On August 17, Yang Wharf held a global conference for the 10th anniversary in Chongqing. At the meeting, Jia Penglei, the founder of Horseshoe Club and president of Ebang Power, delivered a speech entitled "Being a Long-TermIst Through the Cycle", sharing the latest insights on Haitao e-commerce in the second half of 2020.
It is not policy, not the model, that creates the outlet, let alone capital, but demand.
--Jia Penglei
President of Ebang Power, Initiator of Horseshoe Society
(The following is the transcript of Jia Penglei's speech)
Hello everyone.
Last night I chatted with Bibo (Horseshoe Club mentor and founder of Yang Wharf Zeng Bibo) in the hotel lobby, talked about a lot of history, today on behalf of industry practitioners to give you a brief review of why to say "ten years of Haitao Road" and why to say "new Yang Wharf".
In the entire history of the development of China's e-commerce, the two words haitao and yang wharf are difficult to bypass. The title of my sharing topic today is "Being a Long-Termist Through the Cycle", and first of all, there are a few important data for you to share:
The first is that last year's entire cross-border e-commerce retail imports were 91.8 billion yuan, which sounds like a big number, but look at the next two figures, one is the online retail sales of physical goods, which is 8.5 trillion yuan in 2019, and the other is the total imports, which is 14.3 trillion yuan. The total import value includes the traditional general trade imports and cross-border e-commerce imports, etc., and the proportion of cross-border e-commerce is also very small.
Even though cross-border e-commerce and sea amoy have become a very mainstream business model today, the proportion of the entire e-commerce market is still very low. Judging from the figures in 2019, cross-border e-commerce accounted for the highest 1.08% of the total e-commerce market, while the import market share was only 0.64%. From the perspective of future development space, it is still very large.
In terms of the current situation of the industry, we will look at domestic retail e-commerce from three dimensions, the first is the total online retail sales of physical goods, the second is the total retail import and export of cross-border e-commerce, and the third is the online sales of the national service industry.
Judging from the situation in the first half of 2020, the total retail sales of physical goods online accounted for 22% to 25% of the total retail sales of consumer goods in the whole society, which actually exceeded the expectations of many people, and e-commerce accounted for a greater proportion of total retail sales of social consumer goods, and the development speed was faster.
Let's look at Chongqing, Chongqing's GDP growth rate in the first half of the year was very fast, surpassing Guangzhou, and its development has become a phenomenon in China's first-tier cities. Recently, there have been many discussions in the circle, such as "why is Chongqing growing so fast" and so on.
From the combination of these numbers, what is the biggest change? It is that e-commerce in today's Retail and Consumption in China has become an irreplaceable driving force while maintaining a very high vitality.
Whether it is sea tao, cross-border e-commerce, cross-border e-commerce imports, what has been experienced in the past period? Why talk about the long-termism of crossing cycles at Ocean Piers?
Bibo and I met in the spring of 2014, in Henan, when the main form of import was still Haitao, at that time, Haitao was still a not strict business model, mainly foreign buyers or sellers through the way of mail delivery to China.
On September 29, 2013, the Shanghai Free Trade Zone was established, followed by five import pilot cities approved that year. In this process, the most original batch of overseas Amoy entrepreneurs represented by Yang Wharf began to gradually move towards the road of compliance under the guidance of policies.
In the confused period, that is, after 2016, many practitioners and previously very well-known platforms disappeared, and even some entrepreneurs touched the regulatory red line and were sentenced, which is very common in this industry.
On April 8, 2016, the "April 8 New Deal" was launched, and the elderly in the imported e-commerce industry know what the "48 New Deal" means for cross-border e-commerce.
After a certain period of piloting, the New Deal landed, which solved two key problems: the first is taxation, which is in line with the line, and the two are in a state of going in opposite directions; second, the negative list system for commodities has been implemented.
In the one to two months at that time, the "April 8 New Deal" was a "sleepless thing" for cross-border e-commerce practitioners. I myself experienced this myself, when it was 12 o'clock every night, and everyone was still in the group discussing "what to do". In the initial period, the "April 8 New Deal" has been unstable, and although it has landed, it has also been a state of pilot progress.
From 2016 to 2019, in the three years of confusion, the vast majority of cross-border e-commerce platforms have disappeared, and some platforms may still exist, but haitao or cross-border e-commerce imports can no longer support an independent business model.
In 2019, Alibaba officially acquired NetEase Koala, which marked the basic end of the golden development period with Haitao as the main form and the import e-commerce policy as the dividend, and the entire industry entered a mature period.
"Maturity period" is Zeng Bibo's definition, in the view of Ebang, we find it difficult to assess what maturity is - because everyone can buy imported goods at a lower cost and more conveniently. Or has it matured into a particularly ordinary industry?
So we have a definition of our own, calling it the "fusion period."
Although many cross-border e-commerce platforms have disappeared, Chinese consumers' demand for good goods around the world has not stopped, and it continues to rise. In the process of rising demand, haitao is difficult to exist as an independent business model, but the transaction of imported goods as a major form of transaction, it is perfectly integrated with ordinary e-commerce and even offline retail. Therefore, from the perspective of integration, it presents more cyclical characteristics.
To summarize, if we think of it as several stages:
During the grassy period, due to unclear policies, a large number of black and gray production existed, and the hot word in the industry at that time was purchasing.
The dividend period, mainly refers to the policy dividend, supported by the policy dividend, the capital brought a wave of dividends from 2015 to 2017.
During the period of confusion, a large number of players disappear or transform.
During the integration period, Haitao consumption and domestic trade consumption are integrated.
These are the most important stages of development of the "Ten Years of Haitao Road".
Just mentioned the "disappearing sea tao" - once used to be the sea amoy or cross-border e-commerce import as the core model of the platform, some are still there, but more is in decline or completely disappeared.
I will give a few examples, such as Jumei Premium, Ctrip Global Shopping, Honey Bud, Honey Honey, Honey Tao, etc., some of them may still exist, but the former cross-border e-commerce import model has been gradually replaced. These few examples are actually a tribute to them, they really played a very important role in promoting the globalization of China's e-commerce.
These words were once very familiar to us.
We once ate at a table and had a heated discussion about how to make Haitao bigger, but today there are only two companies that are really doing cross-border e-commerce imports: a Tmall International and a yang wharf.
For Tmall, Tmall International Business is just a subset and a module of Tmall, and for Yang Dock, this is all it is.
I often don't know how to evaluate Bibo, we see a forwarder who goes against the trend. Without fear of moving forward, he is such a person, so Yang Wharf is also a very special phenomenon company.
If you review it, what has changed in the past ten years? For Chinese e-commerce, I think these three points are very important:
First, the globalization of competition.
According to the demand of Chinese consumers for the world's good goods, with the support of policies, Haitao has taken advantage of the rapid development of the domestic Internet to quickly introduce the world's good goods into the Chinese market in large quantities and decentralization. This speed is almost unimaginable in the era of traditional trade.
Second, the consumption upgrade.
Haitao has given Chinese e-commerce a very good soil, so many international goods with advanced ideas, beautiful design, excellent quality into the Chinese market, brought About China's consumption upgrade. This big upgrade does not refer to the purchase from "cheap" to buy "good", it refers to the comprehensive upgrade at all levels, in all dimensions, and in all directions. This is largely due to haitao e-commerce, if there is no haitao e-commerce, The speed of China's consumption upgrade must be several cycles slower than it is now.
Third, domestic brands have risen in China.
Today, when the post-90s generation has established a family and become the main force of shopping, we will find that Chinese consumers are no longer so admiring, in their view, domestic goods and foreign goods are the same.
Two days ago, Balenciaga released a poster of a strange bag, and everyone will say "Is there any misunderstanding of The national tide of China by Balenciaga"? Indeed, its biggest misunderstanding of us, or our biggest misunderstanding of international brands, comes from the collision of international cultures, which is too violent and too fast, and we don't have so much time to understand each other's culture. The Chinese tide that Balenciaga thinks is, to some extent, like a certain American culture that we think we understand, but in fact there is a very deep gap that needs to be eliminated with time and a lot of work.
However, there is a good trend that Chinese domestic brands have a place in global fashion design weeks, which was almost impossible 20 years ago, because then we did not export our culture. Today, China's traditional buckles and Chinese silk fabrics will be displayed at international big-name fashion weeks, which is essentially a manifestation of the rise of domestic brands.
These are three invaluable assets that I think Haitao has left for the Chinese consumer market.
What has Ocean Terminal represented in the industry over the past decade? What do e-commerce people think of it? I think there are three words:
The first is the originator of Haitao. It took the lead in doing Haitao, the first to do C2C, the first to introduce the "Black Friday", a Western shopping festival, into China, and made a traditional festival in China. Of course, this also shows that this company is not young, this year is the tenth anniversary of the establishment of Yang Wharf, it can be said that it has completely crossed the core cycle of China's e-commerce.
Second, to this day, Zeng Bibo still maintains a high-pitched hormone and fighting posture, appearing in front of the industry as an industry fighter. In this industry, there have been so many people retreating, and a key reason for retreating is that many people can't afford to lose, many people may not be able to bear this risk, and many people are not willing to do such long-term cultivation, but Zeng Bibo has done it.
Third, innovators. It used to be the earliest mobile e-commerce, and now, in the first half of this year, the transaction volume of Yang Wharf has increased by 70% compared with last year, and its live e-commerce accounts for about 30% of the entire platform sales, which is expected to increase to about 50% by the end of this year. In today's China's e-commerce industry, it is remarkable that an independent platform or APP with a unique business model can achieve such a growth rate in the case of such dry traffic and so decentralized shopping.
"Ten years of Haitao Road, new Yang Wharf", where is our thinking?
Yang wharf is just a microcosm of cross-border e-commerce, a tentacle, if lucky, there will be more "yang wharf", but perhaps, there will be no second "yang wharf", it is possible. How do we distill some information from the development of the industry that should be paid attention to?
Our first thought: it is not policy, not the model, that creates the outlet, let alone capital, but demand.
In the development of China's Internet and e-commerce in the past so many years, we have seen a lot of outlets. I remember in 2014, when Ebang Power cooperated with Jiangbei District to do a China Online Retail Annual Conference, our theme was called "The Next Outlet", it was 2014, and that conference was very hot.
The concept of the outlet is very familiar to the Internet, but what really drives the outlet and can really create the outlet is not capital, nor is it policy, which is essentially the demand, which is the demand brought about by industrialization, urbanization and informatization in the process of China's rapid development, which has promoted the sustained growth of China's Internet for so many years.
Second, we must be very soberly aware that Haitao e-commerce is only a part of retail e-commerce, in fact, it and the entire retail are coexisting and competitive state. Many companies or entrepreneurs once thought that grasping a model can stand for a long time, but in fact, we must see the background we are in, and it is difficult to get along with the big situation.
Third, if we look to the future, the real opportunities for business change lie in the comprehensive restructuring of production relations brought about by full digitalization, the adjustment of global supply chains, the comprehensive reshaping of international relations, and a new round of consumption transformation.
Haitao is only a part of retail, retail is only a part of the industrial Internet, and the industrial Internet is only a part of the consumption of China's traditional manufacturing circulation industry. And what are China's strengths today? It is we from the consumer end to the circulation end, to the manufacturing end, to the means of production... Even to soil transformation, to the advancement of science and technology, etc., these aspects are being fully digitized. In the process of full digitalization, the growth of birth and the prospect of the future are not the same.
Last night we were discussing the topic of reform and opening up, as far as China is concerned, it has experienced many reforms and opening ups in history: the opening up in the early days of the founding of the People's Republic of China was oriented to Asia; after 1978, our opening up was mainly to learn from Europe and the United States, learning from each other's advanced markets and advanced technologies; and today, China's GDP is the second largest in the world, what kind of opening up should we open up? We believe that it should be a technology-driven, low-level, comprehensive, open to the global market. Perhaps today's globalization has encountered very great resistance, but I think China's opening up is unstoppable, and China's future still lies in opening up.
Finally, share a few small trends about cross-border e-commerce.
First, the consumption dividend is still there.
Haitao consumption is more routine, large-scale and diversified. Scale refers to the fact that although the Haitao platform is disappearing, the scale of Haitao has not disappeared, and it is still growing. Diversification refers to the diversity of brands, products, importing countries, and the diversity of service forms.
Second, the policy dividend continues to be released, but the supervision is becoming increasingly stringent.
For example, today's Yang Wharf can land in Chongqing, which is essentially a policy dividend that continues to be released. Chongqing has leapt to a first-tier city, and the entire western market has been developed and developed again, which is the biggest policy dividend.
At the national regulatory level, from the expansion of the list of imported goods of cross-border e-commerce to the further increase of import pilot cities, to the increasing number of comprehensive test areas, it is the release of policy dividends.
The increasingly stringent regulation mainly means that today's comprehensive digitalization has led to a lower possibility of black and gray production than before, and the risk of innovation is greater than before, which also reminds entrepreneurs here to pay special attention.
Third, new second-tier cities and sinking markets are opportunity points, and "westward expansion" has become a necessary strategy.
The new second-tier cities are an opportunity for the entire Great West, and of course this is even more true for Haitao. Today's landing in Chongqing is also part of the "westward expansion" strategy.
Fourth, the conditions for Haitao's new retail are gradually mature, and large-scale replication is possible.
As we mentioned earlier, Haitao is ultimately to combine with traditional e-commerce retail and offline retail. In 2016 and 2015, there was a concept of new retail in China, but it has not grown up for so many years, and the key point is that offline retail at that time did not have such good digital conditions to support the large-scale growth of a format, but today it is already possible.
Finally, live broadcasting is the inevitable evolution of traffic, and at the same time, this year there is also the accident of the epidemic, the accident of the epidemic has accelerated the overall speed, and Haitao e-commerce needs to establish live broadcast capabilities as soon as possible.
We understand live broadcasting as a relatively perfect combination of e-commerce efficiency and offline experience. In the past, buying things online may not be well recognized and understood through pictures, but today you can feel it very well through live broadcasting, in addition to not being able to touch, other basically can be achieved. In this case, the reorganization and redistribution of traffic in live broadcasting are more efficient than traditional graphics and short videos, and from this logic point of view, the entire industry has made great efforts in live broadcasting, and it is also very happy that Yang Wharf has done a very good job in this.
The last sentence is called starting from the needs of users, hoping that entrepreneurs in our entire industry can be long-termists who cross the cycle, and victory belongs to long-termists.
Thank you.