Nowadays, the transformation of the traditional retail industry by the Internet has made every consumer feel deeply

Nowadays, the transformation of the traditional retail industry by the Internet has made every consumer feel deeply, but due to the particularity of the industry, the adult products (or sex toys) industry has undergone drastic changes in this wave of e-commerce has not attracted much attention. At present, such as Taobao, Jingdong, Amazon and other platforms, coupled with Chunshuitang, Taohuawu, Qicai Valley and other vertical e-commerce, together to build a 10 billion level of adult products online consumption market.

China Business News interviewed Lin Degang, founder of B2C Chunshuitang sex Toys, who learned that under the traditional offline supply chain model, sex toys are sold to consumers at a price multiplied by six after they are produced from factories. The vertical e-commerce model cuts off about 60 percent of the water content. With various social marketing methods, This sensitive industry is slowly emerging from the soil of e-commerce.

"At the heart of vertical e-commerce is a matter of trust"

At present, the total size of the adult products market is about 30 billion yuan, in addition to about 200,000 "husband and wife shops" distributed across the country, are online sales channels. Chunshuitang, founded in 2003, accounts for about 6 percent of all online platforms and more than 30 percent of vertical e-commerce businesses for adult products. Consumers between the ages of 25 and 30 account for half of its total users, and its sales are expected to reach 300 million yuan this year.

Lin Degang told reporters that the largest part of Chunshuitang's profit model is the retail website, which accounts for nearly 70 percent of revenue. Currently, there are about 1,000 products on the platform, and 30 percent of private brands. At the same time, it also supplies to Taobao, Jingdong, Amazon and other platforms and distributes its own brands, contributing about 20% of its revenue. The rest is sales of its core products; In the future, it will expand the field of offline sex hotels and training.

The initial detour reflects the chaotic offline market for adult products. In 2006, when the domestic e-commerce environment was not perfect, Lin Degang started to join the offline, and quickly expanded the franchise to 16 provinces and 22 cities within two years. In fact, seven or eight years ago, before the current hot O2O concept appeared, Lin Degang was already doing O2O. He put the phone numbers of all the local franchise stores on the Chunshuitang website, and the online and offline channels flow together.

But he soon found that offline franchisees' purchase channels were difficult to control, and the risk of fake goods posed a potential threat to the Chunshuitang brand. When the e-commerce boom took off in 2008, he decisively reversed course, cutting down offline (he still has only one store in Beijing) and going back online. At that time, such as love Valley, Taohuawu and a number of adult products B2C e-commerce also began to start.

"If the value of platform e-commerce lies in solving the problem of commodity circulation efficiency, the core of vertical e-commerce lies in the safety experience of consumers." In the Internet industry for more than ten years, Lin Degang told reporters.

For example, he said, JD.com, which focused on 3C products in its early years, eliminated users' fear of being cheated when buying technology products such as computers. For example, at present, mother-and-child B2C e-commerce companies mainly selling milk powder and diapers also pursue safety. Vertical B2C is the best way to meet consumers' safety needs for adult products, "and vertical e-commerce provides a very private shopping environment for these consumers."

The B2C model cuts out all levels of wholesalers and retailers in the traditional adult supply chain, thus reducing the cost by 60%. In the offline market, it is a common phenomenon in the industry that goods are sold to consumers at five or six times the price after being shipped from the factory.

Sex toys "crossover" smart hardware

Smart terminal, wearable device is a fashionable term in the Internet circle in 2014, it is hard to imagine that sex toys should also catch on the express train of smart hardware.

A month ago, JD's crowdfunding platform launched iball, a dumbbell for women's genitals that was designed and developed by Lin Degang's team. In fact, there are a variety of PC muscle exercise dumbbells on the market, but the innovation of this one is that by connecting the dumbbells to a mobile App through sensors and Bluetooth, the female user's exercise steps and grip strength can be reflected in real time through the constantly rising "cat" on the phone screen. In addition, social and ranking elements are introduced into the game. Let users and other use the same device many sisters together, share.

"The idea is to get the user to stick with the exercise." The product is aimed at women giving birth and is more of a health product than a sex toy, Lin said. According to his investigation, postpartum vaginal muscle recovery is recommended by many maternity institutions, but the cost of one class can be as high as 500 yuan, and most women find it hard to stick to it. The fun of intelligent hardware may make it a "personal trainer" for women.

According to Lin Degang, more than 20,000 pieces of this smart hardware have been sold in nearly a month since its launch. He believes that riding smart hardware is not to catch the trend or create a stunt, but to recover the market after delivery is just a necessity for him. Developing an extreme single product, just like Apple's iPhone, is very helpful to the value of its own brand. To this end, he set up a separate division within the company for the iball.

Hitchhiking intelligent hardware makes the value of sex toys rise to the height of science and technology.

Word-of-mouth marketing in the cracks

E-commerce businesses like to use "festival" marketing, such as Ali's "Double 11", Jingdong's "June 18", Suning Tesco's "August 18", has become a standard part of e-commerce promotion. However, on June 9 this year, Chunsuidang created Section 69, named after a sex position, which made people blush.

On the same day, 69,000 instant products were launched on the e-commerce platform. Customers could buy airplane cups, vibrators, jumping eggs, erotic underwear and condoms for only 0.69 yuan. Meanwhile, 69 world-class brands jointly promoted the products and sent 6.9 million coupons to users.

The emergence of the Internet is also profoundly changing the secretive communication mode of the adult products industry in the past. Ma Jiajia, a "post-90s" graduate of Communication University, who became famous with the concept of adult products, has demonstrated it to the extreme.

Because adult products cannot be openly advertised in mass media, social marketing and word of mouth are standard features of the industry. Like the majority of Weibo users familiar with Durex Weibo, has become a classic case of Weibo marketing. At present, Durex official micro blog has nearly 1.2 million followers, and almost every day, several micro blogs with more than 1,000 comments are born. By setting various sexual topics, Durex expands the derivative value of the brand, while guiding the flow of e-commerce.

Compared with Durex, which is run by a team of professionals, Chunshuitang's account is much less influential, but Lin Degang is putting more eggs in the word-of-mouth marketing basket this time. At present, there are more than 80 experience-testers gathered at Chunshuitang. Their tasks are to try new products in advance, write experience reports, and disseminate them in research columns on Weibo, wechat and the official website. Like the above intelligent dumbbell, there are some consumers through wechat to Chunshuitang feedback use effect.

In addition to the traditional way of buying traffic, Lin Degang is also building his brand's influence by making micro films, running his own online radio station and cooperating with fashion magazines.

Vertical e-commerce is subverting the traditional adult products industry in an all-round way, and also subtly reshaping consumers' concept of sex toys. For now, the sector has struggled to make it to the "grand hall" of the domestic capital markets, but Chunshuitang, which has already had two rounds of funding, is preparing to list on the A-share market in 2017, which could set A precedent.