Located within China, Dangdang is one of the leading e-commerce sites that China has to offer the consumer market. The company is defined as a business to consumer or B2C company that has its headquarters in Beijing. The business started out as an online book retailer, which is succeeded at beyond expectations. After this success, the company branched into other offers to the consumer market. These offerings include:
- Fashion and apparel
- Home and lifestyle products
- Expanded to include a marketplace program
The expanded marketplace program allows merchants to offer their products, alongside the products that are offered by Dangdang. In this way, the company is meeting the needs and demands of the consumer market more thoroughly.
When looking at Dangdang compared to other related companies, it is often seen as the Chinese Ebay or Amazon, that is found in the Western countries. When compared to those Western companies offering the same type of services, Dangdang is not as profitable, but the company does have the resources and abilities to outperform their competition in the future.
The company started in 1999 and was founded by Peggy Yu Yu and Guoquing Li.
Peggy Yu Yu
Prior to founding Dangdang, Yu and Li worked in the book industry. Yu got the idea of starting a platform like Dangdang while she was in the United States and after work would go to a local book store. Li, on the other hand, had various experiences in the book industry already, thus felt this was a natural move to make. The two were married in 1996, just 3 years before they founded the company.
Now, Peggy Yu Yu serves as the Executive Chairwoman and Guoging Li serves as the Director and Chief Executive Officer. Also on the team, Dangian Yao is the Senior Vice President, Yue Wang is the Vice President of children books section and Chief Editor of baby, while Justin Changging Xiong serves as the Head of Technology.
The Board of Directors includes Ruby Rong Lu as the Independent Director, Xiaolong Li as an Independent Director, and Ke Zhang also as an Independent Director.
Along with having a management team and board of directors, Dangdang has several committees in place to meet the needs of the ever growing company. The Audit Committee consists of Ke Zhang, Xiaolong Li, and Ruby Rong Lu. The Compensation Committee consisted of Ruby Rong Lu, Ke Zhang, and Xialonog Li. Finally, the company has the Corporate Governance and Nominating Committee that includes ke Zhang, Xiaolong Li, and Ruby Rong Lu.
The business model that Dangdang utilizes is one that is often considered to be faith based customer philosophy. With this type of model, customers are always put first with what they are needing, and Dangdang trusts the customer to act in honest and open methods. The business model is one that many people find to be encouraging, and will often help a customer to decide to use Dangdang for their online shopping needs.
Financial backers of Dangdang that have saying in how the company performs during a quarter are numerous, as the company held a public offering not too long ago. The major companies that have a stake in Dangdang financials are Invesco Ltd, Hillhouse Capital Management LTD, Goldman Sachs Group Inc, Marcquaries Group, LTD and Millennium Management LLC. The chart below shows how much of a stake each institution has in the company:
The company had several IPO investors once they went public, which has helped to streamline the company into what it is today.
Dangdang offers a mobile and website platform for shoppers to utilize. With the mobile platform, consumers have the option to use this through their browser on their device, as well as downloading an app that will allow them to shop through this. The mobile platform:
The website platform:
Both platforms allow for the consumer to shop all the departments, which include:
- Sportswear & Sports gear
- Outdoor clothing
- Clothing accessories
- Personal care
- Skin care
- Home improvement including lighting, hardware, appliances, etc.
- Nutrition and health
- Imported foods
- Snack foods
- Teas, liqueur, and local food specialties
- Mobile and accessories
The primary functions with either platform is to connect consumers with a variety of goods for shopping purposes. Both platforms allow a user to buy the product they are interested in and have this delivered to their home. The mobile version is simple to use, and is configured to work great with all mobile devices.
Target consumers for Dangdang include all ages and income brackets. The slogan of the company is “More choices, lower prices”, meaning that the company does tend to target those consumers who are looking to find a good deal on the products that they are interested in acquiring.
For consumers to purchase products via Dangdang, they will need to register for an account. However, the first step is to find the products that a person desires. For example:
After finding a product, click to purchase this with the desired quantity you want, as well as choosing the shipping area that you desire:
Upon doing this, the shopping cart will automatically update with the product that you want to purchase. In this section you will find the product, the quantity, and the total price for the order:
To purchase, you must register for an account, which is free. The registration requires an email or phone number and password:
Upon completing this process, you can then purchase your goods. The payment methods that Dangdang offers include:
- Cash on delivery
- Bank transfer
- Gift card
- Gift certificates
- Bank cards
- Credit cards
Once a person registers for an account, they will find it easier to purchase products later, as the account is created and simply requires a login.
Marketing & Promotion
Dangdang has been praised by many marketers who find the company does an excellent job of adapting to current market conditions in terms of how they promote their products and website. They advertise specials via their blog and website, ensuring that everyone is in the know. For example, for March, they had a permanent link that showed new products and prices:
The company also utilizes Weibo to share videos with consumers and potential clients.
In terms of partnerships, Dangdang does partner with publishers as a way to get books out to the market and to publicize these authors. They have develop relationships with other brands, allowing them to offer products at low cost to consumers.
There are several online shopping platforms available in China, thus Dangdang does have some competition. The three main competitors of the company are Taobao and JD.com or JingDong.
Taobao is owned and operated by Alibaba, one of the leading companies in all of China.The company not only does a B2C platform, but also a customer to customer platform, which can reach a wider audience than Dangdang. The company was established in May of 2003. The C2C platform is one aspect that pulls many consumers towards Taobao as the online shopping site they visit most.
JD.com or JingDong as it is often referred to as, was established in 1998 and is one of the oldest online shopping platforms available to the Chinese consumer market. It is located in Beijing City within China. The company utilizes a B2C platform. JD does offer the option for people to shop overseas, which is one reason why this platform does so well on the market, as it opens up an entirely new target audience.
Implications & Forecasting
Though Dangdang is performing fairly well in the current market, it is expecting to perform better as the awareness of the site and customer loyalty begins to take root. The future growth of the company is going to really be dominated by the amount of time the company puts into their marketing techniques. With the rise of social media, maintaining a social media presence on these channels is a must for all businesses. This will mean that Dangdang has to get more involved with their advertising and social media campaigns in order to reach more customers.
The company already offers a mobile and desktop version of their shopping site, thus they are right on track for today’s time. However, the company may want to consider offering C2C platforms, allowing customers to sell to other customers, something that their main competitor allows. This is going to allow the company to take a stronger stake in the economy, as it is an option that consumers like to have.
External factors that could affect the success of Dangdang are limited, as the company seems to have success for now. However, one aspect that many point out is that investors are looking to Dangdang to expand upon what they are offering, in terms of offering a wider selection of products within their shopping categories. This is a goal of Dangdang, but it has been harder to achieve than the company originally thought. Women are the dominating online shoppers in China, and this particularly demographic does help to dictate the latest trends. Thus, in order to succeed for the future Dangdang may want to consider a social campaign and products that are geared towards these women for the most success.
Overall, the forecast for Dangdang is relatively high and it does seem as though the company is starting to get more share of the consumer market. With the proper planning and marketing techniques, there is no telling how high this company can go.
The company has continued to prosper throughout their time on the market. From 2010 to the current time, we see an increase in their profits, due to their cemented position within the market.
The following chart compares 2007 earnings to those of 2010:
For the time frame of 2009 to 2013, the earnings were as follows:
From 2010 to 2013, the company was able to have a net profit of almost double their net revenue. This figure goes to show just how much Dangdang has grown in the last few years, and financial experts agree that this is going to continue to increase as time goes on.
Stock wise, Dangdang has been showing improvement in this area as well. The stock volume has been pretty steady throughout March, as well as February. Whereas other companies are seeing giant fluctuations, Dangdang is one that remains steady.
Shareholders in Dangdang have seen increases in their value within the last year, despite the drop that was seen from 2011 to 2012. The chart below shows the yearly stock holders value from 2011 to current time.
Overall financial activity for Dangdang is as follows: