There is no need to panic in the cold winter of e-commerce: consumption will not die, e-commerce will not die!

1. Preface: Winter is coming

Since the beginning of this year, black swan events have emerged one after another across the country, and static has become the norm, which has generally made e-commerce companies feel cold. Whenever an e-commerce boss posts a chicken soup article on his Moments and is full of positive energy, he can judge that their company's performance is not good.

"Winter is coming", this is a classic line from Game of Thrones. In the current economic environment, there is no sense of incongruity.

裁员是寒冬的显著指标，据统计，2019年1月1日，百度搜索“裁员”一词，显示278万条信息；2022年9月7日搜索“裁员”，显示1亿条，3年猛增35倍！阿里上半年裁员1.36万人，某大佬几年前说“996是福报”，看如今形势，大佬诚不我欺！

In the cold winter, not only employees are trembling, but the boss is also unable to protect himself. In 2020, 700 chairman of A-share listed companies resigned. In 2021, independent directors of 460 listed companies resigned. It seems that these are high-risk occupations, which are enough to break records and go down in history.

更有甚者，有的老企业家看到无力回天，干脆宣布退休，回家躺平，让下一代接班，把烫手的山芋抛出去。上次碰到一个富二代诉苦，正在跟他爹斗智斗勇，不愿意接班。

However, the glorious road of retirement is probably not suitable for e-commerce bosses . As far as I know, many e-commerce boss successors are still in kindergarten.

So, facing the cold winter, what can we do?

2: Take a heart-saving pill first: consumption will not die, and the economy will not collapse

Let’s think about a question first: Why has the world been lying flat, but China is not lying? The secret is: Chinese people like to save money, while foreigners don’t like to save money. If they had been silent for three years like China, they would have been empty-handed and all starved to death.

Since ancient times, the Chinese people have a strong sense of crisis and have food in their hands, so they are not panic. In 2021, the savings rate of Chinese residents was as high as 35%, with deposits exceeding 100 trillion yuan, ranking first in the world for many years.

What is the concept of 100 trillion? In 2021, the total retail sales of consumer goods in China will be 44 trillion yuan, and 100 trillion yuan of deposits, which is enough to support the people of the whole country to spend 2 years and 3 months of daily living expenses (of course, this cannot happen).

Therefore, even if there are waves of layoffs and unemployment waves, Chinese people still have consumption capacity in the short term, and consumption may be downgraded , but will not disappear . Therefore, from this perspective, no matter how the economy develops, China's consumer market will exist tenaciously , and the consumption power of 1.4 billion people is enough to help the economy survive difficult times.

At the same time, referring to the economic crises in the history of Western countries, the unemployment rate reaches 25% is the limit of the economy . Given the 100 trillion deposits of Chinese residents, China's economy is far more patient with the unemployment rate than abroad.

According to the official website of the National Bureau of Statistics, the unemployment rate of young urban aged 16-24 was 19.9% ​​in July. This group is mainly 30 million college students who graduated in the past three years . They are not financially independent and can still go home to continue to rely on their parents. Don’t be embarrassed to rely on your parents, it’s all about contributing to consumption. Therefore, the impact of this unemployment rate on the economy is very limited.

Seeing this, you can let go of your anxiety and have a good night's sleep tonight!

3. Xiaoqiang who can't die: Only e-commerce can laugh to the end

The continuous impact in the past three years has only hurt the surface of e-commerce and not the fundamentals of e-commerce, because there are three buffer zones in front of e-commerce.

The first buffer zone is offline physical retail. When the black swan and consumption winter hit, offline physical retail was the first to be submerged, which has been highlighted in the past two years.

Last year, the total retail sales of e-commerce market was 13 trillion yuan, accounting for only 29.5% of the total retail sales of consumer goods of 44 trillion yuan, so offline entities are still the big ones. When offline entities decline and more consumption is transferred to online, for e-commerce, this will make up for the losses caused by the economic downturn . Therefore, e-commerce can still maintain a certain growth.

The second buffer zone is the middle class and luxury consumption . The global economy is in a downturn. According to a report jointly released by Bain and Tmall Luxury, global luxury market sales in 2021 fell by 23%! However, the luxury consumer market in the Chinese market is still very strong.

You should know that more than 70% of the global luxury consumer groups belong to the middle class. Because the middle class has a dream of being a rich man, and buying luxury goods makes them feel that they can be on the same level as the rich man. The still prosperous luxury consumer market in China shows that the middle class still has a lot of money in its hands and its consumption power and desire to consume are still very strong.

If one day the middle class faces a crisis, they will first reduce luxury consumption, which is the fundamental reason for the decline in international luxury goods. At the same time, the middle class will lower consumption levels and buy cheaper alternatives, which is also an increase for traditional e-commerce.

The third buffer zone is the new consumer brand. New domestic products and new consumer brands represented by Perfect Diary are stimulating demands , while traditional e-commerce is a growing demand . When purchasing power declines, people will first give up the demand that is stimulated rather than the demand that is grown .

To sum up, all three buffer zones are still there, and e-commerce will not collapse. Traditional e-commerce is Xiaoqiang who cannot be killed. If the earth is destroyed, traditional e-commerce may not die.

4. Growth is the best anesthetic drug, and if it doesn’t grow, it will be a mess.

Based on the previous analysis, although consumption is not dead and e-commerce is not dead, the growth rate of e-commerce will decline and profits will decrease, so we cannot be blindly optimistic and take it lightly.

E-commerce has been in a prosperous and dazed manner for the past 10 years. Some companies have been confused and have reached the first place in the subcategory. A boss modestly said that he has made money beyond his ability and is very embarrassed. He often goes to burn incense and worship Buddha, asking the Bodhisattva to bless you to earn more.

Growth is the best anesthetic, covering up all kinds of contradictions and problems in the company, painless and itchless. Once the growth rate drops, all problems will be exposed , and companies with poor management, unorganized and undisciplined will feel anxious and messy.

Due to the simple and crude interest distribution mechanism of e-commerce companies, the decline in performance will lead to the resignation of core backbones, team turmoil, morale will decline, internal resource competition will intensify, and internal friction will increase. In the past two years, we have seen many failure cases, not dying from competition or dying from the cold winter, but dying from internal friction in internal organizations.

5. Pay attention to the health of business indicators and you will live longer

Some e-commerce bosses are too hard when they are young and have a lot of problems. Common symptoms include: back pain, back pain, leg cramps; high sugar, high fat, and high blood pressure... So it is recommended that everyone have a physical examination every year to monitor their health status.

Whether the e-commerce company is operating healthy also needs a physical examination to know. In the "E-commerce Management President Class", we have a set of e-commerce company business health examination indicators. For example: Consumer e-commerce and self-operated brands in a first-tier city have a gross profit margin of about 50%, human efficiency of more than 1.5 million, net profit of about 10%, promotion costs of 10%, salary accounts for about 10%, old customers account for more than 40%, hot and prosperous products account for more than 40%, wrong pieces rate is less than 3‰... These indicators are very healthy.

Running a healthy company will have the potential to be eternal. Companies with abnormal business indicators, such as: scale but no profit, hot products but no echelons, sales but no repurchase (except durable products) . This is a weak constitution, and when there is any disturbance and the environment is turbulent, it will easily fall apart.

6. Build a strong organization. Can achieve success in life

Many people who talk about management have basically never managed the company or led a team. Therefore, they take it for granted that management is to manage people, and they talk about some skills of controlling people all day long, study fighting wits and courage with employees, and even use historical figures and palace struggles as cases, which has misled many junior managers.

Drucker, a master of management practice, believes that management includes three levels: managing employees, managing enterprises, and managing managers. Managing people is just a small part of it, it is entry-level content, and anyone can chat for 3 days and 3 nights.

After more than 10 years of e-commerce management practice, the author has led a large team of more than 300 people to fight, operated more than 40 e-commerce consulting projects with a scale of over 100 million, trained tens of thousands of e-commerce bosses, and understood one essence: the core of modern enterprise management is the organizational system.

Organizational management includes 8 major modules: organizational structure, job responsibilities, talent echelon, job promotion, business processes, salary design, performance appraisal and corporate culture.

Some students may not understand it. For example, a small example: There is an old store manager in an e-commerce company who is someone who cannot control the boss but dare not fire it. He mastered the main store and realized that he had made great contributions. He was unwilling to lead the team or lead the new business. He sticks to one acre of land and does not want to make progress. He is in a Buddhist way and becomes the ceiling of the company's development. This situation is very common in e-commerce small and medium-sized enterprises. The fundamental reason is that the company has not built an organization, the organization is very small, and the individual seems to be very strong.

If a functional organization and talent echelon are built, and the organization is greater than that of an individual, the individual will not dare to stand up again, because the talent echelon can take over his position and if there are functional departments to work together, the role of an individual will be less important. Therefore, the entire team immediately becomes harmonious and smooth , reducing internal friction, and the boss does not need to fight with his subordinates all day long. The problem of difficulty in managing people has been completely solved.

Managers cannot only see trees but not forests; they cannot only see individual people but not the power of the organization. Always be clear-headed: the power of an organization is greater than that of an individual.

For example: The property services in our neighborhood are poor, rude, and the property fees are often raised. The owners are very dissatisfied, but there is nothing they can do. Theoretically speaking, the owner is the boss and the property is the employee, and the employee should listen to the boss. But the property company is an organization, and the owner is a mess, so the owner cannot beat the property. Unless the owners organize. Remember: Only by building a stronger organization can you defeat the other party’s organization!

Therefore, in the second half of e-commerce, we will speed up the cultivation of internal strength, cultivate the generals, and build a strong organization, so that the company will have a foundation and a support . You can be invincible in the future turmoil. Huawei's grayscale management philosophy emphasizes the role of an organization as a fortress, and controls external uncertainty with internal certainty.

7. Fear or greed? Cut off hopeless business

Buffett once said: "I am greedy if others are afraid of me, but I am afraid if others are greedy if others are greedy." So some people copy the dogma and are ready to do a big vote in the cold winter.

What’s strange is that some e-commerce bosses think that it’s too much money and are busy investing; some funds have been closed, and the investment managers have gone to work in e-commerce. They all feel that their profession is not good, and the other party's profession is a good profession.

What I want to say is that the economic winter should not be learned from Buffett. Buffett is a stock god, an investor, not an entrepreneur. What they do is "no matter after investing", and if they see it, they will continue to make a deal. If an entrepreneur invests, he must not ignore it. If he invests in a project with a bright future and bleeding every day, it will become a huge burden and he will not be able to live in peace.

Don’t think that if you don’t invest in winter, it’s like you’ve lost a billion yuan. In fact, there are more investment opportunities in spring, so why not wait for spring to bloom, face the sea, and do more than a big vote!

In my previous article "E-commerce tribulation: Do you have to cut off any businesses that don't make money? 》 specifically discusses how to deal with unprofitable businesses.

Here is the summary:

First, businesses without hope should be shut down - if revenue does not have an upward trend, losses do not have a narrowing trend, and it is impossible to predict where the breakeven point is, then you must be firmly shut down.

Second, business during the rising period must be made necessary investment.

Third, investment and trial and error should be adhered to for the second growth curve.

Fourth, the coach and backbone should be shut down if they lose their fighting spirit.

Fifth, the main business should be subject to strategic contraction to ensure cash flow, and even to survive after breaking the arm.

8. Businesses without moats do not feel safe

In the era when hot products are the king, we see that there is no stable boss in each subcategory. There are talented people in the country who have emerged in the past, and each has been in the forefront for three or five days.

In the second half of e-commerce, the situation and style of play changed. We cannot continue to fight guerrillas, and we must establish a moat. The main measures include:

① New product strategy: new product development + explosive process + quick counter-supply chain.

② Brand strategy, or sell goods with brand thinking, accumulate loyal users and improve repurchase rates.

③ Vertical integration, integration of supply chains, and having the right to speak and control in the industrial chain.

④ Organizational upgrade, build a talent echelon, and enhance the team's professional ability and competitiveness.

⑤ Big store strategy, extend across categories, and tap the dividends of top traffic.