Author: River wine
Source: Zhenghe Island
At the beginning of 2022, the houchang village in Beijing's Haidian District caught fire overnight. To be precise, it is a smart retail company that is on fire.
Today's 3C digital smart retail market has long been caught in a "big red sea" competition, but some companies have actually killed a lot of siege in this "red sea", and it only took 4 years to achieve annual sales of nearly 10 billion, and the valuation is a dazzling performance of more than 100 billion.
This enterprise is a typical representative of China's data-driven smart retail leader based on OMO and C2M business models - Laiku Technology.
At the beginning of this year, Laiku Technology's digital retail track launched a series of brand advertisements in the airport terminals of 7 core cities across the country, which caused a huge response in the retail industry.
As a "rising star" in the field of 3C retail, the growth rate of Laiku Technology is really staggering.
As we all know, retail as a widely "touched the net" industry, with the advent of the "5G revolution" and the "post-epidemic" era, whether online or offline traditional retail formats, are facing multiple dilemmas.
For the online field, all kinds of e-commerce brands emerge in an endless stream, and the situation of homogeneous competition is inevitable; for the offline field, traditional retail enterprises have long fallen into the "growth bottleneck", like giants caught in the swamp, and urgently need a "breaking point" to break the deadlock.
Although traditional comprehensive e-commerce such as Ali and JD.com still occupy most of the retail market, Laiku still creates a new track based on the business model of OMO and C2M with its unique insight and execution of the industry.
In just 4 years, Laiku has built Laiku into a digital smart retail enterprise with a valuation of 100 billion yuan and annual sales of nearly 10 billion, and achieved a turnover growth rate of 200% for 4 consecutive years.
Laiku's rapid breaking of the circle allows us to see that in the "quagmire giant" of 3C digital retail, there is a new force that is quietly rising.
01, the best times, the worst times
2022 has arrived, looking back at the domestic retail market in the past few years, not only issued a sigh: as if ushering in the spring of hope, but also welcoming the winter of disappointment.
In the first half of 2021, as the country gradually got rid of the impact of the epidemic, under the influence of various favorable factors, the retail sales in the domestic market increased by 16.3% year-on-year, basically restoring the average growth rate before the epidemic.
However, for most merchants, the recovery of growth has not made them feel relaxed, but has become more and more anxious, as if only two years have passed, the demand for digital consumption has shown a clear polarization.
With the rapid rise of the "Z era" group, the e-sports industry frequently goes out of the circle, and the consumer demand of young people has gradually shifted from the pursuit of "cost performance" to personalized consumption and quality consumption.
In the face of the new demand put forward by the market, how to transform online consumption power more efficiently, and how to break the offline business model have become important issues that most 3C merchants cannot avoid.
As we all know, in the retail industry, online and offline are barriers that cannot be bypassed, and as the 3C digital field that everyone is eye-catching, this phenomenon is even more obvious.
In order to grab the market dividend of 3C retail, more and more small and medium-sized brands have chosen to join this field, but the high commission and the difficulty of obtaining customers have become the primary shackles of brand expansion, at the same time, in the "law of the jungle" of the market economy, the behavior of the weak eating the strong and the bad currency expelling the good currency has further worsened the competitive environment of small and medium-sized brands.
In the face of the oppression of "giants", the living environment of small and medium-sized brands is very difficult, because they cannot dominate the market wind, they can only submit to the rules formulated by large factories and carry out endless homogeneous inner rolling.
Therefore, in this seemingly dividend-ridden industry, everyone is not as comfortable as imagined, and many small and medium-sized brands and even platforms are wrapped in huge anxiety.
For large factories, with the advantage of volume, they can continue to expand by cutting costs or reducing profitability.
Domestically, there are former technology manufacturers Xiaomi and Huawei attacking the city, and then there are traditional e-commerce Taobao and Jingdong tigers; abroad, the pace of Apple's expansion has not stopped. In the face of these commercial barriers created with "real money and silver", although they feel unfair, they can only sigh.
With the increasing cost of platform traffic year by year, and the gradual peak of online dividends, the traffic advantage obtained by paying a huge advantage can be converted into sales synchronously, or it is still marked with a question mark.
Therefore, for every participant who has jumped into the game, today's 3C retail market is both heaven and hell.
All in all, the essence of the retail industry is traffic, regardless of whether it is online traffic or offline traffic, first of all, there must be traffic, in order to talk about conversion rates, customer retention, stage promotion of these things.
For small and medium-sized brands, in today's increasingly "fragmented" traffic channels, the phenomenon of "three dispersions" of sales channels, consumer contacts and consumer attention is the biggest pain point faced by retailers.
Large factories can use "banknote ability" to solve, but for small and medium-sized brands, the return of funds is slow, it is difficult to bear high-leverage debt, and if you want to break the existing deadlock, you can only seek to break the situation from the business model.
At the end of 2017, Laiku Technology was established, which has carried out a new empowerment for the retail industry through the advantages of industry insight and technical data.
In the next 4 years, in the face of new market needs and challenges, Laiku relies on the two business models of OMO and C2M to open up a new track for the "quagmire" of the 3C retail industry.
02、 OMO and C2M
In the previous chapter, we mentioned that the "fragmentation" of traffic channels in the 3C digital field is becoming more and more serious, and the situation of traffic but no sales is becoming more and more obvious.
The OMO model is to solve this problem.
The full name of OMO is Online-Merge-Offline, which is simply to create a full-time and space marketing system through the three-in-one way of online, mobile and offline.
In other words, it doesn't matter whether you go out to the mall or lie at home and swipe your phone, as long as you are a potential audience, you can be accurately reached in OMO mode.
For the business system of OMO, the "1+3" strategy launched by Laiku Technology is a very typical case.
The so-called "1 + 3" is also well understood, that is, the use of a retail service platform, and then the use of multi-scenario retail system, the store's "people", "goods", "field" full cloud.
For example, in laiku's smart campus scenario, although there are only 70 physical stores, the "cloud stores" that cover these physical stores online can reach more than 1200.
The methodology of full-time, global and multi-channel integration is a point that Laiku Technology attaches great importance to, and it is also an important commercial barrier for Laiku Technology to achieve the goal of 10 billion yuan within 4 years of its establishment.
Different from the traditional comprehensive e-commerce giants such as Ali and JD.com, Laiku chooses to grasp both online and offline to maximize the utilization of resources, adhering to the consumer-centered business philosophy, laying a good digital foundation for the brand to reach the precise crowd.
Having said OMO, let's talk about C2M.
If OMO solves the panacea of "traffic integration difficulties", then C2M is a sharp blade to cut costs.
On January 19, 2022, the State Council issued a document entitled "Opinions on Promoting the Integrated Development of Domestic and Foreign Trade".
When referring to the relationship between the supply side and the demand side, the "Opinions" said: C2M is an important way to open up the blockage between the supply side and the demand side, which is conducive to forming a model of demand-driven supply and improving the overall efficiency of the national economy.
C2M is also known as the "short-circuit economy", the so-called "short-circuit" meaning, is through the adjustment of business model, cut off inventory, logistics, total sales, distribution and other bloated links, shorten the distance between manufacturers and consumers, so as to achieve the purpose of cost reduction.
Interestingly, the cost reduction here is for both the B-side and the C-side.
Take the example of cool technology to avoid merchants pressing warehouses and pressing goods, and come to cool to put forward the concept of "pre-warehouse", so that while reducing the "non-standard" chaos, it can also reduce costs.
For consumers, the benefits of the general public are more obvious, under the "flat" supply design, the cost of all parties of the merchant is reduced, so that consumers can get a better consumer experience at a lower price.
In fact, as early as 2006, best buy, which is more mature in the United States, tried to land in the Chinese market, but the way it was used was more brutal, taking the model of "high-priced acquisition of local brands + crazy store expansion".
From the model alone, it can sound that this practice is very expensive, and for the Chinese market that has not yet been civilized at that time, the difficulty of making profits is undoubtedly very high.
With the advent of the "mobile phone revolution" and the rapid rise of the "Z generation", the rapid transformation of consumption habits and consumer objects has thrown out new demands to the market, and personalized consumption and quality consumption have become the new focus of consumption.
The β store that has sprung up in the United States in the past two years is a good example, through a small store, bringing together the smart life scenes of various black technology products, combining the lifestyle of consumption upgrades, and this is also the direction that Laiku initially chased.
At the beginning of this year, Laiku borrowed from the thinking of β stores, with Nintendo, Sony and Savior as the main elements, opened a concept store "Laiku Planet" in Chengdu, with the "Laiku Digital Gaming House" smart scene as the dominant, to achieve the perfect combination of the three major platforms of PC, home console and portable host, and create a new smart scene of "one-fold store, three-fold experience".
In addition to Chengdu's "Laiku Planet", Laiku has also opened new concept stores for smart scenes such as reading, audio and video in Chongqing and Guangzhou, and even increased the environmental atmosphere of taste. In the design, it fully integrates the cool sense of design and futurism, so that customers can fully interact with smart products while making 3C more vivid and popular.
With the advent of the outlet again, Laiku chose to strike decisively, established this set of member-centered operating structure, synchronously developed online and offline traffic windows, and built a moat from the system at the same time, but also through the continuous expansion of stores, two-pronged approach, consolidating Laiku's exclusive commercial barriers.
After 4 years of development, Laiku has basically established an ecosystem composed of dozens of brands, providing 3C+ trendy experiential services through seven scenes. These seemingly medium-heavy asset scenarios, in addition to the functions of traditional 4S, reasonable density distribution can become the best monetization carrier for online traffic, and it is also a system that online platforms do not have that can establish private domain positions.
As of October 2021, Laiku Technology has built more than 350 smart retail stores in 66 cities across the country.
While joining forces with commercial real estate, Laiku extends its multi-scenario retail tentacles to campuses, tax exemptions, cultural tourism and other fields, with offline forms of shopping malls, airports, tax exemptions, campuses, digital content, and Internet celebrity IP.
Laiku's success story symbolizes that China's retail market has opened up a new track, on this basis, the future 3C retail market, or there will be more possibilities.
03, the retail industry "broke the game" of the new track
Zhou Ming, CEO of Laiku Technology, once asked a question: Why do the huge losses in the intermediate links of commercial operations make users pay for them? In order to reduce costs, everyone is aimed at the 10% of the production cost, why not focus on the 90% of the unnecessary operating and transaction costs?
To solve this problem, he founded Laiku.
In 2020, affected by the epidemic, the domestic retail industry was washed away, and many start-up brands or small and medium-sized brands did not hold up and fell down one after another.
Laiku was founded at the end of 2017, the year of the epidemic, Laiku was only a start-up company that was founded for two years, in the face of this sudden "natural disaster", Laiku was very confident, from the "Letter to Business Partners" issued on February 16, 2020, you can see the vision and boldness of Cool Technology CEO Zhou Ming.
However, relying on the advantages of the OMO business system, Laiku still revitalized the traffic through multiple channels, so the sales volume of that year not only did not decrease, but even achieved reverse growth, and the sales increased by nearly 300% year-on-year.
Laiku's experience actually confirms the saying very well: facing the same dilemma, as long as you can breathe more than others, then you win.
As an emerging enterprise, Laiku cannot be compared with those established retailers in terms of volume, but the stability brought by the Laiku OMO model does make many people shine.
As a pioneer and leader of the new retail model, Laiku actually bears the burden of upgrading the entire 3C retail industry, and looking at the entire digital retail field in China, it can subvert from the business model, and Laiku is unique.
We often talk about digitalization, saying that the development of digitalization can give brands a more accurate blow to consumers, but everyone will say, what to do?
Come cool to choose the way, simple and rough.
As Zhou Ming, CEO of Laiku Technology, said: "We will use digitalization to divide the customer base, which used to be divided into 10 years, and now it can be divided according to 5 years or even 2 years." ”
The division of customer groups is becoming more and more refined, and the personalized demand is becoming more and more exuberant, which means that merchants need to more accurately capture user needs and provide corresponding products in a targeted manner.
In the new challenges, the shortcomings of traditional comprehensive retailers with low efficiency, cumbersome links and high costs will inevitably be amplified, the dividend of online traffic will inevitably usher in a peak, and the "breaking" of business rules and business models will inevitably be the general trend of the development of the retail industry.
On this game-breaking road, Laiku's success undoubtedly provides a way of thinking for the 3C retail industry, and even a successful sample.
Xu business to Dunhou, Xu technology to warm, Xu volkswagen to happiness, Laiku has always firmly believed that scientific and technological innovation and progress is only a breakthrough in technology, and what can really be easily shared by the public is the real dividend of scientific and technological development.
We also expect that this business model, which starts from the supply side and the consumer side synchronously, can get more dissemination and more applications in the near future.
Let's wait and see.