Wang Licheng: Three modes of authorized, horizontal and vertical profitability

Le Bee Network CEO Wang Licheng

News and science and technology September 16, le Bee Network CEO Wang Licheng a few days ago, "high-end Interview" column, said that the electricity dealer's profit has authorized, horizontal and vertical three kinds of models.

Wang Licheng in explanation, said that the authorized profit representative for Taobao such platform, commission by authorization; Horizontal development refers to Jing Dong, suning easy to purchase this through expanding the scale to reduce the break-even point; Le Bee network belongs to the third category, has its own brand, has its own crowd positioning, by the largest brand to do deep.

And for the Lok Bee network how to deal with the premise of large capital investment situation, Wang Licheng said very much agree with Zhou's view, that a business to achieve a profit of at least nine years, the first three years is a primer, the second three years of intensive cultivation, the third three years began exerting force. Lok Bee Network set up four years, is in the stage of intensive cultivation. Although in the short term is not likely to have a great return, but Wang Licheng said, planting what kind of "because", will harvest what "fruit", planted under the brand "cause", will certainly harvest the brand "fruit".

The following is a transcript of the interview:

News technology: Wang, in fact, I talked to other guests before, they mentioned a very interesting thing, he said that in fact, most of the Chinese electric dealers are consumer-to-consumer, is copy to China, and then you also mentioned that we are also a lot of experience from abroad, so what is our biggest innovation point?

Wang Licheng: I'm going to talk about Martha's example, when Sequoia invested in our company 4 years ago, it was actually rooted in the relationship between Martha and Oprah, Martha and Oprah, the leading middle-class spiritual leader in the United States, whose influence is very strong and many people like them, watching their shows and doing their magazines. They developed their own brand of products, for example, Martha developed his pots, furniture products, flower arrangements, etc., but first he does not produce, the second he does not have his own sales channels, he is entirely authorized to let others to produce, others to sell, he received the authorized 10% Commission, only in this way to do. So he's his sales. 70% of the sales are media, and 30% of the income is actually authorized income.

But in China such a country, not too carry forward individual heroism, you say to push Li how well-known, finally put Li brand to do others home pot, do you think this reality? Not too realistic, it would be strange. We actually have this kind of shadow, but we have to walk completely different from them. For example, Martha in the United States is a person, we can not fully implement the heroism in China, we are a lot of people, we recently signed 300 people, this is the first difference.

The second difference is that Martha is in the way of authorization, the production of nothing, no matter what, we do not in China, we have to track production and QC, we are responsible for sales, we can not do authorization, to do their own brand products. These ideals and dreams underpin our investment in a short time market, we can get through the price war, it is very important because we have a good expectation for next year and future, we have to develop and profit, so we just walk all the way, not impatient. Talk about this industry a future profit model, in fact, the electric business industry is nothing more than three kinds of profit model.

A model like Taobao platform, by way of authorization, receive Commission 4%. So in the future, China's biggest electric dealer, or China's largest e-commerce site, must not Tencent and Baidu, must be Ali Group, 100%, will be their two or three times times the valuation, this is my personal expectations, but also may be tens of billions of valuations, because if you can Taobao, Alibaba, Poly, cat, Alipay integration, Packaged into a company listing, you think not an aircraft carrier is good, I think this is a company, but these things we have no way to match, we are not a direction.

The second profit model is horizontal development, the so-called horizontal development is to refer to such as Jingdong, Suning E and Amazon, it through the scale effect, constantly expand the scale, reduce their own break-even point. Let's say we open a clothing store, the profit and loss platform may be 35 break-even point. For example, we go to Taobao open a cosmetics shop, may breakeven point 40%, but do not rule out in Jingdong and Suning e purchase, Amazon these companies on the basis of rapid development, their scale is very big. For example, one day suning e to buy a year 100 billion, Jingdong 100 billion a year, this time they do not rule out the break-even point to 8 points. When their logistics, personnel costs are all down to 8 points, you think their profitability is very easy, they sell a toothpaste, only 12 people's gross margin it has 4 points of profit, so they are horizontal development.

Le Bee NET is absolutely cannot develop horizontally, because horizontal development we all compete in any case but these big old, we only have vertical development. Vertical development means you're not selling a toothpaste to make 12%, I have my own brand, I have my own crowd positioning, I have my own production number, I sell a completely German production, our own platform products, I can sell higher profits, but I have a better profit after removing the cost, I think it's also a way.

We know that the first company in the world is Amazon, do you know who is the second largest company in the world? I told you it was Germany's Otto, he is a fully independent brand of the company, he has 1500 brands of clothing, his annual retail total of 130 billion yuan. You see it's all your brand, but he's got the ultimate in his brand, he also has a very high gross margin, he is in Germany you buy a dress I give you three pieces of the past, take one of this size, I take another size, I take the same one of the other color, three pieces for you to choose, his return rate reached 50%, Because customers sometimes take 3 pieces only one, the other two to get back, leaving two other one back, but it is still the world's best, the largest and most profitable e-commerce companies, all of their own brands, all kinds of clothing. For example, he positioned the dress of a girl aged 12 to 14, 12 years old to 14 years old, he may want to just go to junior high School, junior high School also give you positioning, Junior high school I give you a clothing brand, senior to senior three I give you a brand, just into the university I give you a brand, There are just six types of college entrance I will give you six brands, the six brands from the coat to underwear, from summer to autumn outfit, he gave you a lot of brand. If you want 1500 brands to serve you, you're going to be crazy, and there's a lot to choose from.

We're also talking about strategic cooperation, their clothing September will be landing our Lok bee nets, we introduced their highest end of a brand, very beautiful, last time I and Li went to their showroom, see clothing Li Fondle admiringly, a very long thigh here skin coat, leather, with fur, Full leather coats more than 2000 dollars, completely German production. If you buy five thousand or six thousand in China, seven thousand or eight thousand, a good leather if the brand is more than 20,000 of all, but these garments are all European production, we imported from Germany, the country only le Bee in the sale, September listing, all are autumn outfit and winter clothing, we are very proud.

That is to say, suppose this clothing 2000 yuan, I sell one, sell can move? I confess, is not a good thing you buy home a wear to know, the best key to clothing is the version and cloth, version of good, wearing a special fit. Another question, how many 29 t-shirts do I sell in such a costume? So I think there are many ways to do it, and doing it horizontally is a way to do it vertically, so there is no doubt that the only choice is to do it vertically, which is to make the brand familiar. So you just asked us a few brands, I said there are six, you think so much can do it? In fact, when you listen to my story of Otto, you will find that the imagination can also be very big.

News technology: How do we deal with the initial investment will be relatively large situation? Because we introduce the brand or make their own brand, in fact, the upfront investment is very large, our investment is mainly concentrated in these several levels, talent will not talk, because the talent is long-term investment. Next is the logistics, logistics no way, we are now Beijing, Shanghai, Guangzhou three warehouses, each warehouse nearly 10,000 split meters, each warehouse 150 employees. Call center we are on the United States the best server, can support 4,000 seats, this is hard input, our server now two group is also invested 1000 millions of of the server, this is the hardware level.

Market input, if you do the subway you will see the Lok Bee Network in the subway ads, including elevator ads, and so on, we are very invested. Why the industry has a lot of investors in your brand start-up period to give you a lot of investment, in fact, let you for tomorrow, for next year to save your energy today. If you do sales may start to make money, if the brand, the previous years are basically input.

The last two days I saw Zhou on micro Bo wrote very well, I feel very deep, he said a business if you want to make money at least nine years, the first three years is a primer, the second three years is intensive cultivation, the third three years is the force. Le bee nets this year is the fourth year, now we are doing is intensive farming. For some examples, the recent events of Le Bee. For example, we are in Shanghai jiading a 20,000 square meters of cosmetics research and Development Center, has begun to start, the national cosmetics industry, local brands I believe we are the first. The first two days of our new entry is the chemical Doctor of Tsinghua University, to help us to do cosmetics formulations of the head of the total, which is investment.

In addition, our September website will make a comprehensive revision, Le Bee network will be upgraded to a thousands of Hong Kong, Macao and the United States of the three beauty of the community, we call it the bee to the standard, is the trend and trend, we are not price and low prices, trends trend, I think this is a change.

The third change, the Lok Bee network of the entire mall will be open, will be their own brand and agent brand all made an open platform, no matter what kind of good products, as long as you have a good potential consumer demand, I will help you do promotion, and so on, this is the recent changes we are taking place.

So we are doing these things are basically investment level, is unlikely to have a great harvest in the short term. But you plant these reasons for this year, and tomorrow you may be able to take the fruit of the brand; tomorrow you will accept the low price of fruit, also means today you kind of low price, tomorrow is not low price when the consumer will go; today you grow brand, tomorrow there will be many people because like your brand, to like to buy your products.

I think that if any company has been in the past five years and the next five years, I think there is a causal relationship, profit or business development, is such a process.

News and science and technology: good, we today's interview to here, thank you netizens watch, goodbye!

Wang Licheng: Thank you!