Internet Smile curve: O2O is not an elixir net can not fly to the moon

[Internet is a magic net, but it is not a panacea, enterprise is not net can fly high to the moon. o2o--Some people are happy and others are worried.

Now enterprises have Internet, however, not all industries and products can be Internet, the level of online, depending on the industry and products of a series of data and network characteristics. To select only the price dimensions of goods and services, we can draw the "Internet smile Curve". The curve divides the line into five intervals.

First range, high-end luxury. The degree of Internet in this range is not high. The product has a series of characteristics, one is mostly art, jewelry, watches or limited edition of luxury goods, rather than mass production, so there is no need to use the Internet to promote the volume. Second, the value of such merchandise recognition, has a very strong subjectivity, cost plus profit is not the price of such goods. Third, this kind of commodity often emphasizes culture, taste and experience, encourage customers to visit. Four, these luxuries have been online under the formation of a complex and extensive ecological chain, it is difficult to transfer to the line. In the foreseeable future, you may see more LV mansion and LV marketing, but LV will not walk OLE route, it is difficult to take the main line. Some two or three-line brands may be heading online.

Second range, medium and high-end goods or services. The level of online education, entertainment, retail finance and medical care is particularly noticeable. Online service is a scale-free space, and once involved in the specific commodity needs of electronic maps and other scale space to match, therefore, it can be foreseen that the line on these services, is multiplication amplification effect. The value of quality financial, educational and recreational resources will be doubled. Of course, some of the electric business or platform operation of the high-end brand, if the capacity of the end of the pressure is not too much, the degree of Internet is also relatively high. But I still prefer to believe that the second range of the online subversion will be the first in the service industry to succeed, the reason is that almost all of China's pure electric operators to survive in a scale-free space, Ma Yun although purchased MAPABC, but with a good map and distance. What you can't ignore is that Google is actually cutting into a cloud-supported online service.

Third range, mid-range goods. These goods constitute the main body of the Amazon and the cat, under the line competition is very cruel. For these goods and services, it is a somewhat contradictory choice to go online. Online business and customers are not without impact, that is, the range of goods and services, the line under the wire to eliminate the effect of the addition and subtraction, rather than the multiplier effect of the second interval. This makes many merchants are contradictory and uneasy mood to go to the line. There is a possible pattern is: offline to experience and new products, the pursuit of profitability and maintenance of the brand, the line to discount and dumping goods, the pursuit of sales and low-end market coverage. But the internet has not made the third zone bigger.

The Forth interval, the effective long tail interval. Not all the long tail Internet can be powerfully covered. These low-end goods and services, the brand effect is weak, price competition is the primary factor, product quality will be a huge difference in the future in the law, taxation, supervision and many challenges. It is difficult to assess the social welfare effects of the internet on the integration of this long tail market, but it can be judged that this interval cannot breed any decent business. It is noteworthy that there is a certain substitution relationship between the second and fourth intervals, while the high quality resources are magnified by the Internet, while implying the possibility of reducing the value of low-end resources by the Internet.

Interval five, invalid long tail interval. is the internet not omnipotent to the long tail? No, part of the retail market for low-priced and fast-selling goods is beyond the reach of the Internet. There is no cost of access, such as photographs and display of goods, and online retailing also requires logistics delivery time. But for a box of cigarettes, a bottle of soy sauce and the like, roadside shops can beat the Internet.

Therefore, O2O is a trend but not a myth, online coexistence is inevitable, at least in my opinion, Ma Yun and Wang's bet is uncertain. For those with only 8% share of retail sales, they may be more eager to go offline, to the 92% market, pull customers to pull the market, and offline enterprises under pressure, will also appear on the active passive ground.

The Internet Smile curve also reflects the disparity in the degree of Internet accessibility in different industries:

First, the degree of Internet infrastructure is quite high, because infrastructure is already networked, infrastructure nodes are homogeneous from complex network systems, infrastructure is easier to be driven by the government and Internet, and the scale of infrastructure is fully established. So the future of the post is far better than postal savings.

The second is the extent of the Internet in the production side is far lower than the warehousing and trade circulation, because the production end node heterogeneity is too high, the data logic structure is more complex, and these in the business field are no longer exist.

Third, the scale-free financial, education, entertainment services can be internet-wide, higher than the need for scale space with the production and transport.

Four is the higher the industrial concentration, simple chain replication of the industry or enterprises, from the Internet closer. The more dispersed the market, the less standard and clearer the relationship between the industry subcontracting and supply chain, the worse the degree of Internet can become.

The Internet is a magic net, but it is not a panacea, enterprise is not net can fly high to the moon. o2o--Some people are glad to be worried.