| fold 800 vice President Xu Huan
“blue ocean strategy” in the definition of the red sea and the blue ocean is primarily for existing industry development space. In the red sea, industry boundaries are clear and definite, competition rules of the game is known. In the red sea enterprises try to behave more than rivals, to grab the known requirements of greater market share. While blue ocean means virgin market space, the creation of the demand and profit growth opportunities.
according to this definition, we can extend it for, if you want to get high speed development, the best thing to do is to find your so-called blue ocean in the industry, and the first level of the blue ocean market is to meet the uncultivated market space, which fill the blank of the market and the second layer is asked to find even create user requirements, in order to obtain development space. It’s obvious that the latter will be more difficult.
associated with the recently very fire is our sale to exploring market, able to quickly get users favor and win the cause of the capital market is largely depends on its captures the user for a special desire as well as many domestic brands for the desire of the tail cargo clearing. is just meet the first level, makes Vipshop was a particularly large success, causing jingdong, Tmall, dangdang and other major platform to follow.
talking about the sale market, product is still the best example. In our understanding, the success of Vipshop mainly lies in three aspects. First, clear positioning and focus, to enter the market earlier, so even if others followed suit, but also cannot too big to the forming of threats; Second, team ability is very strong, especially the buyer team, you can find the design of sell like hot cakes, and only product will very strong bargaining power and can back the agreement signed with suppliers, make product will inventory turnover rate is very high, it is very nice.
the above said two points, many articles have been described, so not much more. we believe only the success of the product will be, the third is the key reason lies in the bold attempt of brand down, that is, from some tall category before derivative downward to domestic brands, it makes the product will only for users who already seized the domestic three or four line city strong buy mentality, and cater to the domestic brand clear inventory.
in particular, our classification of brand simply classified into four grades, from top to bottom in the pyramid structure. The first class brand is some international high-end luxury brands such as LV, GUCCI, Burberry, and so on, the second class brand is slightly lower, mainly foreign fashion brands, such as Gap, ZARA, H& M, etc., the third class is some domestic brands, such as li ning, peak, 361 degrees, the fourth grade is a lower domestic brands and some direct from the manufacturer, only a trademark, brand awareness is almost equal to no “white card” products.
and various sale website is basically based on the ladder to locate the brand, such as the main to do the first class brand sale website, we know the sale website have treasures, shangpin, temple library, qiao whisper (last year announced to stop operation), the second class of brand sale website, runway nets, dream ba Sally, these fashionable sale primarily, and in the third grade brand, the product will only day, a cat, jingdong, dangdang, including 800 have involved, and in the fourth grade brand, even said that radical white product sale, is we will focus on the area of power.
in fact, before the first, only will be the primary coverage is the brand of the first two class, give priority to with tall, the brand, the main or the sale of luxury goods. but at the time, only products will not appear in such a high growth momentum, but the product will be the third class is only some high-profile brands to join in the brand, whether the product will only audience or shares, have entered into a period of wild growth.
checked the Vipshop stock growth, from the beginning of 2013, about Vipshop shares began to enter a accelerating stage, and the growth continued until now. In 2013, the major domestic brands are what happened? In 2012, the first is the domestic sports brand in the collective, only in 2012, the peak number of shutters and li ning has thousands of. And the air is rapidly spread to the domestic clothing brand from sports brand, in the first half of 2013, seven Wolf close shop 152, nine animal husbandry king closed shop 59… But until now, the domestic brands of the shutters tide also didn’t stop, li ning, anta, xtep, 361 degrees, peak this six sports brand shop close number has more than 3000.
the shutters to reform traditional channels, from offline operation ways of relatively heavy gradually to online sales (electric business channels), but at the same time brought about by the negative impact is generated in the alternation of inventory problem. The inertia of traditional brands production makes it offline channels to regular online sales period of the transition of is particularly prominent. But this is the time, only noodles will seize this opportunity, blend in the domestic brands, in order to produce the effect of fission.
into the domestic brand, which is only product on the one hand on the gross margin improved, because the “sale” in the name of the product will provide brands with only a coat can maintain the original price system, allows the user to share brand, in fact, this “sale big festival” dividends, on the other hand also makes only the added value of products will use these brands infiltrate into three or four line city , only products will suddenly realized that the original LV, GUCCI, Burberry, the sale of luxury brand in China is not the blue ocean, and as high as 600 billion yuan domestic clothing tail goods market is the true blue ocean!
Vipshop captures the sale market of the first piece of blue ocean, also make it for the development of the house down. In website sale in the market, besides Vipshop, there is another two pieces of blue ocean. is a further to display the sale price of properties to the extreme, the brand from down to up, in the blue ocean is found in the definition of untapped markets, another piece of blue ocean is sale point to surface, namely in the pyramid structure, grasp a certain category do wear, this belongs to create user requirements in a large sense.
in particular, the second piece of blue ocean opportunity lies in the fourth gear brand is white card with no high brand awareness and low in the third class brand brand, this is also our fold 800 will be the developing direction of the efforts. In our understanding, Vipshop do brand sale from bottom to top, fold 800 first to start from the white card, and then postpone start up.
is also to seize the price-sensitive customers, relative to the Vipshop, fold 800 figure is lower. Inventory problems actually began in 2012, not just those of domestic brands, for some domestic makers, will also have problems with inventory and operating pressure. We had contact with a wuxi do following from manufacturers, they want to put the goods to sell 800, reason is that “they inventories have too big now, if not handled in time, money can’t bear the rent warehouse. Rather than put these things away, it is better to will sell them at a low price.”
calculate a bill, he gave us a following from tooling cost about less than a dollar, if sold on the Internet, even if the bag mail, add about $5 per piece cost, selling 9 9 bag mail, still can have profit. And these profits, will save the cost of rent warehouse, and can be used to pay the wages of workers, the workers and in most of the time, because there is no order in the out of state.
by folds 800 operations we can also see for a long period of time, we basically didn’t do too many foreign advertising, but our entire brand penetration ability is very strong, and the most is the result of word of mouth. Especially in some three or four line city, there are a lot of us are very loyal users, they’re basically every day through the fold 800, find oneself to like the bargain. Fold 800 according to our statistics, the user can now reach nearly 200 cities across the country, and to fold 800 users, most of guangdong province as an example, the number of users in guangdong accounts for about 15% of the whole visit, and this among them, shenzhen and guangzhou sum only accounts for less than a third of users in guangdong, the rest are all users of other cities in guangdong.
so we think that the blue ocean, there will be a rapid development opportunities. In this market, however, still need two threshold crossing, a brand premium is due to the market as a whole is relatively low, so the whole commodity prices more low gross margin will be lower at the same time, it requires to have enough users. Another is the same from down to up, so the future will be and Vipshop in the third category in a fierce competition is inevitable, and this is precisely the comprehensive user number and gross margin assessment of the most valuable range.
if the two blocks are directly market lateral division, the third piece of blue ocean market lies in the market for sale to point and the vertical division. That is involved in each phase as the brand will be, but from a certain niche categories. The most obvious example is gather beauty is superior and the maternal and infant Zulily sale website.
gather beauty is superior from the subdivision category of cosmetics, depth of cut through the refinement operation, brand throughout from high to low, thus giving users a category sales professional image. Allegedly, gather the best product will be listed on this year, will reach $3 billion in value. In fact, from the perspective of brand sale this value is not too high. On the one hand, the reason is similar to those of Vipshop, gather beauty is superior to group purchase, so it is with very price-sensitive customers give priority to, although has not the concept of “sale”, but actually do is cosmetics from beginning to end the sale of business; On the other hand is Vipshop captures the cosmetics such a high margin of the market, even if there’ll be some discount on the web, but the rest of the goods gross margin will still be very high.
for maternal and infant Zulily sale website in the United States, its degree of amazing achievements. Zulily is one for mothers and children within 10 years old clothes, toys and home decoration flash power purchase business, its operation mode is very similar to the product will only, every morning at 6 o ‘clock time update products, online 3 days on average, more than 50% discount, for mother and child every day have a surprise shopping experience. Zulily successfully seized the maternal and infant rigid demand of the market, since its foundation in 2010, year after more than 100% of its users and revenue present high growth, currently more than 2 million active users, back purchase rate of 82.9%. And at the same time, has been listed in the U.S. has Zulily market value of more than 4 billion dollars.
these two sale market brought us the enlightenment is, if still, from the perspective of the sale market, grab a niche category, especially the category of higher gross margin, to go to do the sale, the final results will be very objective. now I can think of is similar to the cosmetics industry there are shoes, bags and so on. Here to illustrate the point that, once le tao network has recently focused on footwear platform in “sex”, let us sigh behind actually hidden deep reason lies in the fact that music for lack of a let users keep buying power, which is from the big category on the vertical, and is not on a niche in the field of market positioning.
website sale of blue ocean market whether can last long, we don’t know. But at the very least, at this stage will remain netting domestic sale this market the online user’s “no 2” tool. After all, in China, if a store is much cheaper than another shop 10 dollars, most users will still be running without hesitation to cheap that to buy… As long as the prices to guide users to buy mentality still exists, has been has sale market of living space.
time will lead everyone to find their own home. For companies, as well. The development of the enterprise is not how to actually in the wild environment fight our way out, but more is to find their own position, and it is good to go all the time. Perhaps this position, is the so-called blue ocean in the industry.