Suning's Capital Bureau: The new industrial chain of Internet layout

Determined to embrace the Internet Suningyun finally got a mobile internet and PC Internet ticket. This is also the beginning of the new industrial chain of Suningyun.

October 28, Suningyun, Hong Yi Investment announced to 420 million U.S. dollar corporate benchmark valuation joint Strategic Investment PPLive (hereinafter referred to as "PPLive") company. Among them, Suningyun investment 250 million U.S. dollars, accounting for pplive 44% shares, become the largest shareholder. The original institution major shareholder Japan Soft Silver all withdrew.

PPLive all the way, there are many VC support, as well as the largest PE investor Japan soft silver "China gambling." Video, like the electric dealer, is a constant investment in capital, the scale of the cost of running a protracted war. Perhaps it is this, the Fang Sunin and PPLive. They need to join forces to develop new battlefields for mobile internet and home Internet, in addition to the PC Internet. This is where the traditional internet giants have not completely fought.

This year, in the acquisition of pplive many rumors, Su Ning has undoubtedly become the most important protagonist, the industry has been rumored that both sides to talk about. However, Suningyun Vice Chairman Weimin and PPLive CEO in the interview with the Economic Observer has repeatedly stressed that since the two sides have not contacted other companies. Su Ning's "persistent" to pplive, undoubtedly means this piece to its future layout the whole industry chain of importance, and suning in support Suning easy to buy complete to "cloud quotient" concept transformation, once again extended its own industrial chain layout, directly into the Internet digital content consumer market.

Around the investment PPLive Capital Bureau, there are a lot of people who do the Bureau and into the Bureau. Tao told the economic Observer, contact us, there are many, and finally 6 Enterprises formally joined the negotiating team, Suningyun business, Alibaba, video, Hunan TV, as well as the investment including Hong Yi two PE funds. The final choice of Suningyun business, strategic and tactical considerations.

Starting with this capital Bureau, there is no winning or losing side, only to see if it is in the common interest. Bureau is a strategy of interest. With PPLive financing settled, a new capital bureau will begin again.

Into the Bureau

October 2012, Suningyun and PPLive had the first intimate contact. But the intimacy is not at the capital level, it's just business cooperation.

Tao clearly remembers that PPLive was ready to enter the burgeoning Internet set-top box market, but has not found a good sales channel. and rely on 3C products to start the suning, whether it is a rich offline store, or electric business easy to buy, are pplive more value channel resources. PPLive hope to borrow Force Suningyun, open OTT product sales market.

Coincidentally, this very ordinary business cooperation, but catch up with the internet is seeking to transform the Suningyun business. "We were looking for the right investment plate on the internet," he said. Jingun, senior vice president of Suningyun, told the Economic Observer. Before that, the Suningyun business had just invested in red children, and the pace of Internet investment had just taken off.

At that time, Suningyun didn't know what the video meant to them. Looking across the Internet, there are no cross-border cases of electrical business and video gaming.

It was not until February this year that Suningyun began to engage with pplive in capital. Jingun admits that before capital touches PPLive, Su Ning is also studying other video website. During this period, there have been a number of financial investors to the Bureau, hoping to invest in pplive, and give a higher market valuation.

According to Tao, he wants PPLive to have a financial investor, a strategic investor. The former provides the funds that the company continues to develop and expands, and the latter provides resources for pplive strategic development.

In learned that Suningyun contact PPLive, a large number of PE funds hope and Suningyun business "platter." In the end, Suningyun has chosen to invest in Hong-Yi, which is deeply rooted in his own history.

Last July, Hong Yi invested in 12.15 yuan per share of the price of 1.2 billion yuan to participate in Suning appliances (Suningyun) of the targeted additional. Suning shares only 8.5 yuan per share. The subscription price for Hong Yi investment is 42.9% higher than the secondary market price. It is worth mentioning that the managing director of Hong Yi Investment, who is responsible for this investment, is the head of the investment pplive.

In May this year, Hong Yi invested in Suningyun's investment plan. Guo Wei that pplive can integrate suning and Hong Yi's funds, resources and channel advantages, and hardware manufacturers to achieve full cooperation, integration of content to quickly put into the OTT market, the realization of full time intelligent video solutions.

Three months later, PPLive board and Management team agreed that, compared to other investors, the priority is "Suningyun + Hong Yi investment" portfolio.

Even so, PPLive's suitors did not give up. One person close to Alibaba revealed that Alibaba did not give up the possibility of merging pplive until the end. Alibaba to build the digital business division, video is one of the very important plate. To this end, Alibaba dug up the original video CEO Liu Chunning.

After choosing "Suningyun + Hong Yi investment", Suningyun Business conducted a three or four-week due diligence on pplive. Tao said that with early home do not understand the initial and due diligence is different, suning this round is exclusive, "we from (pplive) each contract terms start to, the process is very hard and complex." ”

Investment Fang Sunin Business Hongyi Investment, PPLive, pplive of the original investors reached a final consensus, signed an investment agreement. Tao recalls, the Suningyun trader starts to enter the posture to be more clear, does not seek the holding, only is as a strategic investor, both sides have each other.

As a traditional household appliance retail chain Enterprise, Suning has extended its own industrial chain layout and directly entered the Internet digital content consumption market after supporting Suning's easy purchase to the "cloud quotient" concept. Obviously, pplive this piece to suning future entire layout of importance self-evident, and the reason to take pplive, mainly or in order to seize the living room, that is, through the industrial chain, layout Family entertainment center. The choice to join forces with Hong Yi, may be for the future and Lenovo television cooperation between the consideration.

For the transformation of Suning, it is creating "mobile + Flat + TV + cloud services + Software store +rom+ operators" of the hardware and software industry chain, and Weimin in the interview also said more than once, in the Suningyun business model transformation, the content of goods is the future of suning commodity business is an important part of the field. After this investment pplive, suning directly into the Internet digital content consumer market.

Focal

Suningyun is not the first to embark on the negotiation table, but it is the ultimate success of the hand pplive side.

After the official entry of the Suningyun, the five negotiators, including it, were pplive to be chosen. These five are respectively, Alibaba, Hunan satellite TV, Sohu Video, as well as Hong Yi investment in another PE fund.

Tao said that each seek cooperation is not the same, and some seek strategic investment, some only for simple financial investment, and some need mergers and acquisitions holdings. For PPLive, does not reject any kind of investment form, but the ideal financing way is, can bring the industrial chain resources to the pplive, and can maintain its independent development.

Alibaba is the most confident company to win PPLive. The digital business division is being set up, video is indispensable, plus Alibaba coveted home shopping market has been long, the electric business into the living room is an important step. The person close to Alibaba told the Economic Observer that Alibaba invited a Hong Kong financial investigation Company to conduct a detailed asset assessment of PPLive. In the end, both sides failed.

Sohu Video, Hunan TV and other several of the other programs are also different. Sohu Video hopes to merge PPLive, both sides can highly integrate. The difficulty of merging Hunan Satellite TV with PPLive is the complex ownership structure of both sides. Tao and an unnamed pplive investors told the Economic Observer, the situation is complex, a variety of interests entangled, the media gave a majority of the story in the Shadows.

Economic Observer contacted Alibaba, Sohu Video, Hunan TV and other investors, the explanation is also different. "The process of investing and financing is a process of choice, without the most perfect solution, only the most appropriate transaction." "said Wang Penghui, an Internet analyst.

At the beginning of June, pplive into the most ferocious rumors of "being sold", Tao said, "PPLive can become an independent development innovation company." ”

According to this plan, at that time PPLive basic heart. At this time, the combination of Hong-yi Investment and Suningyun business has joined hands to the negotiating table. Tao explained that because there were many confidentiality agreements at the time, it was inconvenient to disclose more details.

In this kind of game process, whether the original shareholder soft silver exits, has been attracted the attention of the outside world. The economic observer, from close to SoftBank, learned that the entire soft silver system (Japan soft silver and SoftBank China) all withdrew, the return on investment reached more than 10 times times.

After this round of financing, the management team surrendered the controlling power. Suningyun 250 million U.S. dollars, holding 44%. Hong Yi invested 150 million U.S. dollars, holding 29.9%. Tao did not disclose the remaining 26% of the shareholding, but it is certain that the soft silver system all exit.

PPLive board added three seats, Suningyun two, Hong Yi investment. However, Tao revealed that pplive new board seats are equivalent. That is to say, the existing management team occupies half of the seats, the Suningyun of the investors represented by the other half of the seats.

and Suningyun Business Hongyi investment, is undoubtedly pplive the beginning of the Bureau.

Suning Layout new industry chain

From the Suningyun Business Bulletin, this 1-July, the PPLive realized revenue of 320 million yuan, without audit net loss of 65 million yuan. In the entire video industry losses, PPLive also struggling.

For pplive future operating capital issues, Weimin stressed that as long as the future pplive in accordance with the agreed business direction of development, "no matter how much money need to Su Ning will support." ”

Buy PPLive, Su Ning's most direct thinking is that the first is to make up for the digital content consumption of the short board, which can be directly linked to tablets, mobile phones, computer products, and the future is likely to get through the video and online shopping, to achieve the ubiquitous screen in the smart home system in common.

In addition, Suning is trying to build a hardware and software industry chain model, in the cooperative hardware preset to promote their applications. On October 17, Suning also released the tablet computer pioneer G71, video software is exclusive and pplive cooperation. Su Ning has built suning application store, Suning easy to buy, suning business, Yi Bao, suning safety, suning weather, suning reading, suning cloud disk and many other mobile applications.

In this respect, Weimin also said, "physical goods, content goods, service commodities as a Suningyun business model of the ' three commodities ', which is the future of suning commodity business is a very important part of the field, including digital books, music, video, if not operating these things, suning is not the concept of cloud business. ”

There are two details is that Suning is applying for virtual operator license plate, once the license, Suning's own hardware products will be able to carry the independent operator network; another source said that Suning is developing mobile phone ROM based on Android, is expected to be officially released at the end of the year.

That is to say, Su Ning is creating "mobile + Flat + TV + cloud services + Software store +rom+ operator" Hardware industry chain, it is the combination of Suning flagship store, Suning Life Plaza, Suning easy to purchase, software and hardware, digital content services, electric business shopping and other fields, Describe a modern digital content and life Service circle concept to the capital market.

For another unit Dong Hongyi investment, in addition to as a simple financial investment. There are also analysts pointed out that by Yu Hongyi Investment is Lenovo Holdings, affiliated companies Lenovo Group's Smart TV future also exists and Su Ning, pplive cooperation in the industrial chain of the possibility of integration.

Everyone company vice President, 56 net CEO Zhou Juan told Economic Observer, due to competition anxiety, the survival status of the family is not very comfortable, including the industry boss Youku potatoes. Only through mergers and acquisitions, complementary advantages, enhance market concentration, to form a relatively stable pattern, the industry can achieve profitability.

In the view of Jingun, senior vice president of Suningyun, the future development of pplive and market position should be jumped to see, video and electric business is the largest Internet applications, from the future intelligent home and intelligent life of the incremental market and the video industry impact on the cultural industry, Suning and pplive cooperation has a huge growth space. "In the future, we will give them more new business and opportunities to do so that we can create the value of both sides of the issue." Weimin said that in the past, more of the video companies are going to buy things for free to users, or through the way of advertising profits. In the course of this competition, the cost is more and more high, and there is great uncertainty about the income. and suning more hope in the process of cooperation between the two sides, can more do some basic, long-term business problems. According to Weimin, in the future to pplive in the Internet, video base and Suning E-commerce in the industrial chain to form an effective combination, thereby promoting the entire industrial chain in the melt screen, living room strategy. This will reduce their customers and channel users of the development of costs, but also to suning investment resources are more effectively superimposed. ”

But in the traffic for the king of the Internet battlefield, video traffic is always the largest, that is, how to transfer the PPLive traffic into the business problem, the effective combination of traffic between the two sides become a vital link. "The most important thing is data and sales. Weimin said that the past video is advertising, now does not necessarily have to advertise, there are many other businesses. "Both sides through this combination, can drive Suning's entire data marketing, especially point-to-point customer data marketing." "In fact, Suning every year in the Internet marketing and access to the flow of up to hundreds of millions of yuan investment, and the future through the flow of pplive and its huge data group will directly to Suning bring positive."

In Tao's view, this marriage to PPLive is only a phased investment, the future does not exclude the introduction of other investors. But for Su Ning in the transition period, its new industrial chain layout is just beginning.