A large number of e-commerce platforms have died in the past two years. Why?

FMCG B2B e-commerce

In China, the pattern of C2C and B2C e-commerce has been set, and it is harder than ever for entrepreneurs to build a new platform. But B2B is different. Even giants like Alibaba and JD.com do not have a dominant position in the market.

After Jack Ma proposed the concept of "new retail", the B2B field of fast moving consumer goods became popular, and a number of e-commerce platforms emerged.

Alibaba’s Lingshutong, JD.com’s Shopkeeper, RT-Mart e-Lufa, Zhongshang Huimin, Best Store Plus and Yijiubi are the six most important platforms in this field. In addition There are also a large number of small and medium-sized platforms.

These platforms may have different slogans, but essentially they all provide services to offline retail stores, including supply, materials, marketing and promotion, technological transformation, etc.

In the past six months, a large number of small and medium-sized platforms with insufficient strength have collapsed. There are three main reasons behind this:

1. Excessive money-burning subsidies

Money-burning subsidies to grab users , can be said to be the favorite trick used by Internet companies.

Some insiders once revealed to "Chinese Entrepreneur" magazine: "Many start-up companies have weak technology and do not understand business management. Driven by capital, companies have no successful model. The situation has become even more confusing. In order to make the numbers look better, companies, especially some stores, are very aggressive in cheating and have no profit points. If they rely on crazy subsidies, problems will definitely arise."

Burning subsidies. , will accelerate the consumption of funds in the platform’s hands. Once financing does not go smoothly and the capital chain is broken, these platforms will collapse.

2. Users “purchased” by subsidies have no stickiness

The platform relies on subsidies to provide products at lower than market prices, and retail stores are naturally willing to join. However, this method lacks stickiness. Once subsidies are reduced, retail stores will immediately turn around and leave.

A boss in Haidian, Beijing told "Chinese Entrepreneur": "Zhangguibao also has a complete range of goods, but it will only buy some drinks when Zhangguibao has promotional discounts. From the FMCG B2B App The proportion of purchased goods is less than 10% at most. "Because it is cheaper, most of the time, he purchases goods from the wholesale market.

3. FMCG B2B platforms are currently just suppliers

All FMCG B2B platforms are claiming to empower offline retail stores and help them do new retail. . But as can be seen from the second point above, many retail stores currently only use these platforms as a supply channel, and they are still far from empowering new retail.

The control of individual retail stores (especially mom-and-pop stores) is actually in the hands of the store owners. These store owners have many years of business experience, but many fast-moving consumer goods B2B platforms lack this experience; even if some platforms are endorsed by giants, these giants currently do not have a good report card in the convenience store format.

The lack of qualifications and performance will greatly weaken the persuasiveness of platform empowerment and transformation of retail stores.

In the end, the retail stores just use the platform as a supply channel, and the platform has to rely on subsidies to lower the purchase price to "stick" the retail stores. When the financing money is burned out, the platform will naturally collapse. .

Agricultural products/fresh food e-commerce

Among so many e-commerce fields, fresh food can be said to be the most difficult to do. This is due to the three characteristics of fresh food:

1. High logistics costs and easy loss during transportation

2. High delivery time requirements

3. Low product standardization

At room temperature, fresh food is easy to perish, so it must be transported in a cold chain. The cost of cold chain transportation can be said to be the highest among all logistics. The worst part is that fresh food is easy to lose, and the cost will further increase.

In addition, fresh food is different from ordinary goods, and the door-to-door delivery time needs to be very precise. If it is delivered to the door during the day and the consumer is not at home, the courier will put the fresh food in the locker and it will be smelly by the time the consumer comes home to pick it up at night.

Another characteristic of fresh food is that it is difficult to standardize.

Ordinary products such as clothes hangers are produced on factory assembly lines and have their own standards. With standards, consumers can naturally expect what kind of goods they will receive. But fresh food is completely different. Take apples for example. Every apple is different. Some are big, some are small, some are green and some are red. Consumers always have to choose what they like when buying offline. , but how to choose on the e-commerce platform?

Fresh fruits and vegetables are always good and bad. If the goods provided by the e-commerce platform are only good, consumers will definitely not be happy, and the reputation of the platform will not be good; if the goods provided by the platform are all good, , how to sell the goods that time? Smash it in your own hands?

The large number of fresh food e-commerce companies that collapsed in the past two years failed to solve these problems.

In 2015, the China Agricultural Fresh Food E-commerce Development Forum released a set of data: among more than 4,000 fresh food e-commerce companies in the country, only 1% achieved profitability, 4% remained flat, 88% suffered losses, and the rest The lower 7% is a huge loss.

Cross-border e-commerce

After a round of reshuffle, most of the cross-border market is now occupied by several large platforms, namely NetEase Kaola, Tmall International, JD Global and Vipshop International.

Like other fields, the Matthew Effect in cross-border e-commerce will become stronger and stronger. Large platforms will occupy more of the market, while small and medium-sized platforms will be squeezed into the cracks and it will become increasingly difficult to survive.

Yunhou Global Shopping is a good example. The parent company behind it is BBK, which has a lot of offline resources. Unfortunately, Yunhou Global Shopping has not transformed BBK’s offline advantages into online.

Another mistake made by Yunhou Global Shopping is that the categories are too single and the products lack features.

To compete with large platforms, small and medium-sized platforms must have their own characteristics and their own advantageous products. However, domestic cross-border e-commerce is all very similar, with only three core categories: maternal and infant products, and beauty products. , daily chemicals.

On the one hand, if your product lacks features, it will be difficult for consumers to remember you. On the other hand, relying on scale and capital transfusion, large platforms have the strength to continue to engage in price wars, and the living space of small and medium-sized platforms will be squeezed smaller and smaller and eventually die.

Other e-commerce fields

1. Feifan.com

At the end of last year, Wanda’s Feifan.com laid off large-scale layoffs; this year, Wang Jianlin reorganized Feifan.com Position yourself, reorganize your team, and start again. Whether it can be done is still unknown.

Feifan.com has been in business for five years and its positioning has been adjusted many times, so much so that even Xiaomi didn’t know which e-commerce field to classify it into.

In addition, order fraud is a common phenomenon on e-commerce platforms, and Feifan.com is no exception. The difference is that the order processing on other platforms is for consumers to see, while the order processing on Feifan.com is for leaders to see, in order to "complete" the KPI set by Wanda. Other platforms make products for consumers, while Feifan.com makes products for leaders.

Wang Jianlin was born in the army, and Wanda was also built into an "army" by him, with superiors commanding and subordinates executing. This management model is effective in the real estate industry, but it is not adaptable to the Internet industry.

2. Macy’s China Official Website

Few people in China have heard of Macy’s, but it is actually very famous in the UK. However, when foreign giants enter China, they often have problems with acclimatization and cannot adapt to the rules of the local retail market. They cannot beat Chinese companies. This is the case for Amazon and Macy's.

In addition, Macy’s had a scandal before, in which a manager taught employees to treat customers with Asian accents differently. The scandal caused its reputation to plummet and make it unpopular with consumers.

3. Nongshang No. 1

According to the official website, Nongshang No. 1 provides farmers with value-for-money and efficient one-stop agricultural products and solutions for the entire agricultural planting process. plan. Behind it is a leading company in the field of compound fertilizer.

The failure of Nongshang No. 1 is almost certain. On the one hand, it is difficult to say whether there will be a big market for teaching farmers to farm. On the other hand, the penetration rate of e-commerce in fourth- and fifth-tier cities and rural areas needs to be improved. How many farmers will buy fertilizer online is also a mystery.

4. Online Liquor Network

Liquor vertical e-commerce is a medium-sized outlet with many players. Wangjiu.com was developing well at that time and was still listed on the New OTC Market.

However, although Wangjiu.com’s revenue has been increasing, it is not profitable and its losses are getting bigger and bigger. When LeTV, the financial backer behind it, happened, Wangjiu.com was in trouble, and funds became increasingly tight.

Blessings come in pairs, and misfortunes never come alone. LeTV's accident not only caused Wangjiu.com to lose its source of funding, but also scared away its partners. Many cooperations that had been progressing smoothly could not continue.

In April of the previous year, Wangjiu.com was delisted from the New Third Board.

At the beginning of last year, Wangjiu.com had massive layoffs and its future was uncertain.

5. Pet Bear

Pet Bear is positioned as a one-stop service provider for pets. It started out as a Tmall store selling pet products and once ranked first in Taobao industry sales. one.

Later, Pet Bear developed its own app and even opened offline stores. As of today, Pet Bear has opened 62 stores in 21 cities including Beijing, Shanghai, Guangzhou and Shenzhen.

Everything looks great, but unfortunately, like Wangjiu.com, Pet Bear is burning money too fast and cannot hold on.

In an interview with "Retail Boss Internal Reference", the former technical director of Chong Chong Bear said: "Chong Chong Bear wants to build its own brand and develop independent products, covering food, housing, use, care, nutritional products, etc. Involving, developing SKU. ”

In addition to Tmall stores and offline stores, Pet Bear also invests in live trading, P2P finance and other businesses. While the money is being spent like water, the revenue cannot keep up. In the end, all the money raised from financing was burned away.

In September of the previous year, Pet Bear closed its Tmall store.

At the end of February last year, Pet Bear declared bankruptcy and ceased operations.

The former entrepreneurial star sadly came to an end.

6. Yun Lian Hui

In May last year, Yun Lian Hui and Yun Lian Mall were officially recognized as pyramid schemes. On the day of the seizure, the entire building where Yun Lianhui's company was located was cordoned off by Guangzhou police. This case involves nearly 60,000 merchants and 330 billion in funds, which is very sensational.

Conclusion

How big the trend is, how fierce the wave of bankruptcies will be.

This year’s social e-commerce, this year’s FMCG B2B e-commerce, is destined to be littered with corpses. It is estimated that when the e-commerce death list is compiled in 2019, a large number of social e-commerce players will be on the list.

Internet entrepreneurs shout about creating value for users every day, but their eyes are always focused on the wind. Once the wind shifts, another swarm of swarms will flee.

Many people are so blown away by the wind that they forget that they are actually pigs. When the wind disappears, these pigs fall to their death one after another. The only ones left who can continue to fly are the real eagles. This is Taobao’s biggest business opportunity in recent years

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