By Paul Pannone
The company that used to be known as The Knot faces growing competition in the American wedding market at a time when formal weddings are declining.
The Knot expanded to China’s 10 million wedding a year market that is interested in western culture.
By their own admission competition is already fierce but in their latest Quarterly report filed on 11/04/2011 the following was said:
The Internet advertising and online markets in which our brands operate are rapidly evolving and intensely competitive, and we expect competition to intensify in the future. There are many wedding-related and baby-related sites on the Internet, which are developed and maintained by online content providers. New media platforms such as blogs are proliferating rapidly. Retail stores, manufacturers, wedding magazines and regional wedding directories also have online sites that compete with us for online advertising and merchandise revenue.
We expect competition to increase because of the business opportunities presented by the growth of the Internet and e-commerce. Competition may also intensify as a result of industry consolidation and a lack of substantial barriers to entry in our market. In the wedding market, we also face competition for our services from bridal magazines. Bride’s magazine (published by Condé Nast), Bridal Guide (published by Meredith), and Martha Stewart Weddings (published by Martha Stewart Living Omnimedia) are dominant bridal publications in terms of revenue and circulation. We believe that the principal competitive factors in the wedding market are brand recognition, convenience, ease of use, information, quality of service and products, member affinity and loyalty, reliability and selection.
As to these factors, we believe that we compete favorably. Our dedicated editorial, sales and product staffs concentrate their efforts on producing the most comprehensive wedding resources available. Generally, many of our current and potential competitors have longer operating histories, significantly greater financial, technical and marketing resources and high name recognition. Therefore, these competitors have a significant ability to attract advertisers and users.
In addition, many independent or start-up competitors may be able to respond more quickly than we can to new or emerging technologies and changes in Internet user requirements, and other competitors may be able to devote greater resources than we do to the development, promotion and sale of services.
There can be no assurance that our current or potential competitors will not develop products and services comparable or superior to those developed by us or adapt more quickly than we do to new technologies, evolving industry trends or changing Internet user preferences. Any such developments or advantages of our competitors may have an impact on our future operations and may cause our past financial results not to be necessarily indicative of future operating results. Increased competition could result in price reductions, reduced margins or loss of market share, any of which would materially and adversely affect our business, results of operations and financial condition.
For years the wedding business suspected increased competition would eventually catch up to the Knot that reigned supreme and unchallenged. Their top position in the wedding business remains in tact but as a public company they were compelled to paint a more realistic picture of how the industry has changed.
“The admission was buried on page 17 of their 35 page report and would never had been brought to light, were it not for the Wedding Water Cooler,” according to wedding analyst, Christine Boulton. “This is huge and would never have gotten any coverage in our business– at all.”
Boulton reiterates everything she’s been saying for years and advises to go local in a recent post on her blog.
It hasn’t changed. Go local and build your own web presence. Yep, it may be easier to write a big honkin’ check each month to companies like the Knot instead of doing your own homework on local and building up your site. But then, so is just throwing your money in the fireplace; same results.
The Knot completed several major changes in 2011 including the name change to the XO Group. The company also listed itself on the Nasdaq exchange and announced their expansion into China.
According to AdAge China, “Ai Jie, which debuted Nov. 17, 2010, offers inspiration and advice about weddings, relationships, household planning and pregnancy for couples in China, where 10 million weddings take place annually– five times as many as in the U.S., said David Liu, CEO and cofounder of The Knot in New York. The company has a licensing deal with an Australian wedding site but Ai Jie is The Knot’s first wholly owned operation outside the U.S.
Members of the Wedding Water Cooler continue to discuss the topic. Some competitors of the Knot say their business is growing due in part to paying closer attention to their customers and the American market.
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