Jump out of business-to-business E-commerce platform

2008-09-23 China Internet Conference speech

In the past 2 years, the business-to-business industry is a big hit, by the market bullish, ALI, the IPO will be business-to-business to the climax of the entire business-to-business industry and investment areas for its gearing, as if the spirit of business-to-business has arrived, boil the head. But this year after the Spring Festival, the situation has plummeted, the stock price has fallen steadily, the market is extremely shrinking, layoffs, closing, adjustment, contraction front, and so on. So what causes the business-to-business market to be a flash in the pan? Has the business-to-business come to an end? This should be interpreted from the business environment in which Business-to-business is based, the business model that is wrongly admired, and the business cycle that has long been in place.

1. Business environment

International: The U.S. economic crisis will ripple across Europe and the United States and Asian markets, the global inflationary pressure, the decline in consumption, will affect the promotion of innovation and the new economy of the Nasdaq market tends to conservative, some VC/PE financing difficult, the next 2-3 years should not be a good time for VCs and IPOs, At least the rules of the capital markets will change, which must be a major blow to TMT's way out.

Domestic business situation:

The increase in the cost of raw materials, the appreciation of the RMB, the increase of human cost and the adjustment of financial credit policies have led to a sharp decline in corporate profits, which is difficult to accept by raising the price market.

Due to the lack of timely funding support, resulting in the expansion of enterprises, or the development of new products seriously hindered, will seriously affect the industrial transformation, or improve the technical content. To know: innovation, enhance value-added, adjust product structure, is built on sufficient information, capital, talent, risk, market accumulation above, is not tens of millions of small and medium enterprises can easily do,

Before many are exported to the European and American markets, due to the decline in consumption, economic downturn, trade protection and so on, a large number of returns, some enterprises were forced to turn to the domestic market, but the domestic market disorderly competition, costs, arrears ... What if the future is slim?

A friend told me: very worried, now dozen golf more and more people, many business operators stop hand.

The deterioration of the environment, the shrinking of the market and the sharp reduction in orders have led to business-to-business clients-suppliers to calm down and cherish their cash in the search for a cheap, truly effective way of selling, which the current business-to-business cannot fully satisfy.

Why do you say that?

2. Business-to-business Status and Cycle

The Circle of business model: Business-to-business platform and the vicious circle of participating in trade

Remember when my company just decided to enter the Internet industry, talk with some senior friends, they these eldest brother to me the biggest and most clear topic is: You must get rid of the shadow of trading company, to do a similar to XXX, a third-party business-to-business platform, because you are just, not only to avoid some of the transaction responsibility, but also unlimited development space. At that time, if I get the true meaning, yes, others VC how can invest in a trade-oriented company? So I made up my mind: transition. You know, I'm a businessman who has been a factory for 18 years and engaged in 8 years of Eastern European trade. Although the process of 3 words I do not leave the bank, and the customer sat down with him to analyze the market, how to establish channels, how to develop customers, how to establish a after-sale system, how to choose domestic and international markets, big talk about orders , trading, risk ... In the end my team often reminded me: Mister, another old habits, the result is that customers are very excited to want us to do his overseas agent ... Haha, I quickly accept the sound. So determined: Set up a platform, spell!

2 years have passed, fortunately: I successfully transformed, but a careful inventory, I changed what?

1, to become a professional for the Eastern European market business-to-business platform;

2, the vast majority of resources and costs to the platform: IP, PV, PR, ranking, technology development, network marketing, precision delivery, sales force (agent, direct marketing 、...... ), art, editing, website content, SEO, SEM, customer service, media, resources ... All this has taken over my mind.

3, now the platform was established, the team expanded, reputation, the site is active, everything is good, but is the only one bad: most business-to-business (including Internet) companies are still burning money, the enterprise is not profitable, and according to the current big environment, the profit is even more slim, to know "profit" is the core of the enterprise AH.

4, these consume most of the company's capital and human resources, to know that these are burning money, and can not directly produce benefits.

That means the current business-to-business model is playing: I spent a lot of tangible cash, to build a virtual platform, to rely on this promising platform to make money I have spent on the cash, may be more than before, but also may be less, but the possibility of a large number of too many, because of this hope, Ignoring countless examples of internet start-ups wanting to be successful is 0.1%. In the traditional industry absolutely no one bets this, only on the internet, because like fantasy, also full of hope and story.

I was trying to get people to pay for their stories, but the end result was to pay for their own stories.

I do not know whether this transformation is happy, or sad. Suddenly remembered an advertisement word: I was wrong, I really wrong!

I don't think this is luck, Lehman Brothers bankruptcy, let me meditate for 2 days, finally understand the truth: from the outset, business-to-business is wrong, as a third-party platform for the outside is the biggest misunderstanding and the circle, at least not the only and best business model. Why?

Because it is a third-party platform, most of the profits are based on membership fees (only a very few platforms will have advertising revenue), that is to say, as much as possible, constantly expand the number of members, if the number of members saturated, only to tell a story to increase member prices, and constantly milking, then ask dozens of, hundreds of, Tens of millions of members how do you guarantee their effectiveness? How to make the manufacturers feel value for money? Who has the ability? In other words, business-to-business listed companies will definitely be in the constant demand for rapid performance growth of the shareholders and the constant demand for cheap members of the formation of sharp conflicts of interest, how to balance? You're a platform, but can you stay out of it? The present situation is an indisputable fact, can not solve the contradictions. Such a widely respected business model, once the bubble blew up, conflicts of interest increasingly obvious and prominent, the smoke, the effect can not be guaranteed as a platform is not able to balance and solve.

The vicious circle of product competitive advantage/difference:

Enter the internet first you have to consider the business model, the second must consider the difference, or the advantages.

At present, the differences/advantages of business-to-business visibility are not the following:

A large amount of information, foreign exhibitions (hosting, participation), service high-end customers, pay by effect, according to the price of Chinese cabbage platform, industry vertical, regional vertical, line online, precision marketing ...

Before commenting on the above features, first look at what the company really wants? I think I have a say in that. Because I have worked in a large state-owned enterprise, from being responsible for technology to marketing, to having a joint venture with an IT-listed company, and managing billions of dollars in a famous listed company, I know exactly what the business wants:

What they need more from an E-commerce platform is Order and security transactions, rather than an order of hope, because the other business strategy and management of the Internet industry can not help them, and at present there is no good model to solve the traditional sales model of the market management problems and the Internet awareness of the problem.

If there are no orders, they will not reject this hope, but will certainly consider cost-effective.

The difference between the traditional industry operators and the internet lies in:

The traditional industry is more rational, never say I open a factory first, whether the product is making money does not matter, as long as the first occupation of the market, to catch a reputation, 3 years later I will generate profits, because this story they experienced too much, they know that the future of the market no one can predict and control (only a very few exceptions, such as Google, BAIDU, QQ, etc.).

L They absolutely have to consider cost-effective, the view of financial analysis, must be very practical, especially in the future treasure the era of cash, to be too tight days.

In fact, the traditional industries are not necessarily wrong, they are not short-sighted.

Figuring out what the business wants, let's look at the above competitive advantages:

Mass information, exhibition: Just a show, a hope, is an unknown, the future spend tens of thousands of, hundreds of thousands of to buy a hope more and more difficult, and the problem is that if you have tried for 2-3 years have not deserved return, they will play?

Service high-end customers: the majority of high-end customers today to raise the threshold of high fees, but to provide customers with the real number of matching high-end services? At most, it can be satisfied, but how much is this satisfaction? And the strength of the enterprise is not based on the product but based on the investment of the platform funds, this evaluation system must not be convincing, not objective.

Pay by effect: This is completely a conversion concept of the problem, a click, a phone call, a message to ask the situation can not be said to be the effect, from the actual effect of the order to make the difference is too far.

Positioning a specific group of industries/vertical sites is a good thing, but if there is no order, can not continue to profit.

Only the price of cabbage as the threshold for customers to bring orders and help them safely to complete the order is the real effect, is the future of business-to-business solutions.

In fact, many customers at the beginning of business-to-business sales will ask: how to guarantee the order? Guaranteed effect? To be honest, it really does have a lot of difficulty, challenge and great courage.

Now let's look at Business-to-business and Business-to-consumer:

Business-to-business selling is a concept, hope and the future, is the traditional Chinese culture and consumption habits of the challenge, is quite difficult, we from the western approach to insurance is evident;

and the consumer: there are ready-made tangible products, and participate in, solve the transaction problem, see model get, customer consumers do not have the threshold, in line with consumption habits, so with market operability, with a huge market, high noon.

No one would think that a Web site like a diamond bird was not a platform and worthless, on the contrary, it had won the favor of today's capital, and it was also possible to see the problems and cycles of business-to-business business models.

So what should business-to-business platforms do? First of all, we should understand the difficulties faced by SMEs:

At present, the biggest problem of enterprise management is:

High raw material cost, high manufacturing cost, and international competitiveness decline;

The domestic sales cost is high, disorderly competition, arrears of payment, low credit, lack of security;

Europe and the United States and other mature international market further deterioration, trade barriers and protection, language barriers, information is not, market risk is not controllable, no brand advantage;

There is a serious shortage of funds that cannot be scaled down to reduce costs and to support product transformation and innovation.

How to solve the integration of E-commerce and traditional sales channels, the unknown factors of E-commerce.

What do companies really want?

Have the strength of the enterprise needs: to create a brand, market share, but these are more enterprises to operate their own market;

The small and medium enterprises want the effect, need order (not inquiry), and help them to complete the order safely, and bring customers a new market;

All of these, the existing business-to-business platform can be solved?

Does business-to-business really come to an end?

Business-to-business Orientation:

Face up to customer demand for orders, find ways to help customers get real orders, bring real results and markets to customers, rather than present concepts, presentations, or hopes.

The era of business-to-business profiteering and fantasy is about to pass, and it must rely on the ability of enterprise management and the reorganization of resources. Do not pursue a one-sided business model of innovation and go astray, do not think that there is a good idea, or a blank niche market, or that they have a new technology, or new resources to engage in Internet entrepreneurship, and give up and ignore the core of business operations: profitability. To know that the cultivation of a new market demand is not a small business can be bought, it needs a considerable accumulation of enterprises.

Business-to-business Solution Path:

Reduce operating costs, adjust all resources to profit for the purpose, because the road of venture capital and IPO is getting narrower;

To bring orders for the purpose, not rankings, not popularity;

Participate in the transaction and help to complete the transaction;

The next step in Business-to-business e-business is a higher demand for its operators and teams, and they need to develop more than just a business information platform, but a complete business chain service provider. Their executive power, market resources, risk control and experience can fully help SMEs is the real demand for business-to-business e-commerce "effect."

And for foreign trade business-to-business should be a combination of online resources, to the Internet as a means, combined with international trade and overseas promotion of integrated business services, the choice of emerging markets, to help enterprises achieve sales, low-cost development of the market, is the enterprise choice of business-to-business E-commerce.

Here I would like to briefly introduce the characteristics and objectives of the Goa network:

Focusing on Eastern European markets, this emerging market does not have much impact on the economic crisis in Europe and the US;

Rely on the order and participate in the transaction to establish their own characteristics, low cost for the enterprise to bring real benefits;

Frankly, the fruit net is still very young, there is a long way to go, but we will adhere to this goal, adhere to their own way.

Here, I would like to state one point: the above sentiment is I from the collapse of Lehman Brothers, Insomnia 2 all day and suddenly feel, the only hope is that business-to-business should go out of the myth and the circle, because if the current model is really a dead end, waste is only their own and investors ' hard-earned money, the other is to invigorate the economy, There will be no other regrets. If you can wake up, the money spent upfront is not wasted. If there are some places that offend the peers, please forgive. I am convinced that business is an example only if the overall prosperity of the business-to-business sector is the only opportunity.

It's time for business-to-business to wake up!

Detailed report: http://china.myekoo.com/