Footwear Vertical Electricity Supplier Is Fraud?

Vertical electricity supplier accounts, it is not easy to calculate.

First of all, it varies from person to person.

Relying on endogenous growth, steady and steady progress, or leveraging capital, high and high beating represent two very different business models.

In the strict sense, the two businesses are not right or wrong.

We can not simply assert the good from the results.

Different people and different resources adopt different strategies at different times.

Just right.

But the two business models are very different in terms of short-term financial performance.

Even in the same business mode, the results of different teams can be quite different.

Secondly, it varies from time to time.

The cost of Internet advertising has increased six times, ten times and twelve times in one year.

The specific increase is not important. We only need to make sure that the sharp rise in advertising prices is enough.

In the most frenetic period of the electricity supplier, even though advertising prices are rising fiercely, people are still rushing to squeeze in, and from online to offline.

Once upon a time, the subway crevice was filled with commercial advertisements.

Now, everything is restored to peace.

Although many people complain that the price of Internet advertising has not declined effectively, the decision to spend money is ultimately in the hands of the electricity suppliers themselves.

Again, it is a "stupid account".

The electricity supplier of footwear is not yet listed, and the finance of every enterprise is not completely standardized.

Even if they are standardized, the statistical caliber of indicators is different.

But it also brings benefits.

Every enterprise can publish its own data and see people dazzling.

All this is a great test of the audience's ability to identify.

Who does the vertical footwear business deceive?

Le panning had put forward two versions of the vertical e-commerce cost structure and came to the conclusion that the vertical e-commerce was a fraud.

Hao Le bought Li Shubin tit for tat and made a refutation of the data.

He believes that vertical electricity providers are not hoax.

The data given by them are not entirely accurate, but they are enough to refer to.

We classify the cost of electricity supplier into three categories: order delivery cost, operation cost and marketing cost.

The most important part of the order delivery cost is warehousing and logistics costs.

Li Shubin said, taking the industry "normal average" as an example, the comprehensive delivery order cost of the electricity supplier should be controlled within the scope of 10%-15%, and over 15% is too high.

We can get reference from several listed electricity providers: the storage cost and delivery cost of Amazon are 9.52% and 8.3% respectively; the two fees of Dangdang are 5.8% and 7.45%, while vip.com is 8.87% and 6.31% respectively.

On the whole, the cost of warehousing and logistics is the most heavy cost of the electricity supplier.

Similar to the offline retail effect and human efficiency, the optimization of these two costs is also a delicate activity.

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Another big cost of electricity providers is marketing costs, which is also part of the cost of flexibility.

Decomposition of the electricity supplier in different periods of marketing costs, we can basically see the evolution of the strategy behind this enterprise.

The marketing cost of Bi Tao's speech in Central Europe was 30%.

He also said that at the most radical time, the marketing cost of Le Tao could account for 50% of the current revenue.

After entering the second half of 2011, Le Tao claims to cut 80% of advertising expenses.

In the second versions of Bi Sheng, the drainage cost of Yue Tao dropped to 10%, and two data basically coincided.

Li Shubin believes that the "normal average" marketing cost of the industry is 6%.

He said that the craziest time for marketing was over 10%.

In terms of promotion, the biggest problem facing vertical electric providers is the low efficiency of marketing.

The more vertical, the more subdivided the consumer group is, the lower the probability of traditional broadcasting marketing can be effectively hit.

We see that many vertical electric providers have moved to department stores and platforms after they have reached a certain stage.

Within the Department, department stores can provide more cash flow channels for their own traffic.

The richer the external category, the larger the marketing efficiency is.

Li Shubin believes that the normal operation of the electricity supplier cost should be around 25%.

We can also compare the data of several listed electricity providers.

The operating costs of Amazon, Dangdang and vip.com are 28.95%, 21.69% and 25.87% respectively, with a median value of about 25%.

However, we should also note that the marketing expenses of these listed electricity providers are strictly controlled, and the highest proportion of vip.com is only 4.87% (the second quarter of this year).

Is vertical electric power a fraud?

For self operated electricity providers, warehousing, logistics, backstage technology and other business departments are very similar. The cost can also be referred to each other, but the cost of marketing can vary by one hundred and eight thousand li.

Vip.com uses less than 7% of the market cost to drive revenue growth by 6 times, while the old customer turnover rate is less than 10%.

The marketing cost of Le Tao net was as high as 50%.

After the market budget was cut, the situation turned sharply.

What is the root cause of the problem?

Taobao: the scenery is good here.

Why are all the profitable business providers in Taobao?

Tmall's answer is that Taobao has always been the lowest place for the "comprehensive traffic cost" in the electricity supplier field.

Taobao has hundreds of millions of consumers, and basically all Chinese Internet users are also Taobao users.

The consumption power of these users accumulates on the platform of Taobao, forming a huge force.

More users will gather more needs to support more sellers.

More businesses offer richer products to attract more users.

This logic has promoted the development of Taobao for a long time, and has also created the legend of Taobao business after another.

However, with the development of Taobao, the giant ecosystem has already been rich in species and more participants.

How is the survival of millions of sellers on Taobao?

This has to start with the competition pattern of Taobao.

The footwear products on Taobao are divided into three categories: Women's shoes, sports shoes and men's shoes.

After integrating the factors such as search times, frequency of attention, quantity of experts, quantity of goods and turnover, the market capacity of women's shoes industry accounts for 3.54% of Taobao's whole network, 0.85% of men's shoes industry and 2.25% of sports shoes industry.

The three industries add up to the same market capacity as men's clothing industry, and belong to the top three market with women's clothing.

The market is huge, but the market competition is fierce.

At present, the number of women shoe sellers on Taobao is close to five hundred thousand.

The number of sports shoes and men's shoes is relatively small, but they are all up and down two hundred thousand.

We can see many competitors in the market.

The number of shops is also growing rapidly.

In the past two years alone, the number of Taobao shoe shops has doubled.

In the hundreds of thousands of sellers of footwear, the number of daily active shops (such as shops that browse, collect, place orders, etc.) is only about half of the total number of shops.

The number of shops that generate pactions is less, accounting for only about 1/10 of the total.

Taobao has gone through ninth years.

Any market, after nine years of survival of the fittest, will continue to be eliminated, but will also grow a number of Big Mac.

When new entrants want to take part in the market, these big sellers will become a big mountain.

The evolution of seller size in time dimension can reflect the change of market competition pattern.

Drilled sellers have always been the mainstay of Taobao.

Once, they occupied more than half of Taobao, or even 60% of sales.

Even now, their sales share is still more than 40%.

But their market share is declining year by year.

The most rapid growth is the mall channel.

Taobao mall has grown from scratch to small and large businesses in the past few years.

In the foreseeable future, the proportion of Taobao mall will be further improved.

Subdivision, men's shoes, women's shoes and sneakers show different laws.

Women's shoes are the largest subdivision in Taobao footwear industry, and the market capacity exceeds the sum of sports shoes and men's shoes.

This market has created many large sellers.

In the Taobao women's shoes industry, the crown seller contributed nearly 30% of sales, which is much higher than sports shoes and men's shoes.

Another characteristic of women's shoes is the low proportion of sales in the mall, which accounts for less than 1/6 of the total sales of women's shoes.

Relatively speaking, this proportion is also significantly lower than that of sports shoes and men's shoes.

The characteristics of sports shoes are most distinctive.

The crown and gold sellers account for a very small proportion of sports shoes, only 10% less.

Mall accounts for a moderate proportion, about 20%.

The rest of the sales were all contributed by the stars and the sellers. The proportion of the star sellers increased to nearly 1/4 this year.

Men's shoes are the three subdivision categories, the highest proportion of mall pactions, close to 30%.

The rules of men's shoes, women's shoes and sports shoes are related to their own characteristics, and are similar to those of offline sports.

The market capacity of women's shoes is large, and the brand concentration of women's shoes market is low (the market share of BELLE group is high, but the market share of BELLE's single brand is not high).

At the same time, relatively speaking, women in the consumption of heavier style, light brand, creating a Taobao women's shoes bloom.

For sports shoes, although the brand concentration of the line is relatively high, the market share of the highest Nike, Adidas has not yet stepped up in the electricity supplier.

Domestic second tier brands are more active in e-commerce, but they are limited by their brand influence.

Therefore, there is an obvious "ceiling" in the growth of sports shoes sellers.

In addition, there are lots of unknown brands in China.

A combination of goods, fake products and unknown brands has made the small and medium-sized sellers of sports shoes have different prosperity.

Men's shoes occupy the highest proportion, perhaps because in men's shoes consumption, consumers are more in pursuit of quality and more emphasis on brand.

There is another logic to specific brands.

The greater the brand and the stronger the appeal, the greater the difficulty of channel management.

Formal products are irregular channels such as parallel imports, distributors fleeing goods, and irregular commodities such as goods and fakes are flooding the market.

The most obvious features of these brands are the international first-line brand of sports shoes, Daphne and BELLE brand.

There are tens of thousands of stores selling these brand products, and more than one hundred thousand stores have sold Nike and Adidas.

So many sellers compete for the popularity of these brands, products, users and other resources, resulting in excessive competition in the market.

At the same time, considering that shops have been wandering in the gray area in brand licensing, they can not completely "wash white", and there is a natural bottleneck in the development of sellers.

The result is that despite the high popularity of these brands, the volume of turnover on Taobao is very large every year (Nike turnover has exceeded one billion), but there is a lack of large sellers in the market.

The sales volume of large sellers and shopping centers is also very low.

The main sales volume is completed by star shops and low drill shops.

For those less influential brands, the situation is quite different.

First of all, they are easier to control.

Because if a businessman wants to cheat, he will usually give priority to the brand of international brand with greater appeal.

Second, these brands are more active in embracing emerging channels.

Unlike those larger brands, they usually include e-commerce in the strategic planning agenda.

Now that we need to actively develop the electricity supplier, they are also stricter in controlling the network channel.

The domestic second line brand of the sports shoes industry can be classified into this category.

The biggest feature of such brands is that the proportion of commodities circulating outside the system is lower.

They account for a large proportion of sales on Tmall (Taobao mall), usually reaching 1/3 or more.

And whether they are market distribution or mall monopoly, they control goods very strictly.

Under the strike line, traditional dealers have been fleeing goods and matching Taobao's anti-counterfeiting, they have always been in the forefront of the times.

As for those less famous brands, they are hardly disturbed by channel regulation.

For them, because the influence of brands on consumers is very limited, their attraction to merchants is also limited.

Therefore, they are usually able to achieve effective control of the channel.

As for the main mall or market, the main decision is to rely on flagship stores or to develop distribution.

Although not known, there are many such brands.

Take sports shoes as an example. In Quanzhou, there are more than 4000 sports shoes brands besides most familiar domestic second line brands, most of which are unknown.

These businessmen, with their sensitive business sense of smell, are also yearning for e-commerce.

Dong Xinda, vice president of the shoe net, told us that these products contributed more than 80% of the sales of the shoe net.

Where does this logic affect the footwear business?

In short, selling famous brand shoes is not profitable.

Of course, we must first make sure that the products we sell are genuine.

If you can not get authorization from the formal channels, you can only sell goods through offline dealers.

Even if the shoe business is ranked first in the market, it can only be dispersed by Nike.

After solving the upstream products, these electric providers have to swing their arms and fight against the thousands of sellers on the market.

These grassroots sellers are eighteen Wu Yi, proficient in everything.

After falling into the sea of "people's war", no one can live in peace.

Wang Dongzhu, chairman of Tao shoe net, vice president of the shoe net.

Chen Hujun, vice president of Le Tao network, expressed the same view to us.

Although we do not make money, we can not give up this part of our business.

After giving up these brands, who would dare to justifiably claim to be a vertical supplier of shoes? Consumers can not find these well-known brands on the website, and how can the user experience be guaranteed?

Back to our first proposition: is Taobao or the cost of footwear in a shoe?

In fact, we do not have to calculate the account of the electric business.

If you are just a channel trader, you will have to compete for 360 degrees from the moment you step into Taobao.

However, unlike the independent commercial business environment, Taobao started with the "small peasant economy", and businesses on Taobao always aim at making money.

So the competition may be fierce, but the bottom line of competition is at least some people who can make money.

In recent years, capital has begun to enter the electricity supplier, but they have not caused a bloody storm on Taobao. Why?

The purpose of competition is to eliminate competition.

On the battlefield of independent B2C, the main competitors are several enterprises that can see clearly.

Therefore, independent B2C is willing to use the "savage ten thousand, self harm eight thousand" savage gambling strategy, hoping to become the person who will eventually survive.

But after the war was pferred to Taobao, the game changed.

There are thousands of enemies on Taobao, and they are good at using guerrilla tactics of "millet plus rifle". Can you kill them?

Therefore, people who have done Taobao know that "this market is very large and everyone has an opportunity".

The survival environment of Amoy business is not too bad, but similarly, they are very sad too.

The market is not allowed, competitors are not allowed, nor is Taobao allowed.

Taobao has been emphasizing the concept of "electricity supplier ecosystem".

Earlier this year, Taobao further put forward the two one million strategy, that is, in three years, Taobao sold more than one million last year, and the number of sellers reached one million.

At present, the number of this group is only about one hundred thousand.

The ecosystem must have metabolism.

In this market, businesses are eliminated, but new businesses are also needed. Platforms must provide a possible path for the growth of new businesses.

Therefore, Taobao is pursuing the balance between different groups on this platform, and the huge middle group is the basis for achieving balance.

The shrinkage of the drill grade sellers in the footwear industry is a very bad sign.

The most ideal state of harmony is to make most of the sellers earn money.

So if you are independent

It's hard to fight on the battlefield, so try Taobao.

At least he can keep you alive, as long as you are not too bad.

Where is the vertical electric power moat?

From traditional retail to e-commerce, from independent electric providers to Taobao, we have been pursuing the cost depression of business.

The market cost of Taobao is also rising.

Therefore, in order to maintain its own position of cost depression, Taobao is also actively seeking pformation.

Personalized search and more scientific traffic allocation mechanism are all the solutions Taobao is trying to make.

Taobao may still be able to maintain a 35 year cost depression, but can the cost depressions always exist?

As long as it is a free market economy, the cost depression will not be allowed to exist for a long time.

Once the cost depression occurs, the market participants who rush into the market will quickly fill the depressions.

To this day, we are surprised to find that the vertical electricity suppliers of footwear are in "pformation".

Lok Tak pformation makes its own brand, so that it can expand to the clothing category. The shoe store is positioned as the "supply platform", and develops its own brand with the advantages of its traditional supply chain. The shoe net and the branding enterprise carry out deep customization, and the shoe net focuses on the long tail market.

Summed up is that everyone has begun to "do nothing."

No one is concentrating on shoe sales.

We should not only ask, where is the vertical River business itself's moat?

The core resource of retail is, of course, consumers.

Online, retailers can occupy consumers in space.

But on line, this logic is no longer valid.

Besides attracting users by advertising, what else can we do to keep users in the long term? How should vertical electric providers fight the comprehensive electricity supplier?

At present, there is no satisfactory answer to these questions.

However, if anyone can solve this problem, he will find the golden key to open the door of vertical electric business.

Please don't be too obsessed with cost depressions. He only provides you with a time window to build your own moat.