Talking About The Self Expansion Of Brands And Causing Customers To Get Out Of Control

Lost is undoubtedly the most classic story of distress in China's Internet in the past two years.

It is a perfect candidate for the electricity supplier in the great leap forward era.

With the rise of China's economy and the upgrading of consumption, new users are pouring into online shopping. This huge demographic dividend has stimulated the explosive growth of the retail business, and everyone is one of the most prominent star representatives. In just a few years, it became a phenomenal company with phenomenal speed.

But it also committed most of the mistakes made by most start-up companies: the blind impulse caused by the influx of hot money, too optimistic judgement of the future, superstition marketing and neglect of quality, supply chain and other technical accumulation, resulting in the rapid expansion of young business enterprises, the risk of losing control is increasing rapidly.

Even if there is a deep involvement in the early pioneer of China's e-commerce industry, fans can not avoid falling into these traps.

Until nearly a year later,

Only in this way can we face the media more calmly and calmly, and talk about the crisis and self-help of customers.

"We made a lot of mistakes last year and had to do something right to pay the debt."

In September 27th, Chen expressed great emotion when he accepted the Tencent science and technology interview. He even used "endless night and boundless" to describe his feelings in this difficult time.

At least to this day, Chen can breathe a little sigh of relief: he adjusted the structure of customers in one year, demolished the risk of "landmines" one by one, and cleaned up the category that was too scattered and disorderly after the blind expansion, and focused on the core of the clothing brand; reversing the company culture which paid too much attention to sales in the past, and shifted more emphasis on the more refined operational indicators such as gross margin and product turnover rate.

"Now everyone is back on the right track."

The year concluded.

However, the price paid by everyone in this process is extremely painful, which makes it difficult for the old to speak.

First, last year, there was a large backlog of inventory losses, destroyed or sold at a low price. The amount of speculation may be in the billions. Second, due to over expansion of the category, the early customer's clear positioning of clothing brand was gradually blurred in the minds of users. The supplier and quality control in a period of time were out of control, and the brand image of all customers was damaged.

So what lessons did he get from this unyielding crisis?

Unrestrained expansive ambition led to the defeat of fans last year.

Before this, everyone had just passed a crazy growth in 2010.

In those days, sales of all customers jumped from more than 400 million in 2009 to more than 1 billion 800 million.

This led to an overly optimistic judgement of the situation in 2011. He believed that with the growth rate of van customers, the performance of customers could be even more crazy at that time.

The data in early 2011 also seemed to support his optimistic expectations: in the first two months of the year, sales of all customers grew by more than 400% year-on-year.

So, in March of that year, Chen shouted publicly the annual sales target of 10 billion, which means that the average customer would sell 5 times the same commodity every day.

Although now the number 10 billion is defined as "a joke" at that time, rather than a company assessment task.

But at that time, the company was obviously in a mood of optimism. Many departments began to compete with each other to increase their annual performance indicators.

"If one person says I can finish 2 billion, then the other person must not be able to show weakness and finish 2 billion 500 million.

And the rising stars will do more than you do, when the problem comes. "

The task of keeping up with the wind is pressing down, which eventually leads to a serious breach of the normal ability of the staff.

A customer executive told Tencent technology that in 2011, the target of some customers was too high, and the task of individual employees was even 100 times that of the previous year.

Many newly recruited employees are responsible for many categories and have the right to sign tens of millions of contracts.

In order to achieve unrealistic tasks, many departments can only increase their categories.

Old age mentioned a story: a new product line leader took office, decided to vigorously develop accessories, received 500 million of the task.

At that time, only ten people in this department decided to increase the number of departments to 50 people in three months.

But before that, the Department has to complete 300 single product (SKU) targets per day to ensure that progress is not lagging behind.

With tremendous pressure, these employees can only look for new suppliers while hoping that the existing suppliers will expand their products. In the process, the quality control is completely ignored.

Too high sales expectations and tasks can only produce one result: customers must give large quantities of orders to suppliers in order to meet their expectations, and keep opening new positions throughout the country.

Chen did not disclose the total number of summer clothing that he had entered in 6-8 months in 2011, but he admitted that this is the biggest reason for the backlog of customers.

"At the worst time, we found that with such stocks, there was no need for stock in 2012."

As a matter of fact, in March 2011, he felt a bit uneasy in March 2011, but in the next few months he was busy dealing with the initial preparation of van guest listing, without taking into account the daily operation of the company.

When he returned to his office in June last year, he realized that things might be developing in an uncontrollable direction.

In recent years, a lot of strange employees suddenly appeared in the company. The new rental office floor was full of days, and many employees wandered around the company during their working hours.

It was not until then that Chen began to seriously observe and ponder over what problems had been caused by all the guests.

Chen's vigilance in 2011 was based solely on the judgment of appearances. In fact, he did not know how serious the problem was, even though he was the company's top decision-maker.

A simple explanation is that old age has been "deceived".

To some extent, this is related to the past organizational structure of van guest.

Before September 2011, there were only two business units in the product department, namely, the basic product department and the new product department. Each department had many product lines which were even conflicting.

It is easy to understand that based on the principle of good news and no worries, every product department has the reason of "adjusting" data internally, such as selling products with good sales to cover the inventory of unsalable products.

And the data we saw in the past obviously did not detail the storage and sale changes of each SKU.

But the old man made decisions by instinct: admit the company's problems, freeze personnel and stop expanding.

Then solve the problem one by one, the so-called "mine clearance".

Soon, a layoff was made and the organizational structure was adjusted.

"Everyone had a serious illness in 2011. The adjustment of the organizational structure is a diagnostic process, making a mess clear."

Chen said.

The two business divisions before the adjustment were led by two senior vice presidents, Ke Linli and Wang Yujun.

Ke Linli and Chen had 15 years of friendship. They worked together as early as the excellent network, and Wang Yujun worked in Itochu for 13 years before he came to van Tong.

At the fastest pace of expansion, the two men controlled the engines of the two passengers.

The problem is that the business of these two businesses has a lot of overlap, and when they compete, they often see the outcome and become more spinner.

This has resulted in a great waste of resources.

On the one hand, the adjustment of the Division has improved the operation efficiency of the company, and at the same time allows Chen to understand the operation of the company more directly.

In the past, there were many lines in each division, which could cover the inventory problems of other products with good sales, but the data after splitting would be clearer.

While adjusting the Department, Chen also abolished the original marketing center.

The company set up a website operation Department, the overall overall planning.

In this way, from product planning to final marketing, all departments are directly responsible.

In addition, a data center was set up in the year to report data once a week and learn from past lessons. These data are more detailed than before. They can clearly reflect the company's operation and guide the management of the company.

In order to make all customers more focused, Chen also cut down a lot of categories, resulting in the compression of suppliers.

Over the past year, customers have reduced almost half of their suppliers.

At the same time, customers are also sharing data with large suppliers, so that suppliers can help customers to decide how to stock properly and how to avoid possible problems.

In the adjustment of all customers, the customers are also adjusting or shrinking.

Behind all kinds of adjustments, in fact, is the pformation of old management mode: from focusing on results to focusing on causes.

"In the past, I was concerned about indicators such as purchase, sales volume, new users, and the proportion of old customers, but this year I am concerned about inventory turnover, sales rate, gross margin and product correlation."

Chen said, "now we still want to return to a state of insufficient supply."

If we go back to early 2011, will Chen be able to press the crisis siren in time for all customers?

Self expansion is the most terrible thing.

People can't tell you what it is, they can't stop the car. "

Old reflection said.

Although Chen worked as an excellent network in the early days of Internet pioneer in China, but when he sold it to Amazon, he sold less than 1 hundred million a year, less than a thousand employees, and the business model was very simple.

But now, when he wants to manage billions of businesses, his management ability and industry knowledge are exposed.

In the early years of the valley, the old age is finding a new way of learning.

This year, I deliberately visited some of the traditional entrepreneurs who were very experienced. I want to study how these predecessors who have worked for at least twenty years or so have managed to go through one dangerous beach after another.

He also ran to Semir, seven wolves, PEAK and other enterprises to learn from others. "If last year's development is particularly good, I will not go."

That's the truth. "

Suppliers have also become the object of study.

In the past, all customers' data were confidential to suppliers, but now customers are opening up data to some core suppliers gradually, so as to establish a more flexible supply chain rapid response system through interaction between suppliers and customers.

For example, in the past, the overstock of customers was serious because of the large number of finished orders that had been made for a long time in advance. But the supplier reminded the old customers that they could only reserve yarn, thread and other raw materials according to market conditions, because the cost of yarn and line only accounted for 1/5 to 1/4 of the final garment, even if the mistake was made, the cost would be much smaller.

"All customers have several excellent product lines have done this, their inventory turnover in 30-60 days, this is a very big progress."

The establishment of learning curve can not be quickly evolved.

However, old age has found an ultimate shortcut, that is, from the point of view of thinking, to return to the origin of business.

He dismantled the successful experience of the past five years, and came to the conclusion that the right products and only the right products, nothing else.

"The most important return is the pursuit of products.

I don't believe that a jeweler can make a mop, which is a basic common sense judgment.

The problem seems to have returned to its original point.

As many people have questioned or questioned, the question of whether an Internet user can build an Internet is still being answered.

Brand.

The answer to the question should not be too far away.

Chen told Tencent technology that the goal of all customers is to make profits in the fourth quarter of this year, and this time is precisely the time when the 5th anniversary customers are established.