Analysis on the restriction and influence of traditional OEM/ODM enterprises on the development of Business-to-consumer

With the rapid development of the Business-to-consumer, its own independence, controllability, continuity and high growth makes the company more and more traditional enterprises pay attention to, have a High-profile announcement into the field of business, these representatives include traditional brands: such as Li Ning, only and so on; traditional production enterprises: such as Foxconn's e-flying Tiger Mall Traditional entity chain stores: such as Su Ning easy to buy, traditional state-owned enterprises: such as the post Office of the Mail Music network, Cofco I bought a network. While these traditional companies are entering the company, they have a lot of resources, including: Supply chain, call center, Distribution Center, promotion resources, brand resources and even administrative resources, but we can find that their growth rate is not always comparable to the pure enterprise. Last week, in an interview with the legal daily, we discussed the three questions about the state-owned enterprises entering the company, which will be written separately, and this time we will discuss some of the problems that OEM/ODM enterprises are going to encounter in their operations. (Author of this article: Zhong--senior expert of China e-Commerce Association, Chinese Mobile Research experts and think-tank members)

Influenced by the financial crisis of 08, many OEM/ODM enterprises hope to develop their own brand and achieve the growth of domestic trade through this way, but in the actual operation, it is found that although the operator of the professional business, it is still very difficult to develop their own business mall. Or is the pace of development very slow, and what are the causes of this? This article will do some simple analysis through my experience and experience of two of the relative traditional OEM/ODM enterprises engaged in the business of Business-to-business, hoping to arouse a wider range of discussions.

The first company I went through was a company with a ODM background, and customers in the traditional ODM field, including Adi, Nike and other well-known shoe companies. Following the financial crisis in 08, the company co-founded the Business Mall, which, because of its background, attaches great importance to the supply chain. During my time there were nearly 30 people in charge of the Supply Chain operations center. Because it is relatively independent operation, the company itself in the system is not too much influenced by ODM, but in the operation of the idea of the impact of the traces are more obvious.

As with many OEM/ODM enterprises, they are in the overall commodity planning and logistics distribution on the business and not too much consideration, just because of "long tail effect" and strong media publicity to establish the site visibility, through the investment sector to increase the number of suppliers, in a short period of less than a year, The whole station's SKU will reach more than 30,000. This eventually led to inadequate preparation in the promotion phase, logistics and distribution of a variety of coordination issues that led to a decline in user experience, serious impact on the brand image, making the later operation of the adjustment costs more human and financial resources, but also led to a lot of talent loss.

Of course, because the investor and CEO in the Network brand building on a better and sustained financial support of the relationship, the company is still continuing to develop, but the pace of development is significantly behind the pure shopping mall.

The second company has a more solid OEM/ODM background, with six large-scale factories around the world, although these factories are not related to the goods operated by the company itself, but its deep-rooted operating system and thinking mode have led to the development of the mall has been greatly restricted, Although I and my team did a great effort to make a change, I ended up stalled because I couldn't get the CEO's continued support.

OEM/ODM enterprises have long been in the incoming to single processing production status, for the overall commodity planning one is no experience, the second is not enough attention, and the operation of the core and the basis of business is based on the commodity (supply chain management) on top of the foundation, the subsequent development will be affected by a series This is also I have been stressed and tried to make adjustments, but the resistance is very large, thinking and system changes need more courage to be effective.

There is also this type of enterprise in the market cooperation and promotion has been weak, so in their view, need to strengthen this area, so the whole focus will be offset. And the above foundation does not do well and guarantee, the market cooperation and the promotion wants to obtain the very good effect is not likely, whether you are through the way of the business or other way.

The last aspect is the internal process, you will find in the payment settlement, seal, recruitment and other aspects of efficiency than the pure business enterprise, these enterprises generally in the business, the financial/human resources will still be unified management, so that the overall efficiency becomes very low, Not adapted to the recruitment and expansion of the enterprise, also not conducive to the maintenance of the relationship between suppliers, this is what you will find in a traditional enterprise operation of the business of the company has been buying a good commodity, will suddenly be off the shelf no longer sales, many cases because the settlement of the payment of money has stopped the cooperation with suppliers.

From this point of view, such as Foxconn's OEM/ODM enterprises, want to operate and develop a good business, one is the adjustment of the internal system, the other is the adjustment of operational thinking, really let professional personnel to operate, rather than in the operating process constantly impose OEM/ODM thinking and ideas come in, The result is that the development of the business of the company has slowed or even stalled, for OEM/ODM enterprises, not only the loss of investment, but also the future recruitment of professional business operators, will leave a shadow.