, will certainly than the traditional retail in commodity prices will be lower, this is a normal phenomenon.

Second, the vicious price war in the future will gradually reduce its proportion, because you do not have the benign operation of the way to survive.

News and science and technology: in a while ago a Amoy appeared, commodity parity, so that everyone can suddenly find out where this product is the cheapest. But after the launch of this thing, when the online advertising, encountered some trouble, the traditional business very much resist this behavior. Do you now do e-commerce have encountered such traditional businesses, such as sports brand everyone knows, a few major brands in the monopoly, the domestic is so, there is no resistance to such behavior?

Guo Hongjing: For the traditional brand and channel business, e-commerce is a new business, especially e-commerce to a large extent to break their past price system area of this sales system and so on, so they are very eager to be able to invest in an industry to let everyone know that this is the future. There may be add in the next five years from the sales of network channels, but on the other hand, they are very worried that E-commerce will form its traditional channel strategy and price strategy.

News technology: In fact, I understand that the Chinese place is very large, the sales price is different around. Perhaps you buy 100 yuan in Beijing, buy 120 yuan in other place, if use electronic commerce to do. How does this piece work now?

Guo Hongjing: I think this is also a greater advantage that e-commerce companies can offer, so that business is less developed, even if its goods provide less-than-sufficient areas to get the same goods as other big cities across the country. So, I think this is an advantage in itself. But the problem that you are talking about, the traditional brand is aware of this, but the traditional brand does not vigorously blockade the network channel, everybody knows the network is the future.

We all know Nike such a big brand, if it uses ten years to block the Internet brand exposed, not allow everyone to sell its products, believe that after the 2000 people do not know its brand, it is fatal, so it must accept. How to manage the network channel, make rules and comb, this is a very long-term work for the traditional brand.

e-Business enterprise expansion is becoming rational

News and Technology: Guo, the current E-commerce enterprises, although the capital of the block has been cold, but E-commerce enterprises are still doing in horse racing enclosure, including the expansion of their own product categories, self-built warehouses, logistics and play a variety of brand advertising. Does this have a big impact on the vertical type of e-commerce business? Because they are the trend of general development.

Guo Hongjing: With the cooling of capital, the whole industry in the past large-scale investment in the state will have some changes, at least we see today, the investment in the market is gradually declining, especially in group buying, including part of the business is gradually declining, we will be more rational. As for what you just said, some companies are building a national logistics system and warehousing system, but also for the company is a basic construction, this infrastructure is actually forming a very important part of the competitiveness of enterprises.

You just had one more question. The impact of this large-scale business-to-consumer or general merchandise consumer on vertical classes, I think, is that because users have a higher preference for a diversified product site, this is a challenge for vertical consumers, and how you can provide deeper value to users. For example, West Street today we provide sports products, if we are just a sale of the site, our value and large comprehensive web site is not the difference, how do you based on the motion dimension for the user to provide more professional, from the product structure to the provision of knowledge, It's even more valuable in the interactions of people who like sports.

News Technology: West Street is a differentiated route, is this it?

Guo Hongjing: You can say that, we are based on the user needs of the dimension, on the sale of goods to provide additional value. For example, we want a man to climb the mountain, I hope not only to provide him with hiking shoes and clothing, I will tell him why you climb to choose such shoes and costumes, what kind of mountain to choose such shoes and clothing, you are not to go with the cane, glasses, or even the backpack should be what kind of more pressure on the body, Do you want to bring tents, camping and so on? This is an integrated dimension of movement requirements for commodity delivery and knowledge delivery.

News technology: is a concept, the availability of knowledge.

Guo Hongjing: We will extend the movement of this dimension to do more professional, more in-depth.

News technology: Do you think that kind of comprehensive electric chamber will not form a monopoly?

Guo Hongjing: In today's development, the general class of electric dealers on the large platform will gradually have several form their market size and share, which this year's new people can enter and compete for the opportunity is actually limited, but in the vertical type of electricity dealers will maintain a large number of companies exist, But their premise is that they must provide differentiated goods or services.

News and science and technology: Now online also has very sharp problems, such as electric dealers now through the purchase of warehouse logistics, but a lot of people said that the purchase is not to build warehousing logistics, but to build the house, although the country is now in control, but still very hot. What do you think of this statement?

Guo Hongjing: I think today in China to build warehousing center to promote the development of domestic logistics enterprises, in fact not only to help build their own infrastructure, but also to provide users with more and better services, more is the enterprise in the promotion of the entire industry in the logistics business capacity. We know that e-commerce from the past more than 10 years of development, is basically a user flow concentration, who gets users who will win, we look at Taobao it is achieved a great advantage. On this basis, another solution to a capital flow, the user's money to the seller, I in 2001, 2002 this is very difficult, but in this year Alipay and fast money and so on these enterprises also have a good solution.

There is still one problem that is not well resolved today-the flow of goods. We used to talk about logistics, many people will be logistics as distribution, in fact, logistics is not distribution, is the flow of goods. What is the flow of goods, including the control of the commodity itself, merchandise based on E-commerce orders can support the warehousing capacity, the ability to split and distribution, these three parts. So, personally, I think in this part, now we're away from developed countries like America, or we are still far from matching the needs of consumers, these companies are doing very valuable things, but for them, this investment is long-term, I do not believe that they are looking at the land price of this growth, the future into the real estate, This will never happen.

News technology: You do not support this statement?

Guo Hongjing: Because I think the company that can do these things today should be the ideal company.

The number of registered users in West Street network has reached 1.6 million

News Technology: West Street Network has been operating for two years now, the operating situation?

Guo Hongjing: Our development in the past two years, I think it is relatively benign and fast. Of course, mainly because of the rapid growth of the market, we should say today has become the Chinese sports brand corporate leader. And in the past two years, we are basically breakeven, development is a benign condition, and we have achieved a certain degree of leadership in the control of goods. For us, there are many challenges, that is how we can more effectively provide users with differentiated services, how to be more low-cost to attract users to the West street, so that he formed a certain degree of dependence on the West street, there are many challenges for us.

News Science and Technology: Now the number of users including the purchase rate this piece can reveal some figures?

Guo Hongjing: Our total number of registered users is about 1.6 million, the current conversion rate of the situation is 3%, 100 users 3 to form the purchase.

News technology: How about their heads?

Guo Hongjing: 22.5%. This is good for a new website, but it is very low for a well-known and mature website.

News technology: Because we all know that this year E-commerce is very hot, we all have plans to go public, West street there?

Guo Hongjing: We do not currently, because for West Street, we hope to build a solid as soon as possible in the sports brand strong supply chain system and product control system. In the future, I hope that in a year or two, West Street become the strongest sports brand commodity control company, can support to the whole network of sales, this is one of my goals. And for West Street, today is a benign operation, we may also be more inclined to consider the future development at home.

News technology: You said that the benign operation is not to say that the current operation of their own to meet some of the company's cost of expenditure?

Guo Hongjing: Yes. Enterprise development in the past, traditional enterprises are relying on their own hematopoietic development of their own, in the appropriate time to attract funds. In today's e-commerce industry, is entirely driven by external funds gradually. Why to go public, listing is actually a means of financing, to ensure that they have sufficient funds to promote their own development. If a company continues to operate healthily, it is less urgent.

News technology: What is the purpose of your venture? You've had several startups and some failed experiences, what's your goal this time? And I also heard that some old employees followed you for many years, can you talk about it?

Guo Hongjing: Inertia, because the industry from 2000 onwards to now 11 years, the industry is more emotional, and feel that today is a high-speed development especially good time. This is the time to start a new company, we started in 2009 this company, is also a proper time to enter the industry. There are also some expectations for yourself. The past nine years of entrepreneurship has not actually formed a firm, I hope this West street can become in this industry has our position in such a company.

Vertical electrical dealers to provide differentiated services

News technology: We all know that the West Street network is specialized in sports apparel, just now you also talked about the West Street network, some business philosophy. But we know that like Fank and Macaulay, they also have their own sports brand area, including like Adi, Nike in Taobao also has its own flagship store. How do you attract consumers to buy from you?

Guo Hongjing: This is actually a very interesting question. Sports is our main position, so it is very important for us to provide differentiated services. How we extend different sports, to provide consumers with this professional goods and knowledge, and interaction, this is not what other sites can do. Because if it is a big platform, it can not completely shape a sports atmosphere, for us, we can be based on different projects to do. That's just one of the things.

Another point, West Street has a very important job, we are building the country based on the high supply chain of distributed warehousing, that is, many of our traditional leading brand chamber of commerce and sports brand channels to help them build back-end storage and the entire network of sales channels. What you said just now, such as Macaulay, Macaulay's sports channel is I pushed to build, and the first supplier is West Street. We're doing it today, like we're working with hung-sung, we have built a 10,000-square-meter warehouse in Quanzhou, the 40多万件 of Hong-Xing's merchandise e-commerce, while supporting the Hong-ke in van, Mai, a shop, catwalk, easy to buy, cool eight and so on these big business sales. In fact, today we are not only a business, but also a distribution channel based on the supply chain of distributed warehousing. When the brand and western cooperation, it almost opened the entire network of sales channels, it can be on almost all large platforms and Taobao platform for its product sales. We would like to be able to and brand and channel operators bundled together to promote this market.

News technology: Whether it can be understood, it is equivalent to a general agent of E-commerce?

Guo Hongjing: Yes, but we are based on goods control and warehousing, the goods are in West Street here, West Street and downstream, for example, every guest is also our downstream technology to get through. When a consumer buys a sportswear on a van, it's possible that the sportswear is in a warehouse in West Street. After this order goes down, this order will be directly synchronized to our back-end warehousing system, we will ship to the customer's designated warehouse, or to the site's consumers.

In fact, to the downstream, for those platform business, including some small and medium-sized shops, they do not need to buy so many goods, he does not have to bear so much capital pressure and the risk of not selling, it can call West Street today 250 million of the inventory to sell.

News technology: A while ago you in the West Street Network press conference, you mentioned West Street will build physical shops, this and traditional e-commerce is not the same?

Guo Hongjing: I didn't mention that.

News technology: No mention, I asked West Street today, because I saw the internet has been reported that West Street to build physical stores, so I feel very strange.

Guo Hongjing: No, our main idea is to build a national warehouse.

News technology: or warehousing, through the Internet to distribute those goods.

Guo Hongjing: We are relying on brand manufacturers and suppliers, supply chain upstream to build warehousing, and distributed nationwide.

Guo Hongjing: E-commerce is a new channel for traditional brand enterprises

News technology: We know that West Street is just set up the company, only two years, and in E-commerce in the vertical industry is a recruit. Why can we attract so many heavyweight brands to join the West Street?

Guo Hongjing: Two years in the field of E-commerce is also not a short time, the industry has developed very quickly. In the past two years, our monthly growth rate is about 26%, so today West Street actually has a considerable volume.

I think, of course, more importantly, these brands choose West Street, not to choose West Street, but they chose the path of E-commerce, they hope that companies can help them to open the path as soon as possible. Traditional brand enterprises or traditional retail enterprises, E-commerce has a few steps to go. As a first step, it is necessary to establish an independent e-commerce commodity and warehousing system to support e-business.

Second, it needs to quickly open the entire network of sales channels to ensure that they can cover the whole network.

Third, it began to form its own rules of the game, at the same time with a fast supply chain support.

Four, the line under the combination of online. For us, the advantage of West Street is that over the past two years we have spent a lot of technical preparation and business preparation on the development of our warehousing system and the access to the entire upstream and downstream pathways. So, these businesses and West Street cooperation, first, it has a very strong system to support its full network of sales, a warehouse WMS system. Second, West Street basically and today most of the leading enterprises have business cooperation and technology, at the same time, we also have more than 3,000 sports shops downstream, Taobao, Pat and other small and medium. When this brand enters into my warehouse, when I am digitized, my data will basically sync to the front of more than 3,000 fronts. These front-end can be sold directly, the front-end can call such a large inventory. For example, during our one-month partnership with Hong-sung, I probably made it nearly four times times as much as the sales. Because in the past it may have only one point two points, after working with me, it opened, I believe in the next few months will also be high-speed development.

News technology: In the future, what brands will be like the Hong-sung such cooperation, can disclose it?

Guo Hongjing: We are in the country today the scale of sports brand retail enterprises, especially the channel, we cover should be over 50%, most of them are covered. For the brand enterprise we are also gradually communication and coverage, I believe that in the future months, you will see similar to the domestic and international brand such as the Hong-Xing is gradually started and West Street cooperation.