Most E-Commerce Businesses Lose Money And Earn Money.

Recently, reporters found that our country

Multiple factors make e-commerce "temporarily difficult to make profits".

At the end of last year, Mcglaughlin, the first stock of China's B2C, had been listed for less than a month.

Since its first third quarter earnings report in November 29th, its share price has dropped by nearly 40%.

Some B2C websites have been closed down, such as the rice grain mall, which has received tens of millions of financing, is an example.

"The overall volume of e-commerce market in China is very large, but e-commerce enterprises are basically at a loss."

Su Huiyan, an analyst at the ERI Consulting Group, said that China's e-commerce is still in the basic stage, which takes at least 35 years. At the same time, Amazon, a famous foreign e-commerce enterprise, has suffered losses for nearly 10 years. Its logistics system employs hundreds of Ph.D. students from the US elite schools to achieve profitability.

According to introduction, the cost of e-commerce mainly includes four aspects.

First, advertising investment, shopping websites often need a large number of advertising to compete for the market.

Two is the website construction and maintenance, online shopping on website stability and safety requirements are extremely high, can not be wrong.

Three is customer service, including refund and replacement service, and the establishment of call centers.

The fourth is logistics, because the sales cost of shopping websites is higher than that of traditional retailers.

In addition to high cost and low price, e-commerce has fallen into the predicament of profitability. It is also related to the development strategy of enterprises: to expand the market share as the first choice, rather than strive for the ideal profit.

Because unlike the traditional retail industry, e-commerce has the characteristics of "winner takes all", and it is necessary to squeeze into the top few industries to survive.

The former chief executive of Alibaba believes that there are four stages in the development of e-commerce: the first stage is the non mainstream crowd buying non mainstream products on the Internet, for example, seventeen eight year old children buy hair accessories, game cards and so on; the second stage is the mainstream products such as clothing, mobile phones and other mainstream products started by the non mainstream crowd; the third stage is the products that the mainstream social groups begin to buy offline stores, such as nostalgia souvenirs, etc. the fourth stage is the mainstream crowd buying mainstream products, which means that e-commerce has become the mainstream shopping habit of the people.

"At present, we are in between the third and the fourth stage, and e-commerce has not become the mainstream means of social pactions. Under such a background, it is not surprising that e-commerce companies are making profits difficult."

Watch out for e-commerce bubble and unfair competition

At the end of 2010, a "price war" broke out between the big book network market, the Dangdang network and the new entry Jingdong mall, until the competent authorities concerned paid attention to the two sides, and the storm subsided.

Experts warn that in the fierce market competition of e-commerce, we must protect the enthusiasm of all parties and give some vigilance to the way of development that some enterprises do not profit.

One is to prevent unfair competition.

Wu Sheng, vice president of VCE, said that e-commerce enterprises in China are now in the stage of "earning popularity." as a new industry, e-commerce will not immediately be profitable when it is launched. At present, the most important thing is to cultivate customers, increase star products and expand the market.

Chen Jin, Dean of the school of information at the University of foreign trade and economic cooperation, believes that e-commerce enterprises must reach a certain scale to build their foothold, so initially they are expanding the market and making it difficult to make profits. This also creates a fair competition problem, because some enterprises have deliberately priced the price very low in order to compete for the market, which has affected fair competition.

Two, we should be vigilant against the problem of e-commerce bubble.

Huang Ruo, chief operating officer of Dangdang, said: "I have always believed that a company that is not profitable is not a moral enterprise. I do not believe that" today is not profitable, it is for tomorrow's profit. "

For the current large number of overseas financing of e-commerce enterprises, he believes that there is a danger in it. Just like the Internet bubble, in order to expand the market, people burn their money desperately, regardless of the cost, resulting in great losses to investors and society.

"If an enterprise can't make a profit in the end, it will be a great loss to investors and employees, which is immoral."

"Differentiation" is conducive to improving profitability.

According to the insiders, although the profit model has been relatively stable, the profitability of e-commerce enterprises needs to be further improved, and differentiated products and services are a good solution to the problem.

Jiang Qiping, Secretary General of the information research center of the Chinese Academy of Social Sciences, said that at the beginning, various industries were in a stage of competition. The larger the scale, the more money they made. After this stage, everyone began to spell prices. After the price approached the cost line, enterprises must ultimately occupy the market by relying on the differentiation and individuation of services and products.

For example, there is a very successful online shoe store in the United States. It always insists on sending three shoe sizes to customers for trial wear.

For example, if a customer wants 38 yards of shoes, it will send 38 yards, 38.5 yards and 37.5 yards of shoes to the customer.

Shen Xingzhong, chairman of Tang stun Jewelry Co., Ltd. has similar experience. His business has been wearing jewelry such as rings. Before giving customers rings, the size always has errors and is often returned to replace goods, which has brought greater pressure to cost and reputation. Later, the company invented the method of "circumference measurement" for network marketing, and applied for a patent, which is to produce all the industrial moulds of rings of sizes 5 to 13. When customers want to place orders, they send a set of molds to the past. Customers have tried to ring the rings after a few tests, and the company has delivered the goods in a timely manner, so that the company has made timely delivery of goods, which has gained great recognition from customers.

Experts believe that, compared with other industries, the profit of e-commerce is still small, and the profit space needs to be further expanded. Therefore, we need to attract consumers with differentiated products and services. Only in this way can we change from the initial "losing money making cry" to the stable profit stage, so as to achieve sustainable development.

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The sustainable development of e-commerce enterprises still needs system improvement.

Reporters found in the survey that e-commerce has broken the existing economic system in China, and has brought great pressure and challenges to the industry guidance and management of the existing government departments.

For example, the unclear management system, the lag of supporting laws and regulations, and the "vacuum of talents" in e-commerce become the problem of restricting the sustainable development of e-commerce.

"The essence of e-commerce is business and highly dependent on information technology."

Nie Linhai, deputy inspector of the Ministry of information technology of the Ministry of Commerce, said that due to the different understanding of the concept of e-commerce, the departmental functions and management system were more chaotic.

"Many local government leaders simply see e-commerce as Taobao, Alipay or Alibaba, and their ideas have not been changed."

Lin ya, Secretary General of Beijing Electronic Commerce Association, said that if the traditional bar style industry management method is still adopted, it will get twice the result with half the effort.

Chen Jin, director of the modern service industry research center of University of International Business and Economics and Dean of the school of information, believe that the current management system of e-commerce in China is relatively rigid. From taxation, customs, finance, financing to supervision and cracking down on crime, all policies are based on traditional manufacturing and service industries, and e-business is different from any traditional industry in the past. Therefore, relevant policies need to be changed and improved accordingly.

At the same time, the supply of talents in e-commerce is far behind the development of e-commerce.

Tan Bin, senior analyst at IDC, believes that with the development of e-commerce, especially after the entry of a large number of traditional large enterprises into the e-commerce industry, e-commerce professionals have appeared in a "vacuum zone".