How Long Can Vip.Com Last?

Since August 2011, the first Chinese stock market in the US IPO has been reopened in the US IPO window, and the first IPO e-commerce company in 2012 has...

This series of awards enables vip.com to become the focus of the electricity supplier and the Internet industry.

However, the bloodshed, the market break, and the market value of the "30%" report card is also a concentrated expression of the problems encountered in the vip.com mode in the capital market.

Founder of pattern

Founded in late 2008, vip.com first modeled on the French limited time discount website Vente-Privee and the Gilt Groupe of the United States, adopting the "membership + time limited discount + luxury" mode. The main luxury brand's stock is discounted, and the goods are mostly purchased from abroad.

Because of the tight supply of luxury goods, there is little discount, and the double temptation of "limited time" and "discount" stimulate users' impulse consumption, which makes the model become famous.

Abroad, the main mode is

In China, many of the founders of luxury goods have some background and are familiar with the rules of luxury games. But in essence, China's luxury websites buy back luxury goods at low prices in foreign markets.

All of them are in the initial stage of buying sweeps, and have no unique advantages. They can not cooperate directly with luxury brands.

"Chinese style" pformation

At the beginning of 2009, vip.com began to try to sell some well-known brands in China. It was still a "limited time discount" mode. It only sold the products from the original international luxury goods to the well-known brands of Adidas, Nike, Europe, Lining and other domestic consumers.

Taking off the luxuriant clothes of luxury goods, vip.com turned into a domestic famous brand's "time limited discount" sales channel, that is, an online brand special store.

According to vip.com's roadshow document, domestic

A large number of brand stocks, and offline immature brand discount market, let vip.com founder see the opportunity to become the king of online brand discount channel.

Relying on a large number of brand new products every day, and 4-10 days' Limited sales strategy for each brand, vip.com is rapidly scaling up 15 brands.

Over the past three years, vip.com has maintained an increase of more than 5 times per quarter, with 12 million 100 thousand registered users and more than 1 million 700 thousand customers.

After the pformation of the two or three line brand, vip.com depends on the scale of the volume. If a large number of goods are bought and sold when they sell luxury goods, it will cause great inventory risk and financial pressure.

To this end, vip.com changed its sales model, that is, by prepayment of 10%~15% deposit, first from the supplier to pull the goods, not to sell back to the brand, so as to effectively reduce inventory risk and financial pressure.

Because vip.com mainly sells two or three line brand inventory, and the number of single SKU products is usually below 5, for a B2C, it requires strong product shooting and new operation capability.

To this end, vip.com has a dedicated studio studio, which has five separate filming sessions for different types of products, with special models and dressing rooms.

Its products are new, product description, product shooting and so on, forming standardized process. The operation capability is very competitive in the whole B2C.

After the pformation, 70% of vip.com's sales came from two or three line cities, and only 30% of the first tier cities accounted for sales.

This coincides with the positioning of vip.com's two or three line brand and the loss of domestic two or three line brand discount channels.

Three challenges for low prices

Positioning sales of domestic and international two or three line brand stocks, with "limited time discount" unique form of display and promotion, vip.com quickly opened the two or three line city, ranks among the top 20 of online retail B2C.

However, as a series of doubts about vip.com's listing, the vip.com model itself faces many challenges.

First, the "limited time discount" mode often stimulates users' impulsive consumption, and the two or three line brand is not a strong brand, which will inevitably lead to the high return rate of vip.com.

Vip.com CEO Hong Xiaobo has said in an interview before: "the vip.com mode is characterized by the fact that users did not know what to buy before vip.com came to the world, while Jingdong and Taobao were already thinking about what they wanted to buy."

Because users are stimulated impulsive consumption, the rate of return will be very high.

Industry analysts said that although vip.com's exchange rate has never been disclosed, the data is far higher than the average return rate of 10% of ordinary electricity providers.

According to the information disclosed by vip.com, the warehouse logistics cost accounted for 19.9% of the turnover in 2011, and the warehousing and logistics cost in the first three quarters exceeded 20%.

This is directly related to vip.com's efforts to invest in several major logistics centers. The high rate of return also leads to a high proportion of its warehousing and logistics costs and losses.

Second, the two or three line brand of vip.com's main line has a high degree of coincidence with the mainstream product of online shopping, and the price is not very different from that of B2C and other online retail channels.

At present, the whole online shopping market is still in the low price dominated stage. Both B2C and Taobao mall and Taobao fair are selling traditional brand stock products, driven by low prices.

This leads to direct competition between vip.com and Dangdang, Taobao and other online retail channels.

In fact, although vip.com has a super discount of 1~5 discount, many of its products are higher than those of similar B2C websites, much higher than Taobao's individual sellers.

According to the public information released by vip.com, its gross profit margin is only 19.9%. Raising gross margin has become one of the important means for its profit making.

However, most online retail channels adopt the supply chain mode which is mainly buyout and consignment as a supplement. Vip.com's pure consignment mode does not have advantages in the procurement negotiations of similar products. How to improve negotiation ability and reduce procurement costs has become an important test for vip.com mode.