The business model of vipshop

Vipshop will be listed on the New York Stock Exchange. Since its listing, Vipshop has been profitable for fifteen consecutive quarters. At present, Vipshop has become the largest e-commerce company in the world and the third largest e-commerce company in China. I'll solve the business model of Vipshop for you, hoping to help you.

Business model of vipshop 1 business model of vipshop

Vipshop (NYSE:VIPS), a website specializing in special sales, was established in 2008. The innovative e-commerce model of "brand name discount+limited time snap-up+genuine guarantee" was pioneered in China, and it continued to deepen into a genuine fashion sales model of "selected brands+deep discount+limited time snap-up", selling various famous products such as clothing, shoes and bags, beauty cosmetics, mother and baby, home and so on online.

Vipshop will take the lead in creating a unique sales business model in China. Coupled with its "zero inventory" logistics management and seamless connection with e-commerce, Vipshop will be able to take root in the e-commerce field in a short time.

Vipshop will cooperate with well-known brand agents and manufacturers at home and abroad to provide China consumers with low-cost, high-quality and popular brand products. Authorized to sell hundreds of brands every day, including clothing, shoes and bags, beauty cosmetics, maternal and child, home, 3C and so on.

Market performance of vipshop

The net revenue of Vipshop in 20 13 was1700 million USD (about 106 billion RMB). In the first quarter of 20 14, the company's net revenue was $70190,000 (about 4.4 billion RMB), up by 125.9% year-on-year, increasing for six consecutive years. In the research reports released by iResearch, such as "20 14Q 1 China B2C shopping website transaction scale market share" and "20 14Q 1 China mobile shopping enterprise transaction scale market share", Vipshop, Tmall and JD.COM rank in the top three, which means that Vipshop will "select+guide".

In 20 14, vipshop achieved a net revenue of USD 3.77 billion (about RMB 23.556 billion), an increase of 122.4% over the previous year. According to the Research Report of China Online Time-limited Sale Market in 20 14 released by iResearch Group, in 20 13, Vipshop will lead the China time-limited sale market with a market share of 38. 1%. The online sale model represented by Vipshop has become one of the three mainstream e-commerce formats in China.

In 20 15, the total net revenue increased by 74% to 40.2 billion yuan, the annual operating profit increased by 148% to 2.07 billion yuan, and the annual operating profit rate increased from 3.6% in the same period last year to 5.2%. Annual gross profit increased by 72% year-on-year to RMB 9.9 billion. In the second quarter of 20 16, the net revenue of vipshop increased by 49% year-on-year to RMB1340 million yuan, and it continued to make profits for five consecutive quarters, with mobile terminal sales accounting for 87% and logistics own distribution orders accounting for 90%. In "Global Retail Power in 20 16: Crossing the Digital Divide" published by Deloitte Global, Vipshop will grow at a compound annual growth rate of 320.8% in 2009-20 14 and 20 120.2% in 2009-4. According to the Quarterly Monitoring Report of China B2C Market 2065438+2nd quarter of 2006 and the Quarterly Monitoring Report of China Mobile Online Shopping Market 2065438+2nd quarter of 2006 released by Analysys think tank, Vipshop ranks in the top three in online retail B2C market share in China, online online online shopping market share in China, clothing category share in China B2C market and maternal and child category share in China B2C market.

In the third quarter of 20 16, the net income of Vipshop increased by 38.4% year-on-year, exceeding1200 million yuan, with mobile terminal sales accounting for 89% and logistics self-delivery orders accounting for 90%.

The road to listing of vipshop

It took only three years from the company's establishment to its listing. On March 23rd, 20 12, Vipshop successfully landed on the New York Stock Exchange with an issue price of US$ 6.5,1180,000 ADS (ADS=2 common shares) and raised US$ 72.64 million. By July 26th, 200013, the share price of Vipshop had climbed to $465,438 +0.27, with a market value of $2.276 billion.

20 13, 13 On March 4th, Vipshop announced that the company and specific offering shareholders would issue 8 million American Depositary Shares (ADSs) at an issue price of $24.00 /ADS.

20 14, 14 On May 5th, Vipshop released its financial results for the first quarter of 20 14 as of March 3rd. The report shows that Vipshop has been profitable for six consecutive quarters. In the first quarter of 20 14, the company's total net revenue increased by 125.9% year-on-year to $70190,000 (about 4.4 billion RMB), once again exceeding Wall Street's earlier expectations. Subsequently, the stock price soared. By June 10, the market value of Vipshop had reached1053.3 billion USD, making it the fourth largest Internet company in China.

In 20 15, the total net revenue increased by 74% to 40.2 billion yuan, the annual operating profit increased by 148% to 2.07 billion yuan, and the annual operating profit rate increased from 3.6% in the same period last year to 5.2%. Annual gross profit increased by 72% year-on-year to RMB 9.9 billion. The net revenue of Vipshop 20 16 in the second quarter increased by 49% year-on-year to RMB134.4 billion yuan, and it continued to make profits for 15 consecutive quarters.

In the context of the capital market, perhaps profit is not the core reference to measure the value of a company. The sudden emergence of JD.COM and Pinduoduo has made Vipshop, once the roof of the world's e-commerce, fade out of the first-line camp.

However, it is worth noting that for Vipshop, "falling behind" does not mean that Vipshop will be defeated. On the contrary, Vipshop, which is constantly setting a new record on the road to profitability, continued its thriving trend in the third quarter: according to the financial report data, the net revenue of Vipshop in the third quarter reached 23.2 billion yuan (about 3.4 billion US dollars), up by 18.2% year-on-year, and the GMV exceeded 38.3 billion yuan.

So far, Vipshop has maintained a continuous profit for 32 quarters.

Why can Vipshop be profitable for a long time?

Profitability is the curse of the Internet e-commerce platform: from continuing to burn money to relying on business growth to enter a positive cycle, it is often difficult for many e-commerce companies to cross.

However, for Vipshop, profit is not a problem. In fact, from the date of listing, Vipshop will enter the fast lane of profit. Why can Vipshop be unique in the Internet rivers and lakes where financing and burning money cycle alternate?

In fact, this is related to the business model of Vipshop. Since its establishment in 2008, Vipshop has been deeply involved in the field of sale. After years of operation, it has successfully captured the minds of consumers with the brand positioning of "brand name discount+limited time snapping+genuine guarantee". In the specific mode of operation, Vipshop can buy out the tail goods of well-known brands at low prices and then sell them to consumers to earn the difference.

Vipshop's business model accurately locates consumers and has natural advantages in the supply chain system. In terms of business model, Vipshop will be a wholesaler of bulk commodities. Due to the huge purchase volume, it has super bargaining power. For many products with tail goods and broken codes, Vipshop will even have pricing power. Obtaining genuine products at low prices is the core of Vipshop's competitiveness.

Vipshop will wholesale goods on a large scale in the market, which is also welcomed by manufacturers and consumers. On the one hand, Vipshop can handle the tail goods for the upstream brands, speed up the inventory turnover, and get the goods by packaging, so that manufacturers can clear the goods quickly. Although the freight rate is low, the efficient and fast turnover rate makes Vipshop a hot partner of manufacturers. For consumers, it is a kind of welfare to be able to buy branded goods at a price close to the cottage.

Especially in the year of 1 1, when the inventory pressure of the clothing industry is extremely high, the special sale business of Vipshop has achieved leap-forward development. Vipshop, which was in the limelight at that time, ranked among the top three in the e-commerce industry, both in terms of fan activity and transaction amount. Vipshop will also be regarded as the "roof of e-commerce world" outside Taobao and JD.COM.

It is also under this east wind that Vipshop will also successfully land in the US stock market. Only in the third quarter of successful listing, Vipshop will enter the fast lane of profit. At the same time, according to the relevant financial report data, the revenue growth of Vipshop from 20 12 to 20 13 reached a high growth of 120%. Since then, Vipshop has maintained a profitable financial report record.

Bet on new retail, online and offline dual-track drive

Although Vipshop is a proper leader in the field of special sales, the field of special sales has never been a monopoly business. In fact, with the rise of special sales e-commerce companies such as Mushroom Street and the deep cultivation of vertical areas by head e-commerce, it is not easy for Vipshop to continue to dominate the special sales track. Creating a wide moat is one of the few choices for Vipshop. Vipshop's choice is to bet on new retail and step up the offline layout.

20 19 July, Vipshop, which has been in the capital circle for a long time, announced that it had signed an acquisition agreement with Shanshan Group Co., Ltd. and Ningbo Xingtong Chuangfu Equity Investment Partnership (Limited Partnership) in Shanghai to acquire 0/00% shares of Shanshan Commercial Group Co., Ltd./kloc-0 with cash of 2.9 billion yuan. Vipshop will value Shanshan's direct sales stores and management rights. Vipshop said that through this acquisition, Vipshop will lay out the offline Ole business.

When the related enterprises in the traditional clothing industry usher in the special cycle of closing stores, choosing the long-planned Vipshop will indeed make some moves after a long time. Outlets, which means "export, outlets" in English, refers to a shopping center composed of shops selling brand-name out-of-season goods, off-shelf goods and off-code goods in retail business, so it is also called "brand direct selling shopping center".

In fact, what Vipshop will do is itself an online "window". When the online sales field is struggling, with excellent supply chain management ability and deep cooperation with brand manufacturers, it is almost an inevitable choice for Vipshop to bet on building a moat under the new retail layout line.

For Vipshop, extending the sale to offline will not break away from the scope of the main business, but also open the gap between online and offline, and truly realize the perfect combination of online and offline.

In the above sense, the offline outlet layout of Vipshop is not only based on the consideration of strategic expansion, but also an inevitable choice to stabilize the head position in the special sale field. However, stepping up the expansion of offline layout will also bring new development opportunities for Vipshop.

According to relevant data, in 20 19, Vipshop acquired four outlets with the top 20 sales, namely Ningbo Shanshan Outlets, Mei Tian Shanshan Outlets, Harbin Shanshan Outlets and Zhengzhou Shanshan Outlets, with sales of 2.5 billion yuan, 182 billion yuan,16.5 billion yuan and/kloc-0 respectively. 7.6 billion cash flow is a good cash cow for Vipshop.

What is more noteworthy is that the layout of physical stores also makes up for the shortcomings of Vipshop. At present, the online traffic growth of Vipshop has entered a bottleneck period. It is very difficult to get traffic and retain users by advertising promotion. The traffic of offline stores has provided continuous impetus for the sustained growth of Vipshop.

Vipshop's financial report for the third quarter of this year shows that there are over 43.4 million active users, up 36% year-on-year, and the growth and retention of new users on the platform is also in the forefront of the industry. As an "old brand" e-commerce platform, Vipshop's performance on the user operation side can be described as bright.

Strictly abide by the authentic bottom line, and the business of Vipshop will be stable.

The prosperity of Vipshop is inseparable from the continuous support of hardcore users. Compared with the high probability random selection of other e-commerce platform users, Vipshop in the special sale field has a large number of die-hard users.

Because users of Vipshop believe that this platform allows them to buy genuine licensed products at low prices. Without fighting with celebrities, wage earners can also enjoy brand-name products with their own income. It is this trust of consumers that supports the market value of Vipshop, which is tens of billions of dollars.

But unfortunately, the "authenticity" of Vipshop is not as strong as expected.

Recently, the Announcement of Quality Supervision and Spot Check of Bedding in Guangdong Province in 20 19 (No.212 in 2020) published by the website of Guangdong Provincial Market Supervision Administration (Intellectual Property Office) shows that this time * * * investigated 250 kinds of bedding produced by1KLOC-0/enterprise. Unfortunately, Vipshop will be among them. Similarly, in this sampling inspection, two batches of footwear products sampled by Vipshop were unqualified and were also available for sale at Vipshop.

If the failure is due to the negligence of supply chain control, then counterfeiting means giving up the adherence to the commercial bottom line.

At the beginning of this year, Vipshop was sold by the official "real hammer", which once set off a huge storm of public opinion. It is understood that in the cashmere sample testing, Beijing Consumers Association found that the hooded sweater samples of deer, yellow sheep purchased by Vipshop used wool as cashmere.

According to the statistics of relevant media, there are more than 12000 complaints about Vipshop in mainstream consumer rights protection platforms such as gathering complaints and black cat complaints. Suspected fake goods, wrong goods and poor customer service after-sales experience have become the hardest hit areas for complaints.

If Vipshop does not take decisive measures and strictly abide by the bottom line of authenticity, its hard-won reputation in the field of sale will soon be lost. In this sense, doing a good job of quality control in the procurement process is a lesson that Vipshop must make up.

Sale has always been a good business. However, whether Vipshop can continue to tell its own story in this field depends on whether it can be authentic.

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