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The industrial logic behind manufacturing history is “standardization,” “scale,” and “assembly lines.” Today, with the development of social networks, the traditional industrial era seems to be fading away. Future economic and social organizations will no longer be rigid “matrix” forms, but rather “network” patterns that are individualistic and supported by internet communities. This transformation is revolutionary.
In the era of scale economy, the larger the scale, the more economical; the fewer the varieties, the better (due to standardization and assembly lines). In the future, this rule may be reversed: whoever can satisfy the needs at the long tail end as much as possible will be more profitable. The internet economy is a long-tail economy and a scope economy. Therefore, communities and fans self-limit their scale, which is the self-awareness of future business. The industrial era is over, the scale logic has ended, and the community logic has restarted. So-called cross-community marketing will become meaningless, because you don't need others to understand you, just as Apple fans don't need to explain; if they need to explain, they are not Apple fans. If a company does not limit its scope and develop diverse product possibilities, it will not have its own core fan community. Some say that in the internet era, brands play a kind of “durian spirit” – those who like it will love it to the bone, and those who don't will be completely indifferent. People will form different small circles and communities based on brand preferences.
From Product Sales to User Operations
Before the internet, people had to go to physical stores to shop; people had to revolve around stores and goods. After the internet, people no longer need to go to physical stores to complete shopping; e-commerce platforms, manufacturers, and logistics providers all revolve around user needs. Our business has evolved from “goods revolve around people” to “people revolve around goods,” which strongly supports the view we often mention: future business is based on people, not products.
Nobuyuki Idei, founder of Sony, explained the fundamental reason for Sony's decline with a thought-provoking statement: “The core capability of new-generation internet DNA companies lies in using new models and technologies to get closer to consumers, deeply understand needs, efficiently analyze information, and make predictions. All traditional product companies can only become appendages of this new type of 'user platform-level company,' and their decline cannot be reversed by management. The charm of the internet is 'The power of low end.'”
Why is Xiaomi an internet company? What is the difference between it and traditional mobile phone manufacturers? A typical business model for internet companies is called “wool comes from the dog” (i.e., making money indirectly). They often do not directly make money by selling products, but use products as an entry point to aggregate users, and in continuous interaction with users, create sustained value for them, thereby gaining revenue. For Xiaomi, the phone is just an entry point to aggregate users; it is not simply selling products, but operating users. This is the essential difference behind fan economy.
From Passive Acceptance to Active Participation in Consumer Behavior
Community economy is a user-led C2B business form. The relationship between brands and consumers gradually transitions from one-way value delivery to two-way value collaboration; interaction is dissemination. Why does Lei Jun emphasize that the secret to Xiaomi's success is “selling a sense of participation”? Why can “selling a sense of participation” achieve success? Under the community economy, brands are word-of-mouth brands led by users, not advertising brands led by manufacturers. In the internet era, brands are the product of user evaluations and experiences completed through interactions.
In this era, brand building must involve users in product innovation and brand communication; “consumers are producers.” Especially the young consumer groups born in the 80s and 90s, they are more willing to participate in product R&D and design, hoping that products can reflect their uniqueness. Brand manufacturers must pay attention to this change in consumer behavior.
There are three levels in the internet business model: The bottom level is product-centric, the middle is platform-centric, and the top is community-centric! This gives rise to community commerce: content + community + commerce! Content is a media attribute, used as an entry point for traffic; Community is a relationship attribute, used to precipitate traffic; Commerce is a transaction attribute, used to monetize traffic value. Users aggregate because of good products/content/tools, then precipitate through communities, and because of participatory interaction, shared values and interests form communities and retain users. Finally, with deeply connected users, customized C2B and transactions meet needs, and it all comes naturally.
The fundamental value of a business community ecosystem is to satisfy the different levels of value needs of consumers within the community.
All Industries Are Media
The emergence of mobile internet has greatly improved the efficiency of collaboration between people, and also greatly improved the efficiency of information production and dissemination. In a social network where everyone is media, content is advertising, and high-quality content easily creates a dissemination effect.
All industries are media; “wherever the eye can see, money will follow.” All business behaviors of an enterprise are symbols and media. From product R&D and design, to production, packaging, logistics and transportation, to channel terminal display and sales, every link is in contact with consumers and potential consumers, spreading brand information. Including the product itself, everything is an entry point for traffic; everything is media.
For Xiaomi, all its products are media; for Coca-Cola, every bottle's packaging is also media (the personalized nickname bottle case). The trend of enterprise mediatization has become inevitable; enterprises need to cultivate their own media attributes. Many companies have begun to enter various fragmented social media channels, and managers have also taken to running their own self-media. This is a good thing, but many people misunderstand cultivating media attributes, treating media as a simple information release channel, without deeply considering that “media must also be productized” – cold advertising-like indoctrination and self-praise are no longer effective.
Media is product; treat media communication itself as a product that needs patient polishing, stimulate participation, and build community to achieve word-of-mouth ignition. To put it simply, the fundamental difference between the new media landscape and traditional media lies in identification. In the new media landscape, only identification can create value. Without identification, using traditional media methods – saturation bombing, shouting at the top of your lungs – is useless.
All Relationships Are Channels
Before the internet, brand manufacturers or retailers needed to continuously expand stores to reach target consumer groups as much as possible. The internet broke spatial limitations, allowing people to buy various goods without leaving home. This business phenomenon implies a change in business logic – from seizing “space resources” to seizing “time resources.”
Time resources are user attention. When users migrate en masse to mobile internet and social networks, brand owners and retailers must also gradually shift their positions. Traditional physical channels gradually become ineffective, replaced by online relationship networks, which are more reflected in social networks like Weibo, WeChat, and forums where people can influence each other.
Xiaomi has aggregated a large group of mobile phone enthusiasts through the Xiaomi community and online and offline activities. These Mi Fans continuously provide suggestions for product iteration through this social network, while also helping Xiaomi spread word-of-mouth. This group is Xiaomi's fan community.
Today, when we talk about communities, we specifically refer to internet communities. They are fixed groups of consumers whose needs are met by commercial products, gathered based on shared interests and values. They are composed of like-minded consumers, and their characteristics are: decentralization, interest-based, and having a fixed center with dispersed edges.
All Links Are Experiences
Behind communities are not just fans and interests, but also a very complex business ecosystem. The fundamental reason is the inevitability of human socialization. It's just that the community ecosystem we focus on now is based on commerce and products, using the internet as a carrier to spread across time and geography. The fundamental value of a business community ecosystem is to satisfy the different levels of value needs of consumers within the community.
Let's take an easy-to-understand example: previously, we just needed a house to live in, but competition prompted developers to come up with a clever trick: besides selling the house, they also offer primary school enrollment, various shops in the courtyard, a clubhouse for leisure and entertainment, and even a nanny to watch the house when you go out. These increase the added value of buying and living in the house. Gradually, this forms an ecosystem, creating a closed loop of life and business formats.
Such an ecological model gradually develops and improves, providing consumers with multi-dimensional services, and becomes a complete business system. The currently popular “smart community” is based on such business logic. Real estate developers and property management companies like Vanke, Longfor, and Sino-Ocean are using internet methods to transform traditional property management, establishing a business ecosystem centered on residential community residents, thereby subverting the traditional property management business model. Its essence is also a community business model.
Community commerce is a “micro-ecosystem” with incremental thinking; the ecosystem is naturally win-win. Under the community business model, content is like a sharp blade: it can attract research and meet users' basic needs, cutting open an entry point, but it cannot effectively precipitate fan users. Community becomes a necessity for precipitating users, and commercial monetization is an effective way to derive profit points.
The three seem like three separate skins, but the internal integrated business logic is unified. Future business is based on people, not products; based on communities, not manufacturers. Community commerce is essentially a user-led, data-driven C2B business form, and it has just begun.
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