Editor-in-charge | Gordo The 1716th in-depth good article: 3654 words | 5 minutes to read
The first online launch, reading notes, and business models
Freshness of this article: ★★★★ Taste: Translucent
Notes invite you to think first:
1. What are the changes in the consumer population and environment?
2. What industries are suitable for early investors to enter the layout?
3. How do you find the pivot point of your industry?
4. How to create an incremental market in the industry?
5. Should your industry grow vertically or horizontally?
Consumption upgrading, new retail, and new consumption are all concepts invented by man, and they are often easily confused. In contrast, I prefer to briefly say the simple definition of investment consumption.
In the past two years, Tsingshan Capital's investment in the consumer field has spent a little time, Hanjia Beauty (a domestic beauty chain high-end brand), PIDAN (the fastest growing brand for new consumer pet supplies), Lai Cup Coffee, HIGO and other projects have entered everyone's vision, and have successively become the leaders in the industry.
Many people will ask me how to judge the project in the field of consumption, and here I will share with you 6 points of experience.
First, understand the changes in people and the environment
1. Understand the changes in the crowd
The rise of the post-80s and post-90s as mainstream consumers has given consumption itself a new demand.
The previous generation of consumers is more in the practicality, cost-effective level to consider, the new generation of consumers are completely different, has the following characteristics:
They grew up in a network environment and have a high degree of network dependence;
This group of people has not experienced the era of material scarcity, and is value-sensitive rather than price-sensitive;
The channels for obtaining consumer information are also different from before, and they are becoming more and more decentralized and scenario-based.
These characteristics are the basis for my judgment that the next decade will be the golden age of consumption upgrading, which also means that future consumers are more willing and able to pay for better consumer experiences and products.
2. Understand the current situation of supply and demand
In the past few decades, China has been the world's processing plant, in this process the supply capacity has been greatly improved, can provide good products, but these products have not come to the front of consumers, resulting in many people to the United States, Japan to buy similar products.
For example, the category of headphones: on the one hand, beats, SONY, AKG and the vast majority of the world's high-end headphones are OEM in China, China's productivity is enough, but the local high-end brands in the market are blank;
On the other hand, with the rise of digital music, the consumption concept of young people on headphones has also changed dramatically, they emphasize their own needs and personal style, so we invested in Wang Feng's FIIL headphones, conforming to this trend of consumption upgrading and responding to the lifestyle needs of youth pop culture.
Since there is no problem on the supply side, this means that the channel to reach the consumer is problematic. For example, retail methods, brand building capabilities. This requires that the current consumer-focused entrepreneurs have the ability to push products in front of consumers.
The reason why we invested in the Lai Cup Coffee project in the first half of the year and completed 3 rounds of financing in 9 months is that the new retail format of "channel + product" avoids the excessive dependence of the original coffee on channels.
I'm also more inclined to invest in entrepreneurs with high emotional intelligence. Consumer projects require entrepreneurs to have a deep insight into human nature and be able to continuously capture consumers' demands for renewal. This is especially true in the face of a huge change in demand.
Second, grasp the industry behind the product
I have always stressed that the fundamental logic of Qingshan's investment in the consumer field is to invest in the industry, not to invest in a brand or a product.
For entrepreneurs, choosing a category is too important, even if you don't do anything for a year, as long as you think about this matter clearly, it is worth it. On the surface, behind the flowers, towels, and yogurt are all industries, but not all industries are suitable for early investors to go into the layout. How to judge it?
First, look at whether the industry behind the category has room for integration and upgrading.
Many industries have been very perfect and complete and standardized in the continuous update over the years, so it does not have the space to be integrated and upgraded.
For example, the towel that caused the start-up company and NetEase to strictly choose a dispute some time ago is a typical case.
After years of market game, the supply chain of towels is already an industry with extreme overcapacity, and integration cannot greatly improve efficiency, and there is no large room for upgrading from a technical point of view.
Second, see if there is a need for integration and upgrading of the industries corresponding to this category.
Needs and space are two completely different things. Many industries just don't have demand, because it's good to live the way it is.
Third, find the fulcrum of the leverage industry
Finding the right industry is just the beginning, finding the fulcrum of industrial integration is the key, in this process, it is very challenging for entrepreneurs to make four or two strokes of strength.
The fulcrum of different industries is very different, which is also an important reason why investors prefer entrepreneurs with rich experience in the industry.
Taking taking a little time as an example, the fulcrum of the industrial chain of flowers is in the front end, why is it in the front end?
Because flowers have always been gift-type products, the frequency of consumption is relatively low, therefore, in the front end has not been able to produce a large number of retail enterprises, resulting in the inability to have an integrated voice on the back end.
Taking a moment to turn a gift-type thing into a daily necessity through the concept of living flowers, creating a new consumption scene, instantly erupting at the retail end, generating a large volume, making it have the right to speak to integrate and upgrade the back end.
To take another example, there are many entrepreneurs who are interested in the category of yogurt, many of whom carefully build brands and layout channels in the front paragraph according to the so-called "industrial upgrading" road, but the results are not so good. Why?
Because the integration fulcrum of the yogurt industry is not in the front end, but in the back end of the milk source, processing and other links, that is to say, these efforts in the front end have not been able to solve the fundamental problems of the industry.
Fourth, we must not rely on stock, but on increments
An excellent innovative enterprise will not only solve the above problems, but also create increments for the industry.
It is more difficult for startups to compete in the stock market, and it may only be possible to achieve weak growth in the original market stock to grab the cake and win the first blood.
However, if you can change the consumption behavior of users, create new consumption scenarios and consumer demand, and bring huge industrial increments, then it will not only occupy its own market share in the increment, bring substantial growth, but also benefit other companies in this industry.
Why have technology companies been able to occupy such a large market share in the past 20 years? Because they have always evolved incrementally.
However, incremental space is not the same as incremental market, and I find it easy for entrepreneurs to confuse this concept.
Still taking the category of flowers as an example, the proportion of flowers and gift flowers in the United States is 4:6; while in the Netherlands, the proportion is 6:4; in developed countries such as Japan and the United States that have no obvious preference for flowers, the proportion of daily flower consumption has reached 30% and 40% respectively, and before spending time, China's daily flower consumption accounts for less than 5%.
Only when enterprises revitalize demand, space will become market share. At this time, taking a moment to focus on the weekly Monday flower model of "pre-order + cycle purchase" has opened up the consumer demand of urban white-collar workers.
Fifth, the operation difficulty coefficient can not be too large
Speaking of the high difficulty coefficient of operation, catering should be a better example.
The catering industry is easy to grow rapidly, from a store to hundreds, sales growth of hundreds of times is not too big a problem, but from the perspective of investment and consumption, it is hard to injure, heavy operation, difficult to standardize, the need for multiple simultaneous efforts.
Entrepreneurs have to be fast, to be branded, to polish products, and then find that there are still a bunch of problems in finance that can't be solved.
For a very small example, the cost accounting of purchased ingredients is difficult to standardize, some are purchased by special procurement personnel, some are sent by market vendors, it is likely that there is no way to give invoices, so that upstream procurement can not be financially standardized. These problems are stacked together, which is the dilemma faced by star catering companies in recent years.
In terms of difficulty, there is also a difficulty that everyone usually pays little attention to, the difficulty of industry competition.
The level of players in this field directly determines your probability of success, if you choose between desserts and biscuits, I recommend that you choose cookies, not because of shelf life, online sales difficulties, etc., but in these two categories your competitors are obviously different.
Sixth, find the right development path
The development path is very important in the field of consumption because it is related to two questions, what do you want to be? Where is your future living space?
First, choose horizontal or vertical development?
In the summer of 2016, after half a year of accumulation, sales increased by more than 100% every month. At this time, we are faced with a very important strategic choice: is it to develop horizontally into a new consumer self-pleasing e-commerce, not only sell flowers but also sell lifestyle-related aromatherapy, essential oils and other products, or vertically develop into a leading enterprise in the flower industry to do industrial integration and upgrading?
Horizontal development sounds very smooth, the products made will be somewhat like NetEase Yanxuan, the brand recognition of towels, cups and tea he sells is very low, consumers identify this channel brand, but for entrepreneurs, not only is it not a barrier to competition, but also pushes itself to the battlefield without advantages.
Vertical development is more difficult, that is, we will be a leading enterprise in the entire flower industry chain. In this process, Zhu Yueyi and I continued to communicate and discuss, and finally decided to do vertical and do industry. Looking back, this should have been a relatively correct choice.
Of course, you have to read the industry, have the ability to look down at the industry from a high place, the industrial chain is actually like a river, some places are very deep and turbulent, and some places are very shallow and gentle.
You have to judge where wide and shallow, and card slots in relatively shallow places, so as to establish your own industry discourse power and competitive barriers.
Second, it is necessary to be clear that the future situation of an industry is not necessarily better than the current situation. For example, the current sea tao is very hot, the volume is very large, and it seems that the demand is still growing. Haitao itself is also a process of educating consumers and establishing a way for consumers to buy better things.
But the growing market demand is in a specific environment, since most of the good things can be produced in China, as long as the industrial chain is slightly adjusted, the demand for sea tao will decline rapidly.
I think Haitao will be a reduced market in the next decade, and entrepreneurs in this field should gradually adjust their focus.
Taking HIGO, the global fashion shopping platform we invested in, as an example, from the perspective of positioning, HIGO is actually not a sea shopping platform, but a retail channel in the field of fashion buyers. In the future, HIGO will sink to second- and third-tier cities, develop offline franchise stores, optimize costs and improve efficiency, and do a national chain of fashion buyers.
Finally, I would like to say that many entrepreneurs still think that consumption upgrading refers to the pursuit of brands or buying more expensive things, but this is only a shallow level of consumption upgrades, which is the so-called higher quality products pursued by the previous generation of consumers, such as green food, healthy food and the like.
The new generation of consumers pay more attention to emotional drive, which is based on the user's classification of self-attributes. Get to know them in order to find a way to talk to them.
In the future, new brands will be born in each category, from oil, salt, sauce and vinegar to airplanes and rockets. This is the opportunity for VCs, the opportunity for entrepreneurs.