The Largest Online Shoe City In The US Zappos China Stealth

Reporters learned from people familiar with the matter: a few days ago, the world's largest

Reporters interviewed Le Tao net, but the other side only confirmed that Zappos did have executive visits, but the contents of the negotiations were not disclosed.

The secret of Le Tao has made it inevitable for the industry to speculate: what kind of spark will collide with the 500% largest growth enterprise in the world, Zappos, the largest online shoe city in North America?

Fact Zappos executives visit secretly

Perhaps many people do not understand the US Zappos company, which was founded in 1999 by Xie Jiahua, a Chinese American and headquartered in Henderson, Nevada, is currently the world's largest B2C website for footwear sales.

In October 2009, Zappos was sold to Amason (Amazon) at a price of $1 billion 200 million, but maintained its independent operation.

According to reporters, as early as 2006, Zappos set up an office in China, but has been unable to enter the huge Chinese market.

Localization of operations and understanding of Chinese consumer habits are like giant mountains that keep the giant outside the door.

But Richard Hsieh, the vice president of Zappos, said: "Zappos never ignored the Chinese market. For three years in China, he also claimed that he had a better understanding of Beijing, Hongkong, Dongguan and Fujian."

Richard Hsieh also said: "China's e-commerce development is very fast, especially in the past two years, similar to Zappos online shoe city has been very much, which has produced many very potential companies."

He thinks that the concept of Le Tao net is the same as that of Zappos. Although there are cultural reasons, there are certain differences in specific operation modes.

Forecast

So, does Zappos want to formally enter the fast growing Chinese market by Lok Tao net? Richard Hsieh's view is: "for Zappos, the North American market is very large, and it is already busy."

He claims that from the perspective of Zappos itself, it can not directly enter the Chinese market for a time, but appreciates its operation in China.

However, industry analysts believe that Zappos's position is very thought-provoking and ambiguous.

It is true that recruiting training, establishing logistics centers, and establishing channels of distribution with domestic shoe industry channels will require a higher capital threshold if they start from scratch, but this is not a problem for Zappos. The difficulty lies in speed, let alone an efficient management team is no easy task.

Therefore, it is more feasible to find the most suitable websites in China, and make the merger and acquisition operation appropriate.

Even VC said that tiger fund invested in Le Tao net this year, which is a clue to follow.

As early as many years ago, tiger fund invested in excellent network, and then excellent network was bought by Amazon.

He believes that capital is always following the familiar path and will not be easy to find another way.

However, there is another view that Zap-pos may not adopt the strategy of merger and acquisition, but may take the form of first cooperating alliance. After the running in period, when the time is more mature, the brand and capital level M & A actions will be considered. The shortest process will take 3 years ~5 years.

Exploring China

Reporters in the online sale of shoes B2C website interview found that these enterprises generally believe that Zappos attempts to enter China, will bring pressure on the immature Chinese B2C market, but it will also improve the service level and operation experience of Chinese enterprises.

According to AI data, last year China's overall sales of footwear exceeded 400 billion yuan, including Taobao, the proportion of online footwear retail accounted for less than 5%, while the domestic footwear B2C companies, none of the annual sales of more than 200 million yuan.

In the face of this huge market and the apparently high rate of growth that we can expect, how can Zappos, a global boss, not be so excited?

More power, or Amazon from Zap-pos's parent company.

Recently, the famous Wall Street rating agency Kauffman brothers raised the company's rating, and gave a target price of $135 share price trend.

Although Amazon has a good long-term growth prospects, but because the European and American markets tend to be saturated, in order to achieve remarkable results in profit expansion and revenue growth, we often need such special means as mergers and acquisitions.

In the aspect of clothing business, besides Amazon, Amazon also bought Endless, a network retailer specializing in women's clothing and accessories, and Fabric of online clothing store. In other aspects, Amazon has acquired the voice book provider Audible, online bookstore Abe-Books and Shelfairi in recent years, and has also increased the share of Shelfairi's rival LibraryThing and acquired all the shares of Bookfinder, Gojaba and bibliographic management service provider. Besides, there are also online music retailers, Zappos Network Movie Database and box office Statistics website, etc., and so on. Shopbop

In a word, Amazon's competition rule is: we can't beat our opponents and buy it.

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Future Lok net visit to increase cooperation opportunities

During the deadline, reporters learned that Li Yong, the founder of Le Tao network and CTO Zappos, is planning to visit the US headquarters next month, which will add more imagination to the two companies in the future.

However, an industry expert familiar with the development of e-commerce in China believes that if the two companies can merge or cooperate in other ways, it will also be different from that of Zappos when it was forced to sell to Amazon under the pressure of investors' Sequoia Capital pressure, because the unique "real library sale" mode of Le Tao was unmatched by Zap-pos.

It is reported that the reason why Zappos was bought by Amazon was that its buying mode was challenged in 2009. Huge inventory pressure led to tight capital chain. Finally, Amazon had to reach a takeover agreement with Amazon, which had huge cash holdings.

In this regard, Zappos founder Xie Jiahua deeply deplored.

He once disclosed that he had never intended to sell the company, but had to suffer from the pressure of capital under the condition of economic recession.

And the "real storehouse sale" mode of Le Tao net can obviously avoid the risk of capital. Therefore, whether the network is willing to merge or cooperate with Zappos will depend more on the external competitive situation.

Although Le Tao net is the first Chinese shoe B2C website in terms of brand number and variety quantity, it has little difference from its competitors, and Taobao has also opened the "shoe shoe hall". These external competitive pressures may make Le Tao consider the possibility of both sides joining hands.

According to the insiders, if the M & A happens, Zappos will get a huge Chinese market with an annual growth of 90% and an annual sales growth of 500%. The company will get more support from technology, capital and suppliers, plus Zappos's buying mode and capital, which is equivalent to the fact that Lok Tao net has increased hundreds of brands and tens of thousands of popular brands in the US, and the conversion rate of the website will increase several times.

In a telephone interview with the reporters, Bi Sheng confirmed that he would return to the US Zappos at the end of September. He said he had not considered the merger, but he did not rule out further cooperation.