Long dismissed as an ecommerce laggard for its focus on books, Dangdang may have finally hit on a new identity – as a fashion flash-sales platform.
Dangdang was one of the first Chinese internet vendors to list in the US but caution stopped it from capitalizing on its first-mover advantage to raise funds and expand aggressively.
Overshadowed by its much bigger rivals Alibaba and JD.com, Dangdang did not inspire confidence that it would survive with its meager 2 percent market share. Some said founder couple Li Guoqing and Peggy Yu should sell it while they still could.
But Dangdang has defied the doubters with the launch of its flash sales channel Weipinhui last year. The launch was a hit, propelling the company’s apparel sales to 2.7 billion yuan (US$433 million) in 2013, five times the 2012 total.
Dangdang had tried to reinvent itself before but customers never really bought into the other product lines and only associated the company with books. Weipinhui changed all that by making an impression among mainland fashionistas with discounted products, something mainland shoppers struggle to pass up.
Weipinhui is mostly about end-of-season items and stock clearances but Dangdang is taking the concept further with a flash-sales platform that went live earlier this month. Its focus is new arrivals, another big fashion market.
Dangdang claims that its “new goods” flash platform can match the offerings of its brick-and-mortar rivals while giving customers a much better deal — a 30-50 percent discount compared with the usual 10-20 percent off.
New offerings from companies like Nike, Playboy, Li Ning and Giordano pop up at 9am daily for 24 hours, after which prices return to normal.
After years of losses, Dangdang returned to profit in the last quarter of 2013 and stayed in the black in the next quarter. Apparel has already replaced books to become Dangdang’s most important business.
Dangdang was even able to remain the center of shopping attention last week as JD.com launched a promotion campaign to mark its anniversary. Dangdang has had the highest bump in traffic of the mainland ecommerce players, up 90 percent year on year, according to shopping assistant app Huihui Zhushou.
Still, that is not good enough for the naysayers.
Finance commentator Bian Haifeng worries that Dangdang could be undone by not having a mobile traffic partner, as JD has in Weixin. Others are not sure if Dangdang can hold its lead in flash sales and prevent competitors from poaching the model or brand partners.
Li’s job in next few quarters is to prove them wrong by ringfencing its new-found success.
– Contact the writer at [email protected]