The 2016 death list of e-commerce and physical stores!

On the one hand, offline stores are embracing the Internet, while on the other hand, e-commerce brands are setting up offline experience and pickup centers. There has always been a delicate relationship between physical stores and e-commerce. And the days of both of them are not easy.

Today is November 26th, and there are 35 days left until the end of 2016. Based on data from Yibrun Power Network, this article compiles and lists a long list of e-commerce and physical store deaths in 2016 for entrepreneurs to refer to and summarize experience, just for the purpose of living a better life.

2016 e-commerce death list

01

Cloud at your fingertips

Attention: ★★★★★★★

Keywords: Wechat business, pyramid selling

"Death" time: On September 9, the Xianning Municipal Administration for Industry and Commerce imposed administrative penalties on Guangzhou Yunzaizhijian E-Commerce Co., Ltd.: 1. A fine of RMB 1.5 million; 2. Confiscation of illegal gains of RMB 39,500,040.10. The relevant person in charge of Yunzaizhijian applied to cancel the company. The WeChat public account "Yunzaizhijian" whose main body is "Guangzhou Yunzaizhijian E-Commerce Co., Ltd." has deleted all the content it has published.

Model: The "Yunzaizhijian" online mall opened by Guangzhou Yunzaizhijian E-Commerce Co., Ltd. was launched on October 31, 2014. Participants enter the "Cloud at Your Fingertips" online mall through WeChat , pay a certain fee in the form of shopping to become members, and continue to develop other people to pay to join, and they can receive commissions paid by the parties. The parties set relevant rules through a computer system to calculate and pay remuneration to participants for continuing to develop other people to join.

Financing record: No relevant information disclosed.

【Reflection】

"Cloud at your fingertips" was accused of being involved in pyramid schemes from the very beginning, but it still held promotional activities all over the country with great fanfare, and its official WeChat account survived for more than two years. Industry insiders believe that the national law stipulates a maximum of three levels of distribution, WeChat stipulates a maximum of two levels, and the first level is the platform. Being driven by profit is never as good as being driven by the product itself. Cultivating user loyalty through the product itself is the key. Companies should spend more energy on product innovation and improvement. Money-making models will never last long. A gentleman loves money, but he should make it in a proper way!

02

Delicious Seven Seven

Attention: ★★★★★★★

Keywords: Fresh food e-commerce

Time of death: On April 7, management announced the suspension of operations.

Model: Formerly known as Zhengda Tiandi, it serves fresh food e-commerce in Shanghai, Jiangsu and Zhejiang. The product line covers nine categories, including seasonal fruits, eggs, meat and poultry, seafood, dairy products, snacks, convenient vegetarian food, healthy seasonal vegetables, grains, oils and non-staple foods, and wines and beverages, with a total of more than 2,000 products. In order to achieve one-hour delivery service for all products, Delicious 77 has built many self-operated distribution points in Shanghai.

Financing record: In May 2014, Amazon China invested US$20 million in the company, which was also the first investment by Amazon China in mainland China since its establishment.

【Reflection】

Problems such as large subsidies at the marketing level, high logistics costs, difficult to control fresh food losses, and shady operations in the procurement process are all restricting the development of fresh food e-commerce. After the financing, Delicious 77 failed to stabilize the team, core members gradually left, and user experience began to decline. The huge investment in logistics and distribution is also a major reason for its financial problems.

03

Honey Tao

Attention: ★★★★★★

Keywords: cross-border e-commerce

“Death” time: In January, the official Weibo and WeChat accounts stopped updating, and some company employees’ social media circles showed messages such as “Goodbye Mitao”. Currently, the MiTao official website cannot be accessed normally, and many contents on the app homepage show loading failure.

Model: Its predecessor, CN Haitao, was launched in March 2014, featuring a light model of one-stop overseas shopping and purchasing on behalf of others. In July 2014, Mitao announced that it would enter the upstream supply chain and launch a limited-time special sale service, transforming from a light-mode one-stop shopping to a B2C self-operated overseas shopping e-commerce company. In September 2015, Mitao segmented traditional B2C, focused on countries and Korean products, and proposed the concept of Korean duty-free shops.

Financing record: In July 2014, Mitao received a US$5 million Series A investment from Matrix Partners. In November of the same year, Mitao received a US$30 million investment from Xiangfeng Investment, Matrix Partners and others.

【Reflection】

Unable to compete in price wars with giants, and affected by cross-border e-commerce policies, Mitao’s inventory is seriously overstocked. Later, the concept of Korean duty-free shops was proposed, and the company placed its future strategy on the Korean market in an effort to survive passively, but it was already unable to reverse the decline. "Fighting price wars around popular and standard products is not a long-term solution for cross-border e-commerce. This kind of competition requires huge amounts of capital to be continuously invested, and factors such as user retention rate , repeat purchase rate, and product gross profit margin must also be considered. At that time, Mitao's C round of financing was still in progress and had not yet been completed. It was a good idea to make oneself lighter and more focused, but Mitao chose the Korean line, which was a bit single and lacked characteristics, and it was difficult to do it."

04

OneTable.com

Attention: ★★★★★★

Keywords: Fresh food e-commerce

“Death” time: On September 19, the official WeChat account announced the suspension of fresh food ordering services, and all products in the Yidiao.com app mall have been removed from the shelves.

Model: Yizhuo.com was founded in June 2015, with online fresh food shopping as its entry point. Its buyer team searches for high-quality ingredients and provides services to customers in Shanghai, Jiangsu and Zhejiang through its own delivery team. It also promises that customers within the Shanghai Outer Ring Road will receive same-day delivery if they place an order before 14:00 on the same day.

Financing history: Invested by Kaiming Investment, a private equity firm focused on the consumer industry. The initial investment amount was not disclosed.

【Reflection】

A senior fresh food professional did the math: "In current fresh food e-commerce, logistics and warehousing generally account for 10% of the overall price; labor costs account for 10%; user subsidies for marketing account for 10%; and cargo losses account for 5% to 10%." And what is the total gross profit of fresh food wholesale? 10～20%. Can this situation be profitable? This is the true level of Internet people’s involvement in fresh food e-commerce. ”

05

Magic Department Store

Attention: ★★★★★★

Keywords: 90s entrepreneurship , ACG

"Death" time: July 22, sales stopped. In October, the website was inaccessible.

Model: It is positioned as the first personalized e-commerce platform in China focusing on young people born after 1995, providing high-quality and high-end products to young users based on interest tags and recommendation algorithms. The products selected mainly include snacks, accessories, school bags and stationery, and two-dimensional peripherals that the post-95 generation likes.

Financing record: In early 2016, Magic Department Store received a RMB 20 million Series A investment led by Matrix Partners China, followed by ZhenFund and Innovation Valley.

【Reflection】

In the article "In the one year since the establishment of Magic Department Store, I have experienced almost all the pitfalls of starting a business", Wang Kaixin, CEO of Magic Department Store, reflected on his own experience: After the A round of financing, he began to expand blindly, increased staff significantly, used a large number of headhunters to recruit so-called industry "big cows" and top technical talents, blindly believed in the background of a certain large company, believed in the so-called professional talents and experience, blindly formulated strategies, and got involved in the supply chain and introduced a large number of suppliers when he had no supply chain experience at all. Wang Kaixin believes that there are problems with his own management, but also because "Magic Department Store" is not tolerated by the current trend in the venture capital market.

06

Pinyi Lighting

Attention: ★★★★★

Keywords: lighting e-commerce

Time of death: July. LED lighting e-commerce company Foshan Pinyi Lighting Co., Ltd. was taken to court for defaulting on tens of millions of yuan in payments to suppliers, and the company and its senior executives’ assets were frozen by the court. Pinyi Lighting's executive director Liang Ronghua once publicly responded that Pinyi Lighting chose to close its stores on its own initiative, and that the company's capital chain was currently experiencing serious problems and it was preparing to file for bankruptcy liquidation.

Model: Pinyi Lighting was established in 2006 under the background of the national "Eleventh Five-Year Plan" vigorously promoting semiconductor lighting projects. It is a well-known brand in the domestic LED lighting industry and is committed to the fields of LED home lighting, LED commercial lighting and LED outdoor landscape lighting. The annual sales volume was 10 million in 2013, 60 million in 2014, and exceeded 100 million in 2015. In 2015, the sales volume on Singles’ Day was 12.17 million, making it a dark horse in the lighting industry’s e-commerce industry.

Financing records: No relevant information yet.

【Reflection】

E-commerce’s operating costs are too heavy, and low profits have led to a breakdown in the capital chain. According to the National Business Daily, Liang Ronghua responded to the closure of Pinyi Lighting by saying, "How many lighting brands can actually make money on Tmall? I believe it will not be 5%. The "bankruptcy wave" (of LED e-commerce) will continue, and both online and offline will be hurt in the end." He did the math, "Labor costs are 11%, Tmall deductions are 5.5%, promotion costs are 15%, express delivery is 12%, after-sales service is 2%, financial costs are 2%, and water, electricity and rent are 2%. If you don't have a gross profit margin of more than 50%, there is no way for e-commerce to continue operating on the platform."

07

Tao on the road

Attention: ★★★★★

Keywords: online travel

Time of “death”: On the evening of June 23, “Taozailu” issued an announcement announcing the cessation of operations, and all employees were forced to resign.

Model: Taozailu was founded in 2011. It is a mobile-based travel and vacation product booking platform that provides travel products for consumers to choose from, including air and hotel packages, hotels, attraction tickets, leisure and entertainment, domestic local travel, overseas local travel, outbound travel, transportation connections and other selected travel products.

Financing record: Received millions of dollars in Series A funding from Redpoint Ventures and millions of dollars in Series A+ funding from Alibaba . In late 2014, it received a new round of funding of tens of millions of dollars led by New Horizon Capital.

【Reflection】

They are keen on big sales and spend a lot of money on purchasing traffic, advertising and user subsidies. An open letter sent by Taozai Road to its suppliers stated that Taozai Road has fallen into operational difficulties due to the impact of the capital winter and will carry out asset restructuring to seek new business transformation. Some people outside believe that, in addition to the capital winter, a tourism business model that lacks real competitiveness and relies on burning money will find it difficult to survive in the current OTA market. In addition, the serious infighting between Taobao and Ctrip within the team is also considered to be one of the important reasons.

08

Master's Taste

Attention: ★★★★★

Keywords: catering O2O

“Death” time: On April 29, Master’s Taste’s WeChat official account published a farewell letter, announcing its bankruptcy.

Model: Officially launched in May 2015, it is a food delivery platform for high-end users. As of its closure, Master Taste had established 24 crowdsourced delivery stations in Beijing and once had a central kitchen of 800 square meters.

Financing record: Received several million yuan in angel round financing in August 2015.

【Reflection】

Today's O2O seems to no longer be a light startup, but is becoming heavier and heavier, and the difficulty of successful entrepreneurship is also increasing. In his farewell letter, founder and CEO Fan Xinhong said that due to the expiration of the central kitchen's rent, the failure to seek a new round of financing, and the unfavorable business situation of finding new processing parties, Master's Taste eventually ran out of funds and could not continue, and ultimately could not escape the fate of bankruptcy.

09

Bopai Car Maintenance

Attention: ★★★★★

Keywords: Automotive e-commerce

“Death” time: On April 5, Bopai Car Care’s WeChat official account published an article titled “We’ve known each other for so long, and this is the first time we say goodbye”, announcing the disbandment.

Model: Founded in April 2014, it attempts to enter the market through door-to-door maintenance, gradually diverting user traffic to higher value-added service projects and to the entire aftermarket, thereby obtaining higher cash flow and self-generating capabilities.

【Reflection】

The pace was too fast. After obtaining financing, they began an almost crazy expansion campaign, opening up 20 cities overnight.

10

The freshest

Attention: ★★★★★

Keywords: In-city crowdsourcing delivery

“Death” time: On February 4, Zuixin released an internal email announcing the termination of the project.

Model: Zuixindao is an O2O platform that provides local short-distance express delivery services based on positioning services. It started trial operation in Shanghai in 2014, and its business has expanded to more than ten cities including Beijing, Shenzhen, Hangzhou, etc. Its partner brands include Subway and Huang Taiji. In January 2016, it transformed itself quietly and launched the e-commerce platform Zuixindao Mall, providing "cold chain storage" and "fresh food home delivery" services through a combination of crowdsourced logistics and crowdsourced warehousing.

Financing record: None.

【Reflection】

Founder Lu Gang said that the main reason for the broken capital chain was the failure of the A round of financing, which left the company with no cash. Industry insiders believe that the most popular business model is too "old" and lacks innovation.

2016 Brick-and-mortar store death list

In 2016, physical retailers such as supermarkets, pharmacies, and restaurants also encountered unprecedented challenges. Many stores closed due to rising costs, poor management, and the impact of e-commerce, including many century-old companies and time-honored brands.

01

Xidelong

Attention: ★★★★★★★

Keywords: sports brand

"Death" time: On August 5, the Quanzhou Intermediate People's Court formally accepted the bankruptcy reorganization case of Xidelong (China) Co., Ltd. After approval by the Provincial High Court, it was submitted to the Jinjiang Court for trial on August 23. The bankruptcy reorganization case of Xidelong Company has entered the substantive stage, and Xidelong’s Tmall and JD flagship stores have been taken offline.

Development history: It is understood that Xidelong was founded in 1992 and is a group company integrating the research and development, design, production and marketing of men's and women's clothing, shoes and accessories. Xidelong is positioned as a fashion and leisure brand with sporty attributes, and its products include men's and women's clothing, shoes and accessories.

Xidelong Group is headquartered in Jinjiang, China, and mainly adopts a franchise distribution model. Xidelong has previously established a huge supply chain management system and distribution and retail networks in China. As of the end of 2013, its retail network covered 28 provinces and cities across the country, with more than thousands of retail stores. On October 30, 2009, Xidelong was successfully listed on the NASDAQ in the United States, becoming the first Chinese sports consumer brand to enter the U.S. capital market.

【Reflection】

In 2013, Xidelong delisted from the U.S. and its performance has declined sharply since then, but its transformation has been slow. According to a waiter at a third-party platform, the products sold online by Xidelong are basically old models, and the depth and width of the merchandise are insufficient. In recent media reports , there has been little information about Xidelong's online layout. It was not until March 19, 2015 that there was news that Xidelong had begun to lay out an online distribution system.

02

Nice to meet you (Ningbo store, Wuhan store)

Attention: ★★★★★★★

Keywords: chain restaurant

"Death" time: In August, the Ningbo branch of the "Nice to Meet You" restaurant was fined more than 280,000 yuan for operating without a license and was sealed and suspended. In October, news broke that the supplier went to the Hangzhou store to collect debts. On November 14, the Wuhan Zhongnan Road branch of the "Nice to Meet You" restaurant was closed again due to problems such as operating without a license and serious rat infestation.

Development history: In early 2014, Han Han and two friends (one is a well-known Internet pioneer and entrepreneur, and the other is a Michelin-starred chef and gourmet renowned in the catering industry) founded Shanghai Yexiang Catering Management Co., Ltd. and created the "Nice to Meet You" catering brand. Since its inception, the restaurant has used Han Han's celebrity effect to promote its brand, attracting a large number of consumers in a short period of time.

"Nice to Meet You" mainly expands its stores through direct operation and franchising. It has opened stores in Shanghai, Guangzhou, Beijing, Chengdu, Hangzhou, Ningbo, Wuhan and other cities. Taking the current three stores in Beijing as an example, two of them are franchise stores and one is a direct operation store.

【Reflection】

The threshold for opening a restaurant is relatively low, and the model is easy to copy. Opening a large number of stores to seize the market is a common approach, but it is also prone to a series of problems: inconsistent food standards, inadequate service, low execution efficiency, and insufficient supervision and tracking. Chain restaurants have relatively high requirements for management capabilities, including whether hygiene standards are met, whether safety hazards are eliminated, and whether interior design is up to standard.

03

Xinyijia (many stores nationwide)

Attention: ★★★★★★★

Keywords: supermarket chain

Time of death: In August, many Xinyijia stores across the country closed down, and suppliers demanded payment for goods: Xinyijia Yuanling store suspended operations, and Xinyijia Guangzhou Hongyu store was reclaimed due to overdue rent...

On November 16, the People's Court of Tianhe District, Guangzhou City, Guangdong Province issued an announcement that the Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd. requested the court to order Guangdong Xinyijia Commercial Investment Co., Ltd. to repay the loan principal of 20,000,000 yuan and the corresponding interest, penalty interest and compound interest.

Development history: Xinyijia Supermarket Co., Ltd. was established in 1995. It was once a leading benchmark private enterprise in Shenzhen and a leading circulation enterprise in Guangdong Province. Large chain supermarkets are Xinyijia’s main business format. It is understood that in 2003 the supermarket's total sales amounted to 5.9 billion yuan, ranking second among major retail enterprises in Guangdong Province and 15th among national chain enterprises. In 2004, it was designated as one of the top 20 enterprises to be cultivated by the Ministry of Commerce.

【Reflection】

In the "Xinyijia Group Restructuring Implementation Plan", Xinyijia stated that due to the impact of e-commerce and the cost of human resources and properties, Xinyijia Group is facing tremendous pressure. Since 2015, banks have continuously withdrawn 1.098 billion yuan in loans to its subsidiaries, resulting in a break in the capital chain, forcing the group to experience a debt crisis in June 2015. Industry insiders believe that Xinyijia’s expansion was too rapid, resulting in excessive financial pressure. There is also a view that the main problem is internal management.

04

Marks & Spencer (Mainland China stores)

Attention: ★★★★★★

Keywords: Foreign-invested department stores

"Death" time: On November 8, Marks & Spencer announced that it would close all 10 physical stores in mainland China due to declining performance and operating losses. At the same time, Marks & Spencer will also close stores in France, Belgium, the Netherlands, Poland and other countries with poor sales performance and long-term market shrinkage. Marks & Spencer will also close 30 small branch stores in the UK.

History: Marks & Spencer is a British retailer headquartered in London. It currently has approximately 760 stores in more than 30 countries around the world, including Hong Kong. In 1998, Marks & Spencer became the first retailer in the UK to achieve pre-tax profits of over £1 billion. As of March 2007, it had 520 stores in the UK and was also the largest clothing retailer in the UK, with food sales also accounting for a large proportion.

In 2008, Marks & Spencer opened its first store in Shanghai. Unlike other foreign brands that launched extensive advertising when entering China, Marks & Spencer has maintained its traditional low-key approach, not doing much marketing and relying only on word-of-mouth spread through its goodwill.

【Reflection】

"Out of touch" is what many industry insiders think of Marks & Spencer. This old department store from the UK has continued its traditional conservative and rigorous style in its Chinese stores, and all of its products are sold under its own brand with the Marks & Spencer label. However, its own brand is almost unknown in China, and its styles are all traditional British and restrained, which makes it difficult to cater to the needs of Chinese consumers. In addition, its in-store product displays and related introductions are mainly in English, and clothing sizes have not been adapted to what Chinese consumers are accustomed to. One can't help but sigh: it has been eight years since it came to China, but it has not yet been truly localized!

05

Dalian Pharmacy

Attention: ★★★★★★

Keywords: Pharmaceutical retail

"Death" time: In August, seven drugstores of the Dalian Pharmacy chain ceased operations one after another.

Development history: The predecessor of "Dalian Pharmacy" can be traced back to the "Laoyaowozi" medicine shop near Qingniwa Bridge in the 1920s. In 1948, the "Old Pharmacy" was incorporated into the state-owned Dalian Pharmaceutical Company and was officially renamed "Dalian Pharmacy". In December 2000, the old "Dalian Pharmacy" was acquired by Merro Pharmaceuticals and renamed "Dalian Merro Pharmacy". In the following ten years, the old brand "Dalian Pharmacy" remained idle until November 2010, when it was reopened. At its peak, Dalian Pharmacy Co., Ltd. had 7 chain drugstores.

【Reflection】

Dalian Pharmacy expanded too quickly, and coupled with weak consumption, a sluggish market and heavy debt pressure, it gradually fell into trouble. In addition, Ms. Sun, the general manager of Dalian Pharmacy, passed away suddenly due to illness. The company lost its support instantly and conflicts broke out in all aspects. This is the drawback of the boss-style corporate management style.

06

Flag King

Attention: ★★★★★

Keywords: casual wear

"Death" time: On August 5, the Quanzhou Intermediate People's Court ruled to accept the bankruptcy liquidation case of Flagship King (China) Textile Garment Co., Ltd. based on the application of Zhongshan Hengyue Textile Garment Co., Ltd.

Development History: Flagship King (China) Textile & Apparel Co., Ltd. was established in 1988, specializing in casual clothing with jeans as the core product. In 2005, Flagship King was also awarded the title of "China's 500 Most Valuable Brands". Some netizens even listed it among the top ten denim brands in the world.

Public data shows that from 2004 to 2009, the overall national market share of Flagship King jeans in the same industry remained between 7% and 9%, and its market share ranked among the top two for six consecutive years. It is understood that Flagship King has official flagship stores on Tmall and JD.com. These stores are still in operation and customer service staff said that orders can be placed normally.

【Reflection】

A series of rectification measures failed to enable Flagship King to realize its plan of going public within three years, and it collapsed in the economic winter of 2016. Wu Jingchu, the on-site person in charge of Qipaiwang, a professional team of liquidation group administrators, told the media that Qipaiwang's predicament this time was mainly related to the overall environment, and many companies are now experiencing similar difficulties: first, the economy is in a downturn and the order volume is decreasing. Secondly, it is related to the tightening of banks' lending policies. In addition, due to the huge impact of e-commerce, many physical stores invested by Flagship King were forced to close due to losses. Their normal operating capabilities could not meet their debt repayment capabilities, so they could only apply for bankruptcy reorganization.

07

Spring Tea City

Attention: ★★★★★

Keywords: tea market

"Killed" time: September, Chunlai Tea City closed.

Development history: Chunlai Tea City opened in Zhengzhou in July 2012, covering an area of ​​30 acres. The first phase of the business area is 30,000 square meters and can accommodate 300 merchants. It is the first fully enclosed, one-stop large-scale tea market in Henan Province. Chunlai Tea City will take the mid-to-high-end boutique route, providing a place for tea lovers to cultivate their character and offering consumers a full range of tea culture experience.

【Reflection】

Over the past four years, Zhengzhou's tea market has continued to grow, competition has become increasingly fierce, and the market has entered a major reshuffle. In addition, sluggish sales and rising labor and store rent costs have put tea merchants under great operating pressure.

08

Qingdao Sunshine Department Store

Attention: ★★★★★

Keywords: department store

"Death" time: On August 28, Qingdao Sunshine Department Store issued a closure announcement.

Development history: Sunshine Department Store Co., Ltd. was jointly invested by Jiangsu Sunshine Group, Qingdao Red Collar Clothing, New World (Qingdao) Land, Shengyin Investment, Modern Chaoyang Industry and other five companies. Qingdao Sunshine Department Store opened in September 2003 and is located at No. 38, Hong Kong Middle Road, Qingdao. It is positioned as a boutique store and became a high-end department store in the eyes of Qingdao citizens as soon as it opened. Many white-collar workers and business people have become its members and loyal customers.

Especially in 2007, the transfer of Hisense Plaza on Shandong Road left a gap in high-end department stores in Qingdao, and Sunshine Department Store became the benchmark for high-end luxury shopping malls in Qingdao. Sunshine Department Store was also the first to introduce high-end brands that were unknown at the time, such as Haagen-Dazs, Gucci, and Starbucks.

【Reflection】

Expensive parking fees, failure to properly protect the brands that are stationed at the store, and poor publicity and marketing are all problems faced by Sunshine Department Store. In the opinion of industry insiders, the biggest problem of Sunshine Department Store is that it only pursues the high-end route and does not have complete supporting catering and entertainment projects. A large number of middle-income consumers are constantly leaving, and the market is forcing the department store to make deep adjustments and transformations.

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The author of this article @创业邦杂志 is compiled and published by (APP Top Promotion). Please indicate the author information and source when reprinting!