Dangdang Profit: Winning Year with 2014

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Dangdang is an ecommerce platform that provides are a variety of items for consumers to purchase. However, Dangdang first started out as an online book seller, before branching into offering other products. Due to this, the financial start of Dangdang was less than stellar, and many believed this online platform would eventually fall to the bigger competitors. However, Dangdang has reported its profits for 2014, and they are finally seeing a return to profits rather than deficits.

dangdang ecommerce profit

Chart courtesy of http://ycharts.com/companies/DANG/profit_margin

When compared to the past four years, 2014 is a historical marker for the company, as they are realizing more profits now, than what they had in the past. From 2011 to 2013, the company had losses. In 2011, they had -2.28 billion; in 2012 they had -4.44 on hundred million Yuan; and in 2013, they had a -1.43 billion loss. In 2010, they did manage a 30.8 million yuan profit. And for 2014, they are reporting a net profit of 88.12 million yuan.

So what made the difference for Dangdang? This is very important and one aspect that other Chinese brands could use for their own business model in order to ensure profits. After having such high net losses for 3 years, Dangdang looked at their internal workings. Namely that looked to expand their infrastructure and improve upon the customer experience. Dangdang is an online shopping platform that is powered by the consumers. Thus, ensuring that the consumer experience is as it should be is one of the best ways to entice consumers to keep using the platform for their ecommerce needs.

A look at the in-depth changes that Dangdang made, shows the company paying attention to trends that are dictating most ecommerce sites that are available to the consumer market. For one, during the three years in which the company was losing profit, they were changing the infrastructure of the company to offer more than just books. By expanding upon what they are offering the consumer market, Dangdang has cemented themselves into the market as a viable ecommerce option.

Secondly, Dangdang took their ecommerce platform that was available via the PC and turned this into a ecommerce platform that would also work with mobile platforms. This was an important step and one that rendered immediate results for the company. Dangdang read the reports that mobile usage was increasing in terms of Internet access, and adapted their business model to include this form of access. In fact, in 2014, the company reported that they had more orders via mobiles than PC orders.

Mobile orders increased by 30% for Dangdang in 2014

In addition to this, Dangdang also took advantage of their experience in the publishing industry to make the Dangdang Reading App, which helped to increase their dominance in the market. For 2014, their reading app increased users by three times what they had a year ago, increasing the amount of time in which consumers were reading by up to 40 minutes per day. This step helped to ensure that Dangdang was the company to go to for digital reading materials, which is going to be an important part of their future.

So what is in store for the company for 2015? Ms. Yu (co-founder) has stated that:

“2015 will continue to increase Dangdang to wireless, digital business investment and enhance the competitive advantage of Dangdang…”

In addition to this, Ms. Yu has stated that more changes are coming for Dangdang in that they hope to have more control of their digital publishing services, something that had remained independent for the past few years. The changes are an effort to ensure that Dangdang has an even more profitable year for 2015.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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