Sephora strengthens its position through the Internet community

With the rapid rise of global platform business, competitive products become the core Sephora, a global cosmetics retail chain, is a successful case of platform business connecting enterprises and consumers. Hwang hyejeong, research member of nbsplg Institute of economics, put forward the above conclusions in the "rise and Enlightenment of platform commerce" recently published in the Korean Business Briefing. Platform commerce is a business model that connects most producers and consumers on the platform, interacts with each other and creates value. At present, with the platform enterprises holding the leading power of the industry, the platform business is rising rapidly. The top 10 platform companies in the global total market value increased from Microsoft and alfat in 2009 to 7 in 2019, including Microsoft, apple, Amazon, alfat, Facebook, Alibaba and Tencent. The World Economic Forum (WEF) predicts that by 2025, digital platforms will generate $60 trillion in sales, accounting for 30% of global corporate sales.

In addition, the agency predicts that 60-70% of the new value created by the digital economy in the next 10 years will be generated by data-based digital networks and platforms. The development of artificial intelligence, Internet of things, cloud computing, 5g and other fourth industrial revolution technologies will further accelerate the influence and dominance of platform commerce. The characteristics of platform commerce include breaking the industrial boundary, network effect, winner's monopoly income structure, etc. Alibaba, which started with e-commerce, is expanding its business to pintech, cloud computing, video streaming and other fields. Rakuten, a Japanese e-commerce enterprise, is also expanding to credit card, bank and other fields. The network effect is also worthy of attention. Because the platform creates value through the interaction of most producers and consumers, the more participants, the lower the transaction and operation costs, and the higher the utility. In recent years, the common point of well-known platform enterprises is to expand the network scale and ensure the market dominance. It is worth mentioning that with the increase of participants, the value of platform business is getting higher and higher. With the increase of participants, the influence of the platform is more and more, the existing users will not be lost, the new participants will be more and more, and finally only a few platforms with more users survive. The surviving platform will start to charge. Once the profit model is successful, it will eventually form the profit structure of winner taking all.

The cosmetics retail store "Sephora" platform operated by nbsplvmh group has attracted more attention recently. Sephora currently accounts for 45% of LVMH group's revenue in the United States, consolidating its position. Sephora focuses on consumers' free experience of various cosmetics, and establishes "e-commerce" on the Internet to guide consumers to buy cosmetics. In particular, a cyberspace called "beauty insider community" has been set up to provide a platform for everyone to exchange cosmetics information. Analysts said that information such as product use comments, make-up techniques and skin care suggestions could be shared here to attract more consumers to enter the platform. Amazon is also a typical representative of data-based platform enterprises. Amazon predicts that the data will become the core raw material in the era of the fourth industrial revolution, thus increasing contact with customers. Since then, the company has been based on data, established better services, and gradually formed a virtuous circle structure of preferential feedback to customers. Recently, a number of enterprises with it technology have been acquired to strengthen platform construction. "If the value of the information created on the platform is low, there will be no effect," Huang stressed. Good products and competitive services can ensure that existing customers are not robbed by competitive enterprises and attract new customers successfully. She also suggested that the strategy of "low price first, income second" is effective in platform business. It is suggested to design a business model that can first ensure the success of customers in creating value, and then create revenue.