E-commerce slash Li Ning’s huge profits

“The domestic apparel industry has been in a slump for the past two years, and a large number of stockpiles have caused various companies to worry about it. Some companies have begun to focus on the “flash purchase” model of the e-commerce platform. The day before, Li Ning had a 48-hour sale on the Keguan official website, and some products were low. Up to 10% off, it was basically sold out yesterday, and people in the industry believe that if the cooperation between Li Ning and Vanke can work, other clothing brands will soon follow suit, and e-commerce “flash purchase” may become an important channel for inventory clearance in the apparel industry this year. .

According to industry sources, Li Ning may “sell” inventory items to the site for less than RMB 10. Therefore, despite the fact that the e-commerce “limited-time sale” has already reached a one-off price, it still can obtain high profits. ”

The original price of 199 yuan T shirt is only 19 yuan

On Sunday evening, Xu Xiaohui, the vice president who recently returned to Vanke, suddenly said on Weibo that "at 11 o'clock tonight, where passengers will release major news," users have speculated.

The so-called "significant news" is that where the guest and Li Ning cooperate to initiate special promotions, dozens of goods are sold at a price of 1-4 fold of the original price, and some sports shoes with a market price of two or three hundred yuan will only be worth tens of yuan after the discount. A T-shirt with original price of 199 yuan was even sold for a low price of 19 yuan.

Low-priced goods still have a lot of temptation for consumers. After the answer is revealed, netizens quickly start buying. Li Ning began special one-hour special session, Xu Xiaohui directly called "sales speed is too fast." As of yesterday, around 6 o'clock, most of the sale items were sold out.

This "limited-time sale" model is transferred from abroad, such as MYHABIT under the Amazon microblogging, is to sell a variety of high-end clothing at a very low price, this pattern has been vividly called "flash purchase."

According to sources close to Vanke, as the initial trial of "flash purchase" sales exceeded expectations, Fanke will also launch other brands of "flash purchases." Some heavily-stocked sports and leisure brands may be online in the near future.

As low as 10% off, the electricity supplier can still make huge profits

Vanke insiders revealed that Li Ning and Vanke were deeply involved in the cooperation. The sales of all the products had to go through their quality inspections in advance, and then they entered the customer's warehouse. The logistics was distributed by the customer, such as Fengda. As for whether Vanke's "flash purchase" model is profitable, the person said that it was inconvenient to disclose it on the grounds of trade secrets. However, according to the reporter’s understanding, even with a 10% discount, e-commerce still has considerable room for profit. Part of the sale of goods, where the customer's purchase price may be only a few dollars.

At the end of last year, when customers took out their own products and made several promotions, they all achieved good results. This also made the CEO CEO of the passengers have the idea of ​​expanding the “flash purchase”. According to industry sources, at the beginning of this year, he visited a number of apparel brand companies in preparation for the “flash purchase”.

E-commerce "flash purchase" discounts less than outlets

At present, e-commerce sites engaged in “flash purchase” in the country include Vipshop, ihush, and catwalk, among which Vipshop has already been listed in the United States. Its business model is based on the inventory of sales brands, and the category of products is the most Early clothing shoes and hats have been extended to the home, cosmetics and so on. Including Nike (professional stores), Adidas and other "big names" all clean up inventory on these sites, and the prices will be lower than those of some outlet stores. According to the annual report of Vipshop, the gross profit rate for the whole year was as high as 22.4%, which was enough to make other e-commerce websites jealous.

Take Dangdang.com, which operates proprietary products, as an example. In 2012, its gross profit margin was 13.8%. Suning, Gome, JD.com and other large e-commerce companies were affected by the price war. The gross profit margin was even lower, and they were generally at a loss. The profits of these websites are far less than those of e-commerce websites that sell inventory items.

Clothing brand or "flash purchase" inventory

The cooperation between Li Ning and Vanke attracted attention in the apparel and e-commerce industry, because there are many domestic clothing brands such as Li Ning in trouble. According to statistics, the total inventory of Li Ning, Anta, 361°, Xtep, Peak and Dongfeng’s six domestic sports brands exceeded 4 billion.

Since last year, Li Ning began to clear inventory by increasing promotional efforts, setting up discount stores and factory stores, but the effect is not optimistic. On March 27, the Li Ning Group's annual report showed that the loss in 2012 was 1.979 billion yuan, which was the first time that the company listed in the past eight years has experienced significant annual losses.

The unsalable sales of products and the increasing operating costs of traditional stores have led Li Ning and other clothing brands to start mass-market closures and clean up inventory from offline to offline. According to an industry source, the current inventory clearance has become the number one problem for domestic garment companies. “There are storage costs in idle storage, which is not as good as low-cost sales to electricity suppliers.”

Some mature e-commerce platforms have huge traffic and stable customer base. In addition, the cost of Internet marketing is much lower than the cost of opening stores. People in the e-commerce industry expect “flash purchase” to become a hot spot this year, and various kinds of discounted clothing. There will be more and more goods.