The Way Out For Electric Business: To Abandon Scale And Seek Brand

The European e-commerce website BlackSocks, which sells black socks only for 10 years.

BlackSocks's products are surprisingly simple and the models are very conceited.

In the past 10 years, it has successfully sold 10 million pairs of black socks in Europe, and now it is entering the United States.

Only four black socks, each of which cost about $10, become its users and even have to pay an annual fee.

But such an incredible website has won high user loyalty.

Sami Ryle, his founder, has a clear mind and only focuses on business people.

The success has brought inspiration to practitioners of China's electricity industry.

But in China, there is hardly any household appliance manufacturer who is clear and contented as BlackSocks.

Domestic electricity suppliers or abandon the brand scale, or private brand pformation channels.

Domestic electric providers are willing to gamble on big capital and do not dare to operate the small blue chip brand.

Nowadays, customers sell their own Miook (Miao Ke) cosmetics, and repeat deep tillage.

"With open platform, we continuously distribute the brand of the channel; the elegant 100 of the main high-end home textiles starts to launch the situational living hall; the" Wei cotton net "keeps developing horizons, and continues to bite the teeth and spread advertisements.

Taobao mall founder, Dangdang, former COO

Think: "these two or three years come out of the second tier electricity providers only give up the pursuit of scale, perhaps only have the hope of living."

Choices always seem risky.

In this cold winter, they each have their own ways to exercise.

Scale or brand, burning money or keeping a clear conscience, whose path is better, so far, there seems to be no standard answer.

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Bigger or equal

Second tier electricity providers "small and beautiful"

To brand or scale, in today's development of the two or three line of electricity providers, this is a choice that must be faced.

"It is almost impossible to make a listed company by market segmentation.

But the company that makes a profit of 18 million a year is totally reliable, "Huang Ruo said." only in a small field is it difficult to meet competitors.

The smaller the plate, the more loyal the user will be.

Moreover, loyal customers often have many gold mines to be dug up.

When the electricity supplier is caught in the trap of capital chill, survival is more reliable than scale. In the field of subdivision, it is natural to survive well.

Therefore, when Huang ruo's friend is going to start an undertaking to do business, he even suggests making pillows and pajamas only.

Pillows and pajamas have large imagination, subdivision is not easy to compete, and they can do a lot of articles on the basis of customer loyalty.

Focusing on pillows and pajamas to make a private brand can make a good e-commerce website in China.

This website may not do very well. After 3~4 years of operation, it still has a profit of 50 million a year, keeping its original volume, but it can be very moist and can stand up for many years.

Friends did not listen to Huang's advice.

"He said that the annual sales of 5 billion, even if the loss of 1 billion does not matter, because others give money (investment)."

If Huang wants to speak frankly, the problem is that it will become a dream which is hard to reach and is talking about the future.

"Look up to the world, maybe 1 of 10 thousand people have the power to take the future, such as Jobs, but after all, Jobs has only one."

This is an era when everyone wants to be big, but it is the easiest time to set foot in the sky.

Listing is not the last resort. The impetuosity of the whole society has led to this blind obedience.

Some of the current vertical industry, sketch or small groups of electricity providers, in fact, can fully concentrate on, and then get long-term profits, but they either because of the kidnapping of VC, or because of their own thinking kidnapping, it has become neither before nor after.

Like Huang's friends, many e-commerce companies are not willing to buy that small blue chip stock.

The cotton net, which originally sold men's socks and underwear, has expanded to 11 crosswise categories, from socks, underwear to towels, neck, and so on.

CEO Lin Wei believes that the more categories are not likely to be more risky, "but the higher the demand for talent, the most important waste to the entrepreneurial team is the rapid expansion of the team and the lack of management."

What he has to do every day is meticulous operation.

By developing categories,

The scale has been expanded, and the cash flow problem has also emerged.

It is undeniable that the expansion of the category has led to too long a battle front and the cost to earnings ratio is not satisfactory.

Where the private brand can do business, it must have a precise location for customers.

In a sense, precision is in place.

The electricity supplier must take the customers' eyes and choose the commodities with certain logical connections from the perspective of customers.

"Everyone is looking for scale. The most fundamental reason is that almost all Chinese entrepreneurs are too impetuous. They could have done the business well, but they felt that after doing this, they could do it.

For example, people who are positioned as five star hotels are thinking that there are three star user groups. Why can't they make Samsung?

But in fact, the standards are quite different.

Similarly, making shoes and making cosmetics is quite different. "

Huang Ruo said.

Many girls are loyal customers of Watsons, but Watsons's scale is far from comparable to that of Carrefour and WAL-MART.

God's return to God, Kaiser's return to Kaiser, perhaps this is a way out for second tier electricity providers.

Comparatively speaking, Watsons, as a traditional company, knows how to control itself.

In the face of Jingdong, Dangdang, such strong eyebrows and moustache, they are anxious.

The success of the multinational electricity supplier in the US Amazon is to let them think that the whole category must be the way out.

However, the card battle has ended, the leading array has been set, and there are not many choices for the two or three line business.

Scale or brand, which is not to be seen in the eyes of Huang Ruo.

As long as we are free brands, we should not think big or big. Once bigger, the risks will be even more uncontrollable.

"The electricity providers should restrain those greed, do not always want to say the number of China to become the world.

Only in this way can we have the chance to win.

Huang Ruo told reporters.

However, in the home B2C website elegant 100 CEO Chen Tenghua looks black socks mode is not necessarily universal.

His view is that the difference between Chinese and foreign business environment is obvious. Large industries abroad have been occupied, and they can only use their brains in the areas of special segmentation.

In the limited moment, they can also add to win, elegant 100 is toward the category scale surfing.

Excellent purchase is the representative of living and moistening.

This shoemaking industry has built up its own brand, and has joined the brand of outdoor channels such as Columbia. However, it is not willing to follow the tradition. It is necessary to do business according to the way of doing brand operation, and to incubate its own brand with its own channel brand.

Focus is right, but we did not sell pots and pans. This is the problem of rhythm. If this is done, it means that clothing can speed up. If we do not do well, we may need more time to make shoes. If we invest more resources in our sales expectations, it will be another strategy in sales.

Backed by BELLE's big platform, the best buy online shoe city CMO

Told reporters.

In Xu Lei's view, the new category is incremental to them, so as to make up for the original sales volume.

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Own or channel?

Brand problem is a big problem.

Insisting on the focus of the industry consensus: especially the new second tier electricity providers, more energy to think about whether it is possible to make a proprietary product brand, rather than blindly seeking to do channel brand.

Second line business, Huang Ruo appears, but its own brand electric business ups and downs.

The advantage of the private brand's e-commerce is obvious. It can not only guarantee the initiative of pricing, but also integrate the bargaining and sales of the brand into one, grasp the consumer and extend it to any place where it can be sold.

"In the case of abandoning the scale and not having the scale, making a channel brand is easy to be kicked out by others.

For example, a small cosmetics website has great potential to make its own brand, but it is wrong to start selling L'OREAL and Procter & Gamble at this time.

Huang Ruo said.

,

Such brand is a typical private brand made entirely by Internet sales, which is small but relatively successful.

And these professional private brand electric business to do channel brand, perhaps means lifting a stone to hit their own feet.

More and more second tier e-commerce providers are exploring ways to expand. The channel providers have their own brands, and the free brand e-commerce providers have begun to make channel brands, each to cultivate their own winter skills.

Its own brand focuses exclusively on cosmetics.

Why don't Watsons sell socks? Why not go to other categories?

Customers have a deep understanding of brands. Huang Ruo analysis shows that a brand can not let customers recognize lipstick, eyebrow pencil, watches and shoes at the same time. The possibility of horizontal extension of free brands is almost zero.

"A company can not go to such a wide range of fields. It is definitely not desirable to be unfocused. There are no enterprises that are comprehensive."

This principle is applicable to the e-commerce industry, because the essence of e-commerce is retail.

Watsons did not sell its own brand of socks.

S has never thought of selling other products other than black socks, and they have not done an unrelated lateral addition on the basis of their own brands.

Fan is one of the leading brands of its own brand, but it also wants to get a share in the channel brand. The shoe B2C platform has been one of the winners of channel brand, and its CEO Bi Sheng said it will also gradually launch its own brand.

100 of its own brand income has already occupied half of its total revenue, but their goal is to become "IKEA online", not only to expand the category, but also to expand the channel brand.

It's two different concepts to buy the elegant 100 quilt and buy 100 quilts for elegance.

Instead of buying what brand of quilt to buy, instead of buying a quilt, it is particularly important for Chen Tenghua to cultivate users' habit of elegance 100 and move to the latter.

The original judgment is that if we are to make a home textile website, we are faced with direct and offline home textile producers such as Bo Yang and Luo Lai. After winning, the category is completely overlapped.

In the field of home, commodity brands are weaker and retail brands are stronger.

Therefore, elegance 100 is not satisfied with doing well in a category, and having better hematopoietic function. When considering other dimensions, they should directly do the channel.

Starting from home textiles, Chen Tenghua lets users know that elegance 100 sells high quality products, and then makes comprehensive shopping stores for situational shopping.

"The image of the first phase has been formed, so we must expand it, otherwise the brand extension will be limited."

Elegance 100 the first position is to make a B2C comprehensive home retail brand. To elegance 100 buy quilt is also a channel brand idea.

Once they move towards the new model, they will also have to take greater risks in managing inventory turnover and other details.

Chen Tenghua is also aware of the seriousness of this.

A friend who opened a shop on Taobao told him that his online store sales grew very fast. He had 300 thousand sales in one month.

When Chen Tenghua visited his friend, his friend had a cabin full of goods, about 600000 of stock.

The original money is pressed on products, the more they sell, the more money they press. This is the result of no fine management.

Similarly, if we can not elaborate management, the problem will become more prominent after the electricity supplier makes the channel brand.

"The so-called sales success is one thing. Ultimately, making money is another matter."

Chen Tenghua analysis, especially the production of free brand products, is ultimately the core of whether we can rely on experience to carry out detailed management.

Elegant 100 sales of its own home textile brand products, from the past two months inventory turnover is now refined to one month, two months of accounts have a month of idle time, they use this spare effort to do marketing, looking forward to increase sales.

There are also some electricity suppliers to make the channel brand thrive, but it has just been rising soon.

We have no idea how many opportunities we have.

The capital market is no longer patient. Whether the future will enter a vicious circle or a virtuous circle, and the success of the channel brand will become a key difference for the electricity supplier itself.

Try to find a balance between private brand and channel brand.

This year, Le Tao launched the Applife joint brand, which is different from its own brand.

"Find a well-known non footwear brand business, we jointly do a Crossover brand, sharing the two sides of the user."

Chen Hu, vice president of Le Tao net, told us.

Each brand has its specific connotation and user group. For Le Tao, it can save the initial exploration and invest a lot of cost to build a brand process, and also avoid the problem of 99% private brand selling too low.

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Greed and magnitude

Without growth is death?

On the first Monday of December, we sell socks and underwear.

They still clenched their teeth and spread advertisements on buses and subways.

"When we do not advertise, we still advertise."

His CEO Lin Wei seems to have a few helplessness to reporters.

Subway, sub screen, the Internet, their advertisements are always pouring out. The small business website selling socks and underwear is not stingy with its capital investment in advertising.

"The development of B2C e-commerce in China has been in full swing for more than ten years. Sales will increase to $159 billion in 2015, more than three times that of last year's $49 billion."

Forrester Research, a market research firm, is forecasting.

The Ministry of Commerce has also set the goal. By the end of the 12th Five-Year plan, the scale of China's e-commerce market will be expected to account for 5% of China's GDP.

Such a big cake, most of the electricity providers naturally can not stop, especially when the pie is vividly placed in front of their eyes, they are all riveted efforts to fight.

The future looks very beautiful, but on the other hand, it is very regrettable that the big cake is only painted, and the opponents in the industry think that most of the electricity suppliers are deceiving themselves in the future, while they burn money on the other side but do not talk about profits. Finally, they have deceived themselves, many of them are in the middle of Tianjin, and this impetuous society has also given birth to many impetuous business enterprises.

"This industry in China, this is impetuous, this is not a coffee drinking leisure industry, this has been in the cold winter", Huang Ruo's view is more pessimistic than throwing out the electricity supplier winter theory.

"When the enterprise is not ready, it should not continue to rush ahead.

Just thinking about expanding the scale, actually it's even closer to death. "

In Huang ruo's view, business and retail business is a molecular business.

The old way of burning money is to enlarge the size of the plate and increase the denominator. But in fact, the efficiency has not improved, resulting in a lot of ineffective sales, for example, from 2/5 to 3/10, the investment is much more than the actual loss.

But advertising must be "burn money"? Everyone is the first time to do business, the so-called "degree" is also no standard, there is no set rule.

Lin Wei thinks so.

When the former group buying ad war broke out and the bubble was soaring, it also attracted numerous queries in the industry. All voices were saying that group buying was burning money.

But Lin Wei's explanation is: "the 700 million advertisement in group buying market has a great pull on China's entire GDP, because it throws money from the Americans."

He did not think it was real money burning.

"A website will have such a high traffic volume in just 8 months. That's how it works.

Wu Bo (CEO) is right. To fight a war is not to look at the present. The experience of failure and success must be summed up by the precipitation of time.

They spent money, but at the same time the card battle is over.

"When e-commerce websites are expanding rapidly, they can only first pull people up and run.

This is the normal business behavior of the enterprise, which is classified as burning money.

actually

(fan CEO) is also talking about this problem, but trial and error always try, marketing is always done. "

Lin Wei said that high input does not necessarily mean high output, but there will be no high output without high input, and low cost expansion is completely without opportunity.

"The so-called burning money does not burn money, want to quickly expand the category, we must try, first try wrong and try again."

In the same way, the impulse level of e-commerce websites seems to be the only way for the war of cards.

Lin Wei said frankly: "no growth in this industry is death.

It does not mean that there is money in the accounts. If wages are paid, they will not die.

If we go on, some enterprises without commercial logic will be eliminated.

We must have an open mind and think of the way to live. If the market is warm, there will be opportunities. "

"Our losses are small, and we only take more than 10 million of Xu teacher (angel investor Xu Xiaoping).

I don't think there's a big loss for everyone. "

Lin Wei said.

Insiders say that this big investment has been gaining scale effect by brandishing capital sticks.

It seems that they can get more capital in this way, so that they can expand more quickly to gain status.

I believe that the 4 quarter of the electricity supplier's life is also better than that, because the price of passenger comes up, and the clothes sold in winter are relatively expensive.

Fighting this kind of tragic, losing money market war is all in summer. In the summer, the business itself is not good, the price is homogenized, it is very difficult to have profit margin.

The future looks very beautiful, but on the other hand, it is very regrettable that the big cake is only painted, and the opponents in the industry think that most of the electricity suppliers are deceiving themselves in the future, while they burn the money on the other side but do not talk about profits. Finally, they have deceived themselves, many of them are in the middle of the business, and this impetuous society has also given birth to many impetuous business enterprises.

"This industry in China, this is impetuous, this is not a coffee drinking leisure industry, this has been in the cold winter."

Huang Ruo's view is more pessimistic than that of throwing the electricity supplier's cold winter theory.

"When the enterprise is not ready, it should not continue to rush ahead.

Just thinking about expanding the scale, actually it's even closer to death. "

In Huang ruo's view, business and retail business is a molecular business.

The old way of burning money is to enlarge the size of the plate and increase the denominator. But in fact, the efficiency has not improved, resulting in a lot of ineffective sales, for example, from 2/5 to 3/10, the investment is much more than the actual loss.

Contrary to impulse level, there is another kind of electricity supplier showing another state.

For example, Liu Shuang, former president of Jingdong strategic assistant, participated in the creation of the men's clothing brand e-commerce this year.

Since the first day of their establishment, they have "stingy" every penny in their hands.

So far, its advertising cost is only 50 thousand yuan per month.

But NOP has been developing slowly but steadily growing, making it the lowest loss company in the industry.

To mention this, Liu Shuang is very proud.

The number of rice that many people eat is the reason they advocate.

Stick to it and hold on. It's spring before we get through the winter.

This seems to be a way out.

What is the best thing to do? Painting a big cake is still a matter of how many meters to eat, and the deeper problem is that they are not enough to eat.

But who can eat enough, the current electricity providers? Some people say that the electricity providers are fat, maybe only the industry knows, the electricity providers are not fat.

The enthusiasm of the capital market cooling down, the worse the environment, the more we must persist.

As Lin Wei said, "the worse you are, the harder you work, and the more you shrink when others are less moving, the more you want to run forward."

Of course, at this point, the views of the public business are consistent.

Efforts are bound to be done, although each has its own way of running, burning money is a way of running, static braking is also a way of running.

It is undeniable that only with early exercise can we stick to the bottom line of this industry and win more laughs in the last chance.