App Spring. The name comes from a shopping destination in New York City’s SoHo – “Spring Street.” Similar as most of the stores on Spring Street, the app “is meant for the modern high/low shopper, who buys key luxury pieces and mixes them with fast-fashion[1].”

Source: http://www.wtoutiao.com/a/412770.html

In the middle of August, a new mobile shopping app was launched – Spring, and even the media called it “revolutionary[2].” Two months before its debut, Spring has already gained $7.5 million in its series A financing. According to WWD, a website aims at providing news about fashion, beauty and retail industry, investors includes Groupe Arnault, which is under the charge of Bernard Arnault, the president of LVMH Group; Theory’s former CEO and renowned fashion investor Andrew Rosen; Coach’s former CEO Lew Frankfort; and Rachel Zoe, who is recently a heated spot in the fashion industry.

Consumers can make a purchase buy only one click, except for the first time when they’ll need to input their credit card information and shipping address.

Source: http://www.wtoutiao.com/a/412770.html

Spring is a mobile shopping app which adopts marketplace pattern and combines photo sharing app Instagram’s visual elements, dating app Tinder’s compulsive swipe-down design, and Twitter’s “favorite” and “follow” functions. Here’s how Spring works. Brands release selective products on the app, and they are in charge of pricing and display of products. Consumers can make a purchase buy only one click, except for the first time when they’ll need to input their credit card information and shipping address. Spring will collect orders made on the app, and then send back to the order managements systems of each brand to let them process the orders and take care of delivery.

Spring is different because it provides a platform for brands to communicate with consumers directly. There used to be mainly 2 ways for brands to connect with consumers via mobile apps. The first is some popular social networking apps such as Instagram and Pinterest. However, consumers can’t buy directly from these apps. In addition, as David Tisch, one of the co-founders of Spring said, it can get awkward when brands come in social media. The second is social networking e-commerce apps, such as DongXi. Usually, at first, the apps will allow consumers to upload and share photos of the products they like. But later, the “buy” function will be introduced. But still, as Tisch mentioned, “the best shopping experience is not user-generated content and brands then jumping in, but how to capture that feeling of walking 5th Avenue or your favorite mall.”

That’s how Spring is unique. It’s a pure e-commerce app which fills the gap between brands and consumers, but at the mean time, it saves their time to download independent apps from retailors or brands. Instead of pushing all their products to users, brands only release products “with souls[3],” which means products that these brands believe can represent and show their image. It leads brands to focusing more on their products, because products are their advertisements on Spring – this is how Spring enables brands to talk to consumers directly.

Traditional e-commerce platforms, such as Zappos, usually act like an agent between brands and consumers. They carry the brands which grant them rights to sell their products, and these platforms need to take care of the whole purchase process from stocking, displaying, to shipping. Thus, the cost of traditional e-commerce platforms includes inventory and shipping expenses, and they mainly profit from sale.

Brands manage their own accounts, and Spring doesn’t participate in their selling process – it’s only a platform for brands to communicate with their consumers directly.

Source: http://www.wtoutiao.com/a/412770.html

Different from traditional e-commerce platforms, Spring isn’t involved in any purchase process except for collecting orders made on the app and sending them back to every brand’s independent order management system. In other words, it doesn’t have inventory and shipping cost at all – its major expense is the app’s operating cost.

Spring profits from commission from every purchase, which according to Tisch, is less than 8%, and even lower when the product is exclusive on Spring. This measure strengthens the reciprocal relationship between brands and the app. On one hand, exclusive products can help Spring attract more users; on the other hand, brands will be more able to speak their “souls.”

However, another co-founder, who is also the CEO of Spring, Alan Tisch said that the app is able to gather information about consumers’ browsing and purchasing habits. Not only can brands better control their inventory by analyzing the statistics which show the sizes and colors that are the best sellers, but also they can know how to draw consumers’ attention by interpreting the data collected by Spring – this is no doubt a tempting asset. However, Alan Tisch didn’t mention how much they’ll charge for the service.

Spring indeed provides something new to its consumers, but whether it is revolutionary is still, in my opinion, open to discussion. I have to say that, I felt the impulse to make a purchase when using the app, because all the products on it were so selective and the visuals were great. However, if Spring wants to stay in advantage, it has to find out a way to utilize statistics collected from users’ browsing habits and purchasing patterns, because this is something only Spring can do but nothing else can. Spring is the only one pure e-commerce app which has perfectly incorporated beneficial features of social media while avoided its shortcoming – in this case, Spring is indeed revolutionary.

[1] http://www.vogue.com/972293/spring-app-changes-mobile-shopping/

[2] http://www.prnewswire.com/news-releases/introducing-spring-a-revolutionary-mobile-shopping-experience-271227781.html

[3] http://www.forbes.com/sites/alexkonrad/2014/08/14/how-david-tischs-new-app-spring-looks-to-crack-mobile-shopping/

One of the victim babies who had used poisoned domestic infant milk powder.

In 2008, baby formula milk powder scandal broke out in China. Several domestic Chinese milk powder brands used melamine as protein adulteration, and thus affected more than 53,000 babies. Nearly 14,000 kids were severely sick. Many of them became permanently disabled, and four of them even died. Since then, Chinese consumers began to turn to foreign infant milk powder. They don’t even want to buy it in Chinese retail stores, because they’ve lost faith in made-in-China.

Source: World Bank

Source: General Administration of Customs of the People’s Republic of China

Infant milk powder resell industry was thus born. This secondary market has fully utilized Chinese market’s massive demand for infant milk powder to profit. As shown above, according to a report conducted by World Bank, China consumes nearly 1/3 of baby formula milk powder around the world each year. General Administration of Customs of the People’s Republic of China further pointed out that two out of three families in China will choose import milk powder, and 14% of all foreign milk powder comes from informal channel, which means from individual resellers. Fourteen percent might sound like a small number, but it actually accounts more than 60 million cans every year, which means nearly 170 thousand per day – and it finally leads to a business valued more than $3 billion.

A photo taken in a Germany retail store. Many products were sold out on the infant milk powder isle.

As a consequence of Chinese excessive demand, infant milk powder is consistently out of stock in some areas in foreign countries. However, the phenomenon isn’t caused only by Chinese consumers.

The first reason that needs to be taken into consideration is the supply chain of milk powder industry is a typical model of low-elasticity. This means that even if manufacturers want to respond to the massive demand, they can’t. First, it takes at least three years to raise cow from its birth to the day it can produce. In other words, it will take at least three years for manufacturers to increase supply. Besides, manufacturers just won’t take the risk to increase the supply of cows to cope with the unknown market after 3 years. Imagine that if demand dropped after 3 years, it would cost them even more to take care of the surpluses.

The second reason that also leads to insufficient demand is the marketing strategy of milk powder manufacturers themselves. Aptamil and Milumil are 2 sub-brands under Milupa, the best milk powder brand in Germany. These two brands use the same milk resources. Chinese consumers love Aptamil, but they don’t buy Milumil. Usually, milk powder brands distribute their products both online and offline. They’re free to adjust prices online, but not offline, because they’ve signed contracts with retail stores.

Aptamil had been out of stock in retail stores since the beginning of January. However, Aptamil were off-shelf not only because it was sold out. Milupa said that there were problems with Aptamil’s milk resources, and they decided to stop producing Aptamil temporarily.

But interestingly, at the mean time, Milumil, which uses the same milk resources, was still on shelf. Even more interestingly, Milupa was still selling Aptamil online, with an increased price. Around the middle of April, after 3 months, Milupa reproduced its new Aptamil as a new product with a higher price in retail stores. The infant 1 milk powder used to be 15 euro, now it is 23.

It’s obvious that this has increased resellers’ cost dramatically. However, except for strategic price change from foreign milk powder manufacturers, new policy implemented by China Customs has also brought pressure to the secondary market. In order to protect domestic brands and control informal milk powder import, China Customs decided to tax packages that values more than $150 – the number used to be $1,350. To be more specific, in the past, reseller could send 26 cans in one package each time. But now, they can send only 2.

The new policy has further squeezed profit, because shipping companies charge much less for additional pounds. For example, here in Los Angels, the first pound costs $11, and only $4 for each additional pound. How does shipping price affect infant milk powder resellers’ profit? Resellers in the U.S. used to be able to earn more than $13 a can; now the number is around $9.

The existence of infant milk powder second market is no doubts an interesting phenomenon, which reflects many problems in Chinese market. The government’s move to protect domestic market is understandable. However, if it doesn’t reinforce food administration in China to gain back consumers’ trust, its attempt to solve the problem merely by isolating external forces will be eventually in vain.

Spotify has been in a long battle with the music industry over its controversial streaming business model. While the music industry has undergone a lot of change in the last decade it still hasn’t fully adjusted to the change, leaving the industry in somewhat of a standoff. Spotify, currently the leading streaming company, has been at the forefront of this stand off as they work to introduce the music industry to a new revenue model. Over the last several years Spotify has been making strides toward acceptance as they have worked to educate artists about their site and have steadily increased the royalties they pay out. This acceptance however hit a major hiccup 2 weeks ago, when Taylor Swift pulled her entire collection of music off the site.

On the subject Taylor stated, “I think there should be an inherent value placed on art. I didn’t see that happening, perception-wise, when I put my music on Spotify.”
Taylor has been vocal about her distaste of streaming services as she feels streaming sites are part of the reason album sales are shrinking. Though Taylor has voiced a negative opinion about streaming as a whole she has left her collection on both Beats Music and Rhapsody. Before pulling her collection off Spotify, Taylor had asked the site to make her content only available to paying users which Spotify responded was against their policy. Taylor also asked for her content to only be available outside the United States but this again was against Spotify’s policy. The two sites that still have Taylor’s content are sites that require a paid membership.

“With Beats Music and Rhapsody you have to pay for a premium package in order to access my albums. And that places a perception of value on what I’ve created.” – Taylor swift

While Taylor has made a very public separation from streaming, the real question is whether or not this will affect the Spotify. In response to the ordeal Spotify’s founder Daniel Ek released an open letter to the singer explaining why she made the wrong decision in pulling her music.

In the essay, “2 Billion and Counting” Daniel Ek wrote- “Taylor Swift is absolutely right: music is art, art has real value, and artists deserve to be paid for it. We started Spotify because we love music and piracy was killing it. So all the talk swirling around lately about how Spotify is making money on the backs of artists upsets me big time. Our whole reason for existence is to help fans find music and help artists connect with fans through a platform that protects them from piracy and pays them for their amazing work.”- Daniel Ek
This letter makes a very important argument, which is Spotify makes money where it didn’t exist by combating illegal downloading. In the same letter the founder explains that Taylor was on track to make 6 million this year had she left her collection on Spotify. Further than the 6 million the number was on track to increase significantly every year as the site grows. Daniel Ek made it clear in the essay that Spotify is not against artists; rather they are working very hard to make sure artists are properly compensated.

“Here’s the thing I really want artists to understand: Our interests are totally aligned with yours. Even if you don’t believe that’s our goal, look at our business. Our whole business is to maximize the value of your music,” he said. “We don’t use music to drive sales of hardware or software. We use music to get people to pay for music. The more we grow, the more we’ll pay you.” –Daniel EK
The Spotify battle is long over as it is a matter of educating both the public and those in the music industry on the business model of streaming. Spotify’s response to Taylor shows that the site is willing to fight back against artists to make streaming successful. While Taylors move to take down her music got a lot of buzz it, also got a lot of people stepping up to defend Spotify.  If Spotify is able to continue its efforts to educate artist on the benefits of streaming, it may have a fighting chance.  Spotify has proven that they can handle even one to the biggest pop stars dismissing their site. Though the future is not clear, it looks like the streaming site is here to stay.

Facebook wants to enter the workplace and in a big way. In the next year Facebook hopes to launch a new side to its site that would allow colleagues to collaborate on projects, share documents and function as an in office communicator. In Facebook’s London headquarters the company says they have been developing the program for a long time.
The site would feature a very similar design to the existing personal site, but would strictly be for inner office collaboration. User’s personal profiles will have no connection to the work profiles. The site would feature similar news feed and group functions, allowing users to post content for the entire company as well as preform smaller team work. While much of what the site will feature is still speculation many have wondered how Facebook for work will rival preexisting office applications.
Forbes contributor Erika Morphy states- “that Salesforce Chatter is already a popular service used by thousands of Salesforce.com users. Slack has also become a popular collaboration service that’s challenging Atlassian’s HipChat and Campfire, with its clean interface for chatting with colleagues or sharing documents and links.”
Further than just communication sites alone there has been speculation about Facebooks profile feature and how it could function in a very similar way to LinkedIn. If users are able to create a public business profile that moves with them from organization to organization as a user changes jobs the site could function as an online resume tool.
While there are many existing office communicator application out there already, there is speculation that Facebooks well-known name will lead it to success. Many offices have had to ban Facebook across the country as their employees are too addicted to the site. Facebook in the office could prove to be very popular among employees leading many companies to switch communicators. More so then popularity the familiar interface would mean little transition time for companies as the majority of employees are already accustomed with how the site works. The counter to this argument being that most employees have no say over their company’s communication systems as it is often a decision made in IT departments. With Facebook at work the site will only be available to employees if the company as a whole signs up for the service.
Facebook also faces another issue, privacy; can it get companies to trust the site? In today’s corporate structure much of what happens within the walls of a company is top secret. Posting and collaborating on sensitive documents on the internet would be worrisome to many.
Facebook has many issues that it must look at to become successful in this office space, however if done right it has the possibility to change the game. Facebook at work is currently in the testing phase at a select few organizations across the country. Though it is still unclear when Facebook will officially launch the site, it is definitely something to watch for.

Sephora, one of the most famous cosmetics shops in the world, just finished its semiannual sale on November 10. The 20% off event was for VIBs and VIB ROGUEs, who have, respectively, spent more than $350 or $1,000 in the past year. However, many qualified accounts with Asian surnames were blocked during the sale this year. Sephora released an official announcement on its Facebook page on Nov. 7, stating that they were deactivating accounts to stop reselling. But the company is facing possible charges not because their attempt to regulate its market. Many accounts with Asian surnames were deactivated, though the owners claimed that they’d never resold any items. Some of them even said that they didn’t buy anything on Sephora.com during the sale this year, yet their accounts were still locked. Now there’s an outrage on Sephora’s Facebook page.

Many Asian consumers are now complaining on Sephora’s Facebook page about their accounts’ being deactivated for no reason.

It seems that the reselling phenomenon is the key issue here. However, Sephora actually has its stores in China. Why do Chinese purchase oversea? This article will look into the reasons why people resell Sephora products to China.

As mentioned, Sephora has its stores in China, but people still buy from Sephora.com. There’re mainly 2 reasons: Some brands that are exclusive in the U.S., and more importantly, it’s much cheaper to buy directly from the website. For instance, the price for the Rose Mask produced by Fresh is $58 on Sephora.com. Chinese Sephora stores don’t carry the brand. If consumers turn to Fresh stores – which now only exist in Beijing and Shanghai – to make a purchase, it will cost them￥500, which is about $82 – the price is 41.4% higher than it is in America. This is because Chinese government places high customs tax on import goods.

Besides, it is said that the quality of skincare products sold in manufacture countries is much better than those sold elsewhere, which is considered an open secret in the cosmetic industry – and Sephora sells a lot domestic products. Last but not least, Chinese Sephora also doesn’t do well in marketing itself, so few people actually go to stores and make a purchase – these are all the reasons why Chinese consumers turned to Sephora in America.

However, high customs tax, low product quality and diversity, and poor image of Chinese Sephora are not the only reasons why resellers exist. One of those whose accounts were banned decided to file a class action against Sephora for discrimination against Asians. He made an announcement on Weibo, encouraging people whose accounts had been unfairly deactivated to leave their contact information to the lawyer in charge. Interestingly, he mentioned that he had asked certain promotion account to help him tweet the message, but he was refused because there’s interest conflict between helping him and the account’s relationship with Sephora.

The Weibo announcement made by a Chinese consumer whose account was deactivated for no reason. He’s now working with a lawyer to file against Sephora for discrimination against Asians, especially Chinese.

It’s interesting because, many promotion accounts on Weibo constantly tweet about sales going on on Sephora.com. However, Sephora.com explicitly points out on its website that international shipping only includes Germany, Japan, Netherlands, Norway, South Korea, and the United Kingdom. So it doesn’t ship to China, yet it’s advertising on Chinese promotion accounts, where most of Chinese consumers get the latest promotion information.

Shipping policy on Sephora.com.

One of the Weibo accounts which had tweeted about promotions on Sephora.com. According to Rise_Against_Sephora, it is this account which has refused his request for help with the class action.

 The same promotion account had publicized information about how Chinese can buy from foreign websites such as 6PM and Saks, which shows that its target audience includes those who are living in China, though its account description is “looking for deals for Chinese who are living in North America.”

Now that Chinese consumers have seen the promotion information, they want to make a purchase. Since Sephora doesn’t ship to China, consumers use transshipment companies to deliver their products. Here’s how it works. They buy things on Sephora.com. The address they leave on the website belongs to a transshipment company. The company will receive the orders, and will send them to the buyers. Everything looks perfect, until Sephora began to ban transshipment addresses. From more than a year ago, consumers started to complain that their orders had been declined due to detected transshipment addresses.

A consumer was complaining about the fact that Sephora doesn’t allow people to use transshipment companies to purchase.

 Since consumers can no longer make a purchase on their own, they start to look for individuals to help them place an order. This is the most major reason why there’re resellers targeting at Sephora. Some people said that resellers might hoard hundreds of the same products while they’re on sale, which is not fair to other consumers. However, on one hand, there’s a limit on the number of the same products that one can purchase online, so it should be hard for one to hoard. But on the other hand, though Sephora has made a limitation online, it doesn’t limit the quantities that one can purchase in stores, except for some limited-edition gift sets.

All in all, Sephora has banned all possible means by which Chinese consumers can make a purchase on their own; but at the mean time, it’s advertising in China. Sephora said that some accounts were locked due to the purpose to control resell, but it’s actually implementing different rules online and offline. It seems that Sephora is blaming resellers, but the company itself is one of the reasons that contribute to the phenomenon. Some even argue that Sephora is hypocritical, because it wants to utilize huge purchasing power in China, but at the same time, when it’s short of supply, Asian accounts are the first to be locked with “justified reasons.[1]”

It’s not suggesting that Sephora is guilty. However, the contradictions in the company’s rules do make it seem suspicious. Regardless of the fact whether Sephora is discriminating against Asians, the company obviously has a lot of PR work to do if it still wants to stable the Asian market, especially the Chinese market.

The latest update on the issue is that the promotion account which advocates Sephora and has refused to help with the sue, has contacted the management of Weibo, trying to filter some of the tweets that the person who raised the class action publicized. Obviously, this is not the best PR it can do.

The anti-Sephora Weibo account @Rise_Against_Sephora claimed that Weibo had hidden some of his tweets. In the picture, it is his conversation history with the promotion account which advocates Sephora. Actually, in one of the tweets he publicized last night, he mentioned the exact name of the promotion account – but that tweet can’t be found now.

Another tweet just publicized by Rise_Against_Sephora, stating that his tweet was filtered again.

[1] Resource: http://www.douban.com/group/topic/66540865/