Gege: Subversion of traditional business model

Turn boredom into shopping time

The consumer industry is still unable to find direction, the losses of enterprises intensified, and the Beijing-East and Suning easy to buy [micro-bo] forcibly dragged into the capital and price wars of other enterprises, the possibility of being buried is increasing. In the second echelon of the industry, and determined to achieve "online Wal-Mart" long-cherished wish of the 1th store Chairman Gege, and will go?

"Not in favor of price war, innovation is still the key to enterprise survival." "Gege in the 2012 (sixth session) China CEO annual meeting sponsored by the manager. In the first 10 months of this year, Gege has made two major changes to store 1th: strategically, by letting Wal-Mart hold the latter's global supply chain, and by developing and using the "Virtual supermarket model" of "Infinity 1th" in the business model. These two strokes, can you let store 1th avoid the Beijing-east and Suning Tesco ignited the war? At the same time, as a business model of the subversive image, whether there is a chance from the market successor, to become a benchmark?

Strategic docking with Wal-Mart

According to the public information, store 1th in 3 years to maintain 192 times times the growth rate, the last year to achieve a 2.72 billion sales revenue. However, compared with the deep and rich Beijing-East, Suning is still more than 10 times times the size gap. To squeeze into the first camp, Gege introduced Ping An insurance and Wal-Mart's two strategic investors last year, with a share of 62.3% and 17.7% respectively. At that time, gege more value on financial capital than on industrial.

Into the 2012, Gege is under great pressure: first, to shop No. 1th in the current scale, there is the possibility of being thrown away by the opponents; second, from the financing point of view, the first half of the total financing of more than 5.96 billion yuan, but the second quarter of the investment and financing, compared with the same period last year, 71.3% Reserve capital ammunition.

From the overall strategic point of view, the 1th shop to create "online Wal-Mart", is Gege and partner-incumbent President Liu Junling, in 2008 years of business together to identify, but the practice of the road to stumble. 4 years down, store 1th Although precipitated the industry experience, but there are three mishap: one is to deal with the price war based on the purchase quantity in exchange for a lower purchase price, but to 1th shop strength, do not; the second is no strength of 1th stores like Jingdong and Suning easy to buy, since the establishment of the national Logistics Base; The third is that the business model is seriously homogeneous with its opponents.

Wal-Mart is the 0-distance strategic partner of shop 1th. Wal-Mart's core advantage is that the world's lowest price of the procurement network and logistics distribution system. This just fixes the top two mishap in the strategic question for store 1th.

Wal-Mart has sought to expand its online retailing opportunities in China. Wal-Mart first invested in store 1th last year, changing from 17.7% to 51% Holdings this October. In Gege's view, this is not a simple equity deal, but a strategy for two companies to innovate together: from the Wal-Mart point of view, to achieve its real "landing" in China's online retail business, and its 370 of China's online stores to form a encirclement, to Carrefour, Metro, and online "enemy" Amazon [Weibo], constitute a strong competitive advantage; From the point of view of store 1th, according to Gege, is "on the one hand to share Wal-Mart's suppliers, logistics, facilities and warehousing resources, on the one hand, can also expand the 1th stores of capital and knowledge strength."

This time with Wal-Mart depth, is a new strategy. The shares of executives such as Gege and Liu Junling, 20% of the stake in Ping An, has fallen to the current 11.8%, from the equity perspective, the new investment in the personal future of the huge risk, but in exchange for the Wal-Mart alliance with the "aggregation effect": Shop 1th not only solve the troubled commodity purchase price problem, And can take advantage of Wal-Mart's supply chain resources, reduce the hard investment in logistics facilities, and even sell Wal-Mart's own products, partly to avoid the online homogeneity of the commodity competition. As a result, store 1th eased pressure on both the price and the capital battlefield. But Wal-Mart can't solve all the problems of shop 1th, just need to think about how to bring Wal-Mart's powerful resources into revenue in the most effective way.

Creating Virtual Offline Supermarket mode

Gege believes that in order to win in the highly competitive business market, shop 1th can only rely on a transformative model of commerce.

Unfortunately, in addition to the use of price leverage to stimulate the consumer nerves, the enterprise in business model has no countermeasures. Can the concept of Gege and its team, which has been fully built this year, be identified as the innovation of the business model?

First, pay attention to the trend of the Business-to-consumer. According to the Ruzenwang of e-commerce observer, the future retail approach will eventually tend to be "borderless retailing". That is, the retail enterprises to meet the consumer anytime, anywhere, offline, online, mobile and other stereo-style experience needs.

Gege believes that while all the companies have developed mobile apps based on apps or Android handsets, in essence, and in common online shopping, how to fundamentally create a new business model, this is just to do the exploration. In the early July of this year, Gege in his letter to the manager, so he introduced its "unlimited number 1th shop" in the creative origin.

On Weibo, I saw South Korea's online supermarket home plus launch the virtual store creative AD at the subway station and get the Cannes Advertising Festival award. The main idea is that home plus has been struggling to catch up behind the industry boss E-mart (easy to buy), and they have been thinking, in the case of not increasing the store, can achieve the e-mart of the go-ahead?

Home Plus finally came up with a way is to build a virtual supermarket on the wall of the subway, which is published in the goods and physical stores are not the second, all waiting for the subway, as long as the smart phone, aimed at each of the goods on the side of the two-dimensional code to take pictures, you can use mobile phone mobile interconnection function to achieve the ”

According to Gege's understanding: In the previous stage, the "People wait for the elevator boring time, into advertising business"; In the latter stage, e-commerce can again use the subway, building and other communities, through mobile interconnection to "boring wait" into "actual shopping time."

Next, how quickly does this external knowledge gege into its own business model? To this end, Gege a two-step fast implementation: The first step, the focus of choice in Beijing and Shanghai Subway, station billboards, Gege instructed the subordinates to sign in advance, the resources to grab the first hand; the second step is to request the research and development team to compress the project release time to three weeks.

July 25, Shanghai 9 metro lines and 70 stations, 500 stations in Beijing, one after another appeared "unlimited 1th stores," a large number of goods display wall. As a result, store 1th in China's consumer industry, the first integration of offline, online, mobile interconnection and community and other fragmented resources, set a "borderless retail" precedent.

"Unlimited No. 1th" is the absorption of external creative knowledge, but Gege is not completely copied, in two of references, the "unlimited 1th" concept has also been upgraded to the "2.0" stage: Smartphone users can not even take photos of the advertising wall, you can through the GPS search function, to find the vicinity of the 1th shop "virtual supermarket" shopping.

"Infinity 1th" is essentially a business model innovation based on consumer behavior and modern technology, which breaks the single online retailing model of the industry and conforms to the trend of "borderless retailing" in the future.

Home Plus is the "virtual supermarket" model in South Korea that is the first online supermarket in South Korea, with 130% sales growth growing online. There are successful cases first, not to mention Wal-Mart's online help, the success of just trying to replicate home plus is not a luxury. In addition, from the industry as a whole, the test samples just provided help the industry to move away from the price war, the money war, and the healthy business model of competition.