Loss And Bankruptcy Intensified &Nbsp; B2C Electric Business Is Facing A Profit Test.

China's e-commerce field two overseas listed B2C enterprises Dangdang network and Mcglaughlin recently released 2011 The third quarter The results showed that, due to increased competition, increased marketing expenses and gross profit margins, the two companies appeared to be "surplus to deficit" in the third quarter compared with the same period last year.

As the only two Chinese B2C e-commerce listed companies so far, Dangdang and Mcglaughlin's losses have reflected to some extent that the ongoing "burning money war" in the domestic e-commerce industry has forced everyone to take the lead. price war And expand advertising as the main compete Means, enterprise profitability is facing a bigger test.

Loss and bankruptcy intensified

Mcglaughlin landed on NASDAQ in October 26, 2010, once known as "the first stock of China's B2C listing". But its recent third quarter earnings report released in 2011 showed that the company's net operating income in the third quarter was $53 million 100 thousand, down 4% compared to the same period last year. Gross profit was $14 million, down 36.3% compared to the same period last year. Net loss was 14 million 400 thousand dollars, and net profit last year was 800 thousand dollars. Mcglaughlin's share price has fallen nearly 90% over the past year.

Dangdang shares rose 87% in December 8, 2011 on the first day of listing in NYSE IPO, which has been highly sought after by overseas investors. However, its third quarter earnings report in 2011 showed that the company's total revenue in the third quarter was 908 million 900 thousand yuan, an increase of 50% over the same period last year, but the net loss amounted to 73 million 400 thousand yuan, compared with the net profit of 32 million 700 thousand yuan in the same period last year.

In addition to Dangdang and Mcglaughlin two listed companies' year-on-year decline in performance, the domestic B2C e-commerce industry has also seen many websites failures this year. Headquartered in Shanghai, the B2C warehouse was closed in September. In September 29th, Smith Barney also announced that it would divest its electricity supplier business and transfer it to major shareholders.

Affected by the recent downturn in overseas capital markets, van customer, who originally submitted the IPO application document in November 21st, has recently been forced to postpone its initial IPO in the US.

Companies compete to burn money.

Dangdang network CEO Li Guoqing recently pointed out that online advertising promotion costs higher and higher, business enterprises generally burn money to smash ads, and excessive burn and lead to a large area of loss, this is an important reason for the current e-commerce into the winter.

In the view of the industry, at present, the B2C e-commerce enterprises represented by Jingdong and van guest are still in a huge deficit. While competing with venture capital support, they are competing for money. This has also brought greater competition pressure to Dangdang and Mcglaughlin, who are already listed. Enterprises are also forced to drive traffic and increase sales through huge advertising.

With the continuous warming of e-commerce market, more and more competitors have begun to enter the market, further exacerbating the homogenization of competition. In mid October, Tencent announced the launch of the QQ online shopping platform and began its trial operation in Guangdong. Suning's e-commerce channel suning.com launched the book channel in October 31st and launched a large-scale promotional campaign. In November 11th, another B2C website was also launched online.

Enterprises face profitability test

The scale of China's B2C e-commerce market will continue to grow rapidly in the future, but with the increasingly fierce competition in the industry, the major e-commerce websites will still face greater profit pressure in the short term.

Feng Lin, an analyst with the China Electronic Commerce Research Center, believes that with the gradual closing of financing channels, the low price strategy of e-commerce enterprises can not be sustained. Some e-commerce enterprises will be shuffled out in the future or the gross profit of e-commerce enterprises will rise later.

At the sixth annual summit of IARI, Cao Junbo, chief analyst of the AI Consulting Group, said that the size of China's online shopping users still has great potential to increase. The size of China's online shopping transactions will surpass Japan in 2011 and the size of China's online shopping will surpass that of the United States by 2013. But at the same time, in the next three years, the electricity supplier enterprises will face more severe competition, and the pressure of profit will increase. For some leading B2C websites, the first issue will be IPO listing. In addition, it will face the problem of how to gradually realize profits. It is expected that profits will become the direction of e-commerce enterprises in 2012.