On August 28th, the 2016 Annual Meeting of the Founding E-Commerce was held in Beijing today. Li Feng, the founding partner of Fengrui Capital, gave a speech. He said that virtual economy transactions have shown an upward trend in consumption from online to offline, and the offline retail industry has increasingly become the focus of innovation and growth that capital is paying attention to.
Li Feng said that the offline retail industry has experienced sufficient market competition, and how to make its original limit efficiency further improved after the Internet, which is an important criterion to be considered when investing.
Li Feng believes that consumption upgrades drive users' demand for brand consumption. Good brands should have corresponding supply chain and category experience. This is also the reason why they chose to invest in cross-border e-commerce, foreign trade, ERP, and not online red e-commerce. (The raccoon)
The following is a speech record:
Li Feng: Thank you very much and I am very honored to share with you. It is always a big pressure. We have also created a business in the past year, but I think there have been many changes in e-commerce. We look back to share our own views with you today. These views are not necessarily correct and are for reference only. There are big things to share before we share our opinions. Let us first discuss with you the impact of our own investment thinking during the year.
The larger macro view we want to talk about is that some colleagues have discussed with us and said that there is a discussion about what will happen in the future. In order to answer this question, I probably compiled a set of theories. I probably explained this. Think about China's Internet until 2010. Before 2011, there were several rounds of successful business models that appeared before 2010. Including the earliest portals, then search, Internet games, videos, etc. After these big waves, there have been several such as e-commerce, o2o, finance, etc. The main purpose of cutting it into 2010 is to achieve this goal. Before 2010, almost all of the business models, the mainstream part of which was called the virtual economy transaction, or loop.
In other words, I have just listed the portals, search engines, mainstream users online games and Internet videos. These things are basically pure on the Internet, and the virtual economy is from closed loop economy or full ring. What happened after 2010, e-commerce, O2O, will also generate more industries.
These industries are our offline, we analyze the live broadcast problem, probably this is the case, the advantage of doing a virtual economy closed loop is this, the first thing is very clear, the second thing because it is pure online, in addition One benefit of these closed-loop benefits is that no one has done a predecessor experience, no existing industry and status so the result is no competitors that already exist.
Then the closed loop under the dotted line is different. In fact, the purpose of this thing, as an investor, we also do not want to have a closed loop of the investment economy, but we used to look at the history is probably like this, just talk about BAT, is not BAT regardless, virtual The economic wave before 2010, whether it is a portal site, a search engine or a video, is from the beginning of 2010, after the people in front of these waves of virtual economy came ashore. The challenge, probably with them, the concept of my so-called landing is that they are big and profitable, they have achieved stable market profits after achieving large-scale profit.
After the first few waves of this matter were established, we will look at the endings afterwards. Whether you watch Internet games or online videos, then push back the results. For example, the biggest game developers should now be Accounted for more than 70% of the market, video I guess the above should be Tencent, Sohu, Iqiyi. I talked about the conclusions of this history over the past decade or so. The result of our retrogression from history is that the virtual economy is basically covered by the landing.
The reason is that there are money, people, and users. This is one of the questions we answered to answer this question, but this question has also triggered another. After 2010, we look at the business models that have occurred in China. In order to verify my logic, I can still give a recent one. Internet finance, Internet finance has happened. Who is the biggest Internet funding platform? It is related to money. I will probably think of some names quickly. I ask who is the largest Internet financial asset platform and still can't think of a certain name.
What is the difference between these two things? I call the capital side of the platform capital is a virtual economy, if the asset-side platform has a lot of offline work. We look at the platform of the fund-based fund that started in April of 2010. Basically, the giants of these virtual economies have already been on the shore. Baidu, Ali, 360, and the assets are going offline, so they have not been It is our conclusion that the giants of the virtual economy have done this. Today, we are discussing this issue with our e-commerce conference. In the United States, we happen to see that 15 of the 20 e-commerce companies have such rules. They are growing stronger and then going to the process. You also know a few of you. How to count, the traditional economy, the traditional retail industry. The essence of the e-commerce in the retail industry is that this ending is not the same. Why is this happening? We have turned the offline closed-loop thing after 2010 into such an explanation.
That is, if you want to solve the industry, you have to improve the efficiency of the industry, is an industry that has been online and market-based competition many years ago, intense and fully competitive, when you superimpose information efficiency, this extra factor may It is limited. In other words, if you have to face the industry is an online, for example, retail has been fierce for a long time in the market, we say that regardless of the brand, channel, can become a more important buyer in each vertical field. The efficiency of his online work should have been mentioned to the extent of the limit.
The question involved in this type of industry is how many points we add up in the first phase of our process of adding information to the Internet. This industry has been promoted to a better level because of the full competition for online efficiency. If this score is 100 points, it is assumed that the line has already scored 70 points. If you go to start a business, you should face this from the Internet. Industry, I guess at least you need to add up the score is better than the original industry in the offline, plus the past full score is 20 or 25 points, then the original goods flow goods category, you already need 50 points Or 55 points, you add this more than 20 points, you can get the best online.
We have used this method to evaluate a lot of industries. This industry is also like the offline B2B trading market. It is the so-called looking for all kinds of things from last year to this year, or it is a combination. In the second category, we can also evaluate the retail industry or e-commerce. Just now we have a small speciality in China's e-commerce compared with the US because the offline retail industry is open to marketization and time. We are more effective than the United States, or have a temporary nature.
The second thing is that our offline retail industry has been affected by China's commercial real estate development process between 2000 and 2010. It was originally an industry that has not been fully marketed for many years, plus an important one in the middle. During the development phase, it was influenced by the real estate of our country or commercial real estate. These two things we look at the difference between the e-commerce industry and the offline retail industry in the past few years, I don't know if I can make my point clear.
You can look at a lot of industries with this point of view. After we finish this, we explain the other one. For the United States, the US retail industry's full market competition has been going on for many years, and it is a fully competitive enterprise. Because of its urban pattern, we call the population distribution not in the urban pattern like China, commercial real estate. The development of rapid impressions, so their development rules are more adequate online.
I don't have the exact same idea to explain the specific example. If you want to ask, you can explain what Jingdong will do today, how will it be yesterday, what will happen tomorrow, of course, we can guess the retail industry in China offline today. What it was like yesterday, and what it should look like tomorrow. The first big question we talked about, I did not make it clear, I just said a method.
In the past, we are involved in the e-commerce industry, there are a few things, because they have not been able to afford the expensive B2C, but fortunately they have not invested so much. In 2010, competition will produce many brands, we will invest in many brands. It is also a lot of casts, including the three most pine trees.
As far as today is concerned, I think the retail industry is the hardest to vote for, because the retail industry e-commerce related matters are at the core of the supply chain category selection, if it is not doing business like Taobao Ali, but doing their own business, these two It is the supply chain and category selection that is probably the most difficult to acquire in the two retail industry experiences or industry expertise.
Therefore, there are many people in the retail industry who can run out regardless of the amount of money invested. Why are we very concerned about it? We simply talk about the concept of this concept. I don’t know the famous online red e-commerce at the beginning of last year. We didn’t vote. There is no watercress. We don’t necessarily have a correct view. There may be huge opportunities here. Up
Let me talk about why I didn't vote. We also look at the United States and China. We see that the United States has a network red but there is no online red brand e-commerce, but China has it. The difference between the two is because of the time difference, probably because of such a few things. The first thing is that because of the high degree of dispersion and maturity of US retail brands, you can see that the United States’ online red is basically based on brand endorsements. In China, it happens to talk about the consumption upgrades of a wave of entrepreneurs and consumers. The brand he represents does not represent the expression of this lifestyle, and the net red fills this void.
Of course, for example, the supply chain in the United States, it is difficult to do these small pieces of multi-frequency methods. Of course, you can also say that Amazon did not invest, resulting in the opening of the traffic, all kinds of phenomena, because there are several major reasons for China's small network red e-commerce platform.
We didn't invest in the red e-commerce business. We guess this is probably a China. I only mean that the personal opinion is not necessarily correct. It represents China's demand for the brand from the price/performance ratio of the product to the lifestyle of the product. The value of the life experience represents this matter, what is missing? I can make an analogy.
We recently invested in a sports mid-to-high-end brand. The brand of China's sports industry started in 2012. It is probably not very popular with you and young people. Now few people look at first- and third-tier cities. Represents his lifestyle and concept.
Corresponding to this is the consumer category that everyone thinks sports change in China. The consumption of this industry is getting better and better, but there is no better consumer category. I think the reason why this network red e-commerce has not voted, I know a few net red e-commerce, I think that not necessarily have these supply chain and category experience makes it a brand, but it represents a demand, this demand us It is said that when the consumption upgrades, the consumer demand for the brand is not satisfied, and there is no new one, which represents a certain degree of lifestyle phenomenon as a probability as a fill-in phase phenomenon.
I can spend a little more time on other small categories. For example, in 2008, we invested in some foreign trade e-commerce, export, and the main reason for export is because of the following things. The first is because China's consumer goods manufacturing industry always needs long-term existence. The huge difference between China and other countries is that we must have industry and manufacturing. China's manufacturing industry faces major challenges, especially consumer goods. This economic restructuring If the link can be completed, it will be one after the completion! It is better to absorb such added value as the manufacturing industry and brand, otherwise it will not solve these Jinzheng and adjustment.
The second sentence thinks that when there is a challenge in economic development, for the country, export is definitely an import, that is, it provides convenience for export, which is equivalent to facilitating imports. Therefore, for the same reason, we do not import five inputs. It is not because we are not optimistic because this generation of consumption upgrades, the main reason for not importing Haitao is because the same is just said, the first is the supply chain management and category selection, if it is a small challenge for import choice You need to cooperate with foreign platform vendors before you can manage the collaboration behind the platform vendors.
The advantage of China's export e-commerce is that we have about 70% of the consumption capacity in China itself, but these people do not have a brand. This is what we talk about about the management and application of the supply chain's interest resources. Speaking, a little more sensitive, the impact of the exchange rate on China is definitely better than imports. For several reasons, the export brand chain is the biggest difference from 2008. We don’t know if there will be a brand. But if there is no such wave, it means that many of China's manufacturing industries, called industries, or enterprises, will also exert great pressure on China's economic adjustment, so we bet he will, and this is also In terms of economic law, it is good for the exchange rate, etc., as well as the new supply chain impact and supply chain control in major retail. This is probably the second thing we do.
We have turned back on a number of brands and re-invested in foreign trade. It’s just that this time it’s a brand rather than something. Maybe we’re investing more. In addition to this, there is the last little thing to discuss with you. There is no fixed answer. That is to say, when we were at another new media conference more than a year ago, we discussed it at that time. Many people have discussed about the so-called content. The problem of e-commerce, or the problem of logic e-commerce at that time, I think it is from the personalization of e-commerce that we have talked with many people in the past. I guess it will appear more in the service industry in China. In the commodity category industry, we can give a lot of examples, but because time is over, we will not discuss this topic.
From the e-commerce point of view, we are going to invest in the offline ERP-related activities of the retail and distribution industries. Correspondingly, we are talking about the B2B trading market, this business model. We have to look at the B2B trading market relatively cautiously. There are a lot of reasons for going back to ERP. This is one of the things. If we look at the development of many so-called trading markets in foreign countries, basically no application software from the industry. Or it is called the trading market of SAS turned into an industry application, rather than starting from the information match and starting to trade the market, which is the reason, we just talked about.
In the final analysis, I went back to the big proposition that started first. In the end, how much efficiency is improved. The answer to how many points are raised here is because if I only provide transaction information, I and the whole company’s commodity cash flow country becomes one. IP-based infrastructure, on the basis of which to improve the difference in transaction information.
I am too arrogant, I guess many people who have done this thing have discussed this issue, just to take Alibaba as an example. Alibaba probably put the transaction information in this mode about 10 years ago. At the limit of the world, China has experienced several ups and downs of development and process. I think now that we look back at B2B and only do transaction information, it should be difficult for us to go beyond the process that Alibaba did at that time.
The efficiency of this transaction is only very difficult at the information level. We talk to the field of e-commerce transactions, and I discuss the things and directions myself. Now there are some very good consumer upgrades. We are starting to invest in these industries again. It is one thing to bring brands to the channel. Just like the theme we created in the past, we voted for the three squirrels, Handu clothes, the second one. Things have been invested in cross-border e-commerce, mainly in the way of branding. The third is to invest in Internet data that has been more market-oriented and develops better in certain industries. You understand it as the ERP called SAS. The purpose of our investment in these directions is that one day they can become a trading market. We are more cautious about the Internet business red e-commerce platform and business models, and then we are relatively cautious in investing or looking at the so-called e-commerce business.
In the final analysis, all the business models that have closed loops with the line, from the earliest law just mentioned, the essential reason for the final assessment of who can leave this sentence is probably how much the original limit efficiency of your offline is improved. In other words, no matter how many points are added in the mode or the system or the Internet, if you don’t add enough points, the matter will rise and fall. From 2013 to 2015, countless O2Os are O2O dead. Such a loop. Our views are for your reference only and we also need time experience.
The first proposition we also need time to test, forever everyone has different opinions. We also made a bet, that is, whether the Internet live broadcast will have a pan-live broadcast platform, a new closed-loop business model of pure virtual economy, which is probably an open question at that time, with my logic as an answer. So I am not necessarily correct, just a question, give you a reference, thank you.
Moderator: Thank you, Teacher Li Feng for your speech. Listening to Li Feng’s speech, my personal feelings must be highly focused in order to separate the information. I believe that if you can re-examine your industry from the perspective of capital, you can get a new answer.
The next lecture is still very informative, and it is guaranteed to make you feel refreshed. This speech is far more exciting than my introduction, so I don't have much to introduce, please applause Mr. Wu Sheng.
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