Going around, Vipshop will return to the “sale” track, but the performance is not as expected.
Products | Bullet Finance
Author | Egg Total
Editor | Lin Zhong
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, Vipshop’s order volume exceeded 20 million. Compared with Tmall’s total turnover of more than 268.4 billion yuan, Jingdong accumulated orders over 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. After the return to the “sale” strategy in 2018, 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 pain of the decline in active users. According to the financial report data, since the second quarter of 2016, the growth rate of active users of Vipshop has gradually slowed down. The first quarter of 2018, the first stagnation of user growth, the number of active users increased by zero, which directly triggered the The “life and death anxiety” of the meeting.
To this end, Vipshop will have to transfer the bow, return to the “sale” strategy, and “spend money to buy users” – the high subsidy effect is directly reflected in the financial report: in 2019, in addition to active users, Q3 has grown. 21%, the total order quantity is 127.6 million, an increase of 33% over the 97.0 million in the same period last year. This move once attracted the outside world to question its “spending money to create revenue.”
“This approach may result in Vipshop’s revenue being heavily dependent on high subsidies and advertising marketing, although earnings data shows that its active users are on the rise, but marketing costs are also rising, reflecting its The cost of getting customers continues to rise.” Li Li said.