Vipshop growth are turning out inventory liquidation ambition

Not BAT encounter growth bottlenecks. Flash e-commerce only in 10 consecutive quarters after the 3-digit growth rate, growth rate of revenues the first year 75%.

Trying new product sales, expand category, and an open platform, vipshop is encountered a bottleneck on growth. With the overall decline of retail inventory of water products, but will also actively get rid of dependence on domestic cleaning. Train consumers in mind, made only in new business to attempt to ' abilities.

Growth inflection point

The following chart is not difficult to find, only revenue growth rate has fallen below 100%, into a declining trend. Revenue growth with the peak of 207%, only the high period of growth, and the emergence of inflection point.

Vipshop CFO Yang Donghao said vipshop pattern is clear business inventories. Having simple and crude, but for vipshop, which is rich, but now also a growing chains. China Instacart and its followers

Back in 2011, Chinese overcapacity, inventory of tens of billions of Yuan, down garment manufacturers out of breath. Based on wind data, the textile and clothing industry in 87 companies, 2012 medium-term cumulative inventory of 73.2 billion yuan, compared to 69.9 billion yuan in 2011 and 2010, up from 50.1 billion yuan. Meanwhile, clothing textile 87 companies have more than 60% companies decline in inventory turnover than in 2011 and the medium-term, with 34 companies inventory turnover declined for two consecutive years.

Inventory top forcing clothing companies looking for a new way forward. Youngor, langsha shares, semir, Li Ning, the beautiful Tess nation prestige clothing enterprises are turning to online, e-commerce investment layout, expand sales channels on the one hand, on the other hand is to relieve line pressure to clean up inventory. As the accurate positioning, model new for vipshop, apparel merchants Mall, we have found (later renamed the "cat"), the most easily dumped goods platform.

Compared to cat, Fanke, businesses did sell in vipshop goods to be more convenient. On the product side, vipshop chose was "buying into the library, and United Express. "Businesses without making too much in their supply chain management to add and subtract, just stock supplied vipshop, at the consumer end of pre-sale and after sale by vipshop commitment. Businessmen believe that can clean up the inventory at the same time, more importantly provides the certainty of services.

Market demand amplification vipshop model perspective. Only landed on March 23, 2012 NYSE, contrarian IPO. 5 months later, another Flash sales of polyethylene is net cash 30 million b round of financing, the investor is a round of IDG, respectively, z-capital, with investment of SK capital and yinruida. About the same time, day network announced SOFTBANK China and blue Chi's venture capital investment of 10 million dollars, is the outlet of the Flash mode. Vipshop is secure through the markets wait-and-see period, loss narrows, shares soared.

Only gold will usher in a growth period. Starting from 2012, Q4, but will maintain 10 100% more than a quarter of revenue growth, 2013 Q1 growth rate is more than 200%. Follow the only products will become profitable, after Alibaba, become, second profitable e-commerce company.

Soldiers impermanence potential. With the end of the dividend period of wholesale electric flow, vipshop growth also encountered a bottleneck. Starting from 2014, Q4, vipshop revenue growth beginning year. Worth noting is that in the second quarter of this year, only revenue growth rate fell below 100%, to as low as 75%. In addition, after several years of inventory liquidation, clothing merchant inventory pressures ease, no longer lined up on only a few years ago. Especially for good brands, distribution of benefits and vipshop is here, but not for long.

Simple sales model has to satisfy the situation. Qiao Qiao language, product, poly mesh, these Flash sales have fallen. Indeed, business failure for many reasons, but what is undeniable is, by clearing a path doesn't work. Vipshop is aware of this, on the product side, only extends to the new product; on the category, to the mother and child, home and beauty on the category development; model, open platform has been cautious in implementation.

Advantage is also a short Board

Needless to say, only with "limited-time limited discount + depth + brands featured" models, in the e-commerce competition killed out of the way of the Red Sea, and proved to copy the model of Flash, "success can be replicated.

Advantage is also a short Board. Only because the "inventory liquidation experts" name of merchant's heart. Original poly network executives said that "once the threshold of Flash up, barriers to competition and higher. And only cooperation, fast shipping, low risk, good service, brand tried to get on the only break the head. "But also because of inventory liquidation, brands are reluctant to put new products in the only start, in addition to the concerns about harm the image of the brand, but also worried users are not interested in new products are to.

Clothing merchants, for example, on the sale of new products, in General, business day cat, Jingdong, vipshop, and other e-commerce (suningyi, 1th, shop and other platforms), the order status is on 4:3:2:1. This ratio will vary because business operations strategy, such as some apparel merchants and cat after signing the strategic exclusive agreement, will not be sold on other platforms. For Beijing East, vipshop, this is not a good sign.

According to Analysys Analysys International think tank issued by 2015 the quarterly monitoring report 1th quarter of China's B2C market data show that 2015 1th quarter of cat clothing market share close to 70%, Jingdong accounted 8.5%, vipshop is 5.6%. Jingdong was later on, as a result of open platform, ahead of only, and further from the cat food in his mouth.

Vipshop is also positive, open platform to expand business through new product sales, C2B and business custom. Chairman and CEO vipshop Shen Ya on the second-quarter earnings, analysts said, and falling inventory levels of the retail industry as a whole did not produce any effect on our business, as many new products and customized.

However, the effect of this is generally marginal. Data show that is currently the only product specials sales still account for nearly 80% in sales. Shen Ya said in the second quarter, only new and custom sales 30%. In fact, people familiar with vipshop, called custom or in the "medication", and in the form of sales discounts, if relying solely on new product sales, sales for vipshop far from 30%.

"Only the product's competitive advantage is its competitive weakness. "These people familiar with vipshop believes that merchants vipshop location still on inventory liquidation, and starting new is not willing to put in the platform. This is like next to the LV store to open a special rice shops, regular-priced and sale are not compatible.

Competitive environment

Simple Flash imitators did not live-platform competitor vipshop crush.

August 10, when investment in Alibaba Su Ningyun, widely read will affect the East of Beijing. But it was not to be ignored, vipshop nor beneficiaries. From a data perspective, whether proprietary or open platform, suningyi bite vipshop, once access to the day after the cat and even the Department of resources, patterns or rewritten. According to iResearch 2015Q1 size of China's B2C transactions data show, on an open platform, only has a market share of 3.8%, suningyi 2.8%; import business, only 9.4% per cent, suningyi for 6.9%.

Shake the East Beijing's position is not built in a day, but will face "ASO" threat is greater. Just as I was writing the capital Council: Alibaba and suning how military service?, mentioned in the article, "boss" and "second" fight, "third" suffers.

In addition, only feel pressure from Ali, suning far more investment. Prior to this, Ali has done two things, first, the charm for Flash sales of luxury goods investments benefit and, secondly, cat clothes sign 160 cards, more than 20 companies signed an exclusive strategic partnership agreement. Charm Whitney is light, luxury, luxury-oriented field, locate the discount Flash sale model, helping cat added luxury line at the same time, businesses can give cat a sale. As for the second action, the intent of the cat is more obvious and binding businesses curb competitors from the source. Coupled with gathered deal last year launched the "weight watchers who purchase" (brand sale), built from the new Cat starter, genuine sales, domestic sales of the full life-cycle services.

But all attempts are based on a platform of exploring. At this time, the "degree" of certainty is particularly important. In an open platform on the attempt, vipshop has been wary of treading on thin ice. Open platform step if a step is too big, that may affect the user experience, hurt but will Flash. A support case is that only will buy the business on the development of original and the Flash has a high fit model, but the genes of the only strong platforms, nor developed. Only shrink will start from the third quarter of 2014 group-buying business, to the second quarter of this year, revenue contribution from team business reduced to quarter total revenues of 0.2%, 5.5% for the same period last year.

Seemingly only at the expense of buying scale effects, to preserve 25% 's gross profit margin, actually only on the platform of any possible damage to the layout of the Flash mode is debatable. Although Yang Donghao determine the number of open platform is elevated, but sales of GMV and hadn't been open, unified regulation in other income.

In category development, are only seen as future flagship of beauty, also face sluggish growth. Only to read this as, Le bee operating losses dragged down the performance of its beauty, the increase in operating costs. In fact, the cat of beauty, Jingdong, poly-America in the category of accelerated rolling is will only create a lot of trouble, especially as direct competitors will only gather the United States, the two parties have traded recriminations. Vipshop merge Le Queen, sales volumes did not catch on poly-us, instead getting farther away.

Only 70% per cent for female users will, theory can be in apparel, infant, beauty, Haitao business go further up, but on earnings, but will still enjoy the dividends of inventory liquidation, and new business or stay in the exploratory stage, did not bring substantial contribution to revenue.

On earnings day, vipshop shares 13%. I hope Chen, Xu Xin had a successful release.