The only product will be the first profitable vertical electric business survival is hope

Last week, every customer Prudential announced the acquisition of a wholly-owned vertical electrical goods brand first. The founder and CEO aged said that in 2013 every guest will achieve the annual performance of 50% growth, and strive for full-year profits. Poly Mei Excellent product CEO Chen Au last week also to the media that 2013 Poly-Mei excellent product sales will reach 6 billion to 10 billion yuan, the profit will reach 100 million U.S. dollars.

"Profit" seems to be becoming the hot key word of the vertical electric dealer nowadays. At this time, a South China vertical electric dealer has been on the road to profitability.

Last month, the only product in the fourth quarter of 2012 audited earnings, the quarterly net profit of 6.3 million U.S. dollars, become China's first to realize the profit of the vertical electricity dealer. With the results soaring, the U.S. stock of goods yesterday closed at $24.44, up nearly three times times the price of $6.5 a year after landing at the NYSE.

Accustomed to burning the money enclosure price war, 2013 China Electric Business really will collective transformation?

Only product will control cost accurately to realize scale enlargement effect

Electric Business field has always been fierce, from time to time quite a "life-and-death" means, price war, "loss to make a yell" and so is the industry's normal. In this case to achieve profitability, out of the cycle of burning money, become a lot of electrical business can not be.

"Only goods will be the first to achieve profitability mainly due to the precision cost control of the scale expansion effect." Hong Xiaobo, vice chairman and COO, said in an interview with the media. In such a fierce battle for the electric business Deus, the first to achieve profitability in the vertical electric business, the only thing will depend on the "cut expenditure".

The so-called "open source", that is, to win by volume. As the only product will CFO Yangdonghao said: "The retail industry gross margin and net interest rate to a certain extent, there will be no difference too much, it is impossible to increase unlimited system." The retail industry's profit model, not by high margin Gao Lili, but by "quantity" to make money.

As for "throttling", Hong Xiaobo said, starting from the second half of 2010, the only goods will be warehousing capacity to expand to the national four major warehouses, and the national logistics transfer to the local Low-cost logistics, in short, "self-built warehousing, shorten the logistics radius, and reduce the cost of outsourcing distribution."

In fact, the only product in the initial stage of the venture borrowed foreign luxury discounted sales model, but the record is poor. Shang, volume is still small only goods will turn the bow, in the online several months after the rapid establishment of the two or three-line clothing brand sales strategy, accurate positioning of the two or three-line market consumers. It is this "small but beautiful" way of the electric business, become the only product will realize the cornerstone of profitability.

Only the goods will be profitable, so that other vertical electric operators see the hope, but also consolidate their "fierce chase" determination. However, some people in the industry believe that the rapid change of the electric business field, accurate subdivision positioning, to achieve differentiated operation, is the survival of most vertical electric operators. In view of this, the profit model of the only product will not be directly used by other vertical electric operators.

For now, some well-known vertical electric dealers have chosen their own development path. Where the customer will be its business model positioning as "Uniqlo +h&m or Zara" mode, and target "large-scale" and "fashion" these two seemingly contradictory, but actually compatible concepts.

Does not represent the overall "reverse attack" of the vertical electric dealer

The only product will achieve profitability, whether it means that the vertical electricity that it represents to see the profit Dawn? More overall, does it mean that the domestic electricity industry is not far from profit?

Last November, Jingdong Mall CEO Liu in an interview that 2013, the vertical consumer electric Company "to the independent brand has a large number of opportunities, but the main retail platform for the vertical electric dealer is doomed to no opportunity." In his view, both the traditional retail industry and the Internet industry, "Development to the end of the three to five, and now is thousands of, so I think 99% of the Electric Chamber of Commerce died."

The facts seem to corroborate Liu's remarks. In the comprehensive electric Trader's step press, the vertical electric business development space is squeezed; because the capital market calmly wait and see, in the capital aspect the vertical electricity quotient is "stretched"; under the comprehensive category electric commodity expansion strategy, the vertical electric quotient market share development is relatively slow.

The following predictions were made: the integration, closure and acquisition of vertical electric dealers in the 2013 will become an industry trend. This view holds that, in the years time, the vertical electric power trader will appear the oligopoly competition situation, namely the specific domain two to three enterprises become the market leader, but "defeat" the enterprise will be the comprehensive class electric dealer to acquire more.

According to data from November 2012, the Chinese company's web site was nearly thousands in 2012, but its revenue reached just hundreds of of millions of dollars. Moreover, the 60% to 70% of these sites have a downward flow of traffic, real traffic has risen only between 20% and 30%. Fierce competition, so that "survive" has become a number of small and medium-sized vertical electric operators the primary goal.

Therefore, only goods will achieve profitability, Fank, such as "close" to the profit of the news, in the mode of burning money for traffic is unsustainable, the high cost of marketing operations at present, it seems that the vertical electric operators see the "Kaiyun" hope. But there are also industry analysis that the only product will rely on the category of personalized to establish a pattern of differentiation and can not be replicated for other vertical electric operators, so its profitability does not mean that the overall "reverse attack" of the vertical.

Reporter observation

2013 is still hard to make a profit year

Whether or not a vertical electric trader has entered the era of profitability from 2013 is still a question mark.

You will regret to find that the slogan is just "a year old flower similar". Look at the national electricity business, so far the profit is very rare.

It is not difficult to find out the way of the rise of the vertical electric quotient, it realizes from scratch, from small to large, depends on the continuous investment. And the "City sales rate" as a valuation standard of the financing model, but the vertical electric quotient placed in an awkward position: vertical electric business capital demand, but long capital turnover time, financing more difficult.

The characteristics of the vertical electric quotient determines that it needs more capital injection to attract new users while enlarging its scale, thus the proportion of marketing expenses will also rise. On the other hand, the majority of its sales for the semi-standardized products, repeat purchase rate than the "aircraft carrier" level of the platform of the electricity quotient, capital turnover period is also longer. At the same time, because the volume is small, the vertical electric quotient is not easy to get the investor favor, the fund Duanliang the risk time to linger in the vertical electric business head.

Facing the tight money bag, the vertical electric dealer first thought is reduces the promotion expense and so on expense, but does not have the continuous advertisement to launch, the vertical electric dealer sale often becomes the vertical descent posture. As a result of the profit model, operating conditions are different, the only product will be in the vertical distributor to achieve profit is not for other vertical electric operators to provide a "profit sample." Closer to the reality is that the vast majority of the electricity business in the year of loss in the situation, still holding the "market potential" This life-saving straw struggling.

noun explanation

Vertical electronic commerce refers to the e-business mode of deepening operation in one industry or segment market. Usually E-commerce site's products are the same type of product. For example: Every customer sincerity goods, only goods will.