VC Deep Cut High-End Consumption &Nbsp; Luxury Financing Explosive Growth

In June 23rd, ihush announced that he had received $43 million in capital injection.

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Explosive growth of luxury financing

According to ChinaVenture data, since 2007, since the diamond bird was invested in US $2 million today, the B2C e-commerce business in the luxury luxury industry has increased gradually, and it has seen explosive growth in 2010.

In 2007, -2009 disclosed 8 cases of the financing of the luxury luxury B2C website. The total amount of financing was $41 million, and the investment was mainly in diamond jewelry enterprises.

In 2010, the luxury luxury online shopping industry disclosed 12 investment cases, with a total investment of US $107 million, involving diamond, clothing, luggage, cosmetics, red wine and many other subdivision areas.

Since 2011, 12 cases of B2C websites have been disclosed, and the scale of financing has reached US $283 million, which has reached the highest level in history.

Among them, the largest financing case is the Sequoia China joint DCM investment in vip.com, and Fangyuan capital joint LIAN strategic source investment diamond bird, the investment scale is 50 million US dollars.

The explosive growth of the financing of luxury luxury websites, on the one hand, stems from the popularity of the e-commerce industry since 2010. B2C, such as vertical B2C, group buying and e-commerce platform, has been favored by investors. On the other hand, under the guidance of domestic consumption upgrading, the high-end consumer market catering to the rapidly rising middle class consumer demand has been growing rapidly, and the luxury luxury online shopping industry has also been well received.

In addition, fierce competition in the field of Internet investment has also prompted investment institutions to explore investment opportunities in vertical subdivision.

Despite the size of the market, luxury online shopping is facing the "blue ocean". However, because most luxury brands are cautious about the Internet, the development of luxury B2C still faces many bottlenecks.

Feng Po, an analyst at ChinaVenture group, believes that the luxury B2C website currently faces two hurdles, one is supply channel and the other two is logistics.

Because Internet marketing has subverted the original pricing system of luxury goods, it will damage the interests of brand agents and distributors. Moreover, the simple shopping mode of "cement + mouse" may also damage the brand's "luxury" positioning and mystery.

Therefore, luxury businesses still have a lot of concerns about online shopping, and the purchasing channels of e-commerce websites are relatively narrow.

Another real obstacle faced by luxury B2C website is logistics.

At present, most websites do not have enough capital strength to build their own logistics. Most of them are outsourcing logistics to the third party express companies, and the scattered status of the express industry often leads to the loss of goods, which directly leads to the decline of user experience.

Analysts believe that logistics, distribution, web page design and user experience of shopping platforms and other related factors will be the main challenges facing luxury business enterprises, and the opportunity for market competition is also here.

PE Nuggets targeted private placement

Fierce competition in the market is an important reason why venture capital organizations dig deep into luxury goods and other vertical areas. For PE, the pre competition market is more competitive than early investment. Therefore, in recent years, many private placements in the A share market have become the target of PE institutions.

In June 17th, Hirotake invested 1 billion 200 million yuan to subscribe to sunning [12.81 -0.08% 002024.SZ] (002024.SZ) 97 million 560 thousand shares of private placement, becoming the first investment project to be completed at the beginning of this year, with a scale of more than 10 billion yuan for the two phase RMB fund.

According to the data of ChinaVenture group, since December 2009, the average price earnings ratio of the A share market in China has followed the Shanghai and Shenzhen index, showing a downward trend of three rounds, which is now stable at 30-40 times.

At present, the price earnings ratio of small and medium sized boards and gem IPO is at the lowest level in nearly a year.

At the same time, the average price earnings ratio of the A share market has gradually decreased to 14-16 times while the price earnings ratio of investment has increased and the price earnings ratio has dropped.

Under this background, the directional issuance of A share listed companies has become another option for some local PE institutions and strategic investors to participate in equity investment.

Since December 2010, PE and strategic investors have invested 9 billion 240 million yuan in the targeted issuance of domestic A share listed companies. The number of investment has reached 45. In the same period, the total scale of private placement (116 billion 735 million yuan) and the total number (83) reached 54.2% and 7.9% respectively.

Compared with Pre-IPO investment, the relatively pparent pricing method of private placement is beneficial to PE institutions to control investment costs and risks. Participation in the lower shareholding ratio after private placement is not necessary for PE institutions to invest too much in post investment management.

It is only 12 months' lock up period to subscribe to the non-public offering stock, and the exit cycle is greatly reduced.

However, vanguard, a group analyst, thinks that as a profitable way for private equity investors, private placement has the risk of loss and withdrawal. It is not realistic to take it as the mainstream investment mode.

Domestic investment institutions, which focus on long-term development, still need to focus more on developing potential businesses and management services and investment teams after investment.