The open dispute of the electric business: cooperation and worry need more perfect cooperation mode

Is it vertical or lien?


Jiuxian Network Mall general manager Zhang Jibin selected the latter. At the end of May, the Jiuxian network became the third company of the No. 1th Mall on the big open platform of store 1th.


for the Jiuxian network, the number 1th mall is the eighth Jiuxian network of mutual open consumer Platform partners.


can combine, Zhang Jibin heart not bottom, but he found that this is irreversible trend. For example, shop number 1th, the company's big platform strategy is rapidly advancing, the number of settled businesses to 500 per month at the speed of increase. In addition, the Beijing-east, Tencent and other giants are gradually competing for the day Cat and other platform business resources. At present, the Beijing-East open platform for the average monthly increase of about 40%, in addition to the development of apparel shoe bags, but also in food, home building materials, hotel ticket reservations and other products on the line.


open platform, the biggest advantage is to use the open platform, more limited use of user resources and idle logistics, storage resources, to achieve sales increment.


just, not all the Business-to-consumer are chasing the tide.


, the CEO of Beichun, admitted that the company's first two years on the open platform of the attempt is not successful, open platform upfront promotion costs, in the current competitive pattern, not two or three years time is difficult to profit.


"The platform is open and ultimately the scale determines success or failure. Everyone is the first, and the industry has the days of cats and jingdong such scale enterprises. He confessed.


, can the warning to the electric business enterprises? Li Jongwei, the CEO of the Business Network, bluntly, the open platform looks beautiful, but its implementation faces many details. "Further, it's not easy to get someone else to do business on your platform," he said. ”


how to attract third-party suppliers willing to "work" for the platform, test the platform side strategic vision and management capabilities. This will lead to more cooperation in the coordination of resources of the problem-the commodity and partner products to avoid the "right and left"? How to distribute the flow and benefit rationally with the cooperating party? When the vertical class of electric dealers with other platform to expand their own size, whether "bridges"?


has too many cooperation concerns, the need to find the perfect mode of cooperation.

The temptation to
light assets


From the second half of last year, the wave of platform-type business is brewing in the industry. At that time, the "heavy" proprietary group appeared to be collectively in crisis, the larger the scale, the more sales and the more serious the losses. Platform-type business, however, shows the advantages of light assets, and the company can gain scale expansion without much investment. At that time has not renamed the Day Cat Mall, the first in the second half of last year launched an open strategy, 1th stores, new eggs, Macaulay, and other 28 proprietary Web site to open the official flagship store; then, Tencent launched the platform-type consumer electric business QQ shopping, and intensified the introduction of Third-party vertical business, which, in addition to the investment by Tencent Xun, Good music to buy, the outside of the stone, all the guests, shop 1th and the figure of the wheat bag also appeared in it.

The rivalry between the two giants,
, seems to have brought the new stage of competition to the platform, forcing players to follow. So, when also not to be outdone, recently in the "Open strategy" on the movement frequently.


this March 25, when the United States and Gome to build a retail platform of Gome, the official online operation of the city, and launched a price war; at the beginning of April, when a partnership was reached with Taiwan's east-Mori shopping, it enriched the category of daily necessities, and then when it was announced that it would be the Jiuxian, the latter would operate exclusively as a wine channel. It is reported that when the focus of the open platform for merchants is some of the scale of the business, guoqing not long ago was personally led to Quanzhou, to complete the open platform "footwear" category of 5 billion sales target.


this March 29, in the Chinese manufacturing capital of Guangdong, a similar scene is being staged: Amazon has officially launched a "Global open shop" in front of 500 of Chinese traditional companies: as long as Chinese sellers store their products in Amazon Operations Center, they can send goods to the world through the latter's warehousing logistics system. Last July, Amazon China announced the launch of "I want to open a shop" and "Amazon Logistics" services to attract third-party sellers to open the shop.

The "open impulses" of the
giants are not hard to understand. In the case of Bingbin, CEO of Bao Zun, the current concentration of electricity dealers is very low, and many of the transactions also occur in a fairly dispersed group, "even if the cat's market share is less than 10%." When the whole market has not yet one or two of the single big situation, the platform is of great value, "because all businesses need an export."


not only that, the light asset quality of the platform makes it possible for companies to expand indefinitely with a single system, in other words, with a good system, "running 1 billion of the business volume and running 10 billion of the system pressure is similar." In contrast, if the company does its own procurement and warehousing logistics, when the sales increase 10 times times, the number of employees will also increase at least five or six times times.


However, platform strategy is not "discriminating". Li Jongwei, the CEO of the network, points out that the platform is not a simple superposition of categories, but the extension of the use of consumer boundaries to extend the attention of old users to new products. In other words, more goods can stimulate the user's consumption, to achieve the purchase increment, should be the first consideration of platform strategy.


In fact, this is not easy to achieve because it involves "the degree of coincidence between consumers and commodities" problem. In the case of Mecoxlane, the company's previous category expansion did not motivate users to buy new purchases, nor did it increase the total amount of consumer purchases. Further, Macaulay's target audience is a 25-35-year-old fashion woman, which is not necessarily suitable for purchasing a whole category of daily necessities.


at the same time, the overall margin of the platform is low, the promotion of higher costs is the MAI Lin do "subtraction" another important factor. Mai Lin Marketing director Shaojingping Frankly, "if you have a narrow user base, and there is not enough people, even if the open platform may not be profitable." Because the platform's early planning and promotion costs are very high, if there is no large capital injection, it is difficult to maintain. "On this basis, Mai Lin relies on clothing to start," the characteristics of clothing is more styles, small batches, lots, and such a supply chain is not enough to carry across the category of operation. ”


this actually involves the expansion strategy of the proprietary company. The characteristics of the user group, the characteristics of the company's supply chain and the management ability determine the different development paths. Xu Yunjian, the partner of the company, said, "is to do a single category or the more the better, is to go specialization or diversification of the road, is to do limited diversification or unlimited diversification, need to establish the corresponding core competencies to match." ”


Traffic Allocation Puzzle


to a few of the Big boss, they do not exist in the MAI Lin "user group narrow" problem, so in the acquisition of platform traffic does not cost much, the import is often the original traffic.


for them, the cost of the open platform is much less than the need to invest a lot in purchasing and managing costs. In Li Jongwei view, the input of the electric business platform is mainly embodied in the "Time cost", it represents the supplier and the platform itself running-in progress, "but technical factors are secondary, the key is the problem of distribution of traffic."


specifically, the platform wants to import its own traffic into the new vendor's category in a proper way, and the platform itself may have been competing for these flows within the company, thus making it impossible to digest the new additions.


In fact, in the early stage of platform construction, the conversion rate of third-party suppliers is likely to be lower than the conversion rate of Self-and. For example, in the proprietary sector, the import of 1000 IP generated sales is 100,000 yuan, and in the open platform, 1000 IP may only generate 10,000 yuan of sales. The company's flow of liquidity has declined.


in other words, "when the platform is both an umpire and an athlete, it needs to assess which of the same flows into the proprietary and open platforms, which brings more efficient conversions," Li Jongwei said, "Some companies are not doing well in the open platforms and cannot expand in size, The core problem is that consumers visit third party suppliers as much as they do on their proprietary products. ”


in Shaojingping's eyes, flow distribution is also related to the paradox of precision marketing. It is often thought that the more accurate the flow of traffic is, the better, but it is not, because it is too "precise" to lose potential customers. How to achieve "relatively accurate" test the wisdom of the platform side. In addition, when the scale of the platform more and more, how to let the vertical type of business more involved in the overall platform marketing, the formation of mutual promotion, is also a major challenge.


from the macroscopic point of view, the profitability of the platform is bound to have a scale of the critical point. When the input-output critical point is crossed, the larger the platform, the lower the marginal benefit, resulting in higher returns, and risk allocation to a large number of third-party suppliers.

The
platform's vision, though good, does not mean it can expand indefinitely.


to this, Li Jongwei to reporters calculate: If a consumer web site has 10 million of consumers, in the acquisition of new users, the company will not because of the expansion of the category and users in half a year from 10 million to 50 million; how these consumers transform among the many categories, there is a limit In terms of customer unit prices, if the original average consumer per capita consumption of 300 yuan each time, now may become 500 yuan, such growth is still limited. From this point of view, the boundary of the platform is very obvious.


Control challenges

Another constraint to the expansion of the
platform is the company's background management capabilities. It is not difficult to understand that with the development of the business, if internal management can not keep up with the expansion of the category, there will be uncontrolled situation.


in the case of store 1th, the company on the open platform for each supplier has provided a relatively "personalized" service, some businesses will use store 1th warehouse logistics system, and some are entirely by themselves. At the current rate of investment in Shop No. 1th, this means a lot of backstage coordination work.


In Bingbin's view, if a dealer from the original relatively narrow category into a mixed operation, but also to provide back-office supply chain services, the challenge is too big, "as long as the supply chain involved, the water inside is too deep." ”


further said that the open strategy means that the platform side, in addition to the proprietary category, may also be familiar with other types of supply chain, because each category has a choice of warehousing or not warehousing business. But at present, there is no one platform to all the categories are at their fingertips.


So, 1th shop and Jiuxian network Mutual open cooperation mode, only limited to share users and traffic, the back-end of the warehousing logistics still by the Jiuxian network to complete their own. Shop No. 1th uses the way of inverted water and Jiuxian network for revenue sharing. Similarly, the previous April 19, Jiuxian Network and when the announcement of strategic cooperation, the former will be exclusive operation of the wine channel. When the user is purchased, the data will be transmitted directly to the Jiuxian network, which is responsible for delivery, distribution and after-sale management by the Jiuxian network.


Besides supply chain management, how to grasp the after-sale service of the third party is also very important to the brand influence of the platform side. Xu Yunjian that this covers two factors: first, the access mechanism, that is, whether to allow a third party suppliers to enter the difficulty of entry, how high the standard, the second is the rewards and punishments, through the setting of the rules can also play a certain role in management.


and the other question is, do the big guys spare no effort to run on the open road, whether will let each website's operation and the category gradually converge, thus produces the resource duplication, "The Thousand Human side" phenomenon?


on the Jiuxian net, at present, the company on each platform to provide the same products, but Zhang Jibin said that the company will not rule out the future of the various sites of the product to partition, "such as when the customer base on the price is more sensitive, we will be when on the push for some of the main cost-performance products." ”


for the homogeneity of the question, I wish Peng's interpretation is that each appliance business start when the focus of different, for example, shop 1th started in the fast elimination, when the beginning of the book, and Jingdong started in the 3C, which determines the company's expertise in different areas, the supply chain management capabilities are also focused on, thus creating a differentiated force point.


This statement is accurate, still need time to verify. Bingbin Frankly, E-commerce is still in happy enclosure stage, in addition to the Sky cat, other platforms relatively early, has not yet formed a differentiated characteristics. Or, these platforms do not yet have a true "gene" of their own. But he believes that a full range of integrated platforms may end up leaving only one or two, and the rest of the players will have to think about how to survive differently.


This is similar to Shaojingping's view. In his view, the domestic Internet industry segments of the basic only the first second place there is room for survival, "third after the enterprise will be very dangerous."


However, differentiation does not seem to be a problem for the big boys at this stage. Compared to the platform's characteristics, "they are now more concerned about the size, price, and return, and how to get the right category to bring the right conversion rate." "Li Jongwei said.


at the same time, the competition for the platform will not be contested in the short term, "because there is a lot of venture capital behind it, or the shareholder background of large groups, to provide a steady stream of funding." "Shaojingping said.


Dialogue CEO


Bingbin CEO


Li Jongwei CEO


Xu Yunjian Partner


Zhang Jibin Jiuxian Network Mall general manager


"21st century": At present, many electric business websites are pushing the open platform, and the investment speed is very fast. Why do these companies invest so much in the strategy of an open platform?


Li Jongwei: The open platform approach is actually a return to commercial property. Through the extension of consumer purchase demand, open platform can obtain more consumer dividend. If the consumer dividend is temporarily unavailable, it can obtain dividends from the supplier. In other words, the platform can expand consumer demand downstream, earning money from suppliers upstream. Business models are like this, but to allow suppliers to stay on the platform for a long time, it is necessary to use the purchasing power of consumers to support, otherwise the platform will not make dividends. Anyone can do open platform, but in the end is a very mathematical problem, is through the distribution of traffic to achieve the best cost, consumption efficiency of the highest mode.


Xu Yunjian: I think there are two aspects, the first is to meet the needs of user diversification, the other is to see the business opportunities with third-party suppliers. Platform and vertical site cooperation, from the input-output is a very effective way. As a system integrator, the platform can gain a lot of benefits in the process of consolidating resources.


"21st century": You believe that the electric business to do an open platform, what needs to have the ability to do what input?


Bingbin: I think the investment is mainly in business processes and systems. However, business processes and systems typically do not require particularly large inputs. In the early stage of the platform, it still needs to operate more "light", or the vertical site to complete its own supply chain operations. Because the platform business volume is small, it is difficult to play a scale advantage, only to reach a considerable scale, the integration of these levels of service is meaningful. For example, Taobao may be tens of billions of of sales before considering the introduction of logistics services. Therefore, the level of service is a big trend, but all need in a certain scale time to show economic benefits.


Xu Yunjian: The platform first needs to think about the scope of the future business coverage, how strong the business forward-looking, and then to design the framework structure. Specifically, these inputs include database construction, IT systems, warehousing and logistics systems, security systems (transaction security, user privacy), and so on, these need platform builders to do a lot of input.


"21st century": If the platform side wants to enlarge the scale by simply stacking, what problems do you think you will face?


Xu Yunjian: First of all, the platform's business development and the company's management capacity, technical facilities construction is related. If the background construction can not keep up with the expansion of the front desk, it will certainly bring about the problem of runaway management. Second, in the introduction of vertical Web sites, you need to consider your development strategy, is to do a limited category or the more the better, is to go specialization or pluralism, is a limited or unlimited diversification, such a platform strategy will be the core of your ability to build a guiding role.


Zhang Jibin: I think the platform should first consider its own genes, that is, its target customer base is what the customer needs in the end is what, can not blindly expand. If the new category does not match customer demand, it will lead to an increase in operating costs. For example, the original focus in the food field of the business, suddenly to sell oil, or power tools, it is certainly not suitable.