To be frank, I basically agree with Liu Qiangdong's judgment. That is, in the next five years, the 'windfall' will appear in traditional industries rather than the internet industry, and better high-quality Chinese brands will emerge in fast fashion and food. In a broader view, it is actually that the super dividend of the internet industry is fading, and more and more internet companies are becoming heavier; while those traditional enterprises that have successfully transformed and mastered the tools, methodologies, and values of the internet are bursting with vitality.
China's Consumption Upgrade
Liu Qiangdong believes that after the boom of entrepreneurship and investment, the windfall may not be in the internet but in traditional industries. For example, the clothing, footwear, and hat industry should be able to create fast fashion brands that Chinese people like; in the food industry, China's food safety issues have reached an intolerable level, and in the next five years, this industry can also emerge a batch of food brands that consumers can trust." I strongly agree with this. Now, China is undergoing a world-renowned consumption upgrade. The Chinese people, who have become wealthy, no longer only need low-quality and low-priced goods, but have transformed into the pursuit of high quality and high price. If you don't believe it, look at the fact that Chinese people's overseas purchases amount to six to seven hundred billion yuan every year, and it's been growing! In fact, overseas shopping, outbound tourism, the prevalence of light luxury, and the rise of internet brands are all profound reflections of China's consumption upgrade. Looking at Japan, South Korea, Taiwan, and other countries and regions, they have all experienced similar processes, which is not subject to human will.
Why Is the Windfall in Traditional Industries?
This consumption upgrade is even considered by the world as an important engine for the next global economic growth. Among it, there are huge business opportunities. Now, mainstream venture capital and many forward-thinking people are looking at opportunities for internet brands. In this magnificent upgrade, it is no pressure to give birth to a batch of companies with a market value of over ten billion yuan. Sadly, although the Chinese people have become rich, many of our basic services are still poorly done, such as the clothing, footwear, and food industries that Liu Qiangdong mentioned. Not long ago, the founder of Spanish clothing giant Zara surpassed Bill Gates to become the new global richest person. He started his business at 40, with assets of $80 billion, and his stock price has grown 570% in the past decade. Japan's clothing giant Uniqlo founder Tadashi Yanai is also Japan's richest person. These two major brands are conquering cities and territories in China, opening one store after another. They are deeply welcomed by young people and the middle class, and they are making a lot of money. In stark contrast, a large number of local Chinese clothing, footwear, and hat brands are going bankrupt one by one, and their stores in department stores are also closing in large numbers. What does this show? It's simple: the products are not good enough! This does not only mean the quality of the goods themselves, but also includes services, experience, operational efficiency, and other extensions. On the other hand, traditional excellent food companies are living very comfortably. For example, Lao Gan Ma, which takes cash on delivery, has been the top taxpayer in Guizhou for years, and is not listed, and is even regarded overseas as a 'luxury condiment from China'. Another example is Lee Kum Kee, which enjoys a high reputation overseas and is a time-honored brand. From Zara and Uniqlo to Lao Gan Ma and Lee Kum Kee, these are all 'traditional enterprises' in the mouths of arrogant internet people, but they live better than each other. In a word, as the world's second-largest economy, China's consumption is undergoing a major upgrade. And basic commodity consumption has not been well satisfied, which is a business opportunity.
The Internet Is a Tool, Needs Deep Integration with the Real Economy
In a broader view, it is actually that the dividend of the internet as a tool in its initial stage is fading. Now, from the 'News Broadcast' to local bosses, 'internet thinking' is extremely popular. Using internet technology, ideas, and methods to transform and even reconstruct (note: not subvert!!!) all industries is the biggest highlight of China's economy and a new growth point. The strong impact of this wave has produced selling mobile phones, building houses, selling pancakes with internet thinking... Now, 'internet thinking' seems to have become a spell that turns stone into gold. Some internet practitioners have gone from pride to arrogance, which has also caused a lot of resentment from traditional people. The internet for current China is still the biggest positive energy! The key is how you understand it. I think the internet is divided into three levels: 1.0, the internet is a 'connection' technology tool, bringing high-speed development at the industry level, which is called the internet industry. 2.0, the internet is a universal advanced methodology, bringing transformation and upgrading at the industry level, which is called industrial internet. 3.0, the internet is a value of new business civilization, promoting social changes of transparency and sharing, which is called social internet. Now, after experiencing the boiling fifteen years of 1.0, China's internet has begun to move towards 2.0, which is the internet thinking and Internet+ that have been extremely popular in the past two years. You can clearly see that the increase in new internet users is declining, including giants like BAT, their growth is slowing down, the super dividend is fading, and more and more internet companies are becoming heavier. And those traditional enterprises that have successfully transformed and mastered the tools, methodologies, and values of the internet are bursting with vitality. For example, Huawei's mobile phone sales have surpassed Xiaomi, the representative of internet thinking, and Haier's 100,000+ employees have also successfully transformed. What does this show? Liu Qiangdong believes, "I think the final driving force must still come from changes in production efficiency improvement, including the retail model from the past small commodity market to supermarkets to chain stores to today's e-commerce, all the driving forces behind are from the decline in supply chain costs and the improvement of supply chain efficiency." That's right, this is the essence of Internet+. Internet+ is not subversion, but integration. When the connection dividend declines, it will still return to the essence of business, the improvement of production efficiency. Take O2O, which was very popular in the past two years, as an example. Internet thinkers relied on financing and burning money for subsidies, but as soon as the capital winter came and subsidies decreased, a large number of them died immediately.
Conclusion
Honestly, as the head of one of the Five Hegemons of China's Internet (Baidu, Alibaba, Tencent, Jingdong, Xiaomi), Liu Qiangdong's daring to say this is a bit risky. I want to give him a thumbs up for this. Because the value of an entrepreneur is not just to praise that his own company is good, his industry is good, good, good, extremely good. But to dare to say what others dare not say, to speak out his foresight, so that more people can benefit. This is the social value and ideological power that an entrepreneur should have.
Business leaders prescribe 'medicine' for traditional enterprises
See the Direction Clearly and Follow the Trend
Zhang Jindong, Chairman of Suning Holdings Group: In the past 10 years, the impact of the internet on various industries has been like rain penetrating the earth, from the surface to the inside. The internet is a major trend, and this trend will replace the advantages that traditional enterprises were once proud of. The most important thing for traditional enterprises in transformation and upgrading is to see the direction clearly, put down past successes, and follow the trend. Li Yanhong, Founder, Chairman and CEO of Baidu: In the PC internet era, everything was standard. As long as Baidu did the technology well, users would naturally come to Baidu to search. But in the mobile internet era, it's not like that. Currently, Apple, Tencent, and Alibaba are all focusing on building their own ecosystems. Baidu cannot rely solely on technology; it must also build its own ecosystem. This is an industry trend and also a market demand. Chen Liming, Chairman of IBM Greater China: No matter what type of enterprise, it should think about what impact the internet will have on our enterprise in the future. Do we use the internet to further transform and upgrade, making the enterprise more competitive, or simply make information more fluid, or just treat the internet as a tool to maintain the traditional operating model? This needs to be considered. Liu Chuanzhi, Chairman of Legend Holdings and Founder of Lenovo Group: In the mobile internet era, the computer business is not doing well, this is a major trend. To cope with the trend, Lenovo's approach is to 'turn a big corner'. The essence of 'turning a big corner' is to turn important and urgent matters into important but not urgent matters. In plain words, it means facing the trend, laying out in advance, and responding early.
Focus on Doing Things and Stick to the Main Business
Wang Junhao, Vice Chairman and President of Juneyao Group: In the early 1990s, Juneyao entered the dairy industry, and its market share once reached the top ten in the country. Later, many people saw business opportunities and swarmed in, with more than 10,000 dairy companies emerging nationwide, and they began price wars. The company at that time gave up the pure milk field, and waited until the crisis passed. It was only in recent years that Juneyao began to exert force, but its performance has doubled every year. Facts prove that only by enduring can there be growth! Li Yanhong, Founder, Chairman and CEO of Baidu: However, focus is also relative. When a company is a small company with a dozen people, it must do things very solidly in a very narrow field, but when the enterprise size reaches a certain level, the things to do become bigger. Can bigger things still be called sticking to the main business? Li Yanhong's understanding is that whether Baidu does finance or insurance, it uses the method of building an ecosystem. Baidu will provide these businesses with resource support such as big data and cloud computing, but truly professional financial business will be done by professionals, which is also a kind of focus. Zhang Jindong, Chairman of Suning Holdings Group: Sticking to the main business does not mean being complacent and stagnant. After embracing the internet, Suning still adheres to its main retail business. When transforming its retail business, it went through two stages, namely '+internet' and 'internet+'. The former is to expand offline resources and capabilities to the online, and the latter is to transform and optimize offline processes after integration. At the same time, Suning opens its entrances, exits, and interfaces to build a complete retail ecosystem.
Seize Opportunities and Create Characteristics
Shen Guojun, Chairman of Intime Group: Where is the future development direction for traditional enterprises? Every enterprise must have its own understanding. I think new industry, new consumption, new countryside, and new ecology will have greater development. Liu Qiangdong, CEO of JD.com: If there is a windfall, it may not appear in the internet field, but likely in the traditional field, because the industries with the most problems will also be the industries with the most opportunities. -END- The best FMCG distributor learning platform in China Focusing on providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operation | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operation management | 010 Team management | 011 Efficient distribution skills | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new sales | 015 Internet, brands | [Long press QR code to follow] **To join QQ/WeChat group, please click: **Read the original text