GreenBox learned valuable lessons from its detour to independent B2C e-commerce

By September 17, 2013
Keywords : China e-commerce

GreenBox is China’s leading children’s apparel brand & e-commerce company, and also a partner of Disney consumer products. Taobao C2C was the building block for its ultimate rise. In 2010 it already became the biggest seller of children’s apparel on Taobao. Such fame naturally attracted investors’ attentions, hence the company managed to raise a whopping amount of RMB100 million that year. When suddenly facing a mountain of cash and everybody had said a brand without its independent e-commerce is without bright future, Greenbox made its next move, naturally, splashing the money into creating its independent B2C online store. Result? Suffering and dragging the company to a downward spiral.

On June 1st, 2011, Greenbox officially launched its independent online store. They spun a beautiful dream that if this B2C site could gain enough traffics and revenues, their company might be just one step away from IPO. Greenbox put 90% of its resources and budget into this independent store, hiring more staff, quickly expanding its production and inventory.

Unfortunately harsh reality frustrated them to the deepest core. The ROI of this move never met its expectation; as if throwing the coins into a wish well but nothing dramatic happens. According to an interview with GreenBox CEO, “60% of sales still came from Taobao & Tmall, and around 30% from other major B2C retailing platforms, however its own online store contributed less than 10% while its operating costs were running higher and higher. Additionally average cost of acquiring a new customer for its independent e-commerce was round RMB300~500, however average price per order from customer was just RMB200. Eventually all the money earned were simply not enough to support this independent e-commerce site. Then toward the end of 2011 till 2012, capital market tightened its belt on China e-commerce, which hit Greenbox into a dire situation…”

So from 2012 till now, Greenbox has been going through a healing process after its dissipation of independent B2C. There are some valuable lessons which Greenbox has learned so far:

1)       They would like to keep focusing on design and branding, because these are the soul of apparel business

2)       Quick expansion is a bad idea, and wishing to build up your independent e-commerce into a giant within short time span by showering with money is a much worse idea.

3)       Though independent B2C is indispensable, it might not be your primary target if your Taobao&Tmall stores are still a cash cow.

Maybe let us discuss a bit more about point 3 here. People often asked me “If Taobao or Tmall kinda of platform e-commerce is working fine for brands, do they still need an independent online store?”

Well, the best answer might be “if your budget allows, why not? The strategy still has its bright side. Because your own online store gives you certain "autonomy" as you do not need to follow the rules set by these platform. Additionally you will gain deep insights into your consumer data and a thorough view of e-commerce running".

Like the CEO of Greenbox said your independent e-commerce would bring you abundant knowledge in CRM, ERP, logistics etc. Therefore it is a very important baby she will keep and nurture, yet slowly and carefully, though would not be her main focus, at least not for now.     



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