Rapid Development of E-Commerce and Dream: Capital Adequate Competition

In the last 10 years of the Internet, there have been people who have done experiments on how humans can rely on the Internet to live without leaving their homes. Today, this experiment is becoming a reality for many people.

After 10 years of nurturing and the popularity of the Internet, consumers' online shopping behavior has been nurtured. Online shopping is not just a fashion but a living habit. At the same time, bottlenecks such as online payment, integrity appraisal, and logistics distribution that have hindered the development of e-commerce have been resolved to some extent, and e-commerce is entering a period of rapid development.

As Fang Xingdong, an internet veteran, put it: “The Internet has spawned more than just an Internet industry. It is a major change in society as a whole. It will transform and influence human communication, entertainment and leisure as well as print, telephone and electricity. , business operations, international politics, etc."

Data from the China Electronic Commerce Research Center shows that in 2010, the transaction volume of the Chinese e-commerce market has reached 4.5 trillion yuan, an increase of 22% year-on-year; the online retail (Internet shopping) market has a transaction volume of 513.1 billion yuan, a year-on-year increase. 97.3%, which almost doubled from 2009, accounting for about 3% of the total retail sales of social goods for the whole year. It is expected to exceed one billion yuan in the next two years; in addition, the number of personal online stores has reached 13.5 million, a year-on-year increase of 19.2%. %.

E-Commerce usher in an explosion

In 2011, e-commerce is undoubtedly the most visible part of the Internet. After more than 10 years of continuous accumulation, e-commerce has finally ushered in an explosion. With the enthusiasm of capital sought, all aspects of e-commerce, whether it is integrated platform, integrated B2C mall, vertical B2C, network brand, or traditional brand merchants and retailers, third-party payment companies, logistics companies, providing solutions for e-commerce Companies involved in the upstream and downstream industries, such as service companies, have invested heavily in this market.

At the same time, over the past 10 years, the category of e-commerce has continued to subdivide and expand, from the initial online sales of books, to the sale of electronic products and even clothing, department stores, to more subdivided goods, gradually penetrated into people’s lives. At every level of demand, it is no exaggeration to say that the overwhelming majority of products and services for households living in necessities of life can be obtained through e-commerce.

In this development process, the e-commerce model has evolved. The group purchase that emerged in 2010 is a form that deserves special attention. Group buy-out forms a subversion from B2C to C2B and changes the game pattern in the industry chain. . After the baptism of thousands of missions, the pattern of group buying industry became clear.

Strong capital competition

To a certain extent, the smart life in the homestead relies on the development of e-commerce. To build this kind of "home economy" for online purchase, the cost is not low.

First of all, in order to open the market in the early stages and gain the recognition of customers, online shopping must be able to “knife” the price, adopt a low-price, low-discount strategy to hit the market of traditional companies; secondly, online shopping will accelerate food and food, and traditional enterprises rely on For more than a decade or even decades of accumulation of brand, popularity, and market share, online shopping may only take two to three years. Third, compared to traditional corporate operations, online shopping requires logistics and express delivery. Many times, fast, safe and accurate delivery is closely related to a good customer experience. However, at present, domestic logistics and related supporting construction is still far behind the speed of online shopping development, resulting in more and more electronic Business enterprises began to list self-built logistics facilities and teams as "required courses."

In April 2010, online B2C Jingdong Mall announced the company's latest C round of financing, the financing amount of 1.5 billion US dollars, of which 1.1 billion US dollars of funds have been paid, investors include Russian investors digital sky technology (DST), tiger funds, etc. A total of six funds and some well-known social figures, of which the DST Group invested 500 million US dollars.

Jingdong Mall's round of US$1.5 billion in financing is the company's own, and at the same time, the single largest amount of financing in the Chinese Internet market so far. Its investor billionaire Alishi Usmanov disclosed in an interview with the media that he invested 500 million U.S. dollars in Jingdong Mall and obtained 5% of the shares, which means that the valuation of Jingdong Mall has reached 100 One hundred million U.S. dollars.

Recalling the status of the e-commerce industry around 1999, Ma Yun established an initial capital of 500,000 yuan for the Alibaba Empire, which is not worth mentioning in the eyes of many e-commerce companies today. In the first half of 2010, the group purchase website that was on-line in the first half of the year claimed that the valuation was close to 1 billion US dollars; in May this year, following the creation of the largest financing record in the B2C sector A round of 20 million US dollars, the domestic brand name discount mall only It will formally announce that it will receive 50 million U.S. dollars in joint investment from Redwood and DCM.

Data from the Zero2IPO Investment Database shows that there were 14 cases of financing in the domestic e-commerce sector in 2010, ranging from millions of dollars to tens of millions of dollars. Since 2011, Jingdong Mall, Vanke Eslite, Handle Net, Haolebu and other e-commerce companies have all received huge financing, and the scale of individual financing is more than 50 million US dollars.

However, it is interesting that most e-commerce companies are not profitable or profitable at large.

The reason why most e-commerce companies in the current market are losing profits is very simple. After using money to scale out, increase control over the supply chain, obtain low prices and low discounts; use money to promote and advertise in subways, TVs, and networks; use money to capture key cities and pounce on second and third line regions. Seek rapid expansion; use money to rent or build warehouses, set up logistics and distribution teams, etc.

And this piece of logistics may be the place where e-commerce companies are most likely to burn money. Domestic e-commerce companies have huge investment in logistics and warehousing. Jingdong Mall, Vanke, Dangdang, Alibaba, Haolebu and other companies have or plan to build their own logistics. Jingdong Mall, which has been holding high the banner of “self-built logistics”, its CEO Liu Qiangdong once threatened to raise the bar for e-commerce companies in early 2010. “One 'decent' (refers to annual sales of over 20 billion yuan, net profit of 5 E-commerce companies with more than 100 million yuan are most conservative and will take 10 years to burn more than 1 billion yuan."

Suning Electronics, which entered the e-commerce field only last year, revealed that as of the end of 2010, Suning had four logistics bases and there were 10 logistics bases under construction. The company’s goal is to build 60 logistics centers between 2013 and 2015.

These battles of scale and magnitude are far from e-commerce companies that have no financial strength and can easily participate.

Obviously, the killing has become increasingly fierce, but some people laughed. "Now the level of competition in the entire industry is no longer just as small as online sales. It has been upgraded to the corporate level."

Towards a mature e-commerce market

Some people suggest that there are three signs to determine whether an e-commerce market is mature: First, the proportion of B2C e-commerce is significantly higher than that of C2C; Second, the number of goods categories and the comprehensive B2C mall and vertical B2C coexist; Third, the traditional brand and traditional retail chain Businesses can find the right place in e-commerce sales.

For the first article, in the mature e-commerce market, the proportion of B2C e-commerce is significantly higher than that of C2C. For example, the proportion of B2C in the United States is 80%, compared with 60% in Korea. In 2010, two domestic B2C websites, McCormlin and Dangdang, were successfully listed on the domestic market, of which the market value of Dangdang exceeded 2 billion U.S. dollars. Experts predict that B2C will have great growth potential in the next five years. It is expected that the industry as a whole will grow at a compound annual growth rate of more than 60%, and the total scale is expected to exceed 400 billion yuan in 2013.

If you still hold the impression of three years ago, to buy a book, 3C products still look Jingdong, new eggs, then you fall behind. Today, most of the shopping needs of Internet users can be satisfied on these sites, and even more choices - Dangdang also began to sell clothes, Jingdong layout book market, Suning, Gome, Li Ning, Uniqlo and other stores to seek Internet Access, even underwear, socks and other goods also have a dedicated website. It can be said that the vast majority of products and services for households living in necessities of life can be obtained through e-commerce.

The transition from B2C to integrated commerce is the result of the combined effect of consumers, businesses and the market. Netizens hope to gain the convenience of one-stop shopping. Businesses hope to increase profitability through scale advantages. The average gross profit margin of China's B2C market is only 10% to 15%. The gross margin of 3C products is even lower than 5%. Under such circumstances, it is only possible to rely on the advantage of large-scale operations to survive only by developing a broader market and having more abundant product categories.