The Ultimate Trend Of Luxury Electric Business: Either Die Or Sell

Fifth Avenue has completed its first round of financing recently, the seven year old one.

Electricity providers are now starting to pform to technology providers and service providers.

In the dialogue with CEO Sun Yafei, she used the "B2C mode is wrong", "this industry is quickly killed by the price war" to express the current situation of luxury electric business.

The doubt about the luxury electric business has never stopped. Before that, the tiger sniffer author published the first generation of luxury goods, why did the electricity supplier fail?

From the 2010 capital carnival, to 2012 expansion shuffle, and then to the ebb tide in 2013.

Despite the frequent financing of luxury electric business in 2015, no one really came out for so long that the outside world was more pessimistic about the industry.

The charm of "selling Ali" once again confirms the ultimate trend of luxury electric business: either die or sell.

In this 2.5 hour interview, Sun Yafei from the purchase channel, the electricity supplier and

The contradictions of the side, the drawbacks of the B2C mode, and the future play of luxury goods providers have made a detailed exposition of the luxury electric business, which may inspire readers.

The following is Sun Yafei's account, tiger sniffing interview and writing:

The way to purchase luxury goods is difficult to discount.

If the luxury goods sold by an electricity supplier are genuine, there are no more than four channels: the licensing of the brand, the cooperation of the general agent, the distributor's distribution of goods, and the importing traders.

Then how does the discount come from each channel?

First, the brand side is authorized to pay their own money.

The electricity supplier will directly cooperate with the brand side, but there is a problem, usually with the brand side, the new product has no discount, and can only be sold at the original price.

Once a colleague, in order to rush sales, began to pay discounts after obtaining the authorization.

But this matter was soon known by the brand side and stopped cooperation immediately.

The worry of the brand side is that they have a set of offline sales system. The online discount has hit the sales channel under the line, so that the offline shop is very unhappy.

Second, cooperate with the general agent to get the tail cargo.

The general agent will have the tail cargo to you, but the characteristics of the tail cargo are: the quantity is very small, some are only a few; the style is old, the new style basically has no tail goods; there are defects or broken codes.

What is the tail cargo? For example, the brand thinks the market can sell one billion of the goods, so it produces so much, but in fact it only sells nine hundred million, and the remaining one hundred million is the tail cargo.

It will be put on sale at Outlets (Oteri J) or some other channels. In the first year, it will take a year to make a thirty percent off sale without a sale, and then make a half off sale in second years. At that time, it will give us three to sixty percent off electricity suppliers.

Third, dealers are fleeing goods.

The brand is divided into several levels: the brand side, the general agent, the regional agent and the distributor.

The brand side is willing to do so, although the gross profit is low, but there is no shop cost, that is net profit.

There are exceptions, such as Gucci. These strong brands are proprietary and have no agents.

Dealers need to give the money to the brand half a year in advance, and sell the goods to the mall half a year later. This is the order.

The quicker the sale, the quicker the return of capital, the higher the profit rate of the fund, the more money it will earn.

They have the need to sell the goods quickly, but because of the impact of the sea rush, online shopping and so on, dealers are hard to sell, so some people choose to cooperate with the electricity supplier, give a certain discount to the electricity supplier, the electricity supplier earn a few points, and then sell at a discount.

But this is a disturbance to the brand agent system.

A distributor can only sell in his own area, and the electricity supplier is sold to all parts of the country, which makes dealers in other regions more difficult to sell. This is the same as the first one.

So the brand side will find that the dealer will punish him, but now many dealers are doing this. Some laws are not responsible for the public. The brand side can only turn a blind eye to it.

Fourth, traders or purchasing agents smuggle or import regularly.

There are many businesses that import goods from traders or overseas buyers.

But the price of the brand to the overseas buyer shop is about thirty percent off. If it is to be shipped to China, there will be no big discount after the formal payment of the customs tax, and it will not be possible to place large orders.

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In short, the channels for genuine products are basically those. There are many so-called international traders who do not know where to get the goods. The new price is only 1/3 of the market, which makes me feel unthinkable.

New product hits sixty percent off? Basically not reliable.

Last year, Gucci opened flagship store on Tmall, but not the first seller.

An online shop specializes in Gucci bags, claiming to buy from Oteri J (to avoid advertising and unnecessary trouble, tiger sniffing the name of the shop), a special price monthly sales volume can be sold to six hundred or seven hundred, and some new products can hit sixty percent off.

Is that possible? No way.

Gucci belongs to light luxury. Brand is not a luxury, but its management is very strict. Gucci stores all over the world are directly run. Besides Gucci outlets, there is no wholesale channel for tail cargo.

There are about forty or fifty outlets in the United States, and the special price can reach 66% off, but the purchase is restricted.

And there may be only a few of each ortail's tail cargo, and there may be dozens of large ones. Then where can you buy six hundred or seven hundred special items? Even if you send dozens of buyers without stopping, you can't buy such a large amount in different states.

Ali could not decide whether the goods were genuine or not. I was asked by Ali people that the store had complete procedures and customs lists, but the volume was too large to be questioned.

Customs list does not mean that it is genuine. You can declare it at customs only if you have an invoice.

According to the logic of our purchase, it is impossible to have so many tail goods. Besides, the new type can also get the discount.

To put it another way, Gucci's high imitation has reached its peak. Many of us can't recognize it.

The original documents on the Internet are basically high imitation. The raw materials supplied by the brand side to the foundries are supplied according to the quantity, and the remaining leftover materials will be collected away, so the luxury goods do not have the original statement.

(between words, Sun Yafei sniffed another bag, saying the bag was only sold in two places in New York and Losangeles, but Taobao was already selling it all over the world.

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Low price shocks, the brand side and the electricity supplier stand opposite.

On the other hand, the offline stores have recently attracted the attention of luxury stores.

Like LV, seven stores have been shut down continuously in China, and Urumqi, Hefei and other markets have been pulled out.

There are three reasons why there is a low tide of business.

First, domestic anti-corruption.

The first industry that has been hit hard is the industry of watches. Before China's luxury stores, the consumption structure of the luxury goods stores was basically half of the half of their gifts.

But after the storm at the end of 2013, the state refused to accept public funds for food and drink.

Watches and clocks are the most popular gifts. The first hit is the watch industry. Next, there are bags, accessories, costumes and so on.

Second, the rise of overseas tourism.

A good news for 2014 is the rise of the middle class. The most notable feature of the rise of the middle class is the upgrading of consumption and the higher awareness of the brand.

But this time there was a problem: China's luxury consumption began to shift to personal consumption, and the price difference between domestic and foreign luxury goods up to 30% to 50% made the middle class more inclined to buy overseas.

Coupled with the hunger and thirst of Chinese tourists in various countries, visas in European and American countries are becoming easier and easier. Going abroad means information pparency. The original brand seller sold one package, sold ten thousand abroad, and sold fifteen thousand in the domestic market.

This international price difference makes Chinese tourists basically spend 80% of their time overseas. They are buying and buying, and shopping abroad has become a huge new growth point.

Third, Hai Tao and purchasing are rising.

In 2014, there was another outlet, that is, Hai Tao. More and more companies set foot in the sea under the promotion of capital. The state also wanted to keep consumption in the country, so the free trade zone and bonded warehouse were active.

There is also a large number of overseas students studying abroad. The original purchasing agent has always existed, but now it becomes a standard for foreign students, and the C2C mode such as ocean wharf is developing.

In addition, there is another impact that is the impact of fake goods, fake accounts for more than half of the market, and as mentioned above, it is difficult to distinguish between true and false quality.

So the real product and the high imitation competition are more than three times the price of others. How can they be sold?

In this case, the brand side needs the electricity supplier to expand its sales.

But the reality is that under the impact of low prices, we have to stand on the opposite side.

For the brand side, the electricity supplier's discount to as low as 77% off makes it difficult to accept; for the electricity supplier, it needs to sell at a low price, but the brand side bites the price.

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So, there are some advertising slogans hanging out from the "KO starlight world (high-end shopping center)", and some CEO said in an interview that they did not want to cooperate with the brand side because there was no price advantage.

Under the price war, luxury goods have become fast food products, and the electricity providers are not going anywhere.

From the comprehensive platform Tmall, Jingdong, to the vertical electricity supplier Temple library, to walk the Xiu net, then to the sea to search the website ocean wharf, the small red book entire profession is speaking the low price, but nobody said whether this industry is quick to be killed.

Why do I say so?

Luxury is not a fast food product, its price is the combination of various services.

If the skin value of this package is 300, then the electricity supplier will sell it to 300, then luxury goods will no longer exist.

But now the situation is that everyone is using the fast and fast way to do luxury electric business.

At the beginning of this year, we made the first financing for 7 years, although the final result was satisfactory, but the middle was not smooth.

The voice of doubt is accompanied by our entire financing process. "From 2010 to now, luxury goods have already burned a lot of money, but none of them has really come out", "you should also use the price to grab the market."

But in my view, based on the particularity of luxury goods, it is difficult for e-commerce providers to rely on low-cost strategy.

First, as the first part, "how does the discount on the luxury electric business come from?" as discussed, if the goods are genuine, the source of goods is basically from four ways. It is difficult to get a big discount, and there is no great advantage in price.

Two, C2C can not control the genuine products (there are no more examples of Taobao's case), while the traditional B2C luxury electric providers have two modes to do, but they have no future.

Let's first talk about mode.

The four types of purchase channels can be sold and sold by themselves.

Because of the high price of luxury goods, they are faced with huge inventory pressure.

A B2C business provider has at least three hundred brands. There are 100 SKU under a brand, and 2-5 SKU products, so it also needs tens of billions of cash to purchase. Even if it flows, it needs to press several billion or more than ten billion goods.

At this time, the electricity supplier faces two choices: first, selling the goods at a low price, although it accelerates the operation of the capital, but there is no profit to make, and will be dissatisfied with the brand side. Even if there is a tail cargo to be sold, the quantity of the tail cargo is limited and the procurement is difficult.

Second, maintaining high prices, though avoiding the intensification of contradictions with the branding side, is hard to sell in the face of fierce competition from peers, especially the cheapening of counterfeit goods.

Scale can not be done, heavy mode is meaningless.

In other words, the backlog of stocks in heavy mode will kill you.

Besides, the selling mode.

Consignment can be sold through the brand side, general agent, dealers.

There are two kinds of consignment: one is to enter your warehouse.

Entering your warehouse requires him to put the goods in your warehouse, and then settle the bill after purchase.

The value of these goods is very high, the other side of your expectations are very high, I hope you can quickly sell out.

If you can't sell it quickly, you won't want to put it here. He needs to go out quickly.

So this has great demand for the shipments of e-commerce providers, and small platforms are hard to achieve.

Another pattern is not to enter your warehouse.

After receiving the order, the supplier will adjust the shipment.

But this mode is very harmful to the electricity supplier, because the ERP between you is impossible to get through. Some goods will not be told to you in time after the supplier has sold it, so many users will place the order, but eventually they will be told that they are out of stock.

This mode is basically adopted in the industry.

As a result, B2C luxury electric business is in the situation: frequent shortages, no money to buy goods, backlog stocks, and a lack of after-sales service.

Do you have a future in this business model? B2C has no future.

Even I think its business mode is not as good as flash buying, flash buying is that people give you the tail goods to sell for 3 days. If you can't, you can send them back, but there is no future for flash buying.

Vente-privee, the founder of flash shopping, is a French shop but has been withdrawn to France.

Gilt, the largest flash purchase website in the US, originally valued at $1 billion 100 million, is now valued at only $250 million.

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So what is the future?

I think the electricity supplier and the brand side get through.

The brand side directly supplies, and the electricity supplier platform must provide the system and the service.

Specifically, the platform is directly connected with the offline store system of the brand side. Users can place orders directly in a store on the platform, the store is responsible for delivery, or the platform distributor can deliver goods to the door after delivery, and guide users to match.

The advantage of this is that the supplier directly supplies the brand.

As the system is cleared, there will be no backlog on the platform and there will be no shortage.

At this time, the electricity supplier plays a more role in system maintenance and collocation guidance.

Conclusion:

Whether Sun Yafei can talk about this pattern is still unknown.

But I quite agree with her view that luxury goods have been lowered by the electricity supplier, and that the group that does not belong to its target audience is also trying to buy luxury goods, which has produced a lot of fake products.

The meaning of "service" in the luxury itself is fading. I wonder if this is a good thing or a bad thing for the luxury electric business.