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    Vipshop: It'S Hard To Copy The Flash Purchase Myth

    2014/6/9 12:55:00 412

    VipshopFlash Buying MythMarketing Strategy

    In the past May, Vipshop once became a reference word for listed enterprises, and similar statements such as "TUNIU became online travel Vipshop, JumeiYoupin became cosmetics Vipshop" were frequently reported. For a while, "Vipshop" has become a commercial symbol that blazes a new trail in the red sea and creates a blue sea.


    "How can an e-commerce company rely only on online flash buying (flash buying) discount brands to support a market value of nearly 10 billion dollars", "Why are there few users around me when quarterly profits exceed 30 million dollars", "Why is the industry background and development model so good that no one in the industry can compete with it, Investors also labeled it as a monster stock.


    Recently, Tencent Technology, through visiting the users, upstream suppliers, internal employees and competitors of Vipshop, learned that behind its unique operation idea is its understanding of Chinese consumers' psychology and market environment, and it is really difficult to compete with its competitors in the short term.


    However, Vipshop's flash purchase model is difficult to maintain its advantages after being transplanted to other fields. Especially in cosmetics and other products without massive brand inventory, Vipshop is difficult to replicate its previous successful experience, which means that there are still risks behind today's high valuation of Vipshop.


       User portrait: authentic female consumers in second and third tier cities


    Ms. Li, who lives in Changsha, Hunan Province, is 30 years old and has a monthly income of 3000 yuan. Like many women in second tier cities, Ms. Li is both fashion oriented and price sensitive - in the past two years, her salary has been basically unchanged, but the price of clothes in the mall has soared, and the price of thousands of yuan has made her shy away from fashion brands.


    Until the beginning of last year, a friend told her that she could buy fashionable clothes through the website of Vipshop. "200-400 yuan, pay on delivery, and return the goods directly if they don't fit on the spot." This made Ms. Li heartthrob. After several careful attempts to purchase, she gradually became an avid fan of Vipshop.


    "In addition to buying her own clothes, shoes, etc. (at Vipshop), she also buys a large number of clothes and household items for relatives and friends, such as birthday gifts, friends' marriage gifts, child-bearing gifts, etc." Ms. Li told Tencent Technology that she spent 20000 to 30000 yuan a year at Vipshop, which is basically bought every month.


    Ms. Wang, who lives in Dazhou, Sichuan Province, is the mother of a 4-year-old child. She is 28 years old and disdains to wear some street goods because she often participates in social activities. However, because the richness of local brand clothing is not high and the discount is small, Vipshop has become one of her main online shopping positions.


    "There is a discount for authentic brands, covering middle, high and low-end products, with more choices and fast delivery." Ms. Wang gave her reasons for choosing Vipshop, which is basically consistent with the comments of many female users. In the opinion of these users, there are too many clothes on Tmall, which makes people dazzled, because different comments make them lack the trust of authentic products.


    It is understood that Vipshop users mainly come from the second, third and fourth tier cities in the south, with a repeat purchase rate of more than 80%. According to Baidu index data, Vipshop users are concentrated in Guangdong, Jiangsu, Sichuan, Zhejiang and Fujian, and the user age is 20-40 years old.


    In the interview, Tencent Technology learned that in the county seat, consumers are still pursuing famous brands, and exclusive stores think it is a big brand. Vipshop quickly meets the pain points of consumers with authentic products and good quality at low prices. As for whether it is the end of the season, whether it represents the latest trend consumers do not care. "As long as you like, you can wear fashionable clothes in the surrounding crowd".


    An internal salesperson of Vipshop concluded: "Consumers are concerned about whether the goods are needed, whether the price is acceptable, and whether they can purchase, pay for, and receive the goods in a regular, quantitative, simple and sufficient manner, directly opening their hearts."


    In addition, one of the factors that cannot be ignored is that there are no mature chain stores to clean up the tail goods offline in the second, third and fourth tier cities in China, which makes Vipshop become a centralized outlet for users to buy tail goods online. Once these users have formed the habit of shopping at Vipshop, they have high loyalty and user stickiness, and can form a snowball effect of public praise.


       Sales Insider: Foreign Big Brands and Domestic Brands


    What kind of chain will Vipshop provide users with good quality and low price Discount products Of? According to Tencent Technology, Vipshop mainly has three core links in its operation: supply of goods, warehousing and logistics.


    From 2009 to 2013, fashion goods (especially clothing, shoes and hats) became the largest category of online shopping in China. At the same time, the retail market is shrinking, and the clothing inventory is overstocked seriously. The amazing inventory of several trillion can not be dumped. Every year, about 20% of the sales of large clothing brands are to clean up the tail goods.


    The flash purchase mode of Vipshop is just in time. The Vipshop is located in Guangzhou, which is the most prosperous area of domestic clothing trade. Clothing brand merchants are worried about dumping inventory. Vipshop is in need of a large number of brand goods to sell to second, third and fourth tier cities. In addition, the profit of off season supply and tail goods is amazing. Even if the discount is 50% to 70%, it is still profitable. Plus the commission, Vipshop seems to have found a golden mountain.


    "There are almost no fakes in domestic famous brand products, and a large amount of inventory is waiting to be digested, so there is no need to buy fakes. Foreign mid-range brands are copied in China, Japan and other countries, and a pile of English makes it difficult for domestic users to identify them, and it is also difficult to judge their authenticity from pictures." A clothing supplier revealed that on the one hand, Vipshop will introduce a small number of international brands, Attract consumers with low discounts. This part does not make money, but it can win the trust of users, form word of mouth and gather popularity; On the other hand, sell many cheap domestic brands to attracted users to reap profits. However, this statement has not yet received a response from Vipshop.


    According to Tencent Technology, although these many low-cost domestic brands are not of high grade, they are not inferior. Especially after hundreds of fashion buyers carefully selected by Vipshop, and after exquisite packaging, a limited number of low-cost brands have been snapped up, attracting the attention of a large number of consumers.


    In addition to capturing downstream consumers, win-win with upstream suppliers has become another killer for Vipshop to control the supply chain.


    One supplier said frankly that Vipshop would negotiate cooperation and put forward three reasons, which made people cannot be unmoved. First, it has a strong cargo handling capacity, and can quickly handle the tail goods and out of season goods in large quantities; Second, limited time, limited quantity and special sale will not impact the offline price system of the original brand; Third, the account period is short. The account period of Vipshop is one month, while that of other e-commerce businesses is three months on average.


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    At first, Vipshop will pay 15% in advance to buy off the supplier's tail goods, and cannot return the goods if it cannot sell out. With the expansion of the scale, Vipshop will have more say and realize post payment. If it can't sell out, it can be returned. In addition, when users reach a large scale, the return volume is very small. In the end, Vipshop signed cooperation with hundreds of exclusive special sale platforms, forming a virtuous circle, and more suppliers were joined in the camp of Vipshop.


    At the storage level, Vipshop will quickly enter and exit, and its turnover speed will exceed that of Dangdang Jingdong. Whichever warehouse the brand supplier's products enter, Vipshop will launch this product in which region and city, and consumers in other cities will not see it. This is to ensure the speed of delivery, and to avoid suppliers being unwilling to deliver goods after consumers get them.


    Vipshop's flash purchase mode has short cycle and high logistics requirements. If the consumer has not received the goods from the last time when he or she is in the next rush, it will naturally greatly impact the purchase enthusiasm. For logistics, Vipshop will adopt the mode of "trunk transportation+landing distribution": trunk transportation from warehouse to cities, Vipshop will build its own+outsourcing. For inter city transportation, Vipshop will invest in a strong local company to achieve rapid coverage of urban and rural areas without blind spots.


       A model that can't be learned to avoid luxury e-commerce without competitors


    Generally speaking, there will be two or three competitors in the same industry, such as Youku and Tudou in the video industry, the classification information 58 in the same city and Ganji. Why hasn't there been an enterprise that can compete with Vipshop in the online clothing flash purchase discount industry?


    At the beginning of its establishment in 2009, Vipshop was positioned as a luxury e-commerce. However, luxury e-commerce has a narrow audience, brand merchants are cautious about authorizing online channels, and the scarcity of goods and the proliferation of counterfeit products triggered a crisis of consumer trust, which ultimately led to the downfall of many luxury e-commerce businesses, such as Huha.com, Pinju, and Chuxiu.


    At this time, Vipshop, which is in deep trouble, will make decisive adjustments, abandon the top tier luxury brands, avoid the three hottest "rivers and lakes" in China's e-commerce industry, and aim at the second and third tier popular brands more familiar to Chinese consumers, such as Adidas, Nike, to transform into the fashion e-commerce of the low-end flash purchase model, In the end, we have gained a lot.


    According to Tencent Technology, although these many low-cost domestic brands are not of high grade, they are not inferior. Especially after hundreds of fashion buyers carefully selected by Vipshop, and after exquisite packaging, a limited number of low-cost brands have been snapped up, attracting the attention of a large number of consumers.


    In addition to capturing downstream consumers, win-win with upstream suppliers has become another killer for Vipshop to control the supply chain.


    One supplier said frankly that Vipshop would negotiate cooperation and put forward three reasons, which made people cannot be unmoved. First, it has a strong cargo handling capacity, and can quickly handle the tail goods and out of season goods in large quantities; Second, limited time, limited quantity and special sale will not impact the offline price system of the original brand; Third, the account period is short. The account period of Vipshop is one month, while that of other e-commerce businesses is three months on average.


    At first, Vipshop will pay 15% in advance to buy off the supplier's tail goods, and cannot return the goods if it cannot sell out. With the expansion of the scale, Vipshop will have more say and realize post payment. If it can't sell out, it can be returned. In addition, when users reach a large scale, the return volume is very small. In the end, Vipshop signed cooperation with hundreds of exclusive special sale platforms, forming a virtuous circle, and more suppliers were joined in the camp of Vipshop.


    At the storage level, Vipshop will quickly enter and exit, and its turnover speed will exceed that of Dangdang Jingdong. Vipshop will launch the product in the region and city where the brand supplier's product is stored, and consumers in other cities will not see it. This is to ensure the speed of delivery, and to prevent suppliers from being unwilling to deliver goods after consumers grab them.


       Vipshop The flash purchase mode has short cycle and high logistics requirements. If the consumer has not received the goods from the last time when he or she is in the next rush, it will naturally greatly impact the purchase enthusiasm. For logistics, Vipshop will adopt the mode of "trunk transportation+landing distribution": trunk transportation from warehouse to cities, Vipshop will build its own+outsourcing. For inter city transportation, Vipshop will invest in a strong local company to achieve rapid coverage of urban and rural areas without blind spots.


       Avoid the mode that cannot be learned luxury goods E-commerce has no competitors


    Generally speaking, there will be two or three competitors in the same industry, such as Youku and Tudou in the video industry, the classification information 58 in the same city and Ganji. Why hasn't there been an enterprise that can compete with Vipshop in the online clothing flash purchase discount industry?


    At the beginning of its establishment in 2009, Vipshop was positioned as a luxury e-commerce. However, luxury e-commerce has a narrow audience, brand merchants are cautious about authorizing online channels, and the scarcity of goods and the proliferation of counterfeit products triggered a crisis of consumer trust, which ultimately led to the downfall of many luxury e-commerce businesses, such as Huha.com, Pinju, and Chuxiu.


    At this time, Vipshop, which is in deep trouble, will make decisive adjustments, abandon the top tier luxury brands, avoid the three hottest "rivers and lakes" in China's e-commerce industry, and aim at the second and third tier popular brands more familiar to Chinese consumers, such as Adidas, Nike, to transform into the fashion e-commerce of the low-end flash purchase model, In the end, we have gained a lot.


    After reaping the first barrel of gold, Vipshop got rich in silence. It seldom accepted media interviews, did not participate in industry forums, and refused invitations from peers. This also made Vipshop attract widespread attention until the capital market rose, and there was no real peer.


    Compared with the founders of many domestic e-commerce companies such as JD.com and Dangdang, Shen Ya, the founder of Vipshop, is more pragmatic and low-key. He has been immersed in the field of traditional clothing trade for more than ten years, has a good grasp of selection and fashion, and has a deep understanding of the accumulation and control of the entire clothing supply chain.


    Just like group buying, only Meituan can survive and grow in the end. A person engaged in clothing e-commerce said that Vipshop will follow the mode of "tradition+e-commerce", the essence of which is that the "shell" of e-commerce packages the "core" of traditional retail, and the core competitiveness operates in the traditional part


    The user group of Vipshop is both fashionable and price sensitive, and the goods need to be constantly changed to meet their tastes. When a brand is introduced, it is necessary to know where the brand sells. This requires an eye for pearls when purchasing, finding the most popular among consumers from tens of thousands of styles that can be sold out in the current season, and reaching a very high level in purchase time, purchase volume and inventory control.


    In addition, Vipshop will provide strict training to a team of 800 fashion buyers to ensure that the products to be sold soon can be bought at the cheapest price, which takes time to accumulate and makes it difficult for competitors to catch up in a short time.

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