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Customers Reintegrate $30 Million Into B2C Breakthrough

2008/8/21 12:53:00 35

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Retreat or move on?

The garment B2C industry has come to a crossroads.

In April of this year, Shanghai Zhong run liberation media published a full page debt reminder for PPG in the local media. It said that PPG owed more than 165 yuan in advertising.

Because PPG was the first company to make clothing B2C in China, it not only led to PPG being questioned, but also the whole garment B2C industry encountered media and investment circles' doubts.

In the tense period of market panic, B2C, also known as VANCEL, has obtained a total venture capital of 30 million US dollars.

In August 20th, the founder of CEO, the founder of van guest network, confirmed this news to our newspaper reporter. He also said that the re injection of the Internet has made the industry regain confidence.

It is reported that the investment by Qiming venture capital investment, IDG, LIAN strategy source, Softbank Sai Fu and investment.

This round of investment is the third round of investment by Van guest network. The first round of investment came from the beginning of the van guest network. Investors include LIAN TSE yuan, IDG two investment companies, and Chen, Lei Jun and other founders.

In addition to the first round of IDG and LIAN policy sources, VC participated in the second round of investment.

Chen disclosed that the first two rounds of investment earned more than 10 million dollars.

Victory of the Internet?

PPG pioneered the business model of clothing B2C, once a leader in this industry, and was the first to win the favor and capital injection of VC.

From October 2005 to April last year, TDF, JAFCO Asia and KPCB made two rounds of investment in PPG respectively, with a total value of nearly $50 million.

With the help of capital, PPG has been developing rapidly.

According to the data provided by PPG: PPG last year's annual turnover of more than 1 billion yuan, an increase of nearly 50 times compared to the same period in 2006. By the end of last year, PPG had 500 employees, and the number of clothing sold every day was more than 10 thousand. The sales volume of YOUNGOR was close to the first share in the domestic market, and YOUNGOR's sales volume was about 13 thousand per day.

VANCEL also caught up with the expansion of the industry.

Zhong Kaixin, deputy general manager of VANCEL, told reporters that it has achieved monthly sales of more than 60 million yuan, and at this rate, the annual revenue will exceed 700 million yuan.

The success of PPG and VANCEL made the giants of traditional clothing industry itch.

At the end of last year, the news bird group announced that it invested 80 million yuan in its online direct sale website BONO. Subsequently, Hongkong's leading men's clothing brand Latland (LA LAN) also announced the huge investment clothing B2C.

For a time, the wind and traditional clothing giant formed the situation of B2C.

"The speeding development of clothing B2C is the victory of the Internet."

VANCEL some people say that clothing B2C has no stores, factories and assembly lines. There are only a few small warehouses, and users can deliver goods through the Internet and call centers. YOUNGOR has more than more than 1500 retail outlets nationwide.

Reporters learned that, because of the impact of the PPG incident, Qiming venture invested heavily in VANCEL, and conducted a very rigorous investigation and assessment. The survey found that many young people have been fond of this simple and convenient way of life online, and that they have gradually formed the habit of shopping online, which will change the habit of buying clothes in traditional stores before.

Chen believes that the success of the Internet is not only the success of clothing B2C, but its ultimate success is a change in people's behavior and habits, and this change has just begun.

From excellence to customers

Although the high speed growth of clothing B2C makes the industry and capital gratifying, PPG's arrears of advertising have begun to alert the industry.

In this regard, Zhong Kaixin believes that VANCEL can get the favor of venture capital in the tense period, and has a great relationship with its business model. "VANCEL's mode is different from PPG's."

The initial success of PPG came from the change of user interface. The user interface of traditional clothing industry is store, hypermarket, etc. the products of costume giants reach users through these interfaces. The user interface of PPG is flat media, TV and computer. Through these interfaces, we can only use doorphone call center to deliver door-to-door.

The most important users of PPG are TV and flat media. However, to occupy the two major user interfaces of flat media and TV, it is necessary to invest huge advertising costs.

In addition, in order to attract the attention of TV and media audiences, PPG also asks celebrities to endorse, which also requires a lot of advertising expenses.

In fact, in the event of PPG's arrears of advertising fees, it is the user interface cost to flat media.

The increase in operating costs has also raised the threshold of profitability. VANCEL, a person, said that with the Internet as the user interface, 500 million yuan would be profitable, but with flat media and TV as the user interface, it would not be profitable.

"The advantage of VANCEL is to focus on the Internet as the user interface, and resolutely do not do the media and TV user interface."

Zhong Kaixin said.

This model of VANCEL draws on the experience and lessons of past book B2C.

Before the sudden rise of garment B2C, the domestic B2C industry has no real profit.

The first development of the B2C mode is the book audio and video industry. The representatives are excellent and dandy, but even though they now have more than 1 billion yuan in revenue, they are still in a dilemma of not making profits.

This seems to confirm the American experience of Amazon founder Bezos, who needs to earn more than $10 billion to earn real money in B2C.

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