Vertical e-commerce is disappearing
Now the voice of vertical e-commerce can hardly be heard.
The big stage of e-commerce is too lively, Taobao, JD.com, Pinduoduo three giants of the master move, vibrato, Kuaishou and other rising stars do not let go, vertical e-commerce living space is left.
Just a few days ago, Chinese stocks ushered in a crazy surge. Many popular Chinese stocks rose more than 20%, generally red, and only a few stocks such as Mushroom Street showed a downward trend.
In fact, the decline of Mushroom Street has lasted for a long time, and this is already the fifth year of Mushroom Street's loss.
Last week, Mushroom Street announced its financial results for the second half of fiscal 2022 and the full year. According to the data, for the whole year of fiscal 2022, Mushroom Street had revenue of 338 million yuan and a net loss of 640 million yuan.
Since 2018, Mushroom Street has accumulated losses of more than 4.2 billion yuan. Corresponding to consecutive years of losses, Mushroom Street's stock price has been depressed, and its market value has fallen by more than 98% in five years.
In fact, mushroom street's sluggishness is not unique. "Difficult" is like an unbreakable spell, tightly trapping vertical e-commerce.
On October 30, 2012, the first generation of vertical e-commerce Dangdang.com announced its entry into Tmall, kicking off the prelude to a decade-long struggle in the industry.
Since then, Vanke Eslite has fallen to the altar, NetEase Koala has been acquired, Jumei Premium has disappeared, the first share of luxury goods has withdrawn, and Mushroom Street has been greatly laid off...
(NetEase Koala was acquired by Ali)
Countless vertical platforms have used blood and tears to verify a fact, and vertical e-commerce has ushered in the darkest moment.
The Vipshop, which has been deeply involved in "special sales" and achieved profitability for 38 consecutive quarters, seems to have given a surprise, proving that there are still players in the vertical e-commerce model who have a battle with the comprehensive e-commerce platform.
Being able to maintain profitability when e-commerce giants such as JD.com and Taobao are showing fatigue, Vipshop has shown unimaginable vitality.
However, it is worth noting that Vipshop's revenue and profit have both declined, and under the continuous decline, I am afraid that it is difficult to escape the cruel reality of decline.
A few days ago, Vipshop announced the first quarter of 2022 financial report.
According to the data, the total revenue of Vipshop in the first quarter was 25.245 billion yuan, down 11.13% year-on-year; Net profit attributable to shareholders was 1.096 billion yuan, down 29.06% year-on-year.
Once upon a time, vertical e-commerce also had a glorious time. After the noise, the catchy advertising words are still fresh in my mind.
In 2010, "Van Guest" triggered a carnival of netizens and achieved a landmark marketing event in the history of Van Ke Eslite.
At the beginning, Vanke Eslite invited Han Han and Wang Luodan to endorse and launched a set of posters that were popular all over the Internet.
"Love the Internet, love freedom, love late rise, love night food stalls, love racing, and love the 29-piece T-SHIRT, I am not a rider, not whose endorsement, I am Han Han, I only represent myself." I'm just like you, I'm a vantage. ”
In this way, with no background, only character cutouts, and grounded advertising words. The founder of Vanke, Chen Nian, used the symbolic words of "I am a Vanke" to send the civilian fashion Vanke Eslite to the public.
If "mortal object" is still a little strange to some friends, then the advertising slogan "I speak for myself" must have been heard by everyone.
In 2012, Chen Ou, CEO of Jumei Premium, personally shot an advertising film.
The phrases "You deny my present, I decide my future" and "I am Chen Ou, I speak for myself" have triggered a frenzy of imitation.
In just a few months, Chen Ou's Weibo followers rose by more than 40 million, far surpassing Ma Yun and Lei Jun in the same period, and also pushing Jumei Premium to the peak.
Until now, "mortal objects" and "Chen Outian" have often been used as templates for advertising creation and teaching, but the carriers carrying these brilliant achievements have disappeared into the floating and sinking of the commercial sea.
Vipshop's dilemma is difficult to solve
In 2010, Huang Ruo, a partner at Warburg Pincus, predicted that "e-commerce in the past decade has been mainly the success of the platform, but the next decade will belong to the market segment."
Indeed, huang Ruo said this sentence at the time of the vertical e-commerce explosion.
Le Bee Network, which specializes in women's shopping, Fanke Eslite, which specializes in clothing, Vipshop, which specializes in special sales, Jumei Excellent Products, which specializes in cosmetics, and Jiuxian Network, which specializes in alcohol...
A hundred flowers bloom, and multiple subdivisions have hatched a representative vertical platform.
Looking back, the market competition has changed from the subdivision track to the comprehensive e-commerce track, and ten years have passed.
Comprehensive e-commerce has launched a fierce impact on vertical e-commerce, and many small and medium-sized vertical platforms have almost disappeared.
In the face of the impact of comprehensive e-commerce, vertical platforms focusing on subdivided tracks cannot be carried at all. The power of e-commerce giants is too large, and compared with the "small and beautiful" vertical platform, it seems weak.
(There is little left in the vertical e-commerce market share)
First of all, from the perspective of traffic, vertical platforms are limited by goods categories, and the ceiling of traffic growth is far lower than that of comprehensive e-commerce platforms.
For example, in traditional e-commerce, Alibaba's domestic market already has 1 billion consumer users, JD.com's annual active users are 570 million, and Pinduo's active users are 890 million.
However, Vipshop, which is optimistic about the capital market, has only 93.9 million annual active users, which is not an order of magnitude at all with traditional e-commerce.
The life cycle of an enterprise is limited. In the incremental era, this gap in user size will not have much impact.
However, with the exhaustion of the traffic dividend, the vertical platform has long touched the growth ceiling and entered a period of decline.
Secondly, from the perspective of category, vertical platforms are difficult to meet the increasingly diversified needs of consumers.
With the increasing scarcity of users' attention, major e-commerce platforms regard increasing user stickiness and robbing users of their time as the first priority. After all, more retention time means more conversions.
Therefore, one-stop convenience shopping and providing an immersive experience of "shopping while buying" have become the main tone of e-commerce development.
Comprehensive e-commerce platforms can maximize the user experience advantages with the advantages of scale, but this is a big problem for vertical platforms.
Finally, what is even more fatal is that many vertical e-commerce companies only do vertical in categories, but not vertical in ability.
Compared with comprehensive e-commerce, the competitive advantage of vertical platform differentiation lies in the professionalism of deepening a field.
For example, the medical beauty platform New Oxygen has established recognition in the minds of users with certain professional standards.
And those vertical platforms with their lives hanging on the line need to seriously consider whether the selected field can form a professional threshold, or whether it has reached the height of a professional brand.
Vertical e-commerce survives
Liu Qiangdong once said that in the future, e-commerce only needs to exist in one enterprise. The e-commerce battle has entered the second half of the process, and the time and living space left for vertical e-commerce is running out.
So, vertical e-commerce has no chance at all? Not exactly.
With the rise of Generation Z and consumption upgrading, the pursuit of quality and the pursuit of personalization have become the consumer psychology of more people.
Starting from vertical categories, vertical platforms that accurately focus on user needs are easier to obtain consumers' "hearts" than traditional e-commerce.
With this trend, the number of vipshop core SVIP active users in 2021 increased by 50% year-on-year, and the user repurchase rate reached more than 90%.
Retention has risen, stickiness has increased, and core users have become a valuable asset for Vipshop.
In terms of practical operations to meet consumer needs, vertical e-commerce shows two development directions.
One is to continue to deepen the vertical model.
Vipshop is one of the representatives, betting on the "sale" model is very focused. At present, Vipshop is the only e-commerce platform that is considered to be alive and well by the market in addition to Taobao and JD.com.
The second is to gradually expand to related categories based on core categories and become a comprehensive platform in the professional field.
For example, the core category of Confucius Used Books Network is still second-hand books, but it is expanding to categories such as group purchase books and cultural plays related to the attributes of second-hand books.
(Confucius used book network added categories)
I hope that in the future fight, the survivors of this group of vertical e-commerce can still maintain resilience and move forward.
Author: Yueya