Xu Xin: Every Subversion Of Retail Depends On Price Killer.

Electric business was invented by the United States, and Amazon was the first.

Why is China's electricity supplier even more cattle than the United States? It's because of the competition pattern, because when Amazon got up, the retail stores such as WAL-MART under the US line were very cattle, they were very efficient and the cost was very low, so the benefits brought by Amazon were that the products were very rich, and the delivery was fast and convenient, but there was no advantage in the cheap price.

China is different. When Taobao and Jingdong got up, China's offline stores only went to first tier cities and second tier cities, so they kept pace with each other and stepped into second tier cities, and the Internet was very fast.

Therefore, the first selling point of the electricity supplier is the price is cheap. We studied history, cheap is the absolute principle. Every subversion of retail is a price killer. As long as the price is cheap, it can subvert you.

She has been investing in the industry for 21 years. She has invested in a number of listed companies such as Ctrip, Tudou, vip.com, Jingdong mall and so on. She has invested in many Unicorn businesses such as Ganji, the United States, public comment, Beibei, and so on. 4 of her entrepreneurs have become Forbes's top 100.

In 2016, she founded today's capital with a management volume of 1 billion 500 million dollars, and her investment has a maximum yield of 800 times.

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In September 22, 2016, she brought the most practical dry goods speech, "cold winter, cold and cold, and survived!"

To be honest, my biggest feeling this year is that "everything is growing weak and many things are falling."

I invested in it for 21 years, and for the first time in the first half of this year, I felt this cold winter.

This is not to say that in the winter of capital, I mean that business is really more and more difficult to do. Online businesses say there is no flow to the line, and the enterprises under the line say no one is going to get online, and everyone is growing weak.

So I want to say that when winter comes, it is good to live.

Why did business grow?

Why is the whole retail business growing at 10%, but according to the category, everyone is going down?

First, department stores are also falling, and the old stores are declining year by year.

Look at the annual report again, and many listed companies are down.

Following the department store, it must have been falling. Like BELLE, the cattle business was the first brand, and now it is also falling.

Then the hypermarket, such as WAL-MART and Carrefour, has been very popular for 20 years. Now it is also brilliant and beautiful, because their mode (fresh + dry goods + rent) has been broken and overturned.

Their business model is to catch fresh traffic, dry goods and gross profit, and spare space to rent to KFC and McDonald's for rent.

First of all, the gross profit was occupied by the Internet, and the flow of electricity and clothing was taken away. Then, when the flow of people dropped, McDonald's and Kentucky Fried Chicken did not want to rent.

Therefore, these stores first dare not open new stores, second began to cut costs, directly affecting the user experience.

Second, 2-3 years ago, the shopping center was still living well and growing. Now the shopping center is not working. The biggest problem is oversupply and uneven business.

The shopping center relies on the "four dishes and one soup" mode. There is a WAL-MART, Carrefour and a large flow to support it; a department store, most women want to buy cosmetics and clothes, have a children's playground, play games, and in the evening there is a Cara OK, which is the four dish.

What is soup? It's a lot of restaurants. The restaurant ensures you have a passenger flow from Monday to Friday.

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People used to be very good, what happened recently? First, the department stores have not, everyone is on the Internet to buy, department stores have been dug out a big block, how to do it? By what to fill, add a lot of restaurants.

The old restaurant accounted for 20-30% of the shopping center. Now it takes up 40-50%, that is, a good restaurant is two times more competitive. It is in a closed space, so the profit of the old shop is definitely declining, so it is not guaranteed to follow the shopping mall as an old shop.

Third, those companies with product brands are having the same hard time.

In the first half of this year, I looked at the market value of Hongkong, which was very cheap and ten times the P / E ratio.

Dug for a long time, looked at the performance, not much, basically the first half of the year is down.

Let's look at the top 500 again. P & G and L'OREAL are also falling. Wahaha and Kangshifu are also down.

Fourth, how about those three or four line city street shops? The only thing that hasn't been impacted by the Internet is the drugstore. Why? Because of its natural business model, drugs are immediately eaten when you are sick, you can't wait until tomorrow's goods are delivered, and there's dozens of dollars to buy a drug at the drugstore, so business mode + state restriction, so now the drugstore is the least affected, and it is still rising.

Many other businesses are going down. What does the old store mean for a year-on-year decline? That means you will soon have no money to earn.

After most companies pay taxes normally, a retail shop no matter how well you do, the net profit is 8-10%. If you sell 20% down, what does it mean? If your gross profit is 50%, you just have to drop 20%, and there will be no Qian Zuan at all. This is pretty scary. You have a bunch of employees, and the rent is fixed.

Having seen so many drops, but the total retail sales are still rising. Who is going up? It seems that the only thing that is rising is the Internet, and the Internet business is thriving.

The annual growth rate of the Internet has been very large, and there has been a 30% increase. The volume of Taobao is so large that MAU is growing at a rate of about 40%. Jingdong's MAU is 70-80% growth and its revenue has risen by more than 50%; the US group's takeaway GMV has increased 300% this year, and it has achieved 6 million orders a day.

So,

The blow to offline retail is to break down one by one, it is a category, a category to kill, there is basically no room for resistance.

At first, it was a large company such as Taobao, which was made up by clothing. Next, 3C was a large company like Jingdong. The next category that would be developed is the supermarket. The supermarket is a very high frequency product. If the supermarket is taken down and the fresh food is taken off, the proportion can really achieve 50% of Ma's share.

The biggest feature this year is that people are already willing to buy something very sensitive on the Internet, including food, personal care, mother and baby products.

Why do people say that China's Internet business accounts for only 12% of the total, and the offline stores have already complained of pain? In fact, if the two items of cars and gas stations are removed from retail sales, the conclusion is that the proportion is over 20%.

We have an observation that when a new category subverts an old category, the 20% is the turning point. By the time of 20%, there will be a phenomenon called Davies double kill.

That is to say, 50% of the gross profit and 20% of net profit will lose 20% of the total income, which means no profit. The first thing to do every year is not to open a shop, and second things to cut down the cost as soon as possible. After the employees cut down, the service quality will come down, so the experience will be worse.

Electric business was invented by the United States, and Amazon was the first.

Why is China's electricity supplier even more cattle than the United States? It's because of the competition pattern, because when Amazon got up, the retail stores such as WAL-MART under the US line were very cattle, they were very efficient and the cost was very low, so the benefits brought by Amazon were that the products were very rich, and the delivery was fast and convenient, but there was no advantage in the cheap price.

China is different. When Taobao and Jingdong got up, China's

They are not only in the first tier cities, but also in the second tier cities, so they are in the same direction while advancing into the second tier cities, and the Internet is very fast.

Therefore, the first selling point of the electricity supplier is the price is cheap. We studied history, cheap is the absolute principle. Every subversion of retail is a price killer. As long as the price is cheap, it can subvert you.

In this case, as a company under the line, what should you do? If this is irreversible, because low cost, high efficiency and good user experience will surely subvert you, only a matter of time.

So, if you want to survive, you must change.

For example, why is the restaurant industry declining now? If you don't take out, the old store must be down.

So the strategy of opening your shop will have to be readjusted. First of all, the shop can't open so much. Before opening a shop, the area covered is 800 meters. Now you open a store to take a takeaway, which can cover 3 kilometers, so you don't need to open so many stores. Second, SKU is less, stores can't be too big, and a special takeaway team is needed. If the takeaway can't account for twenty or thirty of the sales, it can't make money.

This is the cruelty of reality, so as a traditional restaurant owner, we must change and keep pace with the times.

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What is the reason for so many slowdown? It is very simple. One is the demographic dividend is gone, and the other is the bonus of mobile Internet.

Now people on line say that they should open an experiential shop online. The flow of people is there. Now the traffic of Tmall is too expensive, there is no bonus; the people on the line say no, the number of visitors is down, and the Internet is going to salvage.

Just like competition enters the second half, when the increment is not many, when you stare at my bowl, I stare at your bowl, we are more than stock, but the key is to integrate.

Now consumers have changed, 80 and 90 become the main force.

Those Internet users who are known as "otaku / Ozawa" have grown up. These aborigines are getting lazy and online shopping is over 50%, and fans are sharing the economy and sharing the economy.

The entry of traffic should be equal to product and content.

So I say two points: first, you just can't do the product. Before you say that the product is rich and the price is cheap, it is the entrance of the flow. Now, I find that consumers need to see the content after upgrading.

In the past, the Taobao couple shop, the wife makes clothes, the husband makes the flow; now changes, the wife makes the clothes, the husband not only needs to make the flow, but also makes the video frequency, writes the content, lets the family very high, comes here to look at you every day.

Living is good! So what should we do in such a situation?

First, ensure that the cash on the account can live for 18 months.

To ensure survival, we must reduce costs and improve efficiency. We need to figure out how to cut people and how many people to cut. You can live on cash for 18 months, because it takes 18 months to find a new round of financing.

Second, business models need to be adjusted.

What is the standard of judging whether a model is good or not? There is only one criterion for us to judge. The rate of return on investment is whether old customers will repeat your purchases.

Specifically, the number of repeated purchases by old customers and the cost of acquiring new users should be returned to the original two years for the longest three years.

Third, financing or financing.

No price cuts, especially in winter.

As for financing, though it is very hard in winter, I always feel that if I can melt money, I still need to blend in a little money, because the money in winter is especially useful; others have no money, you have money, that is, you can win customers, that is, no one else dare to advertise, you dare to advertise, then you can get customers and attract eyeballs.

It is impossible to cut prices, and success is the first. Do not always worry about how many shares, how many options, and how much money will be reduced.

Fourth, greatness comes out.

You are difficult, others are also difficult to see who is staying up? Many founders are very anxious, the staff left, the executives resigned, the competitors got the money, and then grew up without, very panic.

I want to tell you that in fact, there is nothing to worry about. If you think of an enterprise life cycle, if it is 20-30 years, the pain in this year is only a short time. And many great companies have gone through it. These pain is nothing. If you live, there is hope.

Because I have been through the winter, so we are not afraid.

At that time, NetEase, what difficulties have not experienced, junk stocks, being investigated, suspended by others, and the whole executives are all gone, but Ding Lei is still there. He has insight and sees the game, and today is very good. Jingdong also has a very difficult stage. At that time, it can not melt money, see 50 investors do not give money, Lao Liu's hair is white, scared is not dyed, later we gave a little money, today survived, and live very well.

So today, no matter what, the first one is to survive.

Where is the moat for retail?

Seize the three key points: occupy the mind + control channels + grasp the supply chain.

I want to start with several cases. Amazon is very cattle. Amazon's annual market share is 300-400%, which is 3-5 more points per year. WAL-MART has been afraid to start a shop. But there is a company called Costco (good market). Its old store is still up 5-7% every year. What is it?

Because it catches three things: one is the mind of the consumer, one is the channel, and the other is the supply chain.

How did it do it? First of all, its proportion of food is very high, reaching 60%, and food is a high frequency rigid demand, which is the top priority of occupation.

Second, its high cost performance, because of its own brand + exclusive supply + large packaging customization.

Finally, the membership of 99 dollars, many things you can not buy, you can not buy, so 99 dollars is its profit.

Even so, it still feels inadequate. What's the best way to do it?

Hardi, the discount shop that beat WAL-MART, is 20% cheaper than WAL-MART, and is also working on the supply chain.

Amazon has been making no profit for a long time. Later, Bezos fire was big, pulling a small team to study how to make money every day, then found a magic weapon - also a member, gave a little money, and then guaranteed you two priorities. First 48 hours arrived, second video free.

Amazon is now more cattle and constantly innovating. I especially like to read its annual report. Every time I read it, I was very excited and learned a lot. Amazon always launched new things, and the new things must be done by the boss. Bezos did it personally.

Super platform =1-2 + users + users spend more than 8 times a year.

In view of this situation, we think the super platform is very valuable, and the super platform should be held for a long time.

Because users will not take the initiative to download APP, often do not use more than 11 APP, if you are not those 11, you have no chance, because the cost is too expensive, each cost 100 yuan, one hundred million users what concept? 10 billion, you do not have the money to do this scale.

Why don't people need so much? First, I think people are lazy. Everyone is used to it and doesn't want to do it.

Usually a category of two APP, one is spare, long time can not remember the password, the next time the mobile phone will not download.

Remember that passwords are the core of APP.

"Dividends of mobile internet no longer".

We feel that the mobile Internet has brought huge subversion. The previous commercial competition is that I have this city. I can make a snake in the province. I can make a snake in the whole country, and get all the business to a cell phone, and every category on the cell phone is one or two APP. I think this is really a rare chance of life, which is caught by our Chinese enterprises.

What is the definition of good business? Good business is consumption monopoly.

Because of monopoly, you have high profits, and then you can do R & D + innovation, which can be a virtuous circle.

Either big or out, and where are the opportunities for small companies or medium-sized companies? I think we need to rely on big platforms to make traffic, and we also need to have traffic volume. We can not be small and beautiful, but we need hold users to rely on content and frequency to attract users.