The sad story of Massamasso

This is a sad story about the vertical electric quotient, the Massamasso of the high hopes have paid what kind of growth cost, it lost what

Former Massamasso's marketing director, Han-hui, after learning that Suning is easy to buy or will acquire Massamasso news, wrote a post "Yes! Massamasso, don't sell!".

Massamasso CEO Sun Hongyi saw this post, tears immediately fell down. He forwarded: "Will stick to it!" is not only for the ideal, but also our teeth and adhere to the glory! Never forget the sweat, tears and laughter when you start a business!

Such a sad scene can not help but sigh, each of China's e-commerce entrepreneurs experience the arduous process and unpredictable tragic results. But no one thought that it would happen to Massamasso, the company focused on the men's field of business has been the role model for China's vertical electric business, entrepreneurship 4 years year-on-year growth rate of up to 300%, a total of two rounds from Sequoia Capital, the Northern lights of the second round of financing, amounted to tens of millions of U.S. dollars. The Arctic light in the second round of financing even said that, in addition to Massamasso I do not see a second can vote for the men's business enterprise.

Such non-standard, personalized vertical electric operators, such as Massamasso, has always been the founder of the Liu, including Jingdong Mall, including all the people in the industry optimistic about the enterprise. Massamasso founded in June 2008, and created and actively develop its own brand, sales volume of the rapid rise in 2011, vigorously promoted, until now out of the takeover, layoffs leave the storm. Its vice-president, Messing, officially resigned on August 7.

The development track of Massamasso is too consistent with the overall development rhythm of China's electric business, but the essence of the vertical electric quotient is farther and further away. In the interview, "global entrepreneur" reporters over and over again asked Hong, if you can come back, you will do it?

Hong said: "I have asked myself this question many times, if I restore myself to the scene and the historical environment, I will do so, because there is no way to go, must first survive." ”

What kind of Hong has he gone? What kind of mistake has he made? This error will give all vertical electric dealers and even the entire business of the CLP a heavy police training.

A good start

The founder of the gene and character often lays the gene for this brand.

In the eyes of Han ou, Hong is a true love of clothing people. Hong co-founded Massamasso before, has been in the traditional clothing industry for more than 10 years, served as Saint Paul and Wictor (Vicutu) Mister. The most impressive thing for employees is that Hong will pick some good styles in the sample and try all of them. If the layout is very good, he will also be excited to ask employees to see together.

When the reporter saw Hong, he had just finished the cooperation with several international brands. Our conversation has just begun, Hong to show his new boss pants, "this pair of trousers to more than 700 yuan, but you see, this pants seam, in fact, not very good workmanship, there are some small folds." He quickly got up from the chair, and very carefully touched the folds at the seams, very serious expression. He suddenly lowered his intonation to ask you: "The same pants, if the Massamasso only sell 298 yuan, and the quality is better, which one do you buy?"

His love of clothing and Massamasso has been incorporated into every little detail of his life. Han Hui recalls that year Massamasso under the Experience Shop (May 2010 out of Beijing World Trade Day Order entity shop), Hong personally to the shop to customers when shopping. "He would analyze every piece of clothing with every customer, and some of the jargon that I didn't understand, and he would crouch down on the floor and take his trouser legs for the customer himself," he said. Han Hui recalls that period of time some excited.

Hong His love of clothing to the electric quotient and established Massamasso, a subject of his emba in Central Europe in 2007. At that time he was thinking that the traditional industry's fare increase system was wrong, for example, the same quality of things, equivalent to the price of Burberry and Prada, but these world famous brands have their brand culture accumulation, so this system is problematic, there will be other ways to make the clothing industry can have a higher price. PPG's appearance gave Hong some inspiration, he felt for the first time through the Internet large-scale intensive warfare, will break the traditional industry price system.

Chang Xiaulio is his classmate and is now the chairman of Massamasso. Zhang has previously created a financial network (blog, Weibo) and Shenzhen Network Hing Technology, familiar with E-commerce. In mid-2007, the two men decided to study the problem together and begin to write a report on the related topics. In half, Sun and Zhang came to the earliest Massamasso mode: Do high-end own men's brand, and has been recognized by some professors in central Europe. December 2007, the two people very quickly set up Beijing JIU he Shang Products Technology Co., Ltd. June 2008, named "Massamasso" Men's online operation.

Today, their subject has become a classic teaching case in Central Europe, but Sun joked: "Unfortunately, the results of this subject scoring are not excellent." ”

They give Massamasso positioning: The target customer group lifestyle packaging brand. It is precisely because of this positioning, Massamasso after the expansion is in this direction. Hong in the mind of the brand is like no printing good products, can provide a way of life, such as cotton, hemp, simple health.

In the 4 years of entrepreneurship, Hong has been the product manager's identity to locate themselves. He not only try to wear clothes, but strict screening agent factory, its cooperative factories are the first-line brand cooperation factory, and other clothing manufacturers, in production, Massamasso are the procurement of fabrics, and then design and factory processing, in order to ensure the quality of fabrics.

In addition, he also insists that a brand electric dealer should dare to promote own brand. So he is the first to make a very big brand logo, and dare to enlarge the map on the homepage of the people. The idea was initially challenged because a larger picture might reduce the speed at which the page was opened, but he insisted that speed could be improved by technology, and that brands were something that consumers must see. Today, this visual effect has been widely used in large electric dealers, including Taobao.

"2008 Martha start-up Stage, a team of more than 20 people, nest in a small room in the modern city, product development, website construction, marketing promotion, a very difficult time to go through a very hard day, advertising done, mail sent, the product catalog sent to the hands of the user, the sale of the total no improvement. Han-Hui's post such memories of the start-up period.

Hong Memories, the first single Internet advertising is a 1180 windbreaker, in NetEase advertising, NetEase sales also deliberately called to ask: "You are not the price of the wrong, more than a 0?" Yes, that's what Hong has been insisting on, doing quality clothes.

Turning up in 2008, a winter, a pricing of more than 1500 yuan in a down jacket on the internet to sell goods, Massamasso business model at that moment set up. Adhere to the free brand, adhere to product quality, adhere to the leading supply chain management, these vertical electric operators should have the fine features, in the Massamasso has been the ultimate play. It was supposed to be a happy ending, but why did it go downhill?

Capital Curse?

"For 2009 years, Martha got a fund of Sequoia, to tell the truth, this is the beginning of the tragedy, my brain no longer need to think about how the brand to do, but to think about how the overall site promotion activities to organize, how to pull through the activities of new customers to pull sales. Han ou reflect.

In fact, Martha frequent discounts are also starting from this period. A lot of people said to Han OU, this brand of cattle, sold on the internet so expensive clothes never discounted, those times, this straightforward Beijing girl really feel that Martha will become online Zara. Later, South Korea in the Lok Bee network as the platform to promote the general manager of the center, was fortunate to see the founding partner of Sequoia Capital Shen (Micro-bo), but also Massamasso investors. Shen in learned that she is Massamasso out of the time, shaking her head to Han Ou said, Martha Plate is too small. The gaze was full of sight. "Han ou try to restore the scene at that time. And this is capital, and they have very realistic scale requirements for Massamasso.

But now recall, Han ou have regrets, if Martha can not discount, endure the period of the brand's lonely period, so that users really feel, wear Martha clothes, is also wearing a brand, may now be completely different situation.

"From an investor's point of view, they have no problem with that," he said. Hong responded. He revealed that in the one or two rounds of financing, he has agreed with investors in advance "Massamasso is a brand, profits more than the scale", also did not sign a gambling agreement with the Sequoia Northern Lights.

Hong said that, in addition to the early 2008 loss, 2009-2010, Massamasso business has been very good, and is profitable.

In fact, according to Sun and Korea's consistent feedback, then the attempt from the data, is also good, advertising and precision marketing results are good, customer volume has a steady growth. But in the long run, will frequent promotions have a subtle impact on customers, compromising brand size? Today's outcome seems to have been answered.

Scale traps

Hong very frankly confessed to his mistakes. The biggest impact on the brand is the second half of last year's large-scale discounts.

The wrong seeds were planted in the first half of last year. As Han Hui said, at that time the whole electric business in the brain, investors see the most frequently asked question is scale, investment evaluation indicators are also the user's growth and the proportion of new customers. In such a situation, the electric dealers began to circle people, put a lot of market advertising.

The electric dealer's wishful thinking is: Not afraid of investment is not enough, afraid of the plate is not big enough, because 6 months later can be a new round of financing. Massamasso is no exception, Hong said, in the hit ads and promotions, also constantly have investors come in contact.

But who also did not expect that the second half of last year, the sudden turn, overseas stocks all the way down, the market window temporarily closed, financing window is also closed. This trend in the electric business enterprise performance is particularly obvious, from "see more" to "see Empty" electric dealer.

Agreed to financing yellow, Hong Urgent.

The first half of the advertising, in addition to paying a lot of market costs, but also means that more consumers buy, which requires a lot of stock. With the expansion of the scale, the need for a large number of personnel, warehousing. At that time, it was proposed that the layout of the warehouse in the country, Hong now remember to feel more fortunate, "fortunately maintained the maximum rationality, as long as a warehouse, now a lot of electric dealers in the clean-up." ”

Without financing, Massamasso's cash flow became tense. As a result, the team thought of how to quickly realize and clean up inventory in advance to maintain a stable cash flow, first let Massamasso survive. The vicious circle of large discounts and low price sales has since started.

"Although the customer has benefited, but the brand electric dealer this kind of discount sale, to the brand image still has the impairment." "Hong Reflection. At that time, some of the bad dealers have been out of layoffs, the failure of the news.

Looking back on this history, you will find that the scale trap created by the invisible hand of capital is the most direct cause of Massamasso's precipitous fall. But, as Han Ou said, to see the development of an electrical business, must be restored to the real environment at that time. Now calm down, you think that brand electric business to see profit is a very normal thing, but in the environment, no one would think so, many people think that it is natural to do the scale first. That time, even she thought so.

"In fact, with the Massamasso the same time period to establish a vertical brand of electric dealers, such as Dream Bazaar, Kupala and so on, the competition was too intense." But the survival is not much, your survival and development needs to maintain its existence of funds, investors come up to ask sales, new customer rate, if you can not meet the requirements of investors, it is difficult to get financing difficult to survive, so it is in the circumstances of the time there is no choice. "Han-Hui said.

What is it about the market? In fact, investors are also exploring, perhaps to seek the big greed to promote the bubble, but they also grow up slowly realized that the electricity business is actually a business, business is to make money.

Return to commercial nature

In the impetuous and crisis Hong, actually has been thinking about how to return to the commercial nature of the problem. After the storm, he became increasingly aware that his goal was to insist on delivering cost-effective products to target consumers. This positioning is not a problem, nor can it be changed.

In March this year, Massamasso in Beijing, the World Trade Day Order of the offline entity shop announced closure. For this one attempt, Hong still feel very necessary. Through the opening of the experience shop, so that the line of consumers online under the combination is right. "Massamasso if you want to return to the nature of the brand, or should do a similar brand shop so that consumers a better shopping experience some of the attempts." "Once was the line entity shop in charge of the head of the Han ou said." The US E-commerce leader Amazon and China Day Cat Mall, are also doing similar physical store attempts.

The reason for closing the shop, on the one hand, because of the operation of the problem, such as Han ou said, "World Trade Day is a person with no amount of traffic is similar to the location of tourist attractions"; On the other hand, it is not possible to support Massamasso's strategic operation at this stage. Sun's analysis is that, although the entity shop to achieve a break-even, but has purchased customers from the offline conversion to the line of the probability of a lower degree of interaction is also relatively low. The original intention of doing physical shop is to bring online conversion rate, through some offline activities to promote the purchase, but the final data shows that the growth rate is not enough. "It is a deviation from the main strategic goal, the line below the conversion rate of less than 10%, not a strategic breakthrough." Hong made a summary.

In fact, since then, Hong has begun a strategic contraction, cleaning up inventories, cutting the advertising budget by 50%, and the company will lay off 350 people to 270 people, gradually returning to the "slow" pace. Not to be aggressive, but to be efficient in the search for sustainable and profitable ways to grow.

Because Massamasso is the high-end of its own brand, and its own brand of gross margin is good, this is Massamasso can survive, even if there is no financing of the reasons for survival. Even after several rounds of price discounts, Massamasso's customer unit price is still close to 500 yuan, winter even to 600 yuan to 700 yuan, such a high customer price in the clothing electricity Shangli not many?

Perhaps it is the Massamasso of past strategic radicalism, and in this strategic contraction, the business is also handled in a rational and conservative manner. Not just layoffs, for example, but a reset of some of the core goals, starting with performance appraisals for employees (formerly a management system without performance). And according to Massamasso, a veteran of the technology, said: The layoffs did not move any of the old staff, but only a few adjustments to the new staff.

Massamasso's adjustment not only returns to the rhythm that a brand trader should have, Hong also is trying some other profit pattern. In addition to Massamasso's own brand, Sun is also actively introducing some international well-known brands of cooperation, has been Armani, boss and other 16 international brands authorized. He chose the brand to have two conditions: first, the high-end brand positioning, the second is the customer unit price than Massamasso, in order to enhance the Massamasso taste and grade. Unlike the channel vendor, the Massamasso layout is more like an open platform. It's just a partnership, not a buyout.

Will this distract you? Sun's heart has a positioning: based on Massamasso consumer group services. They are Massamasso consumers, the high-end brands. Can be like Armani, for this part of the consumer groups to form an industrial chain. Following this logic of thinking, last year Massamasso launched a own women's clothing brand Vivian, because in the Massamasso shopping group, there are 30% of women, he wants to meet the needs of these women. "The scope of business should not be too narrow. "It is his understanding that until now he still thinks Vivian is in line with Massamasso's strategic needs." At present, female customers have been raised to 40%.

For Massamasso's future, Sun and his team have been exploring diversity. But unlike before, Massamasso is returning to the commercial nature of the product itself to expand its size, rather than simply using the price strategy.

Hong said, "I am not so pessimistic, entrepreneurs with vigilance to go down is an excellent entrepreneur's essence, this is not a traditional industry, with ready-made path can learn from, the new business form needs groping, as Microsoft said, we will never closed only 18 months." This is an idea that should be kept awake and vigilant in prosperity, not to mention the development of E-commerce in China at present. We know our goal is not a problem, we need to be in the volatile consumer markets and capital markets to do their own risk-seeking and breakthrough development opportunities. ”

Hong's attitude was adamant: he would not sell Massamasso. At present, many investors are in contact with Massamasso, but he hopes to introduce a flow or industrial resources of strategic investors, if not find like-minded investors, enterprises will adhere to their own.

An electric dealer who loses his imagination

Recently interviewed by the media, they are particularly funny, asked me why not to do the electricity business, I think the electrical business has what to do. At present, the electrical business is a lack of creative industry, I tell you, electric business marketing is a few points, come up first we do CPS (commodity promotion Solution, commodity promotion solutions), and then we do a bit of SEM (Search Engine Marketing, search engine marketing, and then we'll see if we can throw some ads, and finally, see if we can do some activity. I will teach you the basics of one months, including looking at data, selection, you can do it the next month, it is a too good copy of the industry, no new ideas. To do anything, you have to be imaginative, but you have no room for imagination. It is the spell execution. Electric dealers need people with a lot of creative ideas to do it, but creative ideas are short of money.

Chinese electric Business Enterprise's sadness all is develops from Taobao, the foreign is Amazon. Amazon This group of customers is characterized by a lack of price, no time to buy clothes, express can send clothes to our home, they buy online and offline The result is the same. But China, the entire electronic business environment is Taobao came in the goods, we said, we have to look at the price first. No electric company dares to stand up (against the price war), and they are largely accustomed to the user. Electric business training customer is too disloyal, today he can in your excellent purchase, tomorrow he can buy in Jingdong, the day after tomorrow he will be on Taobao.

More unscrupulous to help users than the price of the enterprise appeared. So when the Beijing-East boycott a Amoy, we particularly support. When I was at the Le Bee, the bee was not working with a Amoy. Why not? Because this thing can't do that. Your damage to the industry is unimaginable, and maybe two or three years from now, there will be no one in the industry. It was a devastating injury.

Perhaps now, the electricity business should not go to the price war, should not pay too much attention to the sales, but in 09, when the electric dealers can not get the money, you will certainly go to scale. Do scale will certainly face the price of sales, this is a chicken egg or egg raw chicken. No one would say, well, gross margin is high. Investors come up to ask you sales, your new customer rate is how much you can expand this year, right?

This is the main problem of the year, not like the current investors, came to ask you, your gross profit margin, return to rationality. When you were not so rational, you were forced to go in that direction when you were raising money. It is an environment that creates business relationships, or a causal relationship. This is also not a clear way to understand the thing. When I met a lot of investors, one of the questions asked was: How do you expand your new customers? I'm going insane!

Now you can do something, where you can ah, because there are a lot of wolves in the following competition with you.

I think there is nothing to write about, because the big environment can not come again. Unable to have the 2009 and 2010 environment, all the articles are biased. Look at the environment today, people can not feel empathy, you will be in accordance with the current situation to think about the problem. You will say: "No Ah, now is the pursuit of profit AH." "But now the people who do the electricity business, they will think that the electricity business is supposed to pursue profit, but 09 is not true." That moment is especially difficult, do not start a business you do not know, entrepreneurial you will know, each company experienced the things are unimaginable.

If you have experienced this process, you will feel particularly special pity, because online China's electric business environment is really bad. Really hope that a lot of people stand up and call for the present environment. You don't fight at the bottom of the line!