"China Version Zappos" Dream Shoes B2C Panic Pformation

Zappos, founded in 1999, is located in Henderson, Nevada, the world's largest footwear B2C website, founded by Chinese American Tony Hsieh (Xie Jiahua).

In October 2009, Zappos was sold to Amason at a price of 1 billion 200 million US dollars.

Zappos was originally designed to make shoes easy to do in the United States.

Zappos won't win at a low price. Most of its website products are sold at the original price.

Therefore, Zappos's impact on traditional business is not price, but service.

Zappos provides 7 x 24 hours shopping service through the Internet, which is free and two-way pportation. In order to allow users to choose the right shoes, Zappos encourages customers to order 3 pairs of shoes. When the goods arrive, choose the most suitable pair and return the other two pairs.

And 365 days full support for return.

In order to provide fast delivery service, Zappos built the warehouse near the world port hub of UPS, Kentucky, USA (almost the center of the United States).

Through UPS pportation, we deliver 48 hours' delivery service to 70% of our customers.

Zappos does not spend a lot of money to smash ads, but only word of mouth.

But they are willing to build hundreds of call centers at high cost. The customer service personnel do not presuppose their lines, do not calculate the call time, but only pursue each communication to develop into a trust relationship.

Such service standards almost become.

The benchmark of enterprises.

From the pformation of Zappos mode to failure

At the end of 2010, news Zappos will go to China via the online shoe city Le Tao network. Although it was denied by both sides, Zappos side disclosed the prospect of China's footwear B2C.

Xie Chuangang, head of Zappos international business, predicted that China's footwear B2C would produce a large platform company and eventually become a department store platform similar to Amazon when it came to investigate the domestic footwear B2C market.

At that time, when he saw Le Tao and visited Le Tao storehouse, Xie Chuangang made a prediction: according to the practice of Le Tao, not only could it exceed Zappos, but it would also be able to make valuations and revenues more than three times of Zappos.

At that time, Le Tao was planning his own improved version of the Zappos route. Apart from the website 7 * 24 online shopping and the fashion measures to support customers to order two pairs of shoes, Le Tao made some non Zappos mode adjustment according to his own situation.

Zappos in the United States is "real store distribution", that is, brand shoe dealers, agents wholesale goods to Zappos, Zappos shoes to their own storehouse, online sales.

At the time of getting the goods from the brand shoe dealers, they should pay the money at that time.

Le Tao has adopted the "real storehouse sale", the brand shoe factory puts the goods in Le Tao warehouse, and is sold by Le Tao.

According to the rule of Le Tao, from a shoe on the day, after the expiration of the month, Le Tao will give the shoe part to the shoe factory. Some of the products will be returned to the brand shoe dealers as part of the service charge, which has not been sold off, and the manufacturers will then supply other styles.

The "real warehouse sale" not only does not require any funds, but also deposits a large amount of money on the online shopping platform, which is basically equivalent to "no business".

With confidence, Le Tao continued to raise funds. In 2008, Le Tao took the $2 million angel capital of LIAN's strategy source, and was awarded $10 million by German capital and Tiger Fund in June 2010.

In January 2011, the first two rounds of three old shareholders chased 200 million yuan.

Shanghai, Guangzhou, Wuhan, Shenyang, Chengdu and other cities built warehouse storage center, covering all major regional markets.

In early 2012, Le Tao net continued to get the fourth round of financing.

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Before this year, Le Tao also caught up with the rapid outbreak of B2C in China. Several rounds of financing drive led to the peak of its success in 2011.

No matter in terms of user visits or brand concerns, Le Tao has almost stood in the top position in the shoe industry.

But last year, the three quarter of the business and capital cold winter let Le Tao ahead of time cooling.

The valuation of the fourth round of financing has shrunk, and nearly 80% of the advertising budget has been removed, so that Le Tao has not entered this year for a long time. The traffic volume has dropped by six to 70%, and the brand attention has also been declining. This seems to be fading out of the competition in the footwear B2C market.

The operation that is not warm and unfetched, the money that it brings has become the dry food that is barely enough to live on.

Le Tao's Chinese Zappos dream is almost broken.

In the middle of this year, Le Tao suddenly changed his pen, announcing that he would launch 5 private brands and weaken the agent part to make a complete pformation.

Chance Chance (just), Lavis Lavie (Le Wei), Imosii (Mo Xi), MANWILL (Mai Wei), C+ (Si Ga), and several names that are not foreign to the outside world have become the new hope of Lok Tao net. The early pioneer of China footwear B2C has no more fighting spirit and has been struggling with the selling platform of the B2C that is struggling now.

The "Outgoing" of Le Tao should let the old friends happily buy a sigh of relief for a while, but Li Shubin is not very sure how to get the next step.

This is also a dream of "Zappos China dream".

In May 2007, Li Shubin, who had just bought the CEO project with Lu Ming, was looking for a startup project. At that time, one request was that the market should be large and the price between 300~500 yuan would suit the consumption ability of the Chinese people. The gross margin should not be less than 20%, which is suitable for distributing the whole country.

At that time, after a round of research, it seemed the most feasible way to make a Zappos mode project, and this concept had already been approved by some investment banks at that time, and the concentration of domestic products online for footwear products was still very low.

Li Shubin also had a dream early:

Doing China Zappos

Holle did not completely imitate the business model of Zappos, and carried out a local pformation in the selection of goods, warehouses and returns.

Selecting goods with Chinese thinking, we only do the top sports brand shoes that can cover 80% people.

Due to some problems of manpower and financial resources, Holle did not follow the Zappos's "three pairs of shoes". At the very beginning, it only measured the sizes of different brand products, provided the corresponding length of each brand size, and had customer service to remind users of "real foot measurement".

But later, after melting some money, he began pushing "two pairs of shoes" to improve his turnover rate.

But later this has become an important reason for high operating costs.

In the beginning, good Lok was different from Lok Tao, and good luck bought Zappos's zero inventory management.

Like Zappos, all goods and counters are synchronized, no warehouse is set up, and orders are taken to pick up the goods from the agents.

This problem is very prominent when the development of good Lok has reached a certain scale.

All goods are scattered in various counters, often faced with a single product but many stores to take the problem, the efficiency is very low.

So, like Jingdong, Dangdang, these platforms began to build their own storehouses, or even later built their own logistics.

The improvement of warehouses and logistics infrastructure and services does make good Lok grow stronger, but behind this relatively high quality service is to burn large amounts of money every day.

There have been several rounds of financing since the online purchase of good luck. In June 2009, Sequoia capital invested 10 million dollars.

In July 2010, Dafeng Jie, Intel and Sequoia capital invested three dollars to buy 17 million dollars. In May 2011, Tencent bought 60 million dollars in the form of capital injection, and with a round of capital injection, the business data of good luck in various fields hit a new high.

But when the market was cold in the second half of last year and the financing environment was worse this year, good Lok quickly entered the plateau period, losing money, expanding its scale, blocking advertising, reducing investment, traffic and market concerns.

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In the face of such a situation, Le Tao chose his own brand, while Li Shubin had gone the other way.

Li Shubin said he would not do his own brand, and the brand concentration of shoes was much higher than that of clothing.

Therefore, the result of Holle's purchase was forced to expand its platform, and had sports, outdoor, children, clothing and bags.

Previous Zappos ideals were also forced to stay away.

Among the leading players of the domestic footwear B2C, except for good luck, Le Tao, it is generally considered that there is only one excellent purchase network that has just been developed just last year.

Can you buy Zappos in China? No, it's a website with a golden spoon. It doesn't get rid of the most common growth pattern. It takes money, burns money and changes traffic, but it has not yet reached the bottleneck and pformation stage.

Now relying on BELLE group's supply chain, brand and capital, we are making a good sprint.

However, the precedent of Le Tao and Yue Le has proved that the burned out passenger flow is very difficult to manage.

From the recent adjustment of BELLE's mid term financial results and excellent purchase, we can see that BELLE's attitude towards excellent purchase has begun to show subtle changes.

BELLE's electricity business has already lowered the gross profit margin of BELLE's traditional business by 0.5 percentage points. BELLE will never have no scruples about the layout of the electricity supplier, so half of the $200 million that BELLE has promised to purchase is still unfulfilled.

So, excellent shopping is also exploring more channels to cut costs and expand interests. In August, it launched the Dangdang flagship store, including 18 footwear brands and sportswear brands of BELLE group.

Excellent purchase in BELLE is a traditional exploration in the electricity supplier. There are many problems such as different ideas in the traditional electricity supplier. Therefore, the follow-up BELLE will be more cautious in the purchase of excellent purchase network. In the process of strategic pformation, there will be new requirements for the profitability of the purchase network.

Where is the bottleneck?

"China Zappos" has become a fantasy from the dream, and the competition of shoes B2C has become a survival.

Where is the B2C problem in the shoe industry?

From several footwear B2C pformation reasons can be peep at one or two, Le Tao Bi Sheng said that the scale is too big to make it difficult to get rid of the predicament of loss, so le Tao pulled its own brand as life-saving rope.

Li Shubin told me that he had to estimate the order accurately to reduce costs. Xu Lei said he wanted to avoid conflict with tradition. Han Buyong, the shoe store, complained that the price of the advertising platform had doubled 10 times in 4 years.

Dong Xinda said the cost of obtaining users and the high user stickiness are too low.

West Street Network CEO Guo Hongchi summed up the most comprehensive, to solve the relationship between capital, costs and profits.

This is also the biggest problem of footwear B2C and even the whole B2C.

The gross profit of shoes is basically around 20%, while the operating cost of shoes B2C is often low. Taking the west street network as an example, the cost of operation is 10%, the cost of warehousing and distribution is 3%~4%, and the marketing cost is 10%. The overall accounting is negative, with a net loss of 6 to 8 points.

Compare the highlights of Zappos, which is often followed by domestic shoe companies.

Zappos wants to deliver "three pairs of shoes".

The cost of sending a pair of shoes and sending two pairs of shoes is quite different.

Those who are familiar with the rules of the distribution of footwear B2C account for this: at present, the cost of each pair of shoes in the city is about 10 yuan, and the two pairs are 20 yuan. If a pair is returned, the express fee will reach 30 yuan.

If both of them are refunded, the express fee will be 40 yuan.

The cost of delivery for each pair of shoes is more than ten yuan, and the express price of sending two pairs is more than 30, and the refund fee is almost 50 yuan.

If the two pairs are retreated, the cost of delivery will be almost 70 yuan.

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This kind of service results in a direct increase in the cost of domestic footwear B2C logistics.

However, the online shopping environment in China is much different from that in Europe and the United States. Almost all brands enter the Chinese market and must adapt to the price diversification of the same products in the country, allowing discounts and allowing large discounts.

On the one hand, on the one hand, you can catch up with the high level of service rhythm. On the one hand, you can not get rid of the price competition. The compressed profit space is squeezed or completely offset by the rising operating cost.

Therefore, the shoe size B2C can hardly be profitable in China.

Similarly, the turnover rate of footwear products is related to many supporting services. The third party logistics of good Lok and Le Tao is obviously difficult to reach a one-stop service to enable users to try, experience and return goods. So, under the helplessness, B2C, a small shoe group represented by hollok, has begun to build its own logistics, and the manpower and hardware involved in self logistics has greatly increased the cost.

In addition, the market environment is not good, the manufacturing enterprises have a surplus of products, and all the brands and agents are backlog of a lot of goods. They need large warehouses, needs and all agents at all levels to fight the price, and then have to sell the advertising, and the next round of money does not know whether they can come in. In such a high-risk state of operation, B2C, such a vertical field of shoes, is bound to face unprecedented challenges.

At the moment, nothing can survive, but the way to live is not to continue to consume, but to pform.

Le Tao chose to push the brand to operate its own brand with a gross profit of more than 30% or even higher.

Good Le buy simply cut the surface and quickly extend to other fields.

Children's wear, sports outdoor, luggage accessories.

It looks as if it can expand some scale and raise profits at the same time. The purchase network has begun to shrink, reduce advertising and open flagship stores in many department stores.

These life-saving pformation are somewhat hasty.

Although the gross profit will be improved, the development cycle and brand building of new products will be a lot of money and time.

In sports shoes, China has appeared many of its own brands before, and the quality and price are very competitive, but when facing many big overseas brands, all of them die, and only a few domestic sports brands can make up a certain market.

For Le naughty, there are many rounds of financing before, investors must have a certain demand on the scale, and in such a highly concentrated field, if the brand can not be done, more can not talk about the scale.

In addition, Le Tao also has to bear the operational risks of the platform, which will be a bigger test to the electricity supplier's capital chain and retail capacity.

Vertical website search for third party platform cooperation opportunities, in order to get mature users, orders, reduce input costs, is also a trend of this year.

Excellent purchase network, Le Tao net, Amoy shoes are all settled in Dangdang, good music to buy in Amazon, No. 1 shop, and the name shoes library, Amoy shoes, West Street main order is also from the Taobao shop, such as the three party platform.

In addition to entering the big platform, Le Yue is constantly storing up in the expansion category, and the category expansion allows itself to raise gross profit to attract the long tail users.

But the lengthening of product lines and the sudden increase in inventory pressure also made it very dangerous. In April this year, there were already internal staff who broke out of the market. Because of self built logistics and inventory backlog, the occupancy of funds has forced them to lay off 30%.

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Besides the pformation plan of good Le buy and Le Tao, some other enterprises have explored a new way out. The west street network is groping for the B2C2C mode, and has made systematic docking with online sellers and upstream suppliers of small and medium-sized sports.

Consumers place orders in these sellers' stores, orders will go directly to the west street network system, and West Street will be delivered to consumers directly.

Each paction of a list, the west street network will automatically deduct the cost of small and medium-sized sellers, delivery costs, warehousing costs, etc., West Street network acts as a middleman, at the same time all platform interests bundled, which reduces the risk of a single official website.

Although there are many pformation plans, but now the footwear B2C pformation is obviously a scene of panic and survival. In the past, the industry was looking at the two men who could win the final, and now it became the two main force to see who could first blend into the last PK.