Jumei was listed as the number one online beauty platform in China and has been profitable for seven consecutive quarters. It was unparalleled for a while, but looking back, we can see that its resources were extremely scarce and it was difficult to survive. The side that tries its best to support. This is also a situation that many entrepreneurs must go through: their financing is not as good as that of Laojianghu, and their resources are not as good as those of their peers who are backed by big trees. How to survive? Jumei's "counterattack" logic and style of achieving the ultimate in cost control and efficiency can be used as a reference.

In 2009, Chen Ou returned to China to start a business, received an angel investment of US$180,000 from Xu Xiaoping, and built the game advertising platform Reemake. The website was launched in August of that year. By March of the following year, the company was facing difficulties and had only 300,000 yuan in cash on its books. They transformed on the spot and launched Tuanmei.com? Cosmetics group purchasing, and then transformed into a cosmetics B2C special sales platform, established Jumei Youpin (hereinafter referred to as Jumei), and pushed forward with all their strength.

In May 2010, Xianfeng Huaxing invested an angel investment (), and in August, Jumei began to contact VCs. Until March 2011, Sequoia Capital’s Series A investment of US$6 million was in place.

At the same time, Chen Ou joined "It's You" and began to appear in various media, taking the first step in self-marketing as a CEO. In August 2011, the first version of the "Speak for Yourself" advertisement was released, and Jumei surpassed Lefeng.com to become the first vertical e-commerce company in cosmetics. By the beginning of 2012, Jumei was already twice the size of Lefeng. However, Lefeng.com received US$40 million in financing, and Jumei was locked in a bitter battle with Lefeng.

Jumei ushered in a peak of development due to the social phenomenon caused by the 2013 new version of "Speak for Yourself" advertising, and firmly established itself as the leader in the industry. Today, Jumei is listed on the New York Stock Exchange, with a market value exceeding US$3 billion.

How did Jumei become the leader in the vertical e-commerce field of beauty products in just four years with only 13 million US dollars, and its market value is close to that of Qunar, 58.com and other established Internet companies that have been established for 8 years? Company?

The key word in Chen Ou’s summary is efficiency. This young man said that he is always learning, summarizing, innovating and then surpassing. In an industry that burns money, create a sample that doesn’t burn money.

Even if you give 5% of the shares, you can’t even retain an intern

In 2009, I brought my friends Dai Yusen and Liu Hui back to China to start a business and do game advertising, copying the American model. After doing this for several months, I found that it didn't work.

This was a setback. The difference between China’s market environment (compared with overseas) made us quickly realize that we, as kids, were unable to change the market environment in China. We must transform and follow the trend.

Transformation on the spot is both a survival instinct and a result of experience. Many founders say that they must persist and are unwilling to do new things. Big bosses also say that they must persist, persist, and persist, and the day after tomorrow will definitely be more exciting. But I am willing to deny myself. Games are something I like, but what you like may not necessarily lead to success. What you need to persist is not necessarily what you like, but the pursuit of success.

I had an idea at the time , the company should not collapse, otherwise it will be over. So during the transformation, we found an e-commerce company that was close to the money, raised cash flow, and supported the company first.

At that time, I also considered this team: Dai Yusen could do design, and Liu Hui could write program. No connections, no e-commerce experience, and no retail experience. There is relatively little that such a team can do. Fortunately, there is still 300,000 yuan in cash and there are still opportunities.

It took us two days to launch Tuanmei.com to do group purchases of cosmetics. The page at that time was very simple, but soon users came in and placed orders, and they discovered that this business model was right. It was as simple as that.

Cosmetics are good standard products. There is a lot of data on the Internet, such as Taobao Index and Baidu Index. It is clear at a glance what sells well. At that time, many communities were using group buying to sell cosmetics. As long as the price is cheap and the authenticity is maintained, If the service is better and more professional than others, consumers will recognize it. I didn't know anything about cosmetics before. I was a man doing cosmetics, so I could only learn, research, and summarize.

According to data (Baidu, Taobao, etc.), we only sell one product every day. The method is also very simple: Yusen is responsible for product editing, and then registers hundreds of accounts on Renren.com to post to attract users. Once we have an order, we go to the counter to grab some goods and ship them out in the office. We have very few staff. There are only three founders and one administrative person in the company, so we can’t recruit anyone. At that time, an intern was leaving, and I offered him 5% of the shares. He felt that the company was about to go bankrupt, so he decided to leave anyway.

Because I took money from Xu Xiaoping in the early days of starting a business, I didn’t do the first thing well and felt embarrassed to meet people. Later, when I got better, I dared to tell Teacher Xu that I wanted to change my career and sell cosmetics. I was still a little embarrassed because I was afraid of letting him down.

("Entrepreneur"&iDark Horse Note: According to Chen Ou, there are several reasons for taking Teacher Xu's money. The first is to hope that Teacher Xu can endorse us; the second is to contact Teacher Xu in 2007 , he was very supportive of me, but I didn’t ask for his investment, and I felt quite embarrassed. Later, I went to study on my own, and I felt a little let down by him. The second time I returned to China to start a business, I had the attitude that I would succeed, so I took it. .

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After two or three months, we found that the special sales business was becoming more and more reliable. By June 2010, we were completely relying on this business. More data also proved that this thing was Yes. From August of this year to March of the following year, it was a sweet period for Jumei's development. The performance continued to grow every month, and the cash flow was sufficient to support the operation of the company. But the pain is that we don’t know where the ceiling of this model is. When the growth rate is very fast, if it stagnates a little, everyone starts to wonder whether the sales volume of 10 million yuan has reached the top. Despite this, we still cheer ourselves up and position ourselves as the leader in cosmetics group buying. Jumei had so many things to do at the time, but it was a joy to watch the company grow every day.

In 2011, we visited Vipshop. As representatives of Nanpai e-commerce, they don’t often show up at various e-commerce conferences. They just keep a low profile and do things well. This is worth learning. The success of Vipshop makes us feel that special sales are a feasible way to go.

I don’t know if the business model is right or not, but I think that there is a future in business if we serve women well. The VC I talked to also agreed. From selling one product to two or three, and then to a new category, we figured it out step by step, and the business model was also figured out step by step.

I have always been confident in my business judgment ability. The most original driving force of Jumei is my business judgment. I don’t think anyone, including the founding team and later the senior management team, will deny this.

Since the path is right, we must spend our energy on understanding users. Understand their habits, what they care about, and what they need. With limited resources in the early days, we focused almost all our energy on improving user satisfaction, such as providing good product selection and meticulous services.

Cosmetics are aimed at female consumers. They have requirements for pictures, so we take good pictures and draw good illustrations; they are afraid of fakes, so we put anti-counterfeiting labels on them and allow them to be used for thirty days. They care about the details of the packaging. We use pink boxes and change the three layers to five layers to prevent the goods from being damaged during transportation. In turn, these details help us win a good reputation. Seeing piles of pink boxes at the front desk of a company or in front of a school is a word-of-mouth effect.

We were the first to do an unconditional return within 30 days of unpacking. For example, if you buy a box of facial masks from Jumei and you use 8 of the 10 pieces and feel bad about it, return two to us and we will refund the full price to you. Although our operating costs will increase, in the long run, the benefits of word-of-mouth communication far outweigh the costs. Even so, our return rate is (still) lower than that of our peers. ?

?Jumei co-founder Dai Yusen

Later we launched "Buy 2 Free Shipping" because we knew that consumers would call their friends to buy together to enjoy this policy. It is much more effective than recommending registration to get a 10 yuan (discount) coupon.

In my opinion, a fundamental issue for a company to win is to better grasp the needs of users. The best entrepreneurs in China are those who understand human nature and users.

My business judgment ability first comes from intuition. Beyond intuition, I need to summarize step by step, bet step by step, and test step by step. This is accumulated step by step from the first time I started a business to the present. In these years, I have mainly done two things: learning and transcending. Every step I take, I will summarize something new as the basis for the company to move to the next step. Judging from the development process, every time we summarize, we can surpass an opponent.

In the early days of entrepreneurship, we cannot compare with others and must be ourselves. At that time, everything in the company, including warehousing, logistics, and services, was a process of learning and exploration.

Moreover, as a CEO, I should be responsible to investors and the team. To me, failure is a shame.

Learn from Fanke’s good example

Jumei became popular because of the spread of “I speak for myself”. That was after Sequoia invested money. We had no money for advertising before, but after we raised money, I didn't dare to spend money randomly.

?I speak for myself? In the final analysis, I was forced to do so because I didn’t dare to spend money. If you have little money, you must spend it with new ideas and results.

The three of us are young and are all returnees from overseas. We have no retail experience, no cosmetics experience, and no e-commerce experience. It’s normal for investors to have doubts about us and what we do.

What’s more, in the early days of starting a business, our opponents were far larger than Jumei, with monthly revenue reaching 50 to 60 million yuan. We had media resources, venture capital investment, and the endorsement of big bosses. Enviable.

To get venture capital, we have to prove our ability to get it. Sequoia's investment was first confirmed in March of the following year from August 2010, but our monthly revenue increased from 5 million yuan to 20 million yuan. This shows that Jumei is a very efficient company that can not burn out. Money survives the company.

When the Sequoia money came in, I gave the board of directors a gross budget of 30 million yuan to spend on (marketing), and the board of directors agreed. Later, after much deliberation, I felt the pressure was too much and reduced it to 10 million yuan.

My instinct was that I should spend a lot of money, but when it came time to do it, I was scared, so I calculated it carefully again and decided to reduce it.

Jumeirong doesn’t have much money. Although the board of directors agreed to spend 30 million yuan, we have not done any advertising. We are afraid that it will be wasted and it will be a huge waste for the company. If we don’t spend it, we will be easily ruined. Submerged, very confused. But our cash flow is pretty good. I estimate that 10 million yuan should be enough, at least it won't cause the company to go bankrupt.

Since investment is reduced, we need to think about how to innovate with less money.

With this energy, I made the first version of the "endorsement for myself" advertisement in August 2011. The learning object is a "mundane object".

My understanding of "Mortal Object" at that time was that buzzing caused communication, rather than being purely a promotional advertisement. I went to visit Fanke. Although they did not explain the details very clearly, I grasped a few points: 1. I knew that their delivery channels were buses and subways; 2. The advertisement was spread.

In addition, I studied a lot of data and success cases, and kept observing other people’s advertisements. Study why others are successful and analyze the relationship between data and advertising effectiveness. For example, if you look at the Baidu Index, you can know whether the bus stop signs and subway advertisements in Beijing are effective. Know whether consumers can see this thing.

The core of "speaking for yourself" is to arouse ***.

This advertisement captured several hot topics at the time: the post-80s generation, living in a small house, struggling, naked marriage, etc.

I wrote the first version of the advertising copy, and Hui Pu participated in the second version. We thought of a lot of fun things at the beginning, and after many revisions, we kept recording. It took two months. One day I finished the modification in the studio. Maybe it was because the production process was too hard, maybe it was also because the film expressed my feelings. After watching it, I felt like crying. I think what can impress myself can also impress others.

I watched the films by myself, edited them myself, and then tried my best to make the lyrics and music better. It must be a work that I feel very satisfied with.

After the commercial is shot Although I only spent 10 million, I was still afraid that if it didn’t work, even if the investors didn’t fire me, my colleagues would inevitably blame me, and the CEO’s prestige would be gone. Even today, I am still under a lot of pressure before every hard advertisement. The results cannot be predicted. Coupled with my abnormal requirement of zero tolerance for my own failure, I am extremely cautious every time. But the fact is that all people who have extremely high demands on themselves and are afraid of failure often have a smaller probability of failure because they are cautious.

Soon, all 10 million yuan was invested within a month, including subways, buses and televisions. Thanks to this advertisement, Jumei’s monthly revenue increased from 40 million yuan to 80 million yuan. At the same time, Jumei surpassed Lefeng.com and became the number one in the industry.

The direct effect of this advertisement is: Jumei’s warehouse was liquidated, and this lasted for four months.

During that time, I was under great pressure and negative. I traveled back and forth between the company and the warehouse. At that time, we were preparing to raise Series B, and the investors came over to talk. I said that I didn’t have time to accompany you to make adjustments. The goods had to be shipped out first. The investors had no way to talk to the management, but they felt that Jumei had unlimited potential and was focused on consumers instead of Investors invested immediately.

In fact, in the early days of advertising for oneself, there were great differences within the board of directors on the issue of whether the CEO should be involved in PR. Some investors felt that CEOs who appeared in public were not pragmatic. I I don’t want to come out, after all, I accidentally become a target and sacrifice my private life. But Teacher Xu Xiaoping wanted me to come out. He felt that the publicity should be publicized. Later, I appeared on TV and found that the effect was very good. The diaosi company with no money could only rely on surprise to win.

By 2013, our number of active users was 10.5 million, with a repurchase rate of 88.9%. There is emotion behind this data. I first use precision marketing to accurately find users, and focus on establishing emotional and value connections with users. Jumei also focuses on studying the habits and logic of users' consumption and use of beauty products. What we call "adult beauty" is to retain users by providing the best quality beauty products and the most suitable beauty solutions. ?Chen Ou

Jumei’s approach is to study the successful experiences of others, but innovate on the basis of learning, and the execution is our own, and the execution details are better and more extreme.

By the beginning of 2012, Jumei was already twice the size of its main competitors in terms of scale. However, as a diaosi company, we were unable to raise financing from our competitors. They raised US$40 million in financing, and their valuation is more than twice ours. They also have their own brand. On the one hand, they are desperately advertising and on the other hand, they are engaging in price wars. We were extremely nervous at the time. Jumei has just broken even, and I don’t want to raise money anymore. If we really get involved in a price war and burn money, it will be very dangerous.

In order to cope with this, on the one hand, we are focusing on how to make advertisements with good communication effects, on the other hand, we are holding on to our competitors in the price war, and at the same time, we are working on our own private brands.

I invited my friend Liu Huipu from Jiayuan and allocated him 10 million yuan to develop his own brand.

Huipu and I are both people with strong marketing skills, and we are also proactive and cautious people. As a result, our own brand soon improved, allowing us to make more profits.

I was afraid that the advertising would be ineffective and the company would go bankrupt, so I made very sophisticated ads; Huipu was afraid that his own brand inventory would overwhelm the company and he was very cautious, but ended up with no inventory. Therefore, if you find someone who is strict with you, your boss will be able to relax.

On the other hand, we started planning the second version of the "Speak for Yourself" advertisement. We came up with the idea in June, but actually started working on it in September. Because it was the second version of the advertisement, it was very difficult to surpass the first version, and it took more than two months to change it. In order to differentiate at that time, I shot a 60-second commercial. It was previously 15 seconds. It was broadcast on Hunan Satellite TV during prime time. It immediately triggered an explosive discussion in the industry. On social media, netizens rushed to imitate and spread it. Later, Only then did we have "Chen Ou Ti".

Looking at our opponents, they turned a lot of money into inventory, burned a lot of advertising, and the results were not good. We were much more efficient in inventory control and marketing, and in the end we won.

When company veterans hinder the company’s progress

The biggest difficulty encountered by Jumei in its development history was the 301 incident in 2013 (on March 1, 2013, Jumei held three The anniversary store promotion event caused great dissatisfaction among users due to too many visitors, which caused the page to be paralyzed for a long time. At the same time, due to too many orders, logistics was severely delayed, causing Jumei to encounter the largest trust crisis in the company's history. The underlying reason is that there are problems with the website’s technical system architecture and code quality, as well as overestimating its own logistics and warehousing capabilities.

Logistics has always been our shortcoming. Generally, Jumei advertises once a year. , followed by a liquidation that lasted for several months. When Jumei was at its worst, I posted a promotional message on Weibo, but the website traffic was too high and could not be opened.

In Jumei, San. Each of the founders performs their own duties. I have to make judgments and decide the direction of the company, and am responsible for user acquisition and branding. Yusen is responsible for products and operations, and Liu Hui is responsible for technology and logistics.

When the company is moving forward quickly, it is natural. I also hope they will do well. In fact, not everyone can keep up with the company's development pace, especially a company with explosive growth like Jumei, especially in logistics and warehousing, where the manpower is insufficient. The most frightening thing is that every year. The warehouse liquidation seriously affected the company's growth.

On March 1st, the website page was paralyzed, and the subsequent logistics system was paralyzed. Large areas of goods could not be sent out, and then the chain reaction led to a lot of negative impact. It was a fatal blow to Jumei's brand, which caused Jumei to enter a period of decline in the second and third quarters of last year, and the morale of the team was also low. We found new people and rebuilt the team. It was a miracle that the company did not die at that time.

When starting a business together, it is not easy to replace senior executives. This is a problem that many CEOs will encounter. Replacing senior executives is risky, especially if you replace the co-founders. If you are not careful, you may do it. No. Although things ended with Liu Hui quitting management, we are still good friends and enjoyed the joy together in the United States on the day of listing. After all, in the end, looking back, from a personal perspective, the company was successful. , out of selfishness, I hope that the core executives of the company are my most familiar brothers, but sometimes if someone I am familiar with cannot keep up, he may become a stumbling block for the company's progress, and may undo all the achievements that have been made. For nothing, this is tantamount to a serious conflict of interest with other people in the company. In a company that is developing rapidly, not everyone can keep up with the company's development. Let professional people do professional things instead of becoming a veteran. A family-like business is a necessary process, and every veteran can already make huge gains from early equity and will also have good benefits.

I want to put strong people first. In the most suitable position, after 301, we reorganized the senior management team and revitalized morale. The veterans were also more open to the new senior executives. Jumei went public within a year, and we climbed out of the pit. I later invited The people all played a very good role. As mentioned before, this means learning, summarizing, and then transcending. Only if I keep making progress can I take the company forward.

Every time you spend money, you will force yourself to think clearly.

Jumei has an important value: efficiency. We require every penny to be spent wisely.

Jumei was indeed a poor company during the startup process. Before going public, we raised a total of US$13 million. Money is certainly important to a company, but what is more important is spending every penny accurately. Jumei's transformation from weak to strong and surpassing each opponent relies on the efficiency of spending money. Jumei relies on precision marketing to accurately find users, and focuses on establishing emotional and value connections with users; Jumei studies the habits and logic of users' consumption and use of beauty. We say "adult beauty" is to provide the best quality beauty. Makeup products and provide the most suitable beauty solutions to retain users; Jumei emphasizes operational efficiency, but in an industry that burns money, it pays attention to cost control.

The reason why many companies die is because they waste money. At Jumei, I hold the market firmly in my own hands, do it bit by bit, and don’t rush for success.

Because I am afraid that the company will die, I have to think clearly every time I spend money. For this reason, Jumei is much better than its competitors in offline marketing. Whether I appear on TV or do advertisements to speak for myself, I spend much less money than my opponents, but our content and communication are much better every time. There is not much difference in online communication. You buy position, traffic, and clicks, but offline each company plays a completely different way.

Offline does not rely on advertising, but on word of mouth. After an advertisement is cast in the media, it can only be considered successful if everyone spreads it, and word of mouth is powerful. This depends on whether the advertising power that consumers see is strong enough.

It is very difficult to create a topic. The only thing you can do is to make good content, because good content does not need guidance. This is a three-dimensional society. When someone on the Internet feels that a joke written in "Chen Ou Ti" will get more reposts and comments, he will naturally write it. When the media follows up, it is equivalent to leveraging the spread. It’s easy to get angry. On the contrary, if you give him money for bad content, he may not be willing to do it.

The acquisition cost of vertical platform users is very high, and cosmetics are even higher. This is because: first, users have an inherent distrust of cosmetics e-commerce; second, keywords are rare and expensive, usually two or three yuan each, and it is difficult to do it using conventional methods.

Our total expense ratio is only 16%, which means that my gross profit margin reaches 16%, which can basically achieve profitability. Jumei's gross profit margin in 2013 was 24.5%, which is considered low in the beauty industry, but the key is that my operating efficiency is high enough. By the time the IPO report was submitted, Jumei had been profitable for seven consecutive quarters. This is rare among e-commerce companies.

Jumei’s approach is to drive scale through marketing, and to attract suppliers through scale. Finally, there are more and more brands in the supply chain. In the early days, our supply chain was not that strong, but through the breakthrough of single products, we quickly scaled up, and when we had scale, we had our own brands, and a strong relationship was established between the two. At the same time, we have been focused on what is best for survival. Being user-centered, we cut out some peripheral things and focus our energy and resources on what we do best. In particular, we cannot ignore consumers. It is precisely because they like my services and support my company that we can do this.

I hope this case of Jumei can serve as a reference for all entrepreneurs. You have just started a business, have no money, no one, no resources, and are surrounded by strong players, but you can learn and innovate; you need to first determine the best way to start a business. Important things, and then force yourself to do the most important things to the extreme; you must spend every penny extremely cautiously, and you must spend every penny to achieve results; you do not need to win at the beginning, you must survive first Go ahead and keep the possibility of winning alive.

In summary, Jumei’s most emphasis is on operational efficiency. We pay attention to precise spending in an industry that burns money. We used 13 million to do things that others have done with hundreds of millions or billions. 13 million eventually turned into 3 billion. I think it was the capital market’s recognition of Jumei’s model. In addition to the money-burning model, it provided another new paradigm. This is the business value of Jumei, and it is also the business value of Jumei and my team. A place of pride.