Text | Planet Planet, by | European Gold
As a listed company, Vipshop, which focuses on "brand sale", will not pay much attention to the giant's dense e-commerce field.
Since its listing in March 2012, the company's stock price has experienced three ups and downs, the highest Vipshop stock price reached $46 / share (March 23, 2021 intraday), and by the close of February 23 this year, only $8.665 / share, less than a year the stock price shrank by 81%, the market value evaporated more than 160 billion yuan.
To a certain extent, the embarrassment of Vipshop is just a microcosm of the vertical e-commerce platform.
Since the e-commerce scuffle in 2010, almost all segments have appeared in the "first place in e-commerce", from clothing and beauty to luxury bags, from pet food to home decoration, all of which are fiercely competitive. However, after experiencing the media changes from websites to APPS to Mini Programs, many vertical e-commerce brands have fallen from capital enthusiasm to dust, and it may only take one year from the sky to the ground.
The best people who fought in the past have also gradually declined in recent years. The listed cosmetics e-commerce platform Jumei Premium has been delisted, the luxury e-commerce temple library has launched a privatization offer, the female fashion e-commerce mushroom street has been sharply laid off, the unlisted red children have been forced to sell themselves, the official website of the customers has been closed, and the service of Yi Ersan has been stopped...
These vertical e-commerce companies are gradually moving towards the end of the fall, making the "small and beautiful" argument of vertical e-commerce more thought-provoking.
01 The dilemma of the "Vipshops"
It is worth noting that the fourth quarter is the peak season of e-commerce sales in the public perception, including major promotional nodes such as Double Eleven, Double Twelve, and Christmas, but Vipshop has both revenue and net profit in this quarter, which is really puzzling.
More worryingly, the year-on-year growth in Vipshop's order volume, GMV and active users has declined for many consecutive months. As of the end of the fourth quarter, the number of orders fell 5% year-on-year to 217 million yuan, GMV decreased by 4% year-on-year to 57 billion yuan, and the number of active users decreased by more than 7% year-on-year to 49.2 million.
The weakness of the core indicators can not help but make investors worry about its prospects, after the earnings report, Vipshop's stock price plunged short-term, once fell more than 10%.
Coincidentally, vertical e-commerce listed brands similar to Vipshop have not gone well in the past few years, constantly staging dramas such as delisting and layoffs.
In May 2014, Jumei Premium was listed under the name of "China's First Beauty E-commerce Stock", with an opening price of US$27.25 on the first day, an increase of 24% from the issue price of US$22. Three months later, Jumei Premium's stock price reached an all-time high of $394.5, and for a time the scenery was unique.
However, after that, affected by the fake goods storm, Jumei Premium gradually declined. Ai media data show that as early as 2017, the user penetration rate of Jumei Youpin in China fell to 1.70%, far behind Taobao, Jingdong, Pinduoduo and other integrated e-commerce, nor as well as vertical e-commerce such as Vipshop and Mushroom Street.
In April 2020, Jumei Premium officially delisted from the New York Stock Exchange, ending nearly six years of capital market journey, and the stock price was only about $19 when it was delisted, a 95% contraction from the highest point.
In January 2021, Sekoo, the "first share of luxury e-commerce", announced that the company's board of directors had received a privatization offer from the company's founder, chairman and CEO Li Rixue.
Although another vertical e-commerce mushroom street has not yet reached the point of "delisting", it is close to the end of the "strong crossbow". At the end of 2021, the main fashion women's clothing mushroom street out of the news of layoffs, according to media reports, there are mushroom street employees on the social platform to publish news that mushroom street is undergoing large-scale layoffs, of which the technical department has become the focus of mushroom street layoffs, the proportion of layoffs is about 80%. For Mushroom Street, the layoffs were not the first, as there was a wave of layoffs in April 2020, when the number of layoffs was 140, or about 14 percent.
Mushroom Street's stock price is also the same as the previous two, its IPO price is $14, and by the 25th, only $0.31 was left, almost evaporating 97.78%.
In addition to the "bad mixing" of listed companies, it is not easy for unlisted companies to live.
Once upon a time, vertical platforms also had moments when a hundred flowers bloomed. In the field of clothing and beauty, there are Vipshop, Jumei Premium, Beauty Say, mother and baby directions have red children, honey Tao, lotus parent-child, wine drinking direction has wine fairy network, net wine network, 1919, haitao category has NetEase koala, HIGO, GMALL global shopping...
However, today, the above vertical e-commerce trends have either fallen or have been sold for survival.
Data from Ebang Power shows that in the first 8 months of 2021, 36 vertical e-commerce companies have collapsed, including Yiersan, Tongcheng Life, Global Tesco, Find Oil Network and other former primary market hot targets.
The dilemma of the development of vertical e-commerce has led to a period of time when the argument that "vertical e-commerce is dead" flooded the network.
In fact, as early as 2015, Bi Sheng, chairman of the necessary mall and founder of Letao.com, put forward the view that "vertical e-commerce is a shocking scam", and he also gave a set of cost data.
One-way logistics 10% + warehousing 10% + reverse logistics 3% + customer service 1% + technology 4% + management personnel 10% + marketing promotion 10% + collection fee 2% + packaging 1% = 50% or so, and the e-commerce industry can exceed 50% of the gross profit of the product category is very small, and then counting the price war, subsidies and other situations, the gross profit is only 10%.
Now it seems that Bi Sheng's point of view has a certain truth.
02 Small and beautiful or big and complete?
Why have most vertical e-commerce companies fallen? Why are the few remaining fruits so ugly in this market?
In the final analysis, it is still not dominant in the three core elements of the "human cargo yard".
First of all, the category of goods affects the user portrait, which in turn determines the user's ceiling and the upper limit of the number of active buyers.
Vertical e-commerce has a low degree of satisfaction for the needs of users because of the single category of goods, so the ceiling of the number of users is low. In contrast, integrated e-commerce can meet the diversified product needs of users, so the user ceiling is higher, so under the same conversion rate, the number of active buyers on the platform will be higher.
For example, the number of active buyers in Ali and Pinduoduo is obviously in the first echelon; with the expansion of the category of JD.com, which was originally mainly engaged in 3C products, its number of users is increasing year by year, but there is still a gap compared with the first two comprehensive e-commerce companies; the number of active buyers of vertical e-commerce such as Dangdang.com and Vipshop is significantly different from the top three platforms in terms of magnitude.
Secondly, the richness of goods is positively correlated with the frequency of consumer purchases, which in turn affects the realization of user conversion to buyers.
The more goods sold on the platform, the more obvious the feeling of "shopping online", making it easier to form order transactions. The higher the purchase frequency of users, the more conducive it is to the cultivation of user habits and stickiness, and promote the more efficient retention of traffic and conversion into buyers of the platform.
In contrast, if the number of goods is too small, it will not form a higher user purchase frequency, user habits are difficult to form, and retention and conversion will be poor. Compared with vertical e-commerce, comprehensive e-commerce Taobao and Pinduoduo have a rich product category, so the purchase frequency is much higher than that of other vertical e-commerce platforms.
Finally, from the perspective of categories, the unit prices of different categories vary greatly, so the unit prices of different vertical e-commerce customers are different.
Among the platforms that started with a single variety, Jingdong, which mainly operates the 3C category, has the highest unit price, followed by the vipshop that mainly specializes in brand clothing. Under the same gross profit margin, the higher the unit price of customers, the greater the gross profit, under the same purchase frequency, self-operated e-commerce has stronger profitability, and platform e-commerce can also obtain higher GMV, which means higher income, so as to have more capital expenditure to pay for supply chain and logistics construction. This also explains why in vertical e-commerce, JD.com can give consumers a better performance experience, and through this performance experience, it can promote consumers' secondary consumption.
Based on the dialectical relationship between goods and users, those vertical e-commerce companies that have fallen or died are basically planted on the balance of "traffic, category and capital".
Of course, vertical e-commerce companies are also well aware of the pros and cons and are interested in making changes.
Earlier, Vipshop expanded its category in the hope of obtaining more users, and also extended its sales tentacles to the logistics and financial fields, but eventually retreated to the "sale". Since 2011, Vanke has continued to expand its categories, from clothing to daily necessities, cosmetics, furniture and appliances, etc., but it has suffered from rapid cost increases and inventory backlogs.
Therefore, blindly expanding categories is not necessarily a good thing, and vertical e-commerce platform e-commerce is not a wise move, after all, "it is impossible to beat WeChat is the second WeChat."
The advantage of vertical e-commerce is that it is focused and professional, can provide specific types of products that are more in line with the crowd, meet the needs of a certain field, more easily deepen user trust, deepen customer impression, and also conducive to brand communication.
In the future, if the "Vipshop" wants to get out of the decline and continue to move forward, they can only maintain their focus and professionalism. Retail is a long run to win in the details, in the product, price, logistics services and other aspects of the need to do well, in order to ensure the position in the hearts of consumers and retain them for a long time.