Where Will Vertical Shoe B2C Go?

Suning and Jingdong's electricity supplier war has not dispersed, and the vertical electricity providers seem to have fallen into "vicious competition".

The two strong shoes on the vertical B2C platform of the footwear industry have a heated discussion.

At its source, CEO, Bi Sheng, who threw the "vertical electricity supplier is a hoax" at the end of 2011, when e-commerce was getting cold, triggered a controversy in the electricity business community.

This controversy has not yet been resolved. In August 14th, "Bi business" forum, Bi Sheng again threw new words, clarifying its original words is not as reported, but "vertical purchase and sale of B2C platform is a hoax."

At this time, Le Tao's high-profile pformation has become an original Internet brand.

This pushed Bi Sheng and his "Le Tao net" to the peak of public opinion.

Li Shubin, as an old rival who had already fought with Bi Sheng Ming, "CEO", but in 2012 China's e-commerce growth Summit Forum, said that "the Internet will not be the only one, and the small products have a chance!"

As a result, the just relieved electricity supplier situation has once again become tense because of the gap between the two shoe vertical e-commerce bigwigs.

The contradiction has not escalated significantly, but the view that the two sides become one faction is the whole e-commerce industry's thinking about "vertical B2C is not hoax" and "vertical B2C future go?"

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As an example, with the prevalence of online shopping, more and more footwear enterprises are entering the "blue sea" online shopping. In the implementation of the diversification and multi category development strategy, more platform cooperation is sought, in order to occupy a larger market.

China's online shopping market has sustained high growth since 2008, and the permeability of online shopping consumers is at a lower level of 37.8%, compared with Japan and South Korea, a difference of about 10 percentage points, but at the same time, it also shows that the space for promotion is large.

The data show that the market share of footwear is second only to clothing, accounting for 13.5% of total online sales.

All along, the vertical electricity supplier has a single category to do the advantage of specialization, and has become the main reason for consumers to choose this kind of electricity supplier.

In fact, the development of footwear B2C platform in the Chinese market has always had high costs and the overall operating cost is too high.

Therefore, many footwear B2C will focus on the cooperation with other electronic business platforms, as well as the development path of multi category, with a view to expanding the market and gaining more market space.

Footwear as the most stable, least risky and the earliest consumer goods, "electricity supplier" has occupied a huge market, has a share, profits and prospects, and the "price war" of the footwear business has become the most beautiful and cruelest scenery in the blue ocean four.

With the arrival of the major anniversary activities, the leading footwear platforms are happy, happy, and Amoy.

And so on, also started the "price war" without gunpowder.

It is worth studying that behind the anniversary is the risky behavior of the shoe B2C electric supplier "drinking poison to quench thirst".

Unexpected, reasonable, but not a permanent solution.

In September 14th, the billion China power released the China B2C vitality list (2012.08).

Although Le Tao has pformed its own brand, good Lok has also launched a new autumn special signboard, but it hasn't changed much for itself. After 26 and 19 of the list, it has bought the same type of platform.

After the establishment of a large-scale block, Le Tao sought to break through its own brand to raise its gross profit, and gradually abandoned the agency brand which partially consumed the cost and the gross profit was low.

But le Tao's pformation from the agency channel to some of its own brands still takes time, and the extension of the product line is hard to say whether it is healthy or not.

On the contrary, although the purchase is not as big as that of July, it is basically maintained at the same level as that of good music. However, the traffic has been declining this year, and the marketing of excellent shopping is still going on. So the shoe vertical B2C business market is indeed worth considering.

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"Electricity supplier fraud theory" basis

In view of his controversial remarks, Bi Sheng gave a set of data in the above Forum: he gave a set of costs: one-way logistics 10%+ storage 10%+ reverse logistics 3%+ customer service 1%+ technology 4%+ management 10%+ market promotion 10%+ collection fee 2%+ packaging 1%=50% or so, while the electricity business industry can more than 50% gross profit category is very small, price war only 10% gross profit, 40% loss how can it be a business?

First of all, from a financial point of view, under the premise of assuming vertical e-commerce, although there are many fixed inputs and pre investment.

"Assuming that this year's sale is one billion, almost 5 hundred million of the warehouse will be prepared, and the relevant people should be sought. As a result, the capacity of cash flow is not enough, and your cost can not be diluted."

Bi Sheng gave an example.

In the extremely hot vertical class

Almost everyone in B2C e-commerce is making the same mistake, and this kind of error is a sad data from a financial point of view.

"Besides, the whole social environment is not perfect enough to take all the big things into consideration. It is like a complete e-commerce company, taking into account various roles. It is Brand Company, technology R & D companies, warehouses and logistics companies. When an enterprise has more roles to play, it will invest more and more in every link.

This is very difficult for a light capital enterprise to accomplish. "

Bi Sheng believes that whether vertical e-commerce is a fraud is based on two judgements, that is, to see the profitability of the future, and whether capital can sustain itself until the enterprise comes to this future.

When the logistics system, warehouse system and so on all need enterprises to complete their own business, Mao Liyuan of the enterprise can not support all inputs.

In addition to these two points, for investors, the vertical retail industry's annual sales volume is less than 2 billion, thus losing the significance of investment.

"If these two are not available, then I think it is a hoax."

"There is a chance for small business providers!"

Although Li Shubin did not comment directly on Bisheng in the 2012 China e-commerce growth summit, he did not give precise data for good shopping, but explained the argument in the "normal average" aspect of the whole industry.

First, one-way logistics (including the cost of delivery, including the cost of customer refusal) is less than 5%.

Now, as long as the city express is only a few yuan, many warehouses have been built in order to deliver goods nearby. If the price is calculated at 300 yuan per passenger unit, the one-way logistics cost will not exceed 15 yuan, or less than 5%, and second is warehousing (rent, personnel, water and electricity expenses) at 3%.

The basic level is 10 thousand square meters, if a warehouse is 0.8 yuan per square meter a day, ten thousand square meters is 8000 yuan, can put 500 thousand pairs of shoes, and the poor efficiency can also be issued 4000 single (this is the lowest efficiency), the 4000 orders need 60 people, each person according to the high labor cost + performance monthly 4000 yuan, the personnel cost is 8000 yuan per day, plus other extra cost 8000 yuan (such as management, water and electricity), the warehousing cost of one day is 8000 yuan, according to the check list, the cost per unit is the yuan yuan, plus some other possible cost is calculated yuan (this number is already high), according to the passenger unit price yuan yuan to calculate, the cost is less than. Beijing, for example, warehouse

Third, reverse logistics is far below 3%.

Reverse logistics costs can be discounted by logistics companies, and a small part of the products are free, and more than a certain amount will be recharged. But this part of the cost is even cheaper than 5% of the one-way logistics. Normally, too many returns can not happen. "Good Le buy and refund rate is only 10%, so the reverse logistics cost is far below 3%."

Li Shubin lists customer service, technology + management, marketing, collection fees and packaging plus 14%.

"The cost of the normal operation of the electricity supplier company is about 25%, which can be seen in the latest vip.com's earnings reports (business models are almost the same), and the gross profit of 21.8% is only 4.28%, and it is not difficult to make profits."

As a solution to the rigid demand of human footwear, B2C has different margins on different footwear.

If the electricity supplier industry does not have more than 20% gross profit, it is difficult to do so. If the gross margin is below 20%, people will not do so.

"In short, there are still great opportunities for distinctive vertical products or brands."

Footwear business operators embarrassed

Le Tao net, founded in 2008, is the B2C of footwear.

From the end of November 2010 to January 2011, Le Tao successively offered coupons at a very low price at the US group and other group buying websites.

The two group buying made about 160 thousand people buy Le Tao products. Then Le Tao built a good reputation with quality service, making these users a loyal user.

Coupled with the word-of-mouth pmission of the already consumed consumers, the sales of Le Tao were quickly pulled up.

However, this loss of marketing way makes Le Tao overburdened.

Coupled with the continuous increase in operating costs and competition from competitors in the same industry, the growth of Le Tao has met the bottleneck of growth.

In order to save money, Le Tao once claimed to cut 80% of the advertising budget.

However, cutting the advertising budget is indeed "instant" in terms of traffic volume: data from website Alexa show that the number of users in Lok tau online shoe market has dropped sharply in the first three months of this year, a drop of 44%.

However, it also accelerated the pformation of Le Tao's pformation. Not long ago, Le Tao launched its own brand.

In order to quickly open the market in the unpromising period, Le Tao, like other private brand businesses, spreads products on multiple platforms simultaneously.

At the same time in Tmall, Jingdong mall, Dangdang, Amazon China, vip.com, Cuba and QQ mall and other platforms sell their brands, and the follow-up will expand to more platforms.

Previously, she had repeatedly said she would not promote her own brand, but in a short span of six months, she had launched 5 private brands at the same time, including 3 women's shoes brands, Yue Wei, Mo Xi and two men's shoes brands.

This makes Le Tao in a very awkward position.

Of course, it also confirmed that the original logic of the electricity supplier is "scale accumulation to a certain amount of re profitability" is not feasible.

The vertical electricity supplier itself has limited market space, and is vulnerable to the extrusion of the growing platform electricity supplier.

So for vertical electric providers, deep down may be a good choice.

But it is not easy to conclude that Le Tao pushes its own brand to help itself.

Although everyone has made some success in making clothes, there are few successful examples of footwear B2C.

The main reason is that there are many classifications of shoes, and there are many codes in each category, which requires very high inventory.

Moreover, the return rate of footwear is high and gross profit is high.

Low and even worse, the market is hard to accept.

And shoes are more important to the brand, and the mainstream demand for shoes is brand oriented.

"In general, users are also willing to try new brands, but this market is hard to support Le Tao."

Feng Lizhong, an e-commerce analyst, told this reporter.

Pushing its own brand is also a double-edged sword. In addition to the need for time to accumulate, it is also necessary to take account of the contradiction between its own brand and other brands on the website in the process of building brand. This is also a big problem before le Tao.

"Moreover, product type e-commerce integration is commodity supplier resources, brand electric business integration is the industry chain resources, operation difficulty will be greater, also makes the future of Le Tao is full of variables.

Feng Lizhong said.

Footwear B2C has remained warm for several months. Although the cooperation between Watsons and Watsons has solved its urgent need, it has been leading the market for the first time and has enough market share.

But relying on the strong resources supply chain and brand effect of BELLE group as the first mover advantage, and through the large-scale advertising enclosure, it has become the leader of the footwear business in a short year. However, the example of Le Tao has proved that burning money and shouting in exchange for flow can not change the stickiness of users, nor can it change profits.

From the recent BELLE interim earnings report and excellent purchase, we can see that BELLE's attitude towards excellent shopping has changed.

The main reason is that BELLE's electricity business has already lowered the gross profit margin of BELLE's entire footwear. BELLE group can not help but take corresponding measures to optimize its purchase, forcing it to reduce its losses.

So in August 23rd, the official flagship store was officially launched on Dangdang, including 18 famous brands such as footwear brands and sportswear, which are under the BELLE group.

According to industry sources, follow up BELLE will no longer make great efforts to help purchase the net to burn the money to occupy the scale, and the BELLE business strategy shift will force the excellent purchase to reconsider its profitability.

Where to go is still blurred.

Apart from the bottleneck of the development of two typical footwear vertical businesses, shoes and clothing business platform such as Mcglaughlin, vip.com and other e-commerce enterprises are also in a predicament, the future is not clear.

Shoot the shoe net and strike low into a "dark horse".

In many vertical e-commerce platform for the "price war" to play a happy time, the shoe net low-key but black horse is the top.

In August 24th, AI consulting released the Internet core data in the second quarter of 2012, and selected the ten largest B2C e-commerce websites with the fastest growth rate in the first half of 2012. The shoe net is among the fastest growing footwear business providers, with a monthly compound growth rate of 21.6%, exceeding the comprehensive B2C website of suning.com, Jingdong mall, Tmall and so on, ranking second in the list.

Not long ago, Dong Xinda, vice president of the shoe net, said in an exclusive interview with this reporter that in the first half of this year, when the capital was the coldest, he took the joint investment of Goldman Sachs and SIG capital.

Less than half a year, once again, "counterattack", strong momentum.

The shoe net is the earliest footwear B2C in China, and its development is inseparable from its adjacent China.

Jinjiang's geographical advantages.

To actively integrate the supply chain resources, including the first line and the two or three line brand, as a result of its B2B portal, China shoes net, it has been 10 years of experience in the cultivation of the footwear market, which is also able to take a steady step in the fickle e-commerce and the traditional footwear market in the past two years.

In September 14th, Dong Xinda, vice president of racket shoes net, revealed that the total number of active users was over 1 million 200 thousand, and the daily average DoNews was over 300 thousand. The average daily business orders were close to 4000 orders, and the guest price was close to 150 yuan, and the peak price reached 190 yuan in September 14th.

At the present stage, the gross profit margin is controlled at around 27%, and profits have been realized.

Sales are expected to exceed 300 million yuan this year.

Return to the essence, B2C vertical online shopping "blue ocean" still exist

The biggest advantage of vertical electricity providers is professional. Ideally, it can effectively simplify the way people get the goods they want, and provide targeted consumers with better choices.

Because of its strong pertinence, the relative conversion rate is high.

As long as vertical electric power enterprises are able to dig deep into their own acres and take differentiated competitive routes with electronic commerce websites of department stores, the future should be bright.

But this advantage has become a fatal shortcoming in real conditions.

So, which part of the problem is a problem, or in the whole e-commerce is still in a period of irritability and has been overlooked. For this, this reporter interviewed the original HC electronic business department manager now the angel fund president Liang Wu.

The biggest advantage of vertical electricity providers is that they lose the biggest advantage of the e-commerce industry - the long tail effect.

The biggest difference between e-commerce and traditional business is not only the difference between operation cost and channel, but the long tail effect. Under the big line, the goods that supermarkets can accommodate will also have limits, while the users will also have limited access. However, the electronic commerce can expand the product category through the internet tool to expand to infinity. Through SEO optimization, the number of users can also increase continuously, so as to get profits through the long tail effect.

Liang Wu said.

The essence of business is to get profits. In e-commerce, electronic is only one of many ways to serve business.

Expanding sales is an ultimate goal of all business activities, and vertical electricity providers are no exception.

"At present, in order to bring related sales, vertical electric providers have embarked on the road of category expansion, attracting more users, and even increasing the number of cooperative businesses, thus promoting sales."

In essence, this expansion is not logical. This is a money smashing game. At present, vertical electricity providers are unable to bear the burden.

Whether it is competition with the same type of vertical electricity supplier or department stores, they will push themselves into the dry well, and the market for vertical customers will be limited, and some customers will be shunted. The market space of vertical electricity providers will be suppressed.

Liang Wu also gave an analysis of the phenomenon of "price war".

"Price war" is one of the elements of the market economy, so that the formation of monopoly can be avoided and excessive profits will be avoided to ultimately damage the interests of consumers.

"But enterprises can no longer rely on the flow of survival, the delay is to clarify their own development direction, and then try to change the business mode of initiative, only in a more robust and meticulous way to process control, in order to break through the bottleneck of the current industry crisis."

Liang Wu said, at this stage, the price war of shoes and clothing business will continue. Judging from the growth rate of e-commerce, there is still a lot of room for online traffic.

"At present, most of China's vertical electricity suppliers are involved in price wars or rapid expansion, ignoring their original positioning, which speeds up their own decline.

If the brand type vertical electricity supplier can clear its own position, steady and steady in its own field, rather than blind expansion, there is still a chance.