Problems And Future Of China's Electricity Supplier Development

Crazy promotion

"This is one of the few bright spots in China's economy." Zeng Ming said. What he means is Electronic Commerce 。 Zeng Ming, the chief strategy officer of China's Internet giant Alibaba, predicts that Alibaba platform's turnover will exceed 1 trillion yuan (US $159 billion) this year - more than the sum of Amazon and eBay. This prediction is bold, but considering the performance of singles day, I am afraid it is not difficult to understand where his source is.

"Singles day" began to be popular on campus several years ago, and then became a shopping Carnival by sharp businessmen. The festival is designed to solace singles in November 11th every year, because there are four 1 days. It's kind of like a bachelor's Valentine's day. On this day, single men and women exchange gifts, jewelry and candy.

In November 11th, the volume of Alibaba online platform reached 19 billion yuan, almost four times that of the same period last year. Even with the US internet Monday, the first Monday after Thanksgiving, the United States Internet Retailer It will be more than twice as big as it will be on this day. In November 11th, China's online shopping orders exceeded 100 million, accounting for 80% of the day's express package. The couriers were overwhelmed by massive packages.

Profit pressure

In this way, the days of Chinese electric business enterprises are not very healthy. This is not the case. Digital marketers are indeed growing, and Internet sales are also surging. Consumers prefer lower prices, better services and more diversified commodity choices. But Elinor Leung, a French CLSA analyst, argues that the problem is that the profit pressure of Chinese e-commerce companies is higher than that of the US. "Almost no one makes money." She said.

Internet retailers and physical retailers are launching an unprecedented fierce price war. Dangdang and Jingdong mall are cutting prices in a frenzy. Tencent is also struggling to grab market share. buy It also increased the intensity of price cuts through just $400 million financing. But it is not clear how long these companies have enough money to burn.

With the counterattack of physical retailers, this trend is becoming more and more intense. WAL-MART has increased its stake in shop No. 1. Jeff Walters, an analyst at Boston consulting firm (Jeff Walters), said WAL-MART could open forty or fifty physical stores a year, but it was negligible in the face of the huge demand in the Chinese market. "That's why e-commerce is so important." Many western competitors have suffered setbacks in the process of introducing warehouse store mode to China. Best buy and home depot are the latest examples.

Sunning and Gome, as the largest two home appliance stores in China, have recently expanded the categories of online shopping malls. McKinsey analyst Alan Law (Alan Lau) said they are also pressing manufacturers to stop offering such a big discount to e-commerce providers. He estimated that the number of computers and mobile phones sold online in 2011 was 12% less than that in physical stores, compared with 7% this year. As the gap becomes smaller and smaller, the profit margins of almost all enterprises are squeezed.

Outshine others

The most famous exception is Alibaba, which accounts for almost 3/4 of China's e-commerce market. Because Taobao (C2C) and Tmall (B2C) platforms are only responsible for matching transactions between buyers and sellers, there is no need to invest in logistics or inventory costs. None of the products sold on these platforms are produced by Alibaba itself. American officials classify Alibaba as a "counterfeit" counterfeit market, but Alibaba thinks it is unfair. The company mainly generates revenue through advertising rather than user fees. The main reason for adopting this model is the dominance of Alibaba.

Alibaba is still Private Held Company, so it will not disclose financial data, but YAHOO has some stake in the company. The data disclosed by the US Internet Co showed that Alibaba's revenue almost doubled over the same period last year, reaching $2 billion 900 million in the three quarter ended June, and the profit for the same period increased by two times to 730 million dollars.

Alibaba is very optimistic about its own future. E-commerce is already in China. retail market It accounts for 5% of the share, almost the same as that in the United States. But Alibaba said China has greater potential. In the US, the efficiency of physical retailers is high and everywhere. In China, the physical retail market is highly differentiated and inefficient, and has rarely been set up outside big cities. Therefore, e-commerce can achieve transcendence.

Zeng Ming pointed out that many Chinese did not go to the Internet. After these people become Internet users, Alibaba will focus on, record and analyze their shopping habits. The company is designing a big data strategy. We hope to help enterprises gather user data as soon as possible and share their analysis. This will help them speed up the product design cycle.

The ambition of Alibaba is to help China enter the era of "mass production on demand" and "user independent innovation" - turning these slogans into reality. "The entire supply chain will be integrated into e-commerce." Zeng insists that "it will not only be a tool, but will also become the core of the whole economy."