Dangdang was once thought to be the next up and coming online platform within China. However, now people are starting to wonder if Dangdang will pull out of the slump it is currently in. The first quarter of 2015 saw Dangdang have a net loss of around 60.2 million yuan, the equivalent to $9.7 million. For many this may not come as a surprise, but for those who had listened to Wall Street executives who had estimated a 20.5 million yuan profit for 2015, it is rather disheartening.
So what caused this massive loss for Dangdang? There are many who are looking at the pressure of the market as being the main reason for Dangdang not succeeding as well as predicted. However, other people point to the fact that there are many stresses associated with promoting e-books and mobile content, two things in which Dangdang is known for.
According to Chairman Peggy Yu Yu:
“Although we posted a loss for the quarter, it was primarily the result of marketing and technology initiatives and expenditures related to e-books, mobile and content.”
In terms of the technology and marketing initiatives that Dangdang has set forth, the company is trying to expand into the western market. Furthermore, the company has looked at different methods of advertising and promotions in order to hit the most consumers. Yu Yu stated:
“We believe these initiatives will set the stage for the future healthy development of our business.”
Not All Bad News for Dangdang
Despite the loss in profit that has shocked many, Dangdang did report some good news from the first quarter of 2015. This good news included:
- Growing active customers by 18%
- New customers increased by 46% compared to last year
- Record number of mobile orders that accounted for 41% of all orders
- Mobile app users increased 2.5 times compared to last year
Dangdang may not have the typical results that people expect to see from an online marketplace. However, the company is adamant that the changes they are making during this time and the losses are going to even out in the years to come. The market in which Dangdang is in is a bit fickle, in that books and mobile content are always hard to estimate. But, so far, Dangdang is highly encouraged that they are going to succeed and pass the competition. Only time will tell.