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If the initial success of NetEase’s strict selection is to target consumers who pursue a minimalist life but don’t want to pay premium prices for brands like MUJI, now, these consumers will also be rational. Betray the original brand with price and price.
More importantly, when the de-branded Pinduoduo merchants and the wholesale factories on 1688 have come to the front, NetEase Yanxuan still maintains its price.
On the e-commerce platform of “What is worth buying”, there are users who commented carefully, “Just need 20% off, 40% off stocks, 50% off buy, buy, 40% off what bikes do you want”.
Perhaps, consumers who were quickly captured by a product map are losing at the same rate.
Strong price
Consumption trends and changes in consumer behavior have caused a slowdown in the growth of boutique e-commerce, which has caused a bottleneck in the development of boutique e-commerce. There is an important reason behind it-expensive.
Some people believe that the price of premium e-commerce products is inflated.
So, why can’t the price of boutique e-commerce come down?
Take NetEase’s strict selection as an example. There are only 100 SKUs at the launch site, and then it has expanded rapidly: there were 5,000 SKUs at the end of 2016, and SKUs doubled in 2017 and 2018; SKUs were temporarily expanded in 2019, and the number was 20,000 the above.
Although the ever-expanding SKU has provided users with more choices, it has also caused problems such as inventory backlog and product quality degradation.
Because of the ODM model adopted by strict selection, in most cases, manufacturers are not prohibited from selling designs and products to multiple brands at the same time, nor are they prohibited from selling their own products.
Therefore, on the one hand, Yanxuan attracts price-sensitive customers, and on the other hand, it is difficult to raise prices on the current basis.(Suppliers will meet after supplying other platforms Fall into price competition). In 2018, due to the increase in the number of SKUs, it was at a loss. The gross profit margin in 2019 was around 10%.
In order to make the consumer experience better, NetEase Yanxuan even spent a lot of money to build warehouse centers in multiple cities, which in turn pushed up the cost of Yanxuan, resulting in NetEase’s net profit.ng>One side is the brand tonality, and the other side is the operating pressure. The boutique e-commerce companies seem to be in a dilemma.
But the rise of boutique e-commerce also represents a generation of consumer attitudes. Similarly, its ebb is also a change in consumer attitudes-there is no ever-victorious general, only products that conform to the trend.
Of course, no one can say that in the next cycle of economy and consumption, are there any chances for NetEase to rise again?
As stated in the book “Consumer Society”, when material abundance reaches a certain level, consumer behavior will replace production behavior and become the dominant social economy.
This article is from WeChat official account:Lingshouke (ID: lingshouke)< span class = "text-remarks">, author: ten