Siege Vipshop: dangdang jingdong can poison the limited-time sale market?

the author: ke-xin wang

in dangdang CEO Mr Li’s words: “when a few silly stupid black electricity was at the time of death device, Vipshop out.”

on March 23, 2012, the establishment of three and a half years of time landing Vipshop nyse sale website, offering price of $6.5. The original has been dubbed the “bleeding listed” in the name of the company, today’s stock has climbed to $36.19, for two consecutive quarterly profit, currently valued at $1.83 billion.

product will counter attack only to envy China’s electricity sector. Compared with established 13 years of dangdang Vipshop market value is less than a third.

in is, a campaign will copy only product model quietly began. Dangdang online clothing tail goods sale channel on May 7, collection of “tail”, name and “article will only” homophonic; On May 20, jingdong mall “flash group” business; Earlier, vancl launched “li ning limited-time sale” activities, 1 mall “famous brand sale”, the day the cat is already in August 2011 to launch a “brand sale”.

Vipshop mode, dangdang, jingdong, Tmall can learn?

shoes clothing inventory opportunity

limit the sale, also known as flash sales, Vente-Privee.com in France, the ancestors of later imitated by other countries, such as the United States website Gilt Groupe, OneKings Lane, Exclusively in India. In 2008, domestic flash mode, products are only, qiao whisper, poly is web sites such as online. These sites, the product will only in 2012, the nyse, lu distance with competitors.

Vipshop mode, is the result of shoes clothing industry high inventories. Since the second half of 2010, a large number of inventory backlog of clothing industry. Relevant data show that China’s garment industry enterprise products in stock up to 256.9 billion yuan in the third quarter of 2012 years ago. And clothing brands such as metersbonwe, li ning collective high inventories crisis. The Internet: if all of China’s garment enterprises out of business, only stocks also enough in the clothing market sales for three years.

high apparel inventory pressure makes Vipshop “brand discount, limited sale” pattern of popular rapidly. For shoes clothing brand, need special cleaning goods channel, the tail goods and flagship store by product area, in order to avoid harm the brand, Vipshop patterns to meet the market demand.

with body model, the product will only one is selling famous brand, at present only product can reached a cooperation with more than six thousand brands; The second is the deep discounts, for 1 to 3 fold; 3 it is flash, time and quantity is limited. For specific cooperation way, Vipshop to cooperation brands fixed schedule, goods will be shipped to Vipshop warehouse, if not sold out will be away for 5 days; On average, a brand can get 1 year 6-10 times discount retail opportunities.

compared with many money loss of electricity companies, Vipshop is an outlier. In the first quarter of fiscal 2013 earnings, according to article will net revenue of $310.7 million, compared with the same period last year growth of 206.8%; Net profit of $5.8 million, two consecutive quarterly profit.

analysts pointed out that the product will only limit sale mode is successful, reflect the different levels of China’s retail market brand permeability, high inventory, dominated the ratio of consumption characteristics of the objective requirements, in some way to justifying the limited-time sale mode is feasible. In this context, Tmall, jingdong, dangdang, 1 mall into a certain electric business platform.

electric business platform copy Vipshop

behind Mr Li praised product will only, has a low profile in the process of collection of “tail” 1 year time. On May 7, Mr Li said in weibo: “dangdang clothing target for 2013, 4.5 billion, collection of dangdang tail is important to world war I, famous brand sale must be below 3 fold! The entire clothing 300 billion market, the space is large, dangdang three before this year, we will strive to clothing shopping!”

dangdang, head of the vice President, clothing platform Deng Yifei said during an interview with tencent technology, collection of dangdang tail is different from Vipshop buyer mode, but the platform model. , she thinks, compared with proprietary platform model is more light, because clothing is a popular trend rapidly changing category, their buyer team stock there is the backlog of risk, while investment promotion mode can be avoided.

jingdong is on May 20, launched the “flash” business, the first with samsung, bleum, square too, luo lai, ray-ban, durex, philips avent, tomson times, yunnan baiyao brands to achieve cooperation. Jingdong mall has said, there are more brands in the works, will be gradually introduced in the future.

cat clothing as the core category of the day, of course, also won’t miss a chance of tail market. Tmall, vice President of little dragon electric business summit in quanzhou footwear has revealed that Tmall 2013 will launch a new “brand sale” platform, will provide three exclusive, one is the exclusive channel, entry resources fully independent, the information such as sales, price, etc. Will not affect the flagship store.

the other is the exclusive flow. Little dragon, said the day the cat will spend this year much more special resources for sale channel, it is to help you quickly digest inventory.

three is the exclusive service, the original days the cat platform concept is set up shop selling goods merchants themselves. Sale part can provide overall integration of third-party service business related services, no matter from photos to the sales.

the threshold of the product will only

set up earlier product will, established a certain threshold of competition. As can be seen from the first quarter of 2013 earnings, the core competitiveness of Vipshop has the following several aspects:

high gross profit margin. The gross profit margin on product will only continue to increase, from 2009 to 2012, only will product gross margin was 8.2%, 9.8%, 19.1%, 22.3%, gross margin was 23.4% in the first quarter of this year. Vipshop gross margin increase, mainly due to the company purchases to ascend, enhanced bargaining power with suppliers.

repeat purchase rate is high. Vipshop repeat purchase rate is more than 70%. In the first half of 2012, by contrast, B2C overall repeat purchase rate is 49.76% (according to iresearch report). Cost control, Vipshop marketing spending in the first quarter of this year in net revenues accounted for 4.2%, lower than the same period last year 5.8% of repeat purchase rate is higher than lower marketing spending accounts for one of the reasons.

the differences of material flow system. Vipshop focuses brands of goods to your warehouse, make unified delivery. DCM risk investment director, ramon zeng Vipshop investors had an interview with the media, said Vipshop SKU is big into the big, fast forward, fast, strong dynamic data, logic to the operation logic from business logic, technology, and other electrical contractor have substaintial distinction. To learn this process, need to take a long time.

buyers resources. At present, the only product will buy with 300 hand, cooperation brands to compete in a filtered limited-time sales of goods. How to select the brand, pricing strategy, etc., all need to have a deeper understanding to the fashion industry.

send generation founder XingKong education thought, do limited-time sale need to three factors, one is the traffic, 2 it is to have a supply of goods, 3 it is to buy a hand. Electric business platform with the first two elements, but the third point in the short term will not affect Vipshop. “To snap up effect, the need to select the right goods. If I buy wrong, capturing traffic will be very poor.” XingKong) said.

now the supplier for collection of dangdang tail and the effect of the Tmall brand sale, most still wait. “There used to be sold on the day the cat brand sale, but the effect is not very good, they couldn’t do that kind of feeling of panic buying.” A Vipshop suppliers to tencent technology said.

competition for the electric business platform, will only product, chairman and CEO Shen Ya in q1 earnings analyst said at the meeting was not worried. This, he said, is a “winner-take-all” market, brands hope and do big cooperation partners, so the “snowball” effect also will be more and more strong.

but it is undeniable that Vipshop competition risk still exists. Tmall collective power, dangdang, jingdong limited-time sale market, will no doubt cause certain impact to Vipshop, narrow Vipshop gross profit space. In the business of mining resources, continuous accumulation of the total profit of the structure of the control, the user, Vipshop faced with jingdong, dangdang’s long-term confrontation.

but there are some analysts believe, jingdong, dangdang will prompt sale as tactics, not only as a strategy. Sale is only will all, but only a dessert of jingdong and dangdang, jingdong dangdang’s sale does not break will only.

“sale” challenge

product will only bad-mouthing voice has always been. It is thought that the challenge for prompt sale business brand resources can longendure blood transfusion, continue to push up Vipshop mode.

sale mode mainly relying on the superior star brand lift, these brands in terms of inventory liquidation under a lot of effort, the entire clothing retail inventory planning and management will be more and more high. No superior star brand, three fourth-rate brand strong enough to support a model for long.

although apparel inventory will exist for a long time, but after all first-line brand could not allow the existence of the inventory “subhealth” for a long time. One of the shoe brand said, from last year, a line of clothing brands have to adjust the supply chain, several order is no longer the pursuit of the agent, inventory has improved this year.

electricity, analysts say, clean up the tail cargo mode can survive, but Vipshop gold period is fast in the past, due to inventory crisis have reached a peak, profit space will be smaller and smaller.

in fact, Vipshop have also been aware of this and be prepared. Only products are Shen Ya have stressed on many occasions, chairman of discount retail is the only product will advocate dozen, contains a lot of new products. Now, Vipshop and don’t want to be as simply “sell inventory” website.

source: tencent technology