The Puzzlement Of E-Commerce Development: Selling OR Brand

A set of official data from the Ministry of Commerce shows: China's 2008

According to the upcoming "China e-commerce market data monitoring report 2010" released by the third party Research Institute of China, the e-commerce research center of China will release e-commerce in December 2010.

In addition, the report also predicts that in the next two years

E-commerce is increasing geometrically, traditional electricity providers are expanding rapidly.

According to the latest statistics from AI consulting, the size of China's B2C apparel online shopping market in 2010 reached 12 billion 280 million yuan, of which Taobao mall was in a leading position, with a paction volume of 6 billion 650 million yuan, accounting for 54.2%. In 2010, Vancl ranked second in rapid development, with a paction volume of 1 billion 850 million yuan, accounting for 15.1%. In 2010, Mcglaughlin ranked third on the NASDAQ listing, with a paction volume of 810 million yuan, accounting for 6.6%.

On the whole, the B2C clothing online shopping market has already had the scale of ten billion, the market has gradually matured, and entered a steady and rapid development period. From the perspective of market competition, Taobao mall, Vancl and Mcglaughlin three strong occupy 75.8% of the market share, and are in the leading position in the market competition.

As the biggest trading platform of clothing e-commerce, Taobao is still in an un catchable position in 2011. According to statistics, Taobao will add 10 thousand new shoppers every day.

Taobao has 90 million registered users and 20 million login per day, and this group of people is mainly the most active users of electricity from 22 to 35 years old. The consumption power is very high, and the consumption of each pen is about 180 yuan.

On average, 473 pieces of clothing, 438 household items, 261 cosmetics and 32 laptops will be sold online.

The growth of Taobao can be compared to the trend of growing up against the wind. The increasing number of geometric quantities has laid the foundation for businesses and users for the rapid development of e-commerce.

But Taobao is also quietly changing. Taobao, which has grown on the basis of C2C, has begun to develop in the direction of B2C.

Some experts predict that no more than 3 years, Taobao B2C sales scale will not less than C2C.

From the end of 2009 to the beginning of 2010, Taobao set up a large brand manufacturer such as Lenovo and the United States to set up 3C Electrical City, get rid of the image of "small seller distributing center" and march forward to B2C. As early as 2007, Ma started Taobao mall, and began to blurred the boundaries of Taobao's C2C in media and public opinion, and purposefully put forward the new concept of Taobao as B2C2C.

Another VANCL, the leader of e-commerce in the clothing industry, was born in October 2007. In the short period of less than 4 years, the sales volume was nearly 2 billion, which is undoubtedly an incentive for the traditional garment enterprises under the line.

In the eyes of the founder of VANCL, similar brands abroad did not pose a threat to VANCL. This is also a way of envy for offline apparel companies.

"For VANCL, the revolutionary change is from a standardized product to a fast fashion."

Keeping pace with fashion, variety, parity and rapid turnover is the definition of "fast fashion". The pformation of VANCL has changed from selling only 50 standard men's clothing to selling more than 20 thousand kinds of clothing, shoes and socks.

For future expectations, Chen said that VANCL should at least be bigger than UNIQLO, and the 10 billion target it has set up is not difficult.

"100 billion is the dream that VANCL should have."

Mcglaughlin, the first domestic e-commerce listed company, has gained unprecedented attention since its listing.

Not long ago, Mcglaughlin announced the fourth quarter and full year earnings in 2010. In the fourth quarter of 2010, the net operating income was $64 million 200 thousand, compared with the 60 million 700 thousand quarter of the fourth quarter of 2009, which increased by 5.7%.

Growth is mainly driven by online sales growth.

The net business income of the fourth quarter of 2010 was $50 million 100 thousand, up 18% from the 42 million 400 thousand quarter of the fourth quarter of 2009.

From the open data, Mcglaughlin's sales through orders under the online channel have accounted for more than 2/3 of the whole year.

Mcglaughlin was the first foreign-funded enterprise to get government approval for mail order business in 1996. In 2000, Mcglaughlin set up his e-commerce website M18.COM in the first wave of Internet craze in China.

Until 2006, Mcglaughlin opened the first line shop. In 2009, Mcglaughlin announced that it would expand the scale of offline stores, and at the same time, force e-commerce to make M18.COM look brand new.

Allegedly, from the front page design, to the shopping process, to the background payment and logistics, Mcglaughlin has made a thorough improvement.

As the most perfect channel, Mcglaughlin is the three legged enterprise, and now e-commerce has become the unchanged development plan of Mcglaughlin in 2011.

Traditional offline businesses pour into e-commerce

For e-commerce, the offline businesses didn't take it into account 5 years ago, and 5 years later, e-commerce has become a platform for traditional enterprises to pay close attention and eager to follow.

The department store industry, which occupies the leading position under the online retail format, is also beginning to pile up into e-commerce.

As the two pillar of the Beijing municipal government, the three Bulletin of the Wangfujing and the Xidan market in 2010 showed that Wangfujing's operating income in the three quarter of 2010 was 9 billion 931 million yuan, an increase of 26.75% over the previous year, and 495 million yuan in operating profit. Xidan shopping center actually achieved 2 billion 87 million yuan in the three quarter of 2010, an increase of 20.24% over the previous year, and a profit of 26 million 810 thousand yuan.

Its growth rate is far lower than the growth rate of e-commerce platform.

E-commerce has seen new hope for the department store industry that has spent much time thinking every year. It is precisely when we see the future development of e-commerce that the pace of the department store's entry into e-commerce has already taken place.

According to industry sources, Xidan shopping center has long been involved in the field of e-commerce, but it has not been very successful.

Wuhan Zhong Bai announced in April this year that it intends to invest 47 million pairs of wholly owned subsidiaries in Wuhan hundred Agel Ecommerce Ltd to increase capital, indicating that the scale of online supermarket operation should be further expanded.

And another department store giant Limited by Share Ltd chief operating officer Kang Xiaoyan also said on April 22nd, the company began to study in 2009 and try on the Internet platform, this year will officially test the water e-commerce, "in the future there will be more and more entities do business entities into the field of electronic business, we will set up an independent company to operate."

The development of e-commerce in traditional retail enterprises is one of the inevitable trends in the development of traditional enterprises' Internet.

Strictly speaking, e-commerce in traditional retail enterprises is a combination of online business and offline business.

For these retail enterprises, they are built up under the offline channels. The integration and control ability of the offline resources is strong, and the expansion from offline to online is another channel expansion.

Analysis shows that the development of e-commerce in traditional retail enterprises is relatively slow. On the one hand, the degree of attention is not enough. On the other hand, the traditional industry is lack of talents who understand the operation of the Internet.

However, with the development of e-commerce in China, the e-commerce of traditional retail enterprises is inevitable.

Inspired by many e-commerce brands, the traditional clothing enterprises have shown great enthusiasm for e-commerce in 2010. According to Taobao mall's TOP100 in October 2010, the first place is the offline clothing brand - the official flagship store of UNIQLO, and UNIQLO sold 15 million 640 thousand of the total sales of Taobao mall in the month.

The third place is the OSA brand clothing flagship store, and the fourth is JackJones official flagship store. The monthly sales are 8 million 940 thousand and 6 million 830 thousand respectively, of which six of the top ten sales are clothing and apparel websites.

Moreover, in April 2011, with the help of the 3rd anniversary celebration of Taobao mall, many offline businesses tasted the flavor of tens of millions of dollars. The data of Tonlion flagship store showed that in April 8th, more than ten million consumers took up the clothing with a total value of more than 10 million yuan, forming about 120 thousand packages.

In 2010, Taobao sales data showed that the number of orders for women's clothing was 52 million 61 thousand, ranking the top, followed by men's clothing, the number of orders was 15 million 651 thousand pens, and the number of men's shoes was the lowest, accounting for 2 million 368 thousand.

Such a huge sale is a great temptation for offline businesses. This also strengthens the determination of offline brands to enter e-commerce.

Of course, for traditional clothing enterprises, not all enterprises are so successful. E-commerce is a systematic project. Website construction and maintenance, network marketing, network pactions and so on are indispensable. The traditional enterprises with special strength are unable to solve one or more links, and the problem will accumulate more and more, resulting in half the effort.

However, the enthusiasm for e-commerce has been extremely keen, and it has achieved little effect in the end. This has made many small and medium-sized traditional clothing enterprises very depressed.

What to do? Is it more investment or negative coping? This will be the biggest problem for traditional clothing enterprises in 2011.

The puzzlement of e-commerce development: selling OR brand

Many enterprises are still in the selling stage, and brand awareness is not significant at this stage. Although some well-known brands have emerged, the brand loyalty of consumers is based on parity.

Both VANCL and Mcglaughlin are striving to gain market share at a low price.

In 2010, when VANCL's 29 yuan T-shirt made 2010 VANCL become "civilian fashion", Mcglaughlin also launched a 29 yuan T-shirt promotion campaign, which is similar to the price of 29 yuan T-shirt. This may mean that clothing B2C is also ready to follow Jingdong and Dangdang to launch a price war.

According to Mcglaughlin insiders, the basic price of the lowest price can attract more new customers to come to buy. In order to popularize these basic items, Mcglaughlin has adopted several models, dozens of different collocations and dozens of Zhang Gaoqing photos to display each style, striving to make every basic item like an indispensable matching product.

But no matter how the electricity suppliers render, the price war has become a new round of clothing brand competition.

This is undoubtedly a big blow for the offline clothing brands who want to enter the electronic business platform.

The accumulation of offline brands in the 30 years of development is more of an accumulation of intangible brand value, and the most direct embodiment of brand value is brand value or brand premium.

Let these online fight for nearly 30 years before they have accumulated their own brand value added brand to the line to fight price war, which is undoubtedly similar to the offline brand behavior to kill the goose that lays eggs, this road is not feasible for them.

Analysis has always been puzzled by the traditional line of clothing brand online, the only thing is the conflict between online and offline prices and channels, and the preservation of brand value.

Most of the e-commerce brands are still continuing the mode of explosive payment, and the apparel companies under the line have begun to enter the stage of accumulating the gold content of the brand. How to make the dynamic mode of e-commerce serve the brand?

Huge cost

Data show that in 2010, China's B2B e-commerce service enterprises reached 9200, an increase of 21.3% over the same period. The number of B2C, C2C and other non mainstream enterprises has reached 15800, representing an increase of 58.6% over last year, and it is expected to exceed 2 in 2011.

The increasingly fierce market competition has made the electronic commerce industry throw huge amounts of money into various forms of marketing activities: spike, promotion, group buying and advertising everywhere.

"Venture capitalists are throwing money at the B2C website, not afraid of breaking their own shoes," he said.

Mcglaughlin CEO Gu Bei Chun's exaggeration, to some extent, reflects the current craze of B2C in China.

However, with the enthusiasm of investors, the bottleneck of B2C website development is also very obvious.

Up to now, Jingdong, Le Tao, VANCL and other reputable B2C websites are far from being profitable. Dangdang has been losing money for 9 consecutive years until last year it announced profits.

According to industry sources, nearly 80% of the cost of large B2C websites in China is used for promotion. If a brand name and domain name are not available enough, it will not be known by too many users.

And the price of high value Internet communication platform such as Sina and Sohu is rising.

At present, the advertising input output ratio of B2C website is about 1:1.5, that is, the advertising cost of 10 thousand yuan can earn 15 thousand yuan.

Gu Beichun, President of Mcglaughlin, said that the market situation is quite different from that of a few years ago.

The competition pattern of e-commerce has changed drastically.

A few years ago, the leader of the e-commerce industry was only Taobao, Dangdang and excellent, Jingdong, fan and so on. Now the wind and cloud enterprises are still in the early stage of accumulation and germination. Investment funds for e-commerce are also very limited.

And now that all kinds of funds have entered into e-commerce, the advertising price of the portal has been soaring. E-commerce enterprises are struggling to get ahead. This industry can only get the best interests if they become the eldest.

All kinds of reasons have led to the soaring cost of e-commerce, and the difficulty of making profits has become a common problem of e-commerce.

Chain constraints

E-commerce clothing brands are mostly on the fast track because of price reasons. Fast fashion is the biggest challenge to the apparel industry chain. Only when the industry chain is smooth, can a brand achieve "fast". How to straighten out its own industrial chain in a short period of time is one of the key factors for the success of e-commerce brand.

In the early years, PPG, the e-commerce pioneer, collapsed because of the industrial chain problem. The runaway of product quality became the last straw to crush the camel of PPG.

These lessons are still a challenge to the brand of e-commerce today.

However, for clothing e-commerce, in addition to straighten out the traditional clothing industry chain, there is also a very important link "logistics and distribution".

The e-commerce industry believes that logistics has become the most important part of B2C, and logistics is a weaker part of China's infrastructure setting.

The third party logistics, which is mainly implemented by express delivery, has no long-term threshold and lacks supervision and guidance. The express industry has been in a state of self-development for a long time, with a large number of enterprises, small scale and poor foundation.

Many express delivery companies express their sorting centers. Outsiders can freely enter and send goods. There are hidden dangers of loss or damage.

Because of the size of the third party logistics company and the uneven level of service, there are such problems as "low level of information technology, weak ability to resist risks, poor operation standard, and rough management mode".

All kinds of irregularities, with the rapid development of e-commerce, matching the third party logistics express service has become a new hot spot for service complaints.

In fact, more and more e-commerce companies begin to attach importance to logistics problems. VANCL, red children and other B2C enterprises began to build logistics themselves at the beginning of their establishment, and strictly regulate logistics services.

In VANCL Beijing and Shanghai logistics center, the self built logistics distribution volume generally accounts for 80% of the distribution demand, but other parts also rely on the third party logistics.

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E-commerce is rich and complex in the future.

Zhang Zhouping, an analyst at the China Electronic Commerce Research Center, believes that the number of e-commerce websites in China is showing rapid growth. There are two main reasons: one is the inevitable trend of the rapid development of the Internet in China, and the development of the Internet has also promoted the development of e-commerce in a certain extent.

On the other hand, under the influence of the financial crisis, more enterprises are improving their understanding of e-commerce. More and more SMEs choose e-commerce websites to help them tide over difficulties and promote sales.

China's online shopping users are mainly distributed in Guangdong, Jiangsu, Zhejiang, Shandong, Shanghai, and other economically developed provinces and cities. From the growth rate of these ten cities, the growth rate of Heilongjiang and Shandong is the fastest, and the growth rate of online shopping orders in two or three line regions is increasing rapidly. The growth rate of Anhui's third quarter growth rate reached 487.6% in the third quarter of 2010.

According to the report, the number of online retail users in 2010 was 158 million.

It is expected that this scale will continue to increase rapidly in the next few years.

In terms of personal online stores, the number of online stores has reached 1350 in 2010, an increase of 19.2% over the same period, and is expected to grow steadily in the next three years.

According to AI's consulting statistics, the overall scale of China's e-commerce market in the first quarter of 2011 was 1 trillion and 500 billion yuan.

The growth rate was 7.6%, the growth rate declined compared with the previous quarter, mainly affected by seasonal factors. The first quarter was the traditional off-season of domestic and foreign trade and personal consumption industry.

From the point of view of market structure, e-commerce among enterprises is still the main body of e-commerce market, and the B2B paction scale of SMEs accounts for 49.2%.

2011 in the first quarter, the scale of China's B2B e-commerce market revenue was 2 billion 930 million yuan, an increase of 40.9% over the same period, an increase of 7.7% over the same period, and continued to maintain a steady growth trend.

Looking at the development environment of China's B2B in the first quarter of 2011, the macroeconomic environment is favorable for economic recovery. Foreign trade and domestic trade are all growing steadily and rapidly, and the overall economic situation is good. In the main aspect of e-commerce, operators continue to improve the content of B2B e-commerce services and improve service quality.

With the rapid development of e-commerce and network marketing, the marketing mode of new media has brought about changes in consumption patterns and life concepts, and has gradually become an important channel for high-end brands to carry out brand promotion and marketing.

Nowadays, many international brands are constantly trying to find new ways of marketing suitable for Chinese consumers. E-commerce has also become a marketing channel for luxury goods. This undoubtedly opens up new ideas for the traditional offline brands to enter e-commerce.

Although there are claims that luxury products can become the high-end products and lose their luxury after entering e-commerce, all kinds of commodities entering e-commerce will undoubtedly lay a brand foundation for the expansion of e-commerce.

China's e-commerce will become more and more abundant in the future. For the brand that wants to enter e-commerce, this channel will show more and more complicated situation.