Internet Business Thinking

Chapter 28 Early Entry, Early Profit - Internet Awareness in Traditional Industries (4)
After summing up the lessons from the failure, Li Jie started preparations for the second factory: "When choosing the factory site this time, I was extra cautious, taking into account the external elements, internal elements, and long-term development that the factory needs. , and finally determined the location near the Huaneng Power Plant.”

In March 2012, the new factory was put into normal operation. After 3 months, a large number of customers have been accumulated, and the turnover has grown steadily.By the end of 4, the annual turnover of Li Jie's factory had reached 2012 million yuan.

Breaking down the washing machine with the Internet

Just after Li Jie's laundry factory was in normal operation, he began to try to bring the laundry industry to the Internet.

"When I was in school, I was always busy with my studies and various part-time jobs. I didn't have time to wash clothes. Dirty clothes often piled up for a week. So, I developed the idea of ​​'collecting clothes at home and sending them back after washing'. I first shared among my classmates , A questionnaire survey was conducted in the community, and it was found that most people still agree with this model. This makes me full of confidence. In addition, I major in software, and I think this kind of service can be better popularized through the Internet , there will definitely be great prospects in the future.” Li Jie believes that laundry companies are bound to transform and integrate with the Internet era, which is the need of the market.Li Jie's dream is to completely change people's washing habits through Internet services, knock down washing machines, and remove clothes racks.

In July 2013, Li Jie established the Dry Cleaner online dry cleaning service platform, successfully bringing the laundry service to the Internet.The main target group of dry cleaners are ordinary consumers. The scope of washing services includes hundreds of categories such as clothing, home furnishing, ordinary bags, car accessories, shoes and hats, linen, guest clothes, and group clothing.In addition, luxury maintenance services are also provided.

After consumers place an order through the Internet, logistics personnel will come to pick up the clothes at the collection time they choose, then send them to the factory for washing, and then send the clean clothes back to consumers.This whole process only takes 48 hours.Li Jie revealed: "By the end of 2014, the turnover of dry cleaning customers is expected to reach 5000 million."

For dry cleaners, bringing laundry services to the Internet and eventually developing into an O2O laundry model is not simply a matter of developing an online sales channel.As Li Jie said: "On the one hand, it is the e-commerce of the traditional laundry model. Dry cleaners provide virtual laundry services online, and provide highly standardized laundry services offline through efficient logistics delivery and delivery, achieving online-to-line laundry services. The transformation of the business model under the environment. On the other hand, the cloud information connection of laundry. After the order is placed, each piece of laundry has its own independent electronic ID card, and the information connection of the entire service process is completed, so as to achieve the high standard of the laundry industry , high efficiency, and high environmental protection, so that users can check the whole process of washing their clothes without leaving home."

Overcome the bottleneck of regional e-commerce
As far as the model is concerned, if you look at dry cleaning customers with the thinking of the Internet, you can regard it as a certain degree of regionalized e-commerce, for example, Simi, which has fallen before, and the one that is now living happily Linwei.com is a representative of this model.It's just that the above two provide users with food and snacks, while dry cleaners provide laundry services.

However, both the former Ximi and the current Linwei.com are facing a bottleneck that is difficult to overcome, that is, it is difficult to expand the scope of services.Take Linwei.com as an example. At present, the main business scope is still limited to the Huilongguan area of ​​Beijing. Not to mention making it a national brand, it is difficult to cover the whole Beijing with services. This is because as the scope of services expands, the For these regional e-commerce companies, the cost will also increase geometrically.

However, dry cleaners have basically covered the entire Shanghai area, relying on the intensive dry cleaning mode of the central washing factory.The so-called intensive dry cleaning mode of the central washing factory means that the dry cleaners adopt a unified platform and customer service system in the process of expanding their business to other places. There are different workshops and different areas for washing. The equipment and detergents used have different requirements and standards. There are unified disinfection procedures, soft water treatment, and environmental protection sewage system to ensure standardized washing quality.Li Jie told reporters: "Dry cleaners will use a unified network platform and customer service system to realize the intensive dry cleaning mode of the central washing factory, and rely on the form of franchised factories to achieve standardized coverage in important municipalities or major cities such as Beijing, Guangzhou, Chongqing, and Tianjin."

However, it should be noted that this intensive dry-cleaning mode of the central washing factory, although it is easier to expand because of the many franchised factories, dry-cleaners still face huge logistics cost pressure.As Li Jie said: "To become a national brand in the future, the biggest difficulty is logistics - it is necessary to establish a national logistics network, including CDC (central distribution center), RDC (regional distribution center) and DC (distribution center). Layer distribution center system to achieve the successful docking of information systems between each other."

Faced with billions of capital investment in self-built goods, dry cleaners chose to cooperate with third-party logistics.Li Jie told reporters: "We have a large number of group order customers. Our current delivery method is based on the delivery of group order customers, with the distribution of clothing for individual customers, and then the third-party logistics solves the last 3~5 kilometers. .In this way, the cost of logistics will be greatly reduced."

In fact, unlike most people’s imagination, although the investment of billions in self-built logistics seems to be a lot, the cost of self-built logistics system is actually still lower than that of outsourcing to a third party.Li Jie revealed that even if the third-party logistics is only responsible for the last 3-5 kilometers of transportation for dry cleaning customers, the logistics cost of cooperation between dry cleaning customers and third parties has already accounted for 30% of the total cost. "In the future, we will consider building our own logistics system. , it’s a matter of time.”

The Internet is slowly subverting traditional industries: communications, finance, advertising, retailing... The laundry industry is not the first, nor will it be the last.

(Section [-]) Travel map on fingertips

The value of online tourism has been recognized by the market and capital.For traditional travel agencies like CYTS, there are three main changes brought about by embracing the Internet: first, the marketing method has changed; second, the channels for consumers to purchase have changed; third, and most importantly, is Changes to the product itself.

Before 2012, online travel was only an attempt by Internet people to subvert the traditional travel industry. Mafengwo, Lvmama, Ctrip, Youzai.com, Qunar... Online travel websites with various business models emerged in endlessly, but like Like the "Thousand Regiment Wars" every year, behind the vanity lies a future that no one can see clearly. No one knows how many families will survive in the end, or whether they will all die.So at the beginning of 2011, when Baidu acquired Qunar, although the media voice was full of "singing and dancing" because of Blue Label's strong public relations capabilities, everyone in the industry had such a hidden worry: the 3 million US dollars really won't Is it for nothing?

In November 2013, when Qunar was listed online, Zhuang Chenchao became a billionaire through online travel after Shen Nanpeng and Liang Jianzhang, making people have no doubts about the future of the online travel industry.Don’t you see, even Liu Qiangdong, who has been overwhelmed by logistics costs and WeChat payment, confirmed the acquisition of a mobile online hotel reservation platform on January 11, 2014, 1 days before JD.com formally submitted its IPO application. "Tonight's hotel specials" in an attempt to tell a better story for Nasdaq.

CYTS Internet three elements
With the development of the online travel industry to this day, Internet companies have played various tricks in this industry. There are vertical search media like Qunar, information websites similar to Mafengwo, Tuniu and Youzai. The online travel agency model of Ctrip is also done in all aspects.At this time, traditional tourism companies began to transform and embrace online tourism.Their gameplay is different from that of Internet companies.

CYTS's Aoyou.com was first established in 2005, but at that time it was jointly established by CYTS and the American group company Cendant.Cendant, which held most of the shares at that time, also continued its consistent thinking, which was to cover almost all travel products such as air tickets, hotels, and vacations, and carry out multi-line operations, which is a bit similar to the current Ctrip model.

However, because the product positioning was not clear enough, and Cendant did not know enough about the Chinese market, it quickly retreated and transferred capital to Blackstone.CYTS was tired of this capital operation game, and finally took back all the shares of Aoyou.com in 2007.

2007 was a year of explosive growth of domestic free travel.Considering that the user group of Aoyou.com is highly compatible with independent travel in terms of age level and consumption concept, CYTS directly classified the newly withdrawn Aoyou.com as an Internet marketing department under the independent travel department, which bears the responsibility of Internet marketing and promotion.

It was not until October 2010 that Aoyou.com began to operate as an independent business unit.Liao Weiyong, chief operating officer of Aoyou.com, recalled: "At that time, CYTS just decided to operate and maintain Aoyou.com with the mechanism of a large business department, and positioned Aoyou.com as an Internet platform, not just a channel of CYTS."

The Internet is by no means simply a channel.For traditional travel agencies, especially CYTS, the Internet carries many different things.

First, marketing methods have changed.The entrance of consumers is changing. Before there was no Internet, travel agencies tried their best to open stores at the door of consumers. Now the entrance is on computers and mobile phones.The change of the entrance brings about the change of the marketing method, that is, the change of the way of contacting consumers.

Second, the channels through which consumers purchase have changed.Users began to purchase tourism products on the Internet and even the mobile Internet—Aoyou.com and the mobile phone and tablet client "Aoyoutianxia", which already include travel route inquiries, reservations, payment and other functions.This greatly simplifies the purchasing process for consumers.

The third, and most important point, is the change in the product itself.Tourism products are a product that is very suitable for e-commerce, because its essence is a collection of information, and the Internet is very vivid in the way of displaying information; more importantly, relying on the Internet allows consumers to purchase tourism products on demand .

Buy travel products on demand
Since 2007, independent travel products have experienced explosive growth, and all online travel websites, including Aoyou.com, have no suspense in terms of age levels and consumption concepts of users. Potential users have an amazing fit.Therefore, it is reasonable for free travel products to become their best-selling products.

Taking the island tour, the most popular free travel product, as an example, according to Liao Weiyong, at present, the island tour has accounted for 30% of the revenue of Aoyou.com.Obviously, the independent travel market has become a pillar product of Aoyou.com and even CYTS.So, how to make users pay for free travel products?
The solution of CYTS is to provide a wealth of destination services and allow users to purchase on demand.Liao Weiyong said: "We provide a variety of optional packages that allow users to purchase on demand. The most basic are of course air tickets and hotels, but if users are not familiar with the local area and hope to help arrange dinner on the basis of air tickets and hotels, just You only need to pay a package fee for arranging dinner. Similarly, the services of applying for a passport, purchasing train tickets and boat tickets abroad are all optional services.”

The bottleneck of "Internetization"
As a veteran travel agency that has been in the tourism industry for 30 years, CYTS is undoubtedly much better than the new Internet juniors in terms of procurement system, service system and product research and development capabilities.Not to mention anything else, just the direct charter flights owned by various destinations show the "wealth and wealth" of CYTS.

In October 2013, CYTS planned to invest 10 million yuan of the 12.3 billion yuan fundraising directly in the operation and platform construction of Aoyou.com.This move shows its emphasis on the Internet.However, as a traditional enterprise, even a traditional enterprise such as CYTS with such a deep industry accumulation will still face bottlenecks in the process of marching to the Internet: one is the lack of technology; the other is internal integration and channel coordination.

As the influence of the Internet on the industry is gradually deepening, CYTS's application of technology is also getting higher and higher.Liao Weiyong said: "Compared with other Internet companies, technology may be a little insufficient in the early stage of CYTS. In the past two years, we have put more energy on the optimization of technology platforms and user experience. To this end, we have We are constantly expanding the technical team to integrate resource systems and optimize user experience."

Second, the Internet has not only changed the external operations of CYTS, but is also changing the internal processes of CYTS.With the operation of Aoyou.com, orders from the Internet are increasing day by day, and the internal process of CYTS is also optimized in time.Liao Weiyong told reporters: "Orders from the Internet have made many processes that previously required manual operations automated. In this process, the entire booking process has been simplified unconsciously, and the internal efficiency of CYTS has also been improved. Our human efficiency is improving at a rate of 50% to 100% every year."

Improving internal human efficiency through the Internet is a good thing in itself, but it is not so easy to eat this piece of cake that is already on the lips.Liao Weiyong said: "For CYTS, optimizing internal processes through the Internet is both an opportunity and a challenge, and the challenges mainly come from two aspects: internal integration and channel coordination."

On the one hand, CYTS, like most traditional merchants entering e-commerce, also has many offline stores, so users can buy in both offline stores and online. For CYTS, it takes a lot of energy to integrate the Internet and Integration of outlets all over the country.

On the other hand, after all, CYTS has been doing tourism with traditional thinking for 30 years, and it is difficult for a considerable number of stores or OP personnel to change their thinking in a short period of time.Liao Weiyong gave an example: "In the earliest days, travel itineraries were typed on a piece of paper in the form of Word and provided to users by sales staff. But on the Internet, this approach is completely inappropriate, because the Internet requires The standardized product system should allow users to enter the website of Aoyou.com to see that the price is transparent, the information is accurate, and the product can be purchased directly, without the need for salespeople to do one-on-one sales. Therefore, no matter Whether it is the concept of making products, the thinking of product packaging, or the thinking of marketing, all need a change and adjustment.”

Although there are multiple challenges, the operating income of Aoyou.com now accounts for 20% of the total operating income of CYTS Tourism.Liao Weiyong also revealed: "Since 2010, CYTS' requirement for Aoyou.com's business is to double the annual turnover. Of course, I'm not sure how long the doubled growth rate can last, but at present, This situation can still be maintained for several years.”

Online travel is a proven rich gold mine. Although traditional travel agencies still have bottlenecks to overcome in the process of Internetization, only by actively embracing the Internet can they gain a share of the future Red Sea market.

(Section VIII) Stores with [-] million yuan: data as the basis, e-commerce as the channel

How to achieve easy online shopping for heavy furniture? Lin's Wood Industry, which started with only 2008 capital in 2, has gradually transformed from the original OEM sales model to a data-based operation model that masters the entire industry chain. "Shop" provides a model for the e-commerce of furniture.

For Lin's Wood Industry, which grew up on Taobao, the "Double Eleven" shopping festival in 2013 can be regarded as a meaningful promotion day.

On the "Double Eleven" promotion day in 2013, Tmall set a new record for online shopping in China with a transaction volume of 350 billion, and 17 stores broke 1.6 million.As an authentic Taobao brand, Lin's Wood Industry entered the "24 million yuan club" for the first time with a transaction volume of 1.6 million yuan. In 2012 hours, a transaction volume of 3.8 million yuan was achieved, which was close to half of Lin's Wood Industry's total sales of 2 million yuan in 1.6. "Although we failed to achieve the sales target of [-] million yuan in the end, we all knew the sales of [-] million yuan based on digital means." Lin Zuoyi, general manager of Lin's Wood Industry, told "Manager".

Master the key to brand premium
In 2008, the furniture industry in Foshan was surrounded by seawater and flames.At that time, e-commerce represented by Taobao had been in full swing, but the furniture industry in Foshan was still keen on offline sales, and few people tried online sales channels.Such a time of great contrast inspired Lin Zuoyi, a computer science graduate, to start a business—moving bulky furniture to sell online.

(End of this chapter)