Recently, HNA announced that it is discussing the acquisition with Dangdang.com. In fact, as early as last year, news broke that Dangdang.com would be acquired, but it was later denied by Dangdang CEO Li Guoqing. Now, Dangdang.com has once again reported that it was acquired and has been confirmed. The release of this announcement also made Dangdang.com’s development dilemma in recent years completely publicize.
Once upon a time, Dangdang.com, one of the giants in the e-commerce industry, was full of passion. After achieving great results in book e-commerce, it began to plan other projects and became one of the top "big figures" in the e-commerce industry. Now, it has fallen into the situation where it wants to "sell itself" at Haitian Investment, a subsidiary of HNA. What has Dangdang.com experienced in recent years? What caused the e-commerce giants to reach their current down-and-out situation?
The hero is old, Dangdang.com is no longer there
Speaking of online shopping, many people think of large e-commerce companies such as Tmall, JD.com, Suning, and Amazon, otherwise there will be personalized e-commerce companies such as Vipshop, Pinduoduo, and NetEase Yanxuan. However, few people have mentioned that Dangdang.com, which was once the most glorious at the time, is gradually withdrawing from people's attention in the increasingly developing e-commerce society.
As one of the old e-commerce companies in China, Dangdang.com has been developing steadily since its establishment. Before 2011, Dangdang.com was in the position of the leader in China's e-commerce, and its market share was not even comparable to that of today's e-commerce giant JD.com. Public data shows that in 2008, JD.com's sales accounted for only 75% of Dangdang.com. But in recent years, under the strong siege of e-commerce such as JD.com, Tmall, and Amazon, Dangdang.com has no longer been glorious.
In 2010, Dangdang.com, which was successfully listed in New York, USA, became a well-known online bookstore in my country and was the leader in the online bookstore field. However, after 2014, the book e-commerce market began to change, from Dangdang.com to the only one who dominated the world today, JD.com, Dangdang and Amazon. According to the data released by iResearch on the "China B2C Market Quarterly Monitoring Report 2017, the third quarter of 2017" that in the scale of my country's B2C market publication transactions, JD.com ranked first with a market share of 36.2%, while Dangdang, which has long been ranked second with a market share of 35.1%. Online bookstores are no longer an excellent weapon for Dangdang.com to fight against enemies.
According to relevant data, in 2015, Tmall ranked first with a market share of more than 50% in China's online retail market; JD ranked second with a market share of more than 20%; and Dangdang.com, which once surpassed JD, had only 1.1% of the market share. According to the data released by Dangdang.com in Q3 2015, it can be seen that JD.com’s revenue is 18 times that of Dangdang.com. By 2016, when Dangdang.com announced its private delisting, its market value was only US$536 million (about RMB 3.393 billion). Compared with the first time it was listed, Dangdang.com's market value in 2016 was less than 25% of its listing. Dangdang.com, an old e-commerce company, is gradually declining.
Become a book, seize the opportunity to open the market smoothly
It is perfect to describe the development history of Dangdang.com using parabola. Unlike other comprehensive e-commerce companies, Dangdang.com, which appeared in 1999, quickly took root in the market and became a Chinese book e-commerce giant with low-priced and standardized books as the entry point for e-commerce.
Dangdang.com's success has a lot to do with its clear view of the situation in the book and e-commerce market. Before online bookstores have developed, Dangdang.com has seen the market size of book e-commerce, successfully laid out the book e-commerce market, and has become a well-known self-operated book e-commerce platform in China. Dangdang.com became a well-known book e-commerce platform in my country in 2009, with annual book sales exceeding 10 billion yuan, accounting for more than 50% of the share in China's online book sales market.
After achieving certain achievements through online bookstores, Dangdang.com began to increase its layout in other businesses, gradually joining various department stores from a single online bookstore, and gradually transforming from vertical e-commerce to a comprehensive e-commerce platform. Dangdang.com also built 21 warehouses in eleven cities in China, covering an area of more than 370,000 square meters. In terms of goods delivery, delivery services are reasonably arranged according to regional gaps. In addition, Dangdang.com has also received investments from Kewen Company, the United States IDG Group, the Asian Venture Capital Fund and other parties, providing Dangdang with multiple blood transfusion channels.
2010 was the most glorious time when Dangdang.com was successfully listed in New York and became a B2C e-commerce company listed in the United States in China. At that time, Dangdang.com was truly glorious and was called "China's Amazon." However, the good times did not last long. Dangdang, which started out with book e-commerce, gradually showed signs of fatigue in its future development.
Drawing the land into a prison, Dangdang.com will move towards "selling oneself" step by step
The times are constantly evolving and changing. If only one law of survival is followed, then one will eventually be unable to escape the fate of being eliminated. The reason why Dangdang.com has fallen into the current situation of "selling oneself" is inseparable from this.
On the surface, Dangdang.com's strategic layout in the market can bring a large number of users and profits. But looking deeper, you will find that Dangdang.com only pays attention to the benefits brought by the medium and short term, and does not see the huge long-term interests of the market and the later development of the enterprise. Dangdang.com's "small wealth is safe" state is a direct factor that causes companies to gradually lag behind the development of the e-commerce market and gradually decline.
First of all, after opening the e-commerce market with books, Dangdang.com did not just sit in the same place. After it went public, it also opened other businesses such as home appliances and 3C. However, in the early stage, due to improper layout, the company suffered losses of over 100 million yuan. After the loss, Dangdang.com was unwilling to continue to consume these businesses. First, it refused to "burn money" strategy; second, except for the online bookstore business revenue, the company's other businesses have mediocre development, focusing on online bookstores and neglecting other businesses, which has led to Dangdang.com's development being limited to the book e-commerce field and difficult to expand into other fields.
Secondly, as the online bookstore market gradually becomes clearer, many book e-commerce companies have appeared in the market. After Dangdang.com, self-operated book e-commerce companies such as Interactive Publishing Network and 99 Readers have appeared one after another. In addition to the increasing number of these vertical book e-commerce companies, large comprehensive e-commerce companies such as Alibaba and JD have also opened online bookstore businesses one after another, and the competition in the online bookstore field is becoming increasingly fierce. And Dangdang.com gradually showed an irresistible momentum when facing these many strong opponents.
In addition, in 2013, the Kindle launched by Amazon became a typical representative of digital reading. It became very popular after entering the Chinese market, bringing a certain blow to Dangdang.com. Although Dangdang.com later took the path of reading machine field, with Amazon ahead, Dangdang.com could not make any breakthrough.
Furthermore, with the popularity of smartphones, the scale of the mobile reading market has gradually expanded. While reading software such as Amazon Kindle and Zhangyue APP are intensively deploying the mobile reading market, Dangdang.com missed the opportunity to enter the market due to a single thought.
Once upon a time, Amazon, Tencent, and Baidu all had olive branches to Dangdang.com, but Dangdang.com believed that it still had the ability to continue to "fight", so it did not accept it. Now, Dangdang.com's development seems to have fallen into a swamp, and "selling oneself" is a matter of having to be done.
A teacher who never forgets the past and the future is the teacher. How can e-commerce platforms avoid risks?
In this society, success and failure are everywhere. In the business world, there are countless companies like Dangdang.com that have gone from initially prominent to gradually decline. Now that Dangdang.com is no longer brilliant, the main reason is that Dangdang.com is developing rapidly in the e-commerce industry, because it is too cautious, which makes it slow to keep up with the market development. Furthermore, Dangdang.com's revenue source is mostly online bookstores, and other business revenue is pitifully small. From its initial glory to its current decline, Dangdang.com can to a certain extent bring some new ideas to existing e-commerce or “players” who are about to enter the e-commerce field.
For e-commerce, users are the foundation for their survival. In the e-commerce field, there is never a shortage of competitors. What companies need to do is find a way out when they are surrounded by enemies. At this time, the necessary "burning money" is still very useful, such as large-scale traffic to the platform by subsidizing users, and then slowly cultivate users' consumption habits for the platform. Dangdang.com did not see the benefits behind burning money. Dangdang.com ended its cooperation with Baidu in 2011. This "stop advertising" behavior affected Dangdang.com's spread to a certain extent, causing the external expansion of the platform market size to be blocked.
For Dangdang.com, in the later stages, its development difficulties are: in terms of online bookstores, Amazon, Zhangyue, etc., are the first to enter the digital reading field; in e-commerce, there are Alibaba's front obstacles and JD's back-to-backs, which makes Dangdang.com inevitably be a little cautious in its development. However, with the increasing number of competitors, what companies need to do is not to blindly reduce risks and develop slowly, but to have the fighting spirit of creating a new "hot spot". Personalization and diversification are the unchanging themes of the market. Whoever can grasp these two first will be able to gain a first place in the market.
In short, Dangdang.com's "selling oneself" path is hard to turn back, but from Dangdang.com's glory to its decline, it has brought a lot of experience to the e-commerce industry. First of all, although e-commerce is good, the development of e-commerce has gradually entered the later stage and the market has basically been determined. Now, new retail may become the mainstream retail format in the future, so there is no need to be constrained by one side. Continuous updates and follow industry trends are the correct solution; second, users’ choices for e-commerce are nothing more than three: one is about quality, two is about reputation, and three is about cost-effectiveness. Therefore, by launching diversified vertical e-commerce businesses, targeted layouts based on unused users, it is an excellent way to expand the scale of the enterprise's market, which plays a crucial role in the long-term development of the enterprise.
In this society, in addition to analyzing the reasons for success from successful people, the most important thing is to find the reasons for failure from the losers, so as to avoid re-incidence and achieve the goal of improving the success rate.
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