E-commerce giant diversified its business during the year

Nuggets Telecom, Financial Industry
Industry insiders pointed out that high costs have made the profitability of e-commerce companies still severe in 2013. Recently, the Ministry of Industry and Information Technology released the “Pilot Program for Resale of Mobile Communication Services” to solicit public opinions, requiring telecommunications companies to lease out their networks to private enterprises to provide telecommunication services through the virtual operator model. .

Suning, who previously proposed online and offline integration, competed for the virtual operator license and formally started the battle of the home appliance giants in the telecommunications industry. Before Suning and Gome's e-commerce companies announced their entry into the financial industry to diversify their business; Jingdong CEO Liu Qiang Dong was a recent move, claiming the company’s future three directions: First, self-operated e-commerce, second, open service, and third, financial . E-commerce giants such as Gome also announced profit plans.

At this point, under the pressure of capital cooling, the e-commerce giant began to pursue profits by the pursuit of scale. Recently, major e-commerce giants have announced that they will make profits during the year.

E-commerce giant announces profit for the year

Liu Qiangdong announced zero profit distribution and achieved profit in the fourth quarter. Jingdong finally could not avoid verifying the "unprofitable businessman is immoral" business philosophy. Liu Qiangdong said that Jingdong’s sales in 2012 are 60 billion yuan. In 2013's strategic plan, the platform trading volume of Jingdong Mall will exceed 100 billion yuan. By the fourth quarter, Jingdong will achieve profitability.

Previously, Gome released the strategic plan for the next three years, and said that the company's performance will improve in the fourth quarter. E-commerce Gome Online will develop in line with the offline business. It is expected that the Gome Online business will be realized in the fastest half year and the latest year. profit. Abandoning the past profit model relying solely on the growth in the number of stores, Gome will focus on e-commerce. In addition, Dangdang and other electricity providers also released profit targets.

Suning Tesco also speeded up its product line expansion. Recently, Suning Tesco has introduced many categories such as department stores, lottery tickets, and financial insurance, and for the first time it has set foot in online games, and the diversification trend is significant. Industry insiders predict that Suning's 2012 sales target of over RMB 30 billion will be exceeded, and 2013 will also sprint new targets.

For the profit target of Suning Tesco, Vice President of Suning Tesco said: "Comprehensively considering market competition demands, financial indicators are the weights considered by the company."

According to industry observer Liang Zhenpeng, on the occasion of the opening of 2013, e-commerce giants announced that their profit plans were due to operating pressure. Gome's losses in the past were too high in 2012, and physical stores did not have a better idea of ​​profitability. The development of e-commerce has become an important measure for 2013 in Gome and Suning chain companies. Jingdong Mall is mainly forced by pressure from venture capitalists. ”

"If there is no strong involvement of competitors such as Suning Tesco and Gome Mall, Jingdong has no difficulty in achieving profitability in 2012. However, in response to strong competitors, the construction of logistics and warehousing is too fast and the cost is too high to cause losses. The continuous expansion of the bottomless hole has extended the investment return period of venture capital investors to an infinite length, resulting in the exhaustion of venture capital investors and forcing Liu Qiangdong to increase profits at the expense of market share. Liang Zhenpeng believes.

Entering telecommunications and financial industry

On the one hand, Alibaba was a high-yield stimulus in 2012. On the one hand, it was the cold weather in the VC market. In 2013, the protagonists of the e-commerce price war, or will give up the price war shopping, retreat to a higher profitability. .

The Ministry of Industry and Information Technology recently issued a consultation document on the "Pilot Program for Resale of Mobile Communication Services." It requires telecommunications companies to lease out networks to private enterprises to provide telecommunications services in the form of virtual operators. According to sources, home appliance giants such as Suning and Gome, which are combining online and offline businesses, want to join as virtual operators. Prior to this, Suning and Gome's offline e-commerce companies all announced their entry into the financial industry to carry out diversified businesses.

According to industry sources, China's e-commerce giants are no longer simply willing to seek market size with low profits or even zero profits. In 2013, they will pursue profit as their top priority. However, at present, the e-commerce price war is still not under way. Can e-commerce giants feel comfortable in formulating a profit strategy?

“At present, the mainstream autonomous B2C e-commerce is still in the lowest level of price war competition. E-commerce companies have used price wars to seize market share and continuously invested funds into the information system construction and logistics system, and have not yet obtained better differentiated competition means. The lower profit is not the best time to consider the profit as the first target.” Industry insiders believe: “E-commerce will be difficult to profit for at least two or three years. Unprecedented price war, expensive cost will make electricity The profitability of the business in 2013 is still severe."

Throughout the past few years, domestic e-commerce has developed at an unprecedented rate. However, for many years, the staking and enclosure has not been deeply trapped in the "fight." Even Amazon, the long-awaited giant in the global e-commerce industry, only made profits after losing seven years in the United States. “The future proportion of e-commerce in the development of the Chinese market will certainly increase significantly, but e-commerce is still at an early stage of development, and it is still early to consider profitability. The e-commerce business model that is self-managed is constrained by natural models, and profitability is difficult to achieve in the short term.” Research center stakeholders pointed out.

It is undeniable that China's e-commerce will inevitably undergo a process from quantitative change to qualitative change, and this change may be realized in 2013.

Liu Qiang Dong said that Jingdong Mall will also shut down some businesses that have no future. The future goal of Suning's previous "Wal-Mart + Amazon" also surfaced.

Suning related sources told reporters: "The mobile Internet sector and the e-commerce hot plate have not yet achieved overall profitability. Suning's e-commerce has entered into new stable and reliable areas to realize data and traffic, and thus realize profitability as soon as possible."

In recent years, e-commerce companies that focus on self-employment have been positioned to introduce new categories and partners in order to achieve faster sales growth. “Suning Tesco will expand its platform-type e-commerce product category in 2013 and vigorously expand the category beyond 3C. Virtual and financial products are the main direction.” Suning said.

Tmall.com and Taobao.com verified the feasibility of profitability by using the "pay-as-you-go" model of platform delivery fees. Last year, Tmall's overall operating gross margin reached over 20%, and the gross profit margin of self-managed B2C e-commerce was less than 5%. Self-purchased products such as JD.com and Suning.com, etc., gradually introduced platform partners in early 2012. However, taking the self-operated road is still the main line, and building core strengths will require enrichment in the category.

“E-commerce giants pursued break-even and profitability in 2013. Most of them expressed their commitment to two diversifications: diversifying their structure, introducing high-margin products and pursuing commodity diversification; diversifying their business models and introducing self-managed e-commerce. Vendors and vertical electricity providers will enter the market to rapidly increase sales and increase interest rates. These two diversities will be fully reflected in 2013. The telecom industry and financial industry will be the new round of competition for home appliance giants,” said Liang Zhenpeng. .

Diversified business needs caution

The good days of e-commerce that “have a good ride back to the trees” are hard to come by.

Liu Qiangdong revealed that Jingdong Mall will form a financial company of Jingdong Mall in 2014. It is understood that Jingdong Mall completed the acquisition of third-party payment company Online Banking Online in October 2012. Liu Qiangdong said that Jingdong Mall has mastered China's most authentic and effective order transaction information; through these data, Jingdong Mall can provide loans for businesses and personal loans for consumers. Alibaba, Suning and others have all provided financial products such as bank credits and have been involved in the financial industry.

“With the increase in third-party payment licenses such as Alipay, there is a large amount of funds staying in user accounts. In such cases, funds accumulate and interest is generated to provide loans and other services. The total amount of user account balances forms a huge financial figure. It became the basis for the e-commerce 'money to make money' business, and financial services has become an important direction for e-commerce in 2013." An electronic payment service company source said.

According to Analysys International, the scale of third-party online payment transactions will further increase to 2.7 trillion yuan and 3.6 trillion yuan in 2012 and 2013, showing a doubling increase.

Prior to this, the People's Bank of China announced the Administrative Measures for Payment Services for Non-financial Institutions, which stipulates that any non-financial institution and individual may not engage in or disguise themselves in payment services without the approval of the People's Bank of China. Industry sources pointed out that at present, e-commerce financial transactions are subject to high risks, the legal status of e-commerce financial payment instruments is ambiguous, and transactions have a lot of illegal operations. It is necessary to improve laws to strengthen financial supervision.

"For e-commerce related laws related to financial services are currently at the edge of the ball, e-commerce is not yet independent of the financial business conditions, and the future of e-commerce banking business is bound to expand, the policy environment is not yet clear, e-commerce involved in financial credit There is a certain policy risk in the industry,” said the person in the industry.