Products | Bullet Finance
Author | Egg Total
Editor | Linzhong
Foreword
“Shen Ya is a very low-key boss. Even employees rarely see him appear in public. He hardly accepts media interviews and does not participate in any industry activities. It is almost the most ‘mysterious’ in the domestic e-commerce circle. Daxie.” A former employee of Vipshop told the “bullet finance”. This is similar to the impression that the Vipshop will “behind the scenes”. It may be the nature of the Wenzhou businessman.
However, Vipshop will not be low-key for more than a year.
In the head of the e-commerce to desperately seize the sinking market, this 11-year-old veteran e-commerce has turned the bow, neither sinking the market nor the industrial Internet, but returning to the “sale” This old bank and arrogant heavy gold diversion, started an assault.
At the mid-year strategy meeting on July 7 last year, Shen Ya said: “Vipshop will return to the ‘sale’ strategy and do what it is good at.” Prior to this, Vipshop had done a lot of exploration. ——Expanding categories, transforming platform-type e-commerce, working closely with Tencent and Jingdong, drawing on the transformation of social e-commerce…
The facts prove that the ‘expansion category’ is wrong. The transformation into a platform-type e-commerce will make Vipshop lose the advantage of differentiated competition. In the following years, the overall performance is not as good as expected. This is also Vipshop. The main reason for timely stop loss and return to special sale.” Li Li, who works for a certain e-commerce market in China, said.
Evenly, in the past “Double 11” Carnival, Vipshop still gave a slightly wrong number: As of 12 noon on November 12, the order volume of Vipshop exceeded 2000. Wan single. Compared with the total turnover of Tmall more than 268.4 billion yuan, Jingdong cumulative orders exceeded 204.4 billion yuan, Vipshop only put out the order volume, did not say the turnover, it is inevitably too implicit.
Starting from the “special sale”, the establishment of the New York Stock Exchange opened less than four years ago. Vipshop has experienced several highs and plunges in these seven years. 2018After returning to the “sale” strategy, what changes have occurred in the financial report? Behind Tencent and JD.com, what kind of game will Vipshop face? How will the story of Vipshop’s “sale” be said?
10 billion subsidies to increase user growth
On November 13, Vipshop will release its third quarter earnings report for 2019 as of September 30, with a total net revenue of RMB 19.6 billion (US$2.7 billion), compared with RMB 17.8 billion in the same period last year. Yuan increased by 10.0%; total commodity (GMV) was RMB 31.7 billion, an increase of 17% over RMB 27.2 billion in the same period last year.
This is the first transcript after Vipshop will return to the “special retail”.
Overall, revenues have steadily advanced this quarter, and even several data seem to be growing. However, “Bullet Finance” flipped through the financial report after Vipshop announced its return to the “sale” strategy in 2018. After further focusing on the apparel wear category and receiving multi-party support, the net revenue of Q3 in 2019 did not last for three quarters. The revenue of more than 20 billion yuan, the growth of this quarter did not bring much surprise to the market.
Vipshop’s Chief Financial Officer Yang Dongjun attributed the increase in revenue to the increase in the total number of active users. This growth data may be a strong boost for Vipshop – the number of active Q3 users increased to 32 million. The growth rate was 21%, while the number of Q2 active users showed an 11% year-on-year increase.
“Bullet Finance” found that in addition to the Vipshop’s home page snapped up, fast grab channels to attract a large number of new customers through good goods and deep discounts, high frequent money subsidies and discount models are important drivers for user growth. , including the 10 billion subsidy program.
Before this, Vipshop has already tasted the bitter decline in active user growth. 财>
When the company began to reduce labor costs, it means “to tighten your belt and live.”
Since the announcement of the “sale” strategy, Vipshop internally believes that “future users will buy multiple online and offline online”, so in early 2018, Vipshop launched the layout of offline channels, trying to further strengthen the line. Up and down the sale of the ecosystem.
The acquisition of Shanshan Commercial is an important step in the layout of Vipshop, and it is also one of the boosters of high-margin clothing wear category GMV growth of 29% in the quarter. On July 10 this year, Vipshop will acquire a 100% stake in Shanshan Commercial for 2.9 billion yuan in cash. The main business of Shanshan Commercial is to operate Outlets. Currently, there are 5 outlets in operation and 5 in planning and construction.
In addition, the offline matrix also includes two categories: Vipshop and the Vipshop. The former is opened in the shopping center, and the latter is opened in the community. The categories sold are consistent with the online core categories. However, Wei Pincang is more oriented to the B-side service purchasing and wholesale groups, using the social platform to quickly clear inventory for the brand.
These stores have been opened in the fourth quarter of 2018, ranging from first-tier cities to fifth-tier cities. At present, more than 100 stores and dozens of stores have been opened, respectively. Vipshop will be near the warehouse.
The operating costs and rents of offline stores are not small expenses, plus the acquisition of Shanshan for 2.9 billion yuan in cash, equivalent to the net profit of Vipshop for two years, the purchase cost of such fixed assets, It once caused investors to worry about and pay attention to their cash flow situation.
In fact, in order to develop traffic and improve the ecology, Vipshop will not only spend 2.9 billion yuan to acquire “outline outlets”, but also made another big sale.
In 2014, Vipshop acquired 75% of the equity of Le Bee Network for US$112.5 million and became the major shareholder of Le Bee Network. There is only one purpose: to reinforce the cosmetics category.
Since the listing, the main category of Vipshop is still clothing wear. In the face of the emerging e-commerce rivals, it decided to seek transformation and quickly find the “second fertile soil” of users’ high-frequency consumption. After the acquisition of Le Bee Network, the beauty of Vipshop has become the second largest category after apparel wear, basically achieving the purpose of the original acquisition.
Therefore, in September this year, Vipshop will stop the music bee net, which is not unexpected in the industry. “Vipshop will become the major shareholder of Le Bee NetworkAfter that, Le Bee Network has gradually been assimilated. Not only the staff members have been absorbed, but even the platform users and suppliers have been taken over by Vipshop. In recent years, the brand recognition of Le Bee Network has been weakening. Now, Vipshop will make a decision to stop the Le Bee Network for the sake of reducing operating costs. Li Li said.
Speaking of it, the fate of Le Bee Network is very similar to No. 1 shop and Yi Xun. In the same year, Jingdong acquired “No. 1 Store” and “Yixun.com” in order to strengthen its own business and 3C home appliances category. After absorbing their users, goods, logistics, supply chain and other resources, Jingdong let these two The brand gradually disappeared in the e-commerce rivers and lakes.
However, Vipshop’s measures to cut costs today may also be “learned” because the trial and error costs of seeking transformation in the early years were too high.
At the end of 2016, Vipshop will try to find a new enthusiasm outside the “sale” single and low barrier business, and launch the “Vipshop Finance”. Although it generated net income of RMB 250 million for the Internet finance business of Vipshop in 2017, the bad debts reached RMB 120 million.
The next thing to look at is the new retail outlet. On October 28th, 2017, Vipshop opened the first fresh-boiler shop “Jinjun Life” in Guangzhou. Since then, it has been said that the “Baoyan Zhuang” of 10,000 stores in 3 years has become empty talks. According to relevant media reports, There are less than 20 life stores in Jun.
After trying new business, not only did not bring new growth, but it also dispelled the energy of the original focus on the sale business, resulting in continued decline in user growth and a slight slowdown in revenue. Until July 2018, Vipshop will have to admit the fact that his transformation failed, and announced his return to the sale.
Now, the Vipshop, which has returned to the original point, will cooperate with 30,000 domestic and foreign brands, and will also use Tencent and JD to further open up the relationship between people, goods and fields, and create richer at relatively low cost. The traffic matrix; while drawing on the membership logic of Amazon and Costco, trying to reduce the selling price in the sales front end, improving the efficiency of goods to people in logistics, and ultimately improving user stickiness and activity.
Based on this, Vipshop expects total net revenue for the fourth quarter of 2019 to reach RMB 26.1 billion to RMB 27.4 billion, an increase of approximately 0% to 5% over the same period last year. This growth is expected to be quite conservative. With the advent of winter, the demand for clothing, footwear and footwear has increased dramatically. Together with the “Double 11” and the December 8th Anniversary, the users can still rush for the Vipshop.How much is the performance?
Special Sale Scenes under User Experience
Changes in the platform, users can always be aware of the first time.
Xu Jing, a post-80s mother in Guangdong, as a 7-year-old user of Vipshop, she spends no less than 15 times a year at Vipshop, spending no less than 3,000 yuan each time. She also uses Jingdong and Taobao.
In the beginning, she mainly bought some branded clothing at Vipshop. Later, three children were born one after another, her consumer demand soared, often buying milk powder, baby products, skin care products and household items. However, as family life and work crowded her for most of the time, she couldn’t take part in a special offer at a certain time as before. “In this way, the sale is not so attractive to me.” p>
Xu Jing’s consumption history at Vipshop is exactly the process of Vipshop’s expansion of the merchandise category.In December 2013, Vipshop will undergo a major revision, in addition to the core clothing and footwear categories. Formally cut into maternal and child, cosmetics, 3C home appliances and other fields, from vertical e-commerce to platform-type e-commerce.
” During that time, I felt that Vipshop would be no different from other e-commerce platforms, and the incentives were not as good as before. There used to be full reduction activities, and there was not much after the transition.” Xu Jing said that category expansion led to Homogenization also weakens the core competitiveness of Vipshop and faces the risk of user loss.
However, after returning to the special sale track, Xu Jing said that this year’s “Double 11” Vipshop’s sale was not much better than usual.
And after 90, the understanding of Vipshop will be more from Jay Chou’s endorsement and many embedded advertisements in the hit drama. Lin Wenwen is a college student in Guangzhou. “I started using Vipshop in college in 2012, but I spend about two or three times a year. I buy more skin care products. Now I use Taobao more because Taobao is more complete. More.”
In her opinion, the most satisfying thing for Vipshop is the quality of the goods. “You can buy genuine products on it, but you must have 200 yuan to pack them. Then I have to buy more things to make a single order. ‘The feeling of forced consumption.’
This year’s “Double 11” Vipshop will not subsidize all categories, but selectively subsidize the best-selling products, such as high-end consumer goods such as fashion men’s wear, women’s wear, and beauty, but the end users voted by hand – only 20 million orders.
In addition, Vipshop also borrowed a lot of “social e-commerce” gameplay, from WeChat group diversion to a group, helping people to bargain, grab red envelopes, and use discounts to attract user traffic. .
But the effect is similar to that of the fight: users have to pay more time and energy than the value of the product itself, and they have to work hard to revitalize their social circles. Sensitivity, which is a damage to the user experience.
Of course, the means used in front of the double 11 is more “more ambiguous” – not only play the price of the group, but also play “copy the password, open the app to receive the red envelope to withdraw cash”, send the password to more friends to cash out more More, the move is to use the old users to pull new, reduce the cost of getting customers.
Xu Jing tried two kinds of gameplays of Vipshop and Fighting. I found that it is too much trouble to forward it to my friends. If I have these time and energy, I might as well make more money to buy the original price.” She said helplessly. Later, most of her “double 11” spending amount was given to other e-commerce platforms.
The era of e-commerce “dividends” has long passed, and the more choices users have, the more severe the test of the various operational dimensions of e-commerce platforms will be.
Looking at the annual financial report of Vipshop, “Bullet Finance” found that the user growth dilemma and the decline in customer unit price may be the prominent problems currently facing Vipshop.
Aside from the means of attracting new users through high subsidies, Vipshop will rely on the traffic of Tencent and JD. However, accepting foreign aid is not a long-term solution. If you want to continue to acquire new users, Vipshop will have to strengthen its own hematopoietic capacity.
In terms of customer unit price (customer unit price = total revenue / total order quantity), the price of Q3 Vipshop will be about 154 yuan in 2019, which is basically the same as Q2, but compared with Q2 and Q3 in 2018. The unit price of 186 yuan is already a downward trend, indicating that each single item sold by the user at the Vipshop will contain less or less goods or cheaper prices.
It can be seen that if you want to upgrade in terms of product categories, user traffic, channel operations and cost performance, Vipshop will have a long way to go.
Conclusion
Electric business rivers and lakes fromNot calm, the pattern has changed.
Too much to rely on Tencent’s social traffic entrance to rise rapidly to catch up with Jingdong, Suning, fierce, and launch the offensive after the listing, Xiaohongshu has been catching up… Many Jumeiyou products can’t stand the “beating” and the stock price The situation of continued decline is in the forefront, and Vipshop will seem more anxious.
Since 2018, after being overtaken by the rising star, Vipshop will invest a lot of money to do high-subsidy to attract users, thus opening up a series of counter-attacks of “returning to special sales”.
Before, the market value of the fight was much higher at around 49.7 billion US dollars. When the Q3 financial report was issued on November 20, 2019, the market value of the market was over 10 billion US dollars. As of the press release, the market value of the fight fell to 39.5 billion US dollars, but It is still nearly five times the market value of Vipshop ($8.1 billion), and it has only been established for more than four years.
The enemy is a strong enemy, and it is in trouble. In the current failure of transformation, shrinking market value, weak user growth, and falling customer unit prices, how will Vipshop continue to talk about the story of “sales” and come up with strong profitability and giant e-commerce?
At the request of respondents, Li Li, Xu Jing, and Lin Wenwen are pseudonyms in this article.