Mcglaughlin Plunged Into A Loss Of Perdition.

The Internet has driven the capital to profit, and more and more capital is coming in. Whenever there is a bit of Internet gene investment, the market is not guided by profit, but at the expense of profit maximization, and the scale is huge.

Therefore, Internet companies are trapped in the endless cycle of financing, burning money, refinancing and burning money again.

Jingdong is the best example.

Mail order is gradually withering away, and offline entities are struggling to break through. This "B2C electricity supplier first share" begins to focus on e-commerce.

It was thought that relying on Mcglaughlin's core user database for more than a decade, online shopping, mail order and offline shop in three ways will produce unexpected stacking effect. But in fact, Mcglaughlin faces every embarrassment in the development of every mode of operation.

First of all, with the rise of the Internet and the change of consumer shopping habits, consumers are more inclined to buy cheaper products on the website when they see ads.

Secondly, Mcglaughlin expanded the scale, increased the group income and increased the number of franchise stores. However, because the online products were cheaper than the line, and the display position was limited, the products were not as rich as online. Many people bought products online and tried to buy them online.

And Mcglaughlin positioning low-end, can only be developed in the secondary commercial area, the user's brand imprint is scattered, it is difficult to rely on store products strong brand publicity effect.

Mcglaughlin IPO direct store 158 stores, joined 320 stores, but the actual sales of these shops are not ideal, the offline shop revenue of 37 million 400 thousand dollars, the average annual shop effect is only about 500000 yuan. In the face of the increasing rent and labor costs, many franchisees are unable to make ends meet.

Finally, as the concept of electric business is hot, a large number of capital is stationed, causing the entire electricity supplier industry to plunge into a frenzy of burning money and win the market scale at the expense of profits.

The price war, advertising war and so on make the electricity supplier profit is thin, and the rise of the Amoy brand, Mcglaughlin's electricity supplier share is gradually narrowing.

Mcglaughlin member database sharing, causing members to receive three channels of publicity information, forming a situation of internal seizing tourists, and finally independent accounting of various channels, no one is willing to share data, and ultimately friction continues, resulting in high-rise running away, leaving Gu Bei Chun withered wood difficult.

The three party linkage weakened, the multi operation mode fuzzy Mcglaughlin brand characteristics, member viscosity is not strong, once the data resources have not been completely drained to the network, and "wheat net" did not open up new traffic effective means, resulting in the database once quickly empty.

At this point, Mcglaughlin was plunged into a loss of perdition: a net loss of $33 million 300 thousand in 2011 and a net loss of $22 million 400 thousand in 2012.

Compared with the gross profit of 50% to 60% of the direct channel, Mcglaughlin's e-commerce Department has the lowest gross profit, never more than 40%, and the lowest to 12.4% in 2011.

The biggest reason is the price war of all electronic business platforms. With the hot atmosphere of the electronic business platform, the advertising cost is rising.

Gu Beichun said,

The cost of advertising doubled. The same web site navigation was only 80 thousand yuan two years ago, and the advertising fee in 2011 has soared to 2 million yuan.

However, in the era of information explosion, compressed advertising will undoubtedly reduce the opportunity to contact with consumers, and if consumers are not strong enough, their performance will go from bad to worse.

In the second year, the sales volume of Mcglaughlin's electronic commerce was down to 40%, worse.

Outside the flames of war, and inside the wheat net platform is also urgent situation.

The wheat net does not satisfy the single brand superiority, walks the platform road.

Yin man

A large number of Amoy products such as the rise, the wheat net was caught in a massive commodity competition, and due to the relationship between the production chain, the gross profit margin of the third party brand is generally lower than the gross profit of Mcglaughlin's own brand. Mcglaughlin has no advantage at all, and the loss is increasing day by day.

Once Mcglaughlin's declining trend, Gu Bei Chun tried hard to pull it off. Now the declining trend is reappearing. Gu Bei Chun has no alternative but to borrow his manpower and fight the electricity supplier again.

Soon, Mcglaughlin decided to cooperate with Giosis, the second largest online shopping platform in South Korea, to form a joint venture.

The newly arrived Giosis didn't know about the Chinese market. The brand was not suitable for Chinese consumers. The return rate of clothes was high and the flow loss was serious.

With the popularity of Tmall, Jingdong and other comprehensive platforms, Mcglaughlin has tried to build a comprehensive mall with cats and dogs, and the results can be imagined.

In April 2014,

Net revenue declined for three consecutive years, and online channels fell 43.5% compared to the same period last year. Mcglaughlin's pformation of e-commerce was defeated and defeated again.

In May, the business network bought 290 million 500 thousand shares of common stock from shareholders in a low price of $39 million, and pformed it into a health beauty product.

In this way, Mcglaughlin, who was once a beautiful landscape, was silent. If it hadn't been for the delisting, it would have been forgotten.

However, it has to be mentioned that shortly after listing, Sequoia Capital sold 29% of Mcglaughlin's shares to Sina and China and cash in the amount of $115 million.