---
title: "In the Second Half of the Internet, the Targets of Transformation Are Manufacturers and Distributors!"
description: "The second half of the internet is about integrating online and offline, new marketing and new retail, and the 'traditional plus' model, targeting manufacturers (F) and large distributors (B). This article contrasts the first and second halves of the internet, highlighting six key differences and arguing that the second half requires a focus on supply, mainstream players, and industry value, with digital empowerment of traditional supply chains."
author: "林枫"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-03-02"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/in-the-second-half-of-the-internet-the-targets-of-transformation-are-man-a1ad4597/"
markdown: "https://xinjignxiao.com/en/articles/in-the-second-half-of-the-internet-the-targets-of-transformation-are-man-a1ad4597.md"
original_source: "https://mp.weixin.qq.com/s/4L68NqQ-gBw2lfWzQ-1RCg"
translation: "https://xinjignxiao.com/zh/articles/%E4%BA%92%E8%81%94%E7%BD%91%E4%B8%8B%E5%8D%8A%E5%9C%BA-%E6%94%B9%E9%80%A0%E7%9A%84%E5%AF%B9%E8%B1%A1%E6%98%AF%E5%8E%82%E5%AE%B6%E5%92%8C%E7%BB%8F%E9%94%80%E5%95%86-a1ad4597.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/in-the-second-half-of-the-internet-the-targets-of-transformation-are-man-a1ad4597/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# In the Second Half of the Internet, the Targets of Transformation Are Manufacturers and Distributors!

> The second half of the internet is about integrating online and offline, new marketing and new retail, and the 'traditional plus' model, targeting manufacturers (F) and large distributors (B). This article contrasts the first and second halves of the internet, highlighting six key differences and arguing that the second half requires a focus on supply, mainstream players, and industry value, with digital empowerment of traditional supply chains.

Click the image for details.
The second half of the internet is the second half of online-offline integration, the second half of new marketing and new retail, and the second half of 'traditional plus'. The targets of organization are manufacturers (F) and large distributors (B).
——Lin Feng

The second half of the internet is a concept proposed by Wang Xing, founder of Meituan.
In the second half of 2018, with the rise of the industrial internet boom, the question of how traditional industries should enter the second half of the internet and use digital means to empower traditional offline businesses is an urgent one to answer.
The author has ten years of consulting experience in traditional offline businesses, as well as experience in the first half of the internet founding two internet companies (B2B and O2O) that burned through over 100 million yuan. Additionally, there is consulting experience in digital integration for traditional enterprises in the second half of the internet. By comparing the experiences of the first and second halves, we summarize the 'six differences' between them. Details are as follows:

The first half of the internet focused on demand.
The second half of the internet focuses on supply.
Innovation in the first half broke through from two angles: areas lacking large industry and large clients, and business links that improve efficiency.
Industries lacking large industry and large clients often mean small, scattered, chaotic, and weak players, with no industrial or commercial representatives to protect consumer interests. E-commerce companies directly connected to consumers, using low prices, high efficiency, and convenient transaction models to quickly form scale advantages. Thus, the values formed in the first half were 'user thinking and demand orientation'.
Innovation in the second half occurs against the backdrop of saturated innovation in the first half. It needs to solve the digitalization problem of huge offline traffic. Offline transactions are relatively mature, but the flow direction, volume, and speed of offline traffic are not determined by consumers but by the supply side.
This supply side includes manufacturers, distributors, retailers, and even third-party logistics providers. How to identify the pain points and priorities of the supply side, find a suitable entry point, and carry out digital transformation of the supply chain from shallow to deep is the key to the second half. Therefore, the second half focuses on supply. Moutai Cloud made a mistake in this regard, and paying a huge tuition fee is expected.

The first half of the internet entered from the edge.
The second half of the internet enters from the mainstream and focuses on supply.
The first half of the internet created company value; the second half creates industry value.
In the first half, internet companies experienced long-term losses, but soaring GMV continuously pushed up company valuations, driving them on the track of continuous financing. In the second half, industrial internet must solve the profitability problem from the start, and every business move must find an acceptable balance among industry members.

The first half of the internet was like building a development zone, disruptive innovation.
The second half is like old city renovation, integration of old and new.
The first half of the internet forcibly created a new business different from the past, like building a development zone. The main participants were cross-border bad boys, belonging to the category of disruptive innovation, with different genes, making them new species.
The second half of the internet integrates traditional businesses online and offline, empowering them digitally, like old city renovation. The main participants are traditional players, belonging to the category of incremental innovation and integration of old and new.

The first half of the internet removed intermediaries.
The second half does not remove intermediaries.
The first half directly connected to the C-end, removing intermediaries by cutting out middle links, often using price cuts to improve transaction efficiency. The second half digitally empowers traditional offline industry links, making existing industry members stronger and their businesses better.

The first half of the internet relied on capital and burning money.
The second half relies on industrial resources.
In the first half, internet companies were in a loss state for a long time, and once capital dried up, they could not continue. In the second half, industrial internet companies must win the trust of traditional manufacturers from the start, help solve specific practical problems, and traditional manufacturers have large budget items for the continuous growth of industrial internet.

The first half of the internet was the home of new species.
The second half is the home of digitalized traditional giants.
The first half was an era of new technologies and new models, with B2C, B2B, and O2O being new species different from the past. The second half transforms the mainstream manufacturers of traditional industries. Without the participation or even leadership of these mainstream manufacturers, the second half cannot begin. So, the first half is a flat e-commerce grassland, while the second half is the mysterious Amazon industrial jungle.

Summary
The first half of the internet had three main forms: B2C, B2B, and O2O, all starting from the demand side, targeting consumers (C) and small retail stores (small b). This is a massive scale, with unfathomable organizational costs. In the consumer goods field, the final result was that O2O was completely wiped out, B2B almost completely wiped out, and B2C almost only Tmall and JD.com remained. The first half of the internet was the first half of 'internet plus', a mess!
The late American Nobel laureate, Mr. Coase, who lived to 100, devoted his life to studying 'the growth logic of Chinese limited companies', raising the issues of transaction costs and management costs. In the first 30 years of China, there was no privatization or marketization; the government managed everything, transaction costs were almost zero, and management costs were extremely high. As a result, China built a heavy industry base, but the economy nearly collapsed.
In the following 40 years, marketization and privatization began, private enterprises flourished, and the market became active. Transaction costs in Chinese society rose, but government management costs fell significantly. As a result, China became the world's second-largest economy.
At the beginning of China's market development, goods were scarce and demand exceeded supply. Industrial organizations were initiated by industrial enterprises. Over 40 years, an industrial organization chain centered on manufacturers formed. Although inefficient, it was self-consistent and continuously iterated, with each link finding its value and survival point in continuous evolution.
Technological development has given traditional industries the space to release industrial structure efficiency. In the first half, with capital support, by directly reaching consumers, clearing obstacles, and gradually connecting information flow, cash flow, and logistics, a closed loop was formed. In the industrial chain, the targets of organization were the massive C-end and small b-end, with costs being a bottomless pit. Although it became a huge presence, it also burned countless money and left many bones.
The second half of the internet is the second half of online-offline integration, the second half of new marketing and new retail, and the second half of 'traditional plus'. The targets of organization are manufacturers (F) and large distributors (B).
Although limited in number, they are difficult to organize. First, burning money cannot solve it. Second, relying solely on technology and software cannot solve it. It requires deep industry insight and understanding, the ability to dialogue with traditional enterprise leaders, and the ability to inspire leaders to initiate internal and external changes.
Hui Xiadan seems to start from the supply side, but its subsidies and ground promotion followed the old path of the first half. It used the body of the second half but walked the path of the first half, failing to find the pain points of the supply side and failing to empower the existing industrial organization system from top to bottom in the traditional supply chain, leading to its inevitable collapse. Retail Link followed the first half's path from the demand side, but halfway through, it seemed to realize something and adjusted its gun upward, starting to serve retailers. Will it succeed?


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671