And Clothing Business Is Hard? To Open Online Shop Thousands Of Shops Only Products In The First Three Quarters Of The Year To Earn 800 Million

In November 13th, discount retail electricity supplier vip.com disclosed its unaudited third quarter financial report for 2019. Financial reports show that the three quarter net revenue increased to 19 billion 600 million yuan, an increase of 10% over the same period, extending the trend of the first two quarters. Vip.com's earnings report continues to improve. In addition to its successful 28 quarter continuous profit, the number of active users has increased steadily by 21% over the same period.

Mr. Yang Donghao, chief financial officer of vip.com, said: "in the third quarter of 2019, we achieved strong revenue growth, and profits rose substantially year-on-year. These successes are the result of our focus on high profit clothing and apparel products. The GMV of this category increased by 29% over the same period last year, including the GMV contributed by the recently acquired Shanshan store. With the continued implementation of the good cargo strategy and the further improvement of procurement and negotiation capabilities, we believe that the financial performance and key operational indicators will be further enhanced. Affected by this, vip.com's share price has surged nearly 10% in the subsequent trading.

Earnings showed that vip.com's profitability continued to grow in the three quarter: gross profit was 4 billion 200 million yuan, up 16.6% over the same period last year. According to general accounting standards, net profit attributable to shareholders amounted to 875 million 500 thousand yuan, up 282.7% over the same period last year. According to non general accounting standards, net profit attributable to shareholders was 1 billion 200 million yuan, up 140.2% over the same period last year.

In the three quarter, the total number of orders for vip.com was 127 million 600 thousand, which increased by 33% from 95 million 700 thousand in the same period last year, and the number of active users reached 32 million, up 21% over the same period last year. Vip.com's home page scramble, fast grab channel through good goods and deep discount, continue to contribute a lot of new customers.

Tianhao securities analyst Wen Hao said vip.com began to focus on brand sales since the second half of 2018. The layout of the deep discount channel "last crazy rush", "only product rush" (contributed 30% to GMV in the quarter), through low-priced special sales to consolidate the re purchase of users, thereby stimulating the growth of Ping Tai GMV. The company promoted the transaction effect with low price obviously. Although the increase of the order quantity was accompanied by the decline of the unit price, the overall GMV was improved.

The results showed that vip.com's total orders reached 150 million in the quarter, up 32.8% compared to the same period last year, and the unit price of platform passengers was 230 yuan, down 16.4% compared with the same period last year. The overall GMV grew by 11.1% to 35 billion 100 million yuan over the same period. Platform traffic growth is stable, Tencent and Jingdong contribute to stable passenger flow. This quarter vip.com quarter active buyers reached 33 million 100 thousand, an increase of 11.1% over the same period, a net increase of 3 million 400 thousand, of which 24% came from Tencent and Jingdong channels. Vip.com's Jingdong flagship store currently has about 1 million 500 thousand followers, and the number of new customers from vip.com small program has increased by more than 500%. Vip.com's return to the brand sales business mode won the favor of the core users. In the second quarter, the number of active purchasers increased by 29 million, an increase of 14.3% over the same period last year, and the proportion of repeat buyers increased to 86.1% in the total quarter. The total purchase orders of repurchase customers increased by 34.6% to 140 million, up to 97.2% from the total number of orders, and the average active orders per capita were 4.3 single, an increase of 14% over the same period.

Wen Hao introduced vip.com's stores in one to five lines of urban overweight layout lines, and opened stores under three stores in Shenyang, Tianjin and Anhui in late March, and opened in Hangzhou stores in May. Up to now, the vip.com line has opened 18 stores in the first tier cities, and is expected to open 1000 stores in the country by the end of 2019. In addition to the offline stores, vip.com bought 2 billion 900 million outlets in July for a number of outlets in the Shansi commercial group, exploring the integration of online and offline businesses and strengthening the special sale ecosystem. Shanshan commercial operates 5 outlets, located in Ningbo, Taiyuan, Harbin, Zhengzhou and Nanchang, of which 4 ranked the top twenty in 2018. The structure of the outlets under the outlets is in line with the vip.com business model based on the sale of tail goods. Under the strategy of vip.com's return sale, it is expected to help vip.com develop online and offline.

According to a series of reports on the face consumption of urban young women, discount sales can easily lead to impulse consumption, and the proportion of women who buy goods that they do not need or do not intend to buy is up to 56%. At the same time, commodity quality and commodity prices have always been the two most important factors for online shopping users. Buying quality guaranteed brand goods at low prices is the shopping pursuit of online shopping users, and the deep discount in the online sale mode satisfies consumers' demand for cost-effective brands at low prices, complies with the trend of increasing consumption and releases new consumption power.

Peng Yi, a researcher at Zhongtai securities, said that in the past ten years, as the first e-commerce platform to sell labels, vip.com's sale mode and its ability to control goods have become its core competitiveness. Vip.com has made profits for the first time since the fourth quarter of 2012 and maintained its high speed development trend. As of the third quarter of 2018, vip.com has made 24 consecutive quarterly profits, refreshing the continuous profit record of the electricity supplier industry, showing a healthy growth trend. In the two quarter of 2018, after the release of the earnings report, vip.com announced the development strategy of "upgrading consumption, upgrading sale", and continued to focus on the sale area. In the second half of this year, the strategy of selecting products has been adjusted to reduce the investment of low gross profit and standardized commodities.

At present, the overall growth of consumer spending and the fierce competition in the electricity market have led to the inevitable slowdown in vip.com's main performance. In the third quarter of 2018, vip.com's revenue was 17 billion 830 million yuan (about 2 billion 600 million dollars), an increase of 16.4% over the same period last year. Revenue growth was mainly driven by the growth of the total number of active customers and the growth of the average revenue per customer, but the growth rate of revenue continued to slow down due to the overall consumption slack and fierce competition in the electricity market. Because the adjustment of vip.com's special sale strategy is still being implemented step by step, the effect of the re sale strategy after adjustment is still waiting.

In Peng Yi's view, under the environment of economic downturn, the sale mode has hit the demands of both price sensitive and eager to buy the brand authentic user groups. Compared with other B2C providers, the sale mode has a certain anti cyclical nature. The relationship between the general business and the macro-economy has the conduction mechanism of economic downturns, weakened demand, increased financing difficulties, and weakened self hematopoietic capacity. One of the reasons why vip.com can sustain its strong growth at the beginning of its growth is to expand the target audience. From the initial sale of the big international card to the big sale in China, it finally expanded the scope to the domestic two or three line brand. It has hit the demands of consumers who are both price sensitive and eager to buy brand names. After increasing the number of people pursuing rational consumption, there is a strong demand for quality and rational consumption. The sinking of electric business also allows more people to have access to cost-effective brand products. The discount sale mode will match the business format of the most popular people in the market environment with the economic downturn. Vip.com will control the accuracy of time, goods and prices to meet the needs of rational consumption, and continue to play the advantage of selling through the business cycle.

In addition, the stock user flow from Jingdong will further increase with the entry and exploration of the two ports and the matching of users gradually. And through the entrance of WeChat wallet, vip.com will get the traffic from WeChat ecosystem. At the same time, vip.com is also actively exploring the new mode of social business. In subsequent operations, more resources will be tilted into the WeChat ecosystem, giving energy to the brand's small programs, exploring new ways of social business such as spelling and buying. With Jingdong's reference to WeChat's operation (20% of new subscribers and 10% of GMV come from WeChat), vip.com will soon have a wave of user growth.