In December 2009, a survey report released by Analysys International revealed that the total advertising spending of Eslite, an online apparel direct marketing company, reached 1.896 billion yuan. This figure is astonishing when compared to the 200 million yuan in advertising investment that Eslite's CEO disclosed during an interview on December 14. The discrepancy between these two numbers has sparked curiosity and debate within the industry.
Eslite, a relatively new player in the "selling clothes online" sector, has managed to outspend major traditional advertisers like the three major telecom carriers. According to insiders, Eslite’s ads are nearly impossible to avoid, appearing across a wide range of websites—both well-known portals and niche platforms. In the garment industry, it is widely known that online advertising budgets are substantial, with very low unit prices. However, due to lack of transparency, the exact figures have remained unclear until now.
Analysys International’s report provides a glimpse into this hidden world. The difference between the 1.9 billion yuan figure and the 200 million yuan reported by Eslite is partly due to different methods of data collection. While Eslite’s own figures reflect actual investments, Analysys’ data is based on case prices and average ad display times multiplied by unit rates. Additionally, some industry experts suggest that there could be a 3% to 5% discount on advertised rates, meaning the real amount paid might be between 1 billion and 1.3 billion yuan.
So how does Eslite manage to achieve such a massive impact with only 200 million yuan? The answer lies in the CPS (Cost Per Sale) model. Unlike traditional display ads, where payment is based on ad impressions, CPS allows advertisers to pay only when a sale is made. This means Eslite can turn 200 million yuan into over 1 billion yuan worth of ad exposure by linking payments directly to sales performance.
This innovative approach has helped Eslite avoid the pitfalls faced by earlier online fashion companies like PPG. Before 2008, PPG invested heavily in traditional media but struggled with low conversion rates. Eslite, on the other hand, has focused on digital channels with measurable outcomes, ensuring that every dollar spent contributes to actual sales.
Moreover, Eslite’s business model allows for higher gross margins compared to typical B2C e-commerce platforms. This helps reduce reliance on large cash flow from offline retailers like Gome or Suning, as well as online giants like Dangdang or Jingdong.
At a recent press conference, Eslite’s CEO expressed satisfaction with their advertising strategy, stating that their ads now occupy the most valuable online platforms. With the CPS model driving efficiency and cost-effectiveness, Eslite continues to expand its presence, proving that smart advertising can deliver huge returns.
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