Elaborate domestic e-commerce vertical series

the author: ke-xin wang

in the past few years, the domestic vertical e-commerce has experienced a roller coaster the general excitement, out of control, and calm after the return to reality.

vertical peak electricity financing can be traced back to 2010. Mecoxlane, dangdang, will to a new climax of capital. Public information display, electrical business financing more than 24 in 2010, $600 million; Electrical business financing 95 in 2011, a total of over $4.691 billion at a record high.

in an age of electronic commerce investment overheating, the birth of a batch of Internet brands, such as close-fitting dress B2C d cotton, women’s clothing brand crucco Internet, home textile B2C elegant 100, men’s wear brand NOP, etc.; At that time, the earlier a batch of vertical electrical business such as le tao, good joy buy price war is playing.

in the idea of electricity, there would soon be into the next round of capital, hope to burn money to expand. According to the founder of the elegant 100 Chen Teng China started planning, elegant sales target is $2012 in 100. Similarly, dimension of cotton is expected to more than 2011 sales, and take out 50% of its sales on advertising.

instead. Beginning in the second half of 2011, the electronic commerce environment for investment plummet. D cotton from 2011 years to start A round of funding, but is still not completed in August 2012, until the capital chain rupture was forced to stop operation.

today, crucco is online purchase, own brand challenge for transformation, elegant cost 100 from last year began to strictly control the market, including advertising, gift certificates. “We and the group cooperation in 2011, sent many gift certificates, in fact, some false prosperity. The user will come back after using it? Not necessarily.” Chen Teng China reflection.

“for crucco, sold to every guest, at least there is hope. A brand, it is necessary to ensure the quality of goods, the needs of the supply chain upstream and downstream accumulation, the accumulation of design judgment. Accumulation is the market operation of continuous trial and error correction, the process of trial and error is needed money. For the optimization of the frequency, the more money, try the faster, the quality is guaranteed, the brand essence is more distinct. From the Angle of the founder of crucco xiao-hui xu, now, can not meet the state they want.” An electricity industry officials said.

is still in the independent development of vertical electric business have to reduce costs, through its own hematopoietic, occupancy, and selling way to save his life. Can be expected, in the process, a number of vertical electrical contractor will be eliminated, a batch of electricity will be acquired, there will be a number of vertical electrical contractor will survive independently.

capital promote has never been a stable state. Some entrepreneurs, according to the VC is to tackle in the hands of some projects. VC has to face the reality is that: each fund has a short 5 to 8 years, is 8 to 10 years longer cycle limit, when the capital expires or lack of patience, can contribute to project change hands or sold.

at the platform type electric commercial form value plays, VC driving mode unsustainable state, the vertical electrical contractor only can do is to cultivate their own core competitiveness, search for the correspondency of vertical and scale, and practice their own hematopoietic capability. To form a unique value, the survival of electricity or will usher in the spring in the capital markets.

VC driving mode bankruptcy

electricity investment under severe cold reality, VC or will put an end to rationing electricity development mode.

the investment community personage points out, the so-called electricity winter, on the one hand is the capital market for electricity to return to the rational, realize e-commerce (electronic commerce) is the essence of commerce (business), or to make money, and there is no magic. Platform electricity business opportunities, on the other hand, no longer exist, imaginary space of the electric business segment is a great discount, the attraction of the VC small lot.

“investors threw A and B wheel, is giving you money to demonstrate your concept is feasible. C round, will see you is what position in the market. And D, are you going to tell investors profit path clearly. Many people think that investors don’t vote for me, is too cold, is actually at different stages of your assessment standards are different.” Warburg pincus capital investors wong said.

in addition, for investors, the project return cycle is not unlimited. VC unit is the individual funds, most of the funds of the cycle is 6 to 10 years, the fund needs and VC checkout.

as a result, in terms of a fund, will not survive indefinitely, project investment return period is not unlimited. This is also one of the reasons lead to vertical electricity sale.

“round of fund is not necessarily from the first day of your investment. A fund to enter an enterprise, usually only five to seven years for enterprise development. A lot of electricity, has gone to 3 to 5 years, foundation considering exit mechanism. If the fund can not see clear exit (listed), rather than allow you to sell, sell well, the best even if selling is not good, also lost.” Huang said.

spinning class B2C elegant 100, according to founder Chen Teng China VC now really doing some efforts, such as early exit on some projects, stop loss on some projects, etc. “Because everyone has taken the money and a golden time is about ten years. Electricity has been cold for two years in China, for the VC for several years, may fund itself only four or five years, he must want to hand the project there are some changes as soon as possible.”

a footwear B2C founder, for example, a men’s shoes for the brand, development is good, but as a result of capital expires, had to sell. “VC also to their investors.”

the contradiction between vertical and scale

in addition to funding restrictions, vertical electrical business have to face another problem is the contradiction between vertical and scale.

NEA partner xiao-dong jiang thinks, from the perspective of capital, vertical electrical contractor will face the problem of market capacity and scale: market segment is too small, or pattern can not scale, it is hard to get the favour of capital.

“vertical electrical business done is too narrow also not line, because if the field is too narrow, he couldn’t support to a relatively independent of the platform, it is difficult to satisfy the customer experience. Is too wide, and repeat more apparent with platform competition, so I think this may not be very good grasp.” Chen Teng hua said.

vertical electrical contractor to do large scale there are two ways: one is horizontal way, expand the category, the introduction of brand; Second, longitudinal mode, each category do through deep.

“vertical electrical contractor must really vertical to survive. Now many of the vertical electric business do is level, is simply to do some horizontal expansion. If simple horizontal expansion, in every field of drilling is not deep enough, the end result is what platform type electric business mergers or acquisitions.” Bee network CEO li-cheng wang thought.

really do deep through an industry, from the brand positioning, brand imagination to the brand, from product design, packaging, need to be a professional development, canned, delivery cycle, the road difficult to walk.

at present, has formed a large electric business platform value plays, both goods richness and logistics distribution is better than vertical electrical contractor. Vertical electric company, product differentiation, or service differentiation, cultivate their own core competitiveness. Product differentiation now has the certain difficulty, service differentiation also need time to grope and accumulation.

send generation CEO XingKong education thought, bee, poly beauty in vertical electrical business is a good vertical electric business case. Le bee through expert, star, do their own brands; Gather beauty is superior core advantage is the channel brand. “Bees do their own brands, patience is more important; Gather beauty is superior to do channel brand, need to rapid expansion of the scale, the upstream and downstream through fast, competitive advantage and competitive barriers formed in the process. A period of time, the advantages of the two vertical electrical business will be obvious.”

are expected to arrive in the electrical business mergers or

go today, e-commerce industry JianBingChao is inevitable. For a party is going to buy, the new entrants to an industry of time cost is higher and higher. For small electric business being acquired, traffic cost is high, there is no clear profit path, money can’t support, facing survival plight.

huang believes that electric business mergers and acquisitions are divided into three categories:

the first category, the Internet or retail enterprises into electricity, do your own time cost is high. Direct acquisition of a home appliance business company, upgrading. For example, has bought kubah.

the second, the big electric business platform to buy vertical category. Such as su ning to buy red children. Su ning is the core of 3 c home appliance, from the beginning to expand from mother to child category, it is difficult to buy a vertical type of electricity, directly into the market in the first three mother and baby.

the third class, similar acquisitions, such as online purchase crucco. Every guest is crucco old club, both to do their own brand of leisure garments. “Crucco had modest, the basis of their forward, scale could be achieved, it is difficult to bypass the shadow of every guest. From that point of view, is not only a lower price to buy crucco and market share, at the same time buy crucco basis of user groups, team.”

“since last year, the next two to three years, the situation of the domestic electricity business mergers and acquisitions will be more and more obvious.” Huang judgment.

as a representative of the vertical electrical business venture, one of Chen Teng China from dangdang departure at the end of 2010 set up 100 home textile B2C grace. In the current investment environment, he emphasized to control costs, I hope the next round of financing before entering their own hematopoietic capability, and does not depend on the success of the next round of financing.

for mergers and acquisitions, the founder of the elegant 100 Chen Teng hua said: “for elegant 100 companies at this stage, any choices could be considered. But for acquisitions, certainly not I try to want to pursue one thing now. Because if there is value, naturally. If there is no value, you go everywhere with somebody else could not sell out.”

source: tencent technology