The Financial Evaluation Of Vips' Profit Model Based On Harvard Analysis Framework

In the Internet era of information explosion,online shopping became the new fashion of the moment,driving the rapid development of e-commerce.Faced up with the growing consumer demand for online shopping,B2 C E-Commerce companies are mostly committed to expanding the category of products and advertisement promotion to cause the online shopping market to new areas of extension,which makes online shopping market cake become bigger and bigger,but the industry competition become much more intense.The fierce competition has promoted the prosperity and development of the B2 C market,but it has also led to vicious competition.It is not surprising that many e-commerce companies frequently join the market and are eliminated quickly.As the first E-Commerce platform in China to be listed in the market,Vips has already have 20 consecutive quarters of earnings by the end of September 2017.The exploration of its profit model will help improve its own profit model.Through collection and collation of the Vips' operation related information and financial reports,this article aims to use the four elements profit model to comprehensively analyze Vips' profit model with the help of harvard analysis framework,and at the same time compare with other B2 C industry leading enterpriseJD.The found of this study are as follows.Strategy analysis: Vips occupies certain market with its special lightning deals model in the competitive B2 C market and uses surprise marketing way to expand the influence,and the number of its user base and growth rate are both at a relatively high level,and the user loyalty is high,however,the high cost to keep old and new users,lacking of self-owned brands and fierce competition are the threats,there are also opportunities for development,such as crossovers,E-commerce,new retail and smart logistics development.Accounting analysis: the special profit model determines it should use full amount method instead of net method to confirm income,which is legal and reasonable.Financial analysis: Vips' main business has a high profit margin in its net margin and cost with strong profitability and good cash protection from the perspective of cash flow from operating activities,in addition,gross profit is stable but the breakthrough space is small,and reflects the limitations of the sale model from the side view.Prospects analysis: about risk-the industry has a fierce competitive environment and lags in policy,as well as Vips' own profitability and continued stability risks which closely related to brand numbers,sales model and quality crisis and etc.,about prospects-the development of social e-commerce and cross-border shopping will become the new impetus for the ecommerce industry.By adopting Harvard's financial evaluation on the profitability model of Vips,this paper puts forward the suggestion for further development.