Weimin, chairman of Suning: "The innovation map after the transformation of electric business platform giants"

At the 2014 Electronic Business conference, Su Ning Vice Chairman Weimin made a speech called "the innovation Map of the electric business platform giants after transformation". In the speech, he mentioned that Su Ning is happening now, this change is not only the change of platform strategy, but also the change of Su Ning's cognition to Internet. Perhaps this could be the beginning of a new understanding of the traditional retail giants beyond our finances.

The following is the full text of Weimin speech:

I would like to share with you two aspects, the first one of the strategic path to Su Ning over the past few years to analyze, the second through the process of our strategic path to do some thinking.

The transformation of Suning

In 1999, I was talking to a pioneer in China, who talked about the future of the economy as a mouse-cement model. At that time I think the mouse and cement can not melt together, because the mouse is to point to where it can, but the cement is not want to transport to where. In the end we did not go that way, walk the line under the chain of the road.

Since 07, we have clearly felt that the offline chain is challenged by two forces. On the one hand, the cost of the chain rapidly rising, the output began to appear wandering state. If we look at the environment for 1999 years, we will find that the cost of opening the shop is very low. But after 07, with the rapid rise of the whole Chinese real estate, the flow cost of many enterprises is getting higher. On the other hand, with the rise of Internet, the channel diversion of internet has become an irreversible trend.

In this context, we began to build the Internet channel. We created the line of Suning easy to buy, to create Suning chain, began to walk two roads.

Today, this way of thinking is relatively simple. At the time we thought there were some consumers online, some consumers online. We do two channels can be at the same time the interception of consumers, for different modes of sales. But as we push our way up the line, we actually find that the two-channel strategy is becoming more and more unreliable, especially after the rise of mobile interconnection.

The internet's diversion of physical channels has become an irreversible trend from 07 to 2010. In this case, we have further strengthened the integration of two channels. When we were planning a new path in 2012, we began to think about what Suning was doing.

At first we talked about full grade, full channel.

At the beginning of 2013, we made the change of enterprise name, Suning appliance to Suningyun business, began the fusion under line.

Compared to the name of the change, the internal integration of enterprises is very difficult process. Integration of the first solution is the problem of internal resistance. In the past, two channels were pinched each other. But fortunately, there is no confusion about unified planning. But the real to become two legs cross, there is a certain degree of difficulty. Because in this process, we first have to make the purchase fusion, then is the price fusion.

According to the plan, after the fusion is open. No matter how the line online fusion, eventually open. Open is to learn from the Internet model, now can not make a one-time evaluation, but we are at least toward the traditional enterprises to the Internet enterprises over the road.

Su Ning's reflection: Retail has three changes

From the perspective of today, Suning from 2010 to 2013 these years have been in the strategic layout of the transformation. At the strategic level, although I think the transformation of these strategies is right, but from the current results is not good (Suning's profits are falling). This has led us to rethink: why is the strategic right thing, in the midst of action, not producing the right results?

For us, I think there are a few things that need to be re-examined.

What is retail? Retail is the interaction of commodity information funds.

How do you do retail? Doing retail well is three things: goods, prices and services. Commodity rich, price concessions, service is better, the problem of retail solution. We've been doing retail for decades, and we're convinced. But when it comes to the Internet, is it the same thing that can be done? Not really.

From commodity thinking to product thinking

In the past, what is our thinking about commodities? products have a certain function, the more functions the better, the cheaper the better, at the same time the better the better the service.

But is the product more functional? Not necessarily. Because at that time we do merchandise, often see is the mass group of things, we have a lot of products. A consumer from the use of products to product scrap, there are many features may not know him, but he also paid for this function, our factory also pay for the function, this is the cost.

We can not simply do the goods, we want from the commodity thinking into product thinking. That is to say, you need to understand what kind of consumer demand this product is addressing.

From price competition to value competition

In the past, price competition was a very effective means of competition, as it is today. But in the case of price competition, if we do the ultimate-not just for free, but for the other. If price competition really hit such a point, it is beneficial to consumers, enterprises also have benefits, because after all, there is a remedy.

However, in the internet age, what people fancy is not only price, but value. In the past business process, we have always been linear simple way of thinking, is cheap. Now, the internet era is not cheap things. If the retail enterprises, but also always put the price as an important means, but not the price into the direction of value, in fact, whether online or online, there will be some drawbacks.

From good service to good experience

In the past, we always thought that we would do well in service. But what needs to be considered now is: do the norms, do rigorous, do well, consumers have not felt that the customer has not felt? If the customer felt that this is not what the customer needs? That is to say, from the entity service to the Internet age, we are talking about an experience. Experience is the service that the customer can feel, the service he is willing to accept and pay for, that is the value of the service.

From goods to products, from price to value, from service to experience, this is our experience over the past few years.

What else did Su ning see?

In addition, today I would like to share some of our lessons in the development of the Internet.

The first is the question of free. If you do a thing, it must be free, which means that you don't really catch the users you care about, or you haven't found the user's needs. Free stuff In the past may be successful, but it's getting harder today.

The second is the view of traffic. Traffic is the traditional internet thinking, this traditional internet thinking comes from the traditional retail thinking. In the past, we all talked about the retail development space, lots and lots, this is the principle of open shop, because the lot is traffic.

In fact, in the internet age, traffic is the same concept. Traffic is really important, but more important than traffic is the brand and the customer. If you attract customers through drainage, the flow will always need to be cost-sustaining and its business value will always be the lowest.

But the brand may be different, taking millet as an example. Millet's success is its operating customers, operating the customer itself formed a flow. Millet formed such a flow, to which platform is irrelevant. If we truly return to customer management and brand management, this may be our future to create the ultimate destination of flow.