E commerce winner Liao Liao low profit margin investment return period

low profit margins, return on investment for a long time, the success rate is not high, such e-commerce is not a good business.

text |CBN reporter Dong Xiaochang

as a consumer, I really want to thank the domestic e-commerce companies. They will be the price of the product, provide me with a low price products and logistics services. But as an investor, I might be in a different mood.

February, the discount site vip.com is expected to be less than 23.5% of the expected price of the New York Stock Exchange listed on the first day closing price of $5.5, compared with the issue price fell by 15.38%, so far (March 31st) has more than 32% decline. 2011 vip.com loss of $107 million, revenue of $227 million.

of course, not just vip.com, other listed e-commerce companies are equally tragic. Mcglaughlin 2011 net loss of $33 million 300 thousand, compared with the issue price of more than $11 decline of more than 88%. Dangdang 2011 loss of 284 million 300 thousand yuan, more than $16 issue price fell more than 49%.

The

company is not lower than the average level of domestic e-commerce at present, can not imagine other Jingdong listed mall, Eslite and other peer is how the situation.

but this does not prevent e-commerce as the most popular business model. In addition to venture capital investment in Jingdong and other companies who invested nearly ten billion U.S. dollars, Gome, Suning, retailers seem to regard e-commerce as the future of life-saving business.

The business logic of

e-commerce companies are based on the American Amazon as a sample, it needs extraordinary devotion, patience and scale, and strong bargaining power, cost reduction, and finally to earn a lot of money. But Amazon can not prove that e-commerce is a good business in the country.

investment return period of Amason was established in 1995, until the beginning of the year in 2002, the cumulative loss of $3 billion 300 million during the period reached $. This cycle of investment returns are fast to catch up with the traditional pharmaceutical industry, but e-commerce companies apparently can not do the high profit margins and the monopoly of the pharmaceutical industry. On the current domestic competition pattern, the return on investment will be a very long cycle, such as Jingdong has been established for 8 years, Dangdang has been established for 13 years, are still in a state of loss and continued investment.

low profit margins over the past 5 years, Amazon’s average profit margin of 4.3%, close to the profitability of traditional retailers such as WAL-MART. Domestic companies can not reach the level of Amazon’s profits, because the higher cost of domestic logistics companies. The United States is concentrated in the Amazon logistics warehousing, distribution all outsourced to United States Postal and UPS professional companies such as domestic companies such as Jingdong in addition to the storage, but also built a large distribution team, and this is not a short period of time to solve the large-scale investment, it needs a long-term investment following – >

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