“Lost money and earn money”

As a brand-new, relatively mature business, e-commerce has not only changed the way of life of humans to a certain extent, but also has shaken the traditional business model with a hundred years of history, which has brought a great impact on the traditional physical retail market, and has caused A new round of changes in the traditional retail industry.

E-commerce emerged in the mid-1990s. Thanks to the rapid spread of the Internet and the rapid advancement of mobile technology, it took less than 20 years. With e-commerce taking advantage of all-weather and all-terrain capabilities, it broke the “revenue for channels” and “decisions for victory” in the physical retail industry. law. Customers regardless of national borders, shopping day or night, mobile technology can make people "always online" ... the convenience of e-commerce, not only a lot of traditional retail customers, its transparent information and intensified price war, but also Constantly impacting the traditional retail price system led to the traditional retail industry's reflection and reform of sales channels and pricing systems. More and more physical stores have begun to touch the net, through the online and offline business strategy, successful transformation.

If we analyze from a deeper level, what e-commerce brings to the traditional retail industry is actually a change in technology and channels. It is not a change in the business model. The difference between earning and selling is still the essence of the retail industry. From the supply chain perspective, In the procurement, logistics, warehousing, and sales processes, there is no real difference between e-commerce and traditional retailing. Based on this, it can be concluded that e-commerce cannot subvert and replace the traditional physical retail industry, just as televisions cannot replace cinemas and electronic watches do not make mechanical watches disappear. However, e-commerce does have a severe impact on the traditional retail industry in the short term, prompting its transformation in formats, channels, and products. As a result of the game between the two, there may be a temporary “one-sided” situation. In the long run, whether it is e-commerce or physical stores, the road to win-win seems to lie in the coordinated development of online and offline services.

At present, from the point of view of mature retail markets abroad, the advantages of online and offline collaborative development have been reflected. Wal-Mart and Best Buy have achieved coordinated development both online and offline and consolidated their market share. In fact, in developed countries such as Europe and the United States, some large traditional retailers such as Apple, Wal-Mart, etc., have already penetrated into e-commerce with their own brand and resource advantages. According to statistics, among the top ten e-commerce companies in the United States, apart from Amazon and eBay, the others are all e-commerce sites operated by traditional retailers. Most of the top ten online retail companies in the UK also have physical stores. Although the traditional retailers started later than pure online retailers, the inherent advantages make traditional retailers quickly occupy an important position in e-commerce and profit from them.

It should be noted that after Europe and the United States have begun to take shape in the development of the traditional retail industry and have a high degree of market concentration, e-commerce has only begun to emerge and develop, and its transitional touch network is also relatively fast. The situation in China is rather special. At the moment of the rapid rise of e-commerce, the development of the traditional retail industry is not sufficient, the market concentration is relatively low, and the transition is difficult. Judging from the mode of development, China’s e-commerce has increased its revenue through fierce price wars and seized the market to obtain higher passenger traffic and, to a certain extent, impacted the performance of physical retail stores. However, this “lose money” method does not last long. It is inevitable that e-commerce will improve supply chain management capabilities, abandon the “blood price war” model, and return to profitable commercial purposes.