In a surprising twist, the online apparel industry witnessed a dramatic shift in advertising strategies, as reported by Analysys International on December 13. According to their survey, the total ad spend for Eslite’s direct-to-consumer campaigns in 2009 reached an impressive 1.896 billion yuan. This figure raised eyebrows, especially when compared to the company’s own claim of investing over 200 million yuan in ads this year alone.
Eslite, a rising star in the “selling clothes online†sector, has managed to outspend even major players like the three national telecom carriers. When questioned on December 14, Eslite's CEO confirmed that their advertising budget exceeded 200 million yuan this year. The stark contrast between these two figures has sparked interest in a new marketing model known as CPS (Cost Per Sale).
With a budget of 200 million yuan, Eslite is effectively generating over 1.9 billion yuan worth of ad exposure, thanks to the performance-based nature of CPS. Unlike traditional display ads, where payment is based on time or impressions, CPS ties ad costs directly to actual sales. Advertisers only pay when a sale is made, making it highly efficient and cost-effective.
This model has proven to be a game-changer for Eslite, allowing them to maximize their ad impact without wasting resources on ineffective placements. According to industry insiders, the discrepancy between the 1.9 billion yuan reported by Analysys International and Eslite’s 200 million yuan investment stems from different statistical methods. While Analysys calculates based on case prices, Eslite’s spending includes broader digital campaigns.
Analyst Tang from Analysys International explained that their approach involves multiplying the average ad duration by the unit price. However, industry experts suggest that actual payments are often lower due to discounts—typically between 3% to 5%. As a result, the effective ad spend could be anywhere between 1 billion to 1.3 billion yuan.
Despite this, Eslite’s strategy remains highly successful, leveraging CPS to convert clicks into sales. Unlike traditional ads, which require payment regardless of performance, Eslite only pays when a purchase is made. This ensures that every dollar spent delivers real value.
The success of Eslite’s model has drawn comparisons to PPG, another online clothing giant that struggled with high ad costs and low conversion rates. While PPG relied heavily on TV and print ads, Eslite has mastered the digital space, focusing on targeted, performance-driven campaigns.
According to Hong Bo, a partner at Five Seasons Consulting, Eslite’s approach mirrors that of a successful e-commerce model, avoiding the pitfalls of over-reliance on mass media. Additionally, Eslite’s higher gross margins allow it to operate independently of large retailers like Gome and Suning, or even e-commerce giants like Dangdang and JD.com.
Eslite’s unique ad strategy has also allowed it to dominate top web platforms, with CEO Wang reportedly expressing satisfaction with the brand’s strong online presence. By combining cost efficiency with high conversion rates, Eslite has set a new standard in the online fashion industry.
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