From profit to loss, it is difficult for e-commerce companies to regain hegemony

Overlord Group put forward the theme of "the return of the king, performance is the king", but now it is losing again, in order to return to the king, it may still need to find financing or potential investors. The overlord group which urgently awaits the help of the e-commerce sector to pull back the first round has not yet fulfilled its wish. A few days ago, Bawang Group disclosed its performance announcement in 2018, which showed that the company realized 294 million yuan in revenue and that its owners should account for 11.96 million yuan in profit and loss. Among them, revenue from e-commerce channels has supported half of Bawang Group's revenue, which has also led to a significant increase in sales promotion costs and logistics costs, and the rise in revenue has been partially offset by the decline in sales revenue from traditional channels. Industry insiders believe that the e-commerce sector has been heavily overweighed by the overlord, but the other side of the coin is that sales and distribution expenditures have increased significantly. Overlord Group put forward the theme of "Return of the King, Return of the Performance is the King", but now it is losing money again. If it wants to perform the King's Return, it may still need to find financing or potential investors.

On 29 March, Bawang Group announced that its business turnover was 294 million yuan, an increase of 11.2% over the same period of the year; its shareholders should account for 11.96 million yuan of profit loss, and its shareholders should account for 192.27 million yuan in 2017, a decrease of 106.22% over the same period of the year. Among them, the turnover of the core brand overlord is 271 million yuan, accounting for 92.3% of the group's revenue by brand classification in 2018, which is about 18.2% higher than that in 2017. The data show that the turnover of E-commerce channel of Bawang Group is 160.4 billion yuan, which is 54.2% higher than 104 million yuan in the same period in 2017, and has occupied half of the total revenue. However, behind the rapid growth of Bawang Group's e-commerce channels is its high-cost promotion. In response, Bawang Group also admitted in the announcement that the main reason for Bawang Group's loss was that the increase in packaging consumption and manufacturing costs of sales costs led to an overall increase in sales costs; that the Group invested in promotion activities to continue to develop its e-commerce channels, which led to a substantial increase in sales promotion costs and logistics costs generated by the Group; and that the reduction of other revenues and the true impairment of trade receivables were the main reasons for Bawang Group's loss. 

Beijing Business Journal reporters logged on the official flagship store of King Cat and found that a number of King Cat products are currently engaged in "buy one get one free" promotional activities, at the same time, there are "full 200 minus 50" and other full discount activities, and when the purchase amount reaches 128 yuan and 188 yuan, many kinds of product samples are presented. Industry insiders believe that the frequent and vigorous discount activities of Bawang Group can bring some benefits to the group in the short run, but in the long run, it is not conducive to the return of Bawang Group. At the same time, it is also not in line with the positioning of high-end washing products that Bawang Group just launched. In addition, in 2018, Bawang Group invited famous singer Mao not easy to speak for it, which also increased the marketing cost of Bawang Group to a certain extent. Jiang Xiaofeng, a veteran marketer and founder of Zhiyuntu Brand Consulting Company, pointed out that Mao was not easy to sign a contract with Bawang Group, not only because Mao was not easy to associate with his name, but also because Mao was a well-known star of the younger generation, which could close the gap between Bawang Group and young consumers who had already experienced the problem of brand aging.

Overlord Group originated in 1928. At that time, Grandfather Chen Qiyuan, founder of Bawang Group, practiced medicine in Guangdong and Guangxi. The title of "family of traditional Chinese medicine" of its clan has gradually spread, and the wind of traditional Chinese medicine nourishing hair is prevalent in the countryside. In May 1989, Chen Qiyuan founded the Overlord of Guangzhou, and founded the Overlord and Litao brands. In 2007, the "overlord" won the "well-known trademark of China", and the reputation of the overlord group rose rapidly, which also led to the rapid growth of performance. Since 2007, Bawang Group has maintained high-speed development. In 2009, Bawang Group ushered in the peak of development and became the first brand in the market competitiveness of Chinese traditional medicine daily chemical industry at that time. At the same time, Bawang Group's revenue climbed to 1.756 billion yuan, and both revenue and shareholders'dividends should maintain double-digit growth.

However, the good times are not long. In 2010, because One Weekly pointed out that it contained carcinogenic dioxane, the hegemonic king who had just opened the situation fell from the altar. Since then, for six consecutive years, Bawang Group's performance has fallen sharply. Bawang Group has a total loss of 1.665 billion yuan, which is close to its peak annual revenue. In 2016, Bawang Group was sentenced by the Hong Kong High Court. The defendant One Weekly claimed that Bawang shampoo contained carcinogenic dioxane as a defamation. The Bawang was washed out of the "carcinogenic" case and the company returned to profitability. Tthe top management of overlord had said that it would further cultivate e e e-commerce platform and strengthen the online sales channels of its brand products, such as Xiaobawang, Materia Medica Hall and Chaifeng. In this regard, the industry commented: "Bawang Group Chengye e-commerce, e-commerce failure also."

In fact, after the dioxane incident, the Bawang Group also realized that it relied too much on a single Bawang product and tried to open up a situation with diversification. In April 2010, Bawang Group launched Bawang Herbal Tea. However, in the fast-disappearing market at that time, there were many kinds of herbal tea brands, such as Wang Laoji, Hezheng and Duobao. It was not easy to get a piece of it. In 2011, Bawang Group launched a series of natural plant skin care products "Snow"