Evening, November 10, 1992.

Starting at 8 o'clock, Xinchuang Electronics Group, together with its own company Tesco.com, and major mainstream brands, held a grand opening meeting of Double 11 in Hong Kong.

This year's Double 11, Xinchuang Electronics Group unexpectedly did not release a new product, but completely guided the traffic and focus of attention to the e-commerce platform.

Although, Tesco is still in the stage of burning money, and has incurred a loss of more than 2 billion yuan this year, and after the Double Eleven, it is estimated that it will lose 3 billion yuan in 92 years. The goal for the whole year is 10 billion yuan in online sales, which means that for every 10 yuan of goods sold, there will be a loss of 3 yuan in cost.

If it is another company of the same era, it may have been confused. But Lin Qi was very indifferent and named it a strategic loss.

Not to mention the e-commerce platforms of later generations, they basically start by burning money at a loss to attract traffic and users, which is the second largest retailer in the United States - Costco!

Later, the founder of Xiaomi, Lei Monkey King, said that there are three companies that have the greatest impact on him, Tong Ren Tang, Haidilao, and Costco! Costco's impact on Xiaomi is that Lei Monkey King is shocked to realize that there are companies in the world that have hollowed out their own efforts to reduce their gross profits, as their core competitiveness, and have actually achieved unprecedented success.

Costco warehouse supermarket is known for "not relying on products, relying on members to make money", the gross profit margin of all goods does not exceed 14%, and consumers must pay a minimum annual fee of $55 before entering the store. This kind of membership model is very common in the United States. However, unlike other glamorous cheap goods, Costco warehouse supermarket, if the gross profit margin of the product reaches 14%, it needs special approval from the company's senior management.

Under normal circumstances, Costco's products earn about 1%~10% of the gross profit. A product with a factory price of 9 yuan may be sold for 20~30 US dollars in Walmart and Amazon, but it will only be 10 US dollars in Costco. What's even more powerful is that Costco is extremely cheap, but the quality and reputation have always been good, not because of cheap and inferior, but because of the cheap and beautiful things.

Because, the extremely low gross profit margin has caused Costco's products to always have their own traffic, and there is no need to advertise and promote, basically, American consumers know that if they don't know where to shop, find a Costco branch, they will definitely not rip off customers on price.

Costco's price is basically the benchmark of the market. Basically, consumers may find products that are cheaper than this, but there is a hidden danger of inferior quality. In Walmart and Amazon shopping, it will be more expensive by Costco. As a result, Costco has strong competitors like Walmart and Amazon, but it has been growing against the trend, and the development speed is extremely fast. Relying on the high-speed turnover speed of commodities and the erected reputation, its timely gross profit is extremely low, in the eyes of others is doing loss-making trading, but in fact, it is not a loss as a whole, and even the net profit has been growing steadily upward, and the poor market environment rarely affects such a cost-effective company.

Xiaomi later continued to want to change from a mobile phone to a grocery store, in essence, relying on its own brand reputation, so that any product placed in its shopping mall is a hit, and there is no unsalable product. Later, Xiaomi also tried to expand the cost-effective reputation of mobile phones to more fields. If it is developed to the extreme, it is estimated that it will no longer be a mobile phone brand, but only a Xiaomi grocery store.

To some extent, Costco may not be the most awesome company, but its unique positioning and corporate culture make people feel that Nima's can also make money by doing this?

Although Lin Qi will not copy the Costco model, it has to be said that it is cost-effective and low price is an efficient way to exchange for traffic. At least, there is currently no second e-commerce site as hot as Tesco in the world.

These loss-making costs, in addition to benefiting consumers, are more due to the expenses of holding various events and advertising and marketing activities in order to attract consumers.

Although so much money was burned, in exchange for more than 5 million real-name registered users of Tesco.com, the activity of these users, as well as the gold content of traffic, exceeded that of any other type of website. As long as the attracted consumers can be retained in the future and become long-term consumers, then sooner or later, the money burned will be earned back with interest.

Now that you have money and don't burn money to be the largest e-commerce platform, then you will kneel and shout dad in front of a powerful e-commerce platform in the future.

Lin Qi naturally knows the influence of one of the world's largest e-commerce shopping websites. Later, Alibaba's influence even surpassed the world's top banks such as ICBC and CCB. This is mainly because although ICBC and CCB are very powerful, they can only affect hundreds of millions of people.

However, Alibaba's Taobao, Tmall, AliExpress and other channels affect more than 1 billion consumers in the world. With a large number of consumers as bargaining chips, many brands around the world have to treat Ali as their fathers because they are greedy for the traffic and market of the Ali platform.

In a few more years, e-commerce platforms will indeed be able to do whatever they want. Large-scale e-commerce platforms, with a little traffic to support a brand, can quickly make an unknown brand quickly become a leader in the industry.

At the opening meeting, not only the Red Pavilion Stadium was rented as the main venue, but also several nearby pedestrian streets were rented for the entire venue.

Live performances and events can be seen inside the venue, and spectators on the streets outside the venue, and even those watching live on TV, have channels to participate in the lucky audience raffle.

Some of the lottery sites are free of charge, and some lucky draws are to draw 1,111 lucky viewers to free the goods within 10,000 yuan in their shopping carts on Double 11. and 921111 consumers, who may be randomly selected for a random item on the free shopping cart.

It is expected that on the same day, a total of 20 million yuan of orders will be exempted from consumers, which is directly sponsored by Tesco and some brands participating in the free order promotion.

"Dear viewers and friends, dear parents. The wee hours of the morning are coming, and this year's Double 11 of the new venture group will also be expanded to the Double 11 promotion of all brands of Tesco.com, all kinds of daily goods, TVs, washing machines, refrigerators, computers, air conditioners, mobile phones...... Even toothpaste, instant noodles, chili sauce, etc., as long as it is an active brand on Tesco, it will basically launch unprecedented promotions. After the show came to an end, Lin Qi personally came to the stage and said, "Basically, this profit-making activity is not less than 20 million yuan." Coupled with various discounts, it may be the largest ever to make this promotional concession in the provincial capital, of course, my partners and I are actively planning to make profits, and many products have indeed broken the record of the lowest price in history. However, if consumers do not have their wallets ready and miss this event, we will also regret it...... Of course, there are also some limited edition goods, which also have to test the speed, if you don't hurry up, you will wake up and be sold out. That would inevitably hurt feelings. In order to allow consumers to spend better, we are considering increasing the temporary quota limit by 50% for users who have already opened Huabei. Credit card users of Hang Seng Internet Banking will also be able to obtain a relatively high temporary quota during the Singles' Day period through the fast track. Finally, I wish you all a happy shopping, and at the same time, walk beautifully, don't influence your life because of shopping. Shopping increases the quality of life, but if it reduces the quality of life, it is not cost-effective. ”

In a round of applause, Lin Qi left the stage.

The rest is a feast for consumers.