Dangdang: Clothing Will Become A New Starting Point For Dangdang

The old brand e-commerce Dangdang started with book retail in those years, occupying half of the online book market. Over the past decade, with the maturing of China's e-commerce environment, a variety of comprehensive and vertical e-commerce have emerged one after another, and online book sales have become a red sea. So as early as three years ago, Dangdang has decided to transform. Now the pain of transformation has passed, and the original book seller Dangdang is now selling well? Beyond the book market, where is Dangdang betting?

"From selling books to selling clothing It took us three years to complete the transformation of the clothing department store anti super book business. Not every category wants to be the first in China. I don't believe Tmall can do it. " Li Guoqing, CEO of Dangdang, said this in an interview with CBN, a TV station under Shanghai Oriental Media Group Co., Ltd. (SMG).

There is no competition in book category

In the opinion of Li Guoqing, CEO of Dangdang.com, the transformation is due to the limitations of the book market. According to the estimation of relevant institutions based on book pricing data, the size of the national book retail market last year was about 46 billion to 47 billion yuan, including about 10 billion yuan of primary and secondary school textbooks by Xinhua Bookstore. For this reason, Li Guoqing believes that the online sales share of books is limited, and the future 30% annual growth rate of the book industry is unsustainable, so it is necessary to seek other business growth points.

Li Guoqing said: "In the past, Dangdang only sold books rather than department stores. Books were profitable, but we thought that our 20 million readers not only needed books, they needed other things. We had this condition, so we decided to start selling maternity, baby and child products, home textiles, mobile phones, computers, clothes and food in addition to books. It took three years, that is, three years of losses After this difficult and successful transformation, Dangdang's non book category, namely clothing department stores, has exceeded books. "

According to the financial report of the second quarter of 2013 disclosed by Dangdang, during the reporting period, the overall revenue of Dangdang reached 2.218 billion yuan, of which department stores exceeded books for three consecutive quarters, with a turnover of 1.273 billion yuan, up 86% year on year. Books continue to monopolize about 50% of the online market share, while the loss rate of Dangdang narrowed significantly to 4.3%, It has achieved the best performance since the third quarter of 2011. From the above data, Dangdang has achieved the transformation from a single book impression e-commerce to a comprehensive shopping center. Li Guoqing seems not to have too much concern about the book business that is the foundation of the company.

Li Guoqing revealed that at present, half of children's books in the national book market are owned by Dangdang. Other general books besides children's books also account for about 35% of the share, and some categories such as social science, life and novels account for 40%. Dangdang has a lot of purchasing strategies, such as exclusive underwriting of books published by the publishing house. Because the problem of the backlog of publishing houses has been solved, the publishing house has also reduced many discounts to Dangdang, which has greatly increased the gross profit space of Dangdang's books.

For Amazon, an old rival, Dangdang has more than eight years of experience in the war of resistance. Will Amazon's e-book reader change the current competitive pattern after it is officially launched in China? Li Guoqing believes that he will not: "In paper books, we have played with Amazon for nine years, and always suppressed it, which is about half of our sales. Amazon launched the Kindle, and we also launched Dukan, and our price is cheaper than it, and our performance is more than it. But we think the Kindle reader is not the mainstream of digital reading in China, and the mainstream of digital reading is still mobile phones."

According to Li Guoqing, whether it is Dangdang or Amazon, the current e-book reader does not rely on hardware to make money, but hopes that users can download e-books to make profits. He believes that it will take three years to cultivate the e-book market.

Anti hypermarket books of clothing department stores

Today, on the one hand, Dangdang is trying to maintain its competitive advantage in online book sales. On the other hand, in the clothing and general merchandise category, the growth rate of Dangdang in the last quarter reached 85%, which is about 50% higher than the average level of the e-commerce industry. At the same time, around the clothing category, Dangdang also launched the tail goods sale channel tail goods collection, which made the stock price of Dangdang rise from about $3 to $10 within six months. Li Guoqing revealed that the sales target of this year's clothing category is 3 billion yuan, and it will continue to reach 6 billion yuan within five years, and then it will start to introduce independence designer Brand, make some small and beautiful attempts.

Li Guoqing has his own standards for the investment promotion of open platforms. "We insist on the comprehensive middle and high end, insist on doing boutique clothing and general merchandise, rather than saying that we have sales and profits, we will do it, and resolutely not. This is different from those large-scale online shopping centers that do everything. We do boutique."

The loyal white-collar users of the original book business of Dangdang are the objects that Dangdang Garment wants to strive for transformation. According to Li Guoqing's statistics, only 20% of the active users who have bought books have bought clothes, while 50% of the users in the clothing category have been converted from the original users, and 50% are new users who have won over with high costs.

Li Guoqing believes that Dangdang has paid the least price to win today's market position. What does it rely on? Depending on its brand assets, Dangdang has not only 16 million active customers, but also a large number of customers with good reputation, looking forward to expanding its categories and enriching its varieties. How can these customers let them buy books, e-books, clothes, and maternity and baby products from Party A? For this reason, Dangdang has adopted the strategy of cross distribution, instead of smashing advertisements, or trying to attract some customers who are not Dangdang.

Of course, in the process of transforming from an online bookstore to a comprehensive shopping center, Dangdang has also learned from many advanced models of international giants. Li Guoqing revealed that Dangdang has learned a lot from Amazon in terms of personalized recommendation and cloud computing. In terms of brand evaluation and category building, Dangdang learned a lot from some department stores in the United States.

Admittedly, after entering the clothing sales field, Dangdang cannot avoid facing the competitive pressure from Tmall and Vipshop. How can we find a solution to this? Li Guoqing said that unlike e-commerce on other platforms, Dangdang's clothing open platform will also supervise the prices of merchants settled in, while Tmall and Taobao cannot manage the prices of individual merchants; Second, Dangdang is trying to ensure the value and performance of the goods, and only the merchants who meet Dangdang's comprehensive high-end customer base are attracted.

In comparison with Tmall, Li Guoqing said frankly that Dangdang's traffic is not as good as Tmall's, but he revealed that Dangdang's conversion rate and customer price are 30% higher than Tmall's.

Li Guoqing's plan for the future Dangdang clothing business is to establish a whole chain from new clothing to seasonal and tail clothing sales, take into account the various sales cycles of online sales of clothing brands, and solve the problem within a platform ecosystem Brand clothing The sales problem makes the clothing brand and Dangdang platform coexist and win together.

In fact, the rapid growth of the clothing sector has led to the increase of the gross profit rate of Dangdang. For future profits, Li Guoqing was optimistic that there was no timetable for profits, but it was just around the corner. At the same time, he is very confident that the team trained by himself will shoulder the diversified development strategy in the future.

In fact, in the past three years of transformation, Dangdang has also gone through a detour. It was once superstitious that he would find a ready-made person, and he would bring a few more people to bring up a business, but later found that it was not the case. Today, the backbone of Dangdang clothing and general merchandise is mainly internally cultivated by Dangdang.

Talking about the future of Dangdang, Li Guoqing said: "Dangdang adheres to the comprehensive shopping center. You can think of all kinds of Dangdang.com, including food, specialty food and snacks, including fresh food. But we don't want to be the first in China in every category. I don't believe Tmall can do that, let alone other e-commerce businesses. We must highlight our target categories. We hope that one day you can go to the streets to investigate and ask Shanghai's website Top sellers, middle and high-end online consumers, say that when you buy maternity, baby and children's products online and where to buy home textiles, they choose Dangdang, and I become. When it comes to buying digital products, I don't think of Dangdang first, and it's not my problem. "