Upholding goods on the upstream and credit on the downstream, textile platforms are not filling the bottomless pit of the industrial chain.
Editor’s note: This article is from the WeChat public account “ Trapper Zhi ” (ID : Ibushouzhi), author Zhai Gengzhang, editor Li Yi.
As the third largest domestic industry, the trillion-scale textile market has become a hot spot for capital gold rush. The rich categories and fine industry chain of the textile industry provide ample opportunities for entrepreneurs, but how can we build a platform that penetrates the entire textile industry chain, improve the service efficiency of the industry, and fundamentally complete the industrial upgrade? The market is making various practices.
Due to the pre-emptiveness of overseas corporate service giants and the unique domestic market environment, the domestic corporate service market has developed slowly. At present, the entire domestic enterprise service industry is focusing on PaaS or SaaS and APaaS or IPaaS. On the other hand, some enterprise service companies have begun to target vertical industries, use SaaS and B2B to cut into transactions, and use the open source of business flow to tap the industrial chain dividend. This situation is even more violent in the textile industry with a long industrial chain and fast update iterations.
This year, a number of financings have emerged around textile SaaS, and companies such as Digital, Zhibu Internet, and Baibu have successively received capital investment. During the interview with Captive, I learned that most of the projects are in close contact with the management, and I hope to take advantage of the current capital attention to try my best to get the money.
From a single SaaS business model to a converged B2B transaction, a new textile platform model is gradually formed. This is a new exploration and attempt on the business service business model. The industry service path of the vertical industry shows Chinese characteristics. What changes and opportunities will there be for the textile industry that has strong demand for reverse transformation of the supply chain at the front end?
Current status of the textile industry chain
Using the Internet platform to enter the industrial chain trading market is not new. B2B platforms have always wanted to do it, but for a long time, most B2B platforms have only been able to do a good job of publishing information on the industrial chain. This situation is particularly prominent in the textile industry. Seasonal changes in the textile industry and the randomness of popular styles,This makes it difficult to unify and standardize customer needs, and the corresponding industry chain services cannot be completed online.
“ The textile industry is an acquaintance market. Basically, acquaintances are used to find factories. Otherwise, what do you say you can do in the end? ” Li Bo, founder of FooxMet, said that if the B2B platform cannot Providing one-to-one transaction services is of no practical use. At present, the existence of the textile B2B platform is weak, and it is still not possible for the practitioners to generate continuous motivation. “If I want to use it, I need a special person to operate it. The value provided by the (B2B platform) does not match my investment.”
As of now, Textile B2B can’t really enter the transaction link of the industrial chain. The biggest function is to help users reach suppliers or customers. Of course, B2B has made some achievements in the retail channel links downstream of the industrial chain and the highly standardized auxiliary materials supply at the edge of the industrial chain, but these markets are difficult to penetrate into the industrial chain, and the market volume cannot be compared with textile fabric transactions.
Han Bing’s founding partner, Han Bing, said bluntly: “ The traditional industry is not a backward industry. The fabric has a very close relationship with production, research and development, and the supply chain, but it is in information dissemination. The relative value ratio of the entire industry to the promotion of the industry is relatively small. Based on this, Cambodian Ventures abandoned the fabric valuation project with high valuation and large capital investment in the textile industry, but instead Invested in auxiliary materials B2B platform Easy materials, retail-oriented finished product B2B platform thousands of textiles .
“Now the platform is more inclined to protect suppliers, and the overall credibility is not enough.” Li Bo told Catcher Zhi (WeChat ID: ibushouzhi) that many textile B2B and SaaS companies on the market come to sell, but FooxMet still only uses it. The 1688 order button, an auxiliary material with little difference in quality, is not used by other B2B platforms. The reason is that the service is not good and the inquiry is not reliable. The choice of FooxMet is also a common phenomenon in the industry .
Currently cut into fabric trading projects, The way the market operates is also by screening high-quality suppliers in the upper and middle parts, and relying on the supplier’s reputation in the industry to win customers . This model has limited market share and a longer category expansion period. In the fixed category market, this type of project can only win about 20% of the market, compared with the entire fabric trading market, the sense of existence is lower.
It is optimistic that the declining market and the rapid development of SaaS have brought benefits.
There will be more and more surplus capacity in the market downturn. The upstream of the industrial chain needs channels to release capacity, and the downstream of the industrial chain needs more cost-effective supply services.rong>. At the same time, when the market is not good, the entire industry chain is reducing backlogs, which leads to insufficient supply during the peak season and provides favorable opportunities for the growth of new brands. The concentrated outbreak of new brands has brought the need to focus on finding the supply chain. These have provided B2B, SaaS and other Internet platforms that intend to change the industrial chain to provide opportunities to penetrate the transaction chain.
The mature SaaS services covering procurement, manufacturing, warehousing, and sales processes allow third parties to obtain timely and in-depth data from factories to traders to brand owners, facilitating the integration of production capacity, processing, The standardization of quality level allows the stocks in the hands of traders to circulate quickly, which ultimately greatly reduces the difficulty for brands and channel vendors to select suppliers and processing plants.
The new generation of SaaS technology, which reshapes the industry chain, has won the attention of capital. The original customer structure and business model of the B2B platform make it easier to eat industrial SaaS business, but does capital value the B2B platform or SaaS? This answer has been changing.
“ The ceiling of vertical SaaS is relatively limited, and capital favors long-term growth after entering the trading business. A insider who has been engaged in FA business of B2B projects for a long time said the nature of the market as a B2B trading platform No change.
But capital is more inclined to invest in SaaS. The most obvious phenomenon is that B2B platforms such as Sobu and Chainshang have once again received capital attention after launching SaaS business. The more fashionable name nowadays is “cloud factory”, and even the term “shared textile factory”.
The preference of capital makes textile SaaS go towards asset-oriented .
The asset-light model is unsustainable
The textile SaaS is now in its fast landing period. The innovation around the textile SaaS business model is still being explored and practiced. It is unclear where it will go in the future. But even with the most basic SaaS annual fee business model, this market still has the opportunity to create a unicorn.
In terms of market scale, the data released by the Ministry of Industry and Information Technology shows that the main business revenue of domestic textile enterprises above designated size was 683.6 billion yuan in 2017, and the number of domestic textile factories in 2008 was 400,000 to 500,000. Due to the complexity of the apparel industry chain, there is currently no authoritative data that can accurately count the number of domestic textile companies.
Rough estimates given by several school co-founders Zhou Wenyu show that: The number of domestic textile traders with annual revenues exceeding 100 million is in the hundreds of thousands. In hundreds of thousands. If all of these enterprises use textile SaaS, the annual textile SaaS market size will start at 10 billion based on the annual cost of 10,000. These numbers do not include large and microWorkshop-type textile enterprises. Of course, these two markets are also areas where textile SaaS is temporarily difficult to break through.
It’s just a textile SaaS business, enough to cultivate a unicorn enterprise. However, it is still difficult for textile SaaS to continue its asset-light model.
First, At present, whether it is textile SaaS or B2B platform, the service target is small and medium-sized textile enterprises, including textile mills, traders, clothing factories.
From the perspective of products, some pure-textile SaaS companies like Taipai first customize a full set of warehouse management system WMS, transportation management system TMS, supply chain management system SCM, product data management PDM, data collection and monitoring control for textile traders. System SCADA. After further deepening in textile factories and clothing factories, it is necessary to provide advanced planning and scheduling APS and manufacturing execution system MES.
Compared with the general SaaS systems of SAP and Oracle, the new textile SaaS directly integrates software and hardware, and automatically enters information to maximize automation and reduce manpower. This has a good competitiveness in the face of small and medium-sized enterprises that have not yet adopted intelligent equipment and software services. However, for large enterprises that have long used overseas corporate service software giant products, related software and hardware have already been equipped, making replacement difficult.
The living environment of industrial SaaS has always been worse than that of office SaaS: Based on the domestic closed market environment and unique user habits, international corporate service giants have not exerted influence in the office SaaS field. There is less competition pressure; however, there are no major differences in industrial standards and regulations around the world, and there is little incentive for large industrial enterprise groups to change service providers.
Second, while the problem of horizontal development is difficult to solve, it is not easy to make product depth vertically. Due to the need for corporate tax avoidance, textile SaaS has encountered difficulties in the development of more oil and water fields such as electronic bills and accounting.
In deeper electronic bills, companies are reluctant to adopt them due to complex tax avoidance issues. The direct problem caused by the failure of electronic bills to be implemented is that the product traceability network cannot be promoted, and the operational efficiency between production, warehousing, and trading links will not change qualitatively.
This has hidden dangers for the further expansion of textile SaaS and the continued transformation of the asset-light business model. While maintaining a trillion industry, textile SaaS does not focus on asset trading business, and investors will not agree.
At present, regardless of whether it is B2B or enterprise service SaaS, cloud factory, shared textile factory, the goal of market practitioners is still very clear-is to cut into the transaction . So how can we cut into the transaction and harvest the market?
啃 Fixed trading business
Unlike the big red and big purple of the C-end Internet trading platform, industry chain transactions require a high degree of professionalism, and the requirements are fine and fragmented. For the Internet that prefers the platform’s ecological light model, it is the most difficult to sting.
For all textile platforms, if you want to cut into the textile industry chain, Either be a trader and make yourself part of the industrial chain; Or provide one-to-one services for the industrial chain. , Be an online and offline integration service provider . However, if you want to follow the trader model, the team must have sufficient capital, and it may not be able to come out based on the complexity of the industry; the one-to-one transaction servicer model is too heavy and not suitable for rapid development. Regardless of the model, it is necessary to have the ability to judge the quality of goods, the level of technology, and the trend of market demand.
The upgrade of textile SaaS provides more testing space for the market. The maturity of the Internet of Things and mobile Internet technologies has ushered in a new wave of upgrading opportunities for industrial SaaS. The new SaaS combined with the Internet of Things hardware can not only help the industrial chain improve production efficiency, but also integrate factory procurement, Real-time synchronization of warehousing and sales data improves management efficiency .
So, in the past, the most difficult goods quality and craftsmanship issues in the industrial chain transactions have data basis. Relying on the data, entrepreneurs have the possibility to scale the business model of traders and transaction service providers.
At present, Zhibu Internet, Soubu and other companies are working on the second batch of merchants in the fabric transaction. They intend to replace some traders’ business through the transparency of the supply chain brought by SaaS, and use the credit system and a group of merchants to build new ones. Transaction service system.
Because of the large number, small volume, and scattered characteristics of domestic textile mills, there are many first-tier and second-tier approvers under the mills. The Internet platform can use its own information docking capabilities to shorten the supply. Chains, replacing these price-raising appraisers.
This model is effective and feasible, but if these textile platforms can’t reach the level of applicators, it will be difficult to replace them. Ideally, shortening the supply chain and replacing the price advantage brought by cloth distributors does not play as much a role in imagination.
For a long time, fabric applicators are traders and act as one-on-one transaction service providers in the textile supply chain, helping processing plants, brand owners, channel dealers and other downstream customers to look for thousands of fabrics. Suppliers with stable supply, reasonable price and qualified quality. At the same time, market demand is in the doldrums, using the capital and warehousing capabilities in their hands to help the supply chain hold down credit. The applicators have good professional ability, judgment ability and service ability, and their existence is reasonable.
For the textile industry chain, the essence of the cloth transaction is to press the goods upstream of the industry chain in advance during the off-season, and credit the downstream customers. This also determines the textile industry
The textile SaaS is now in its fast landing period. The innovation around the textile SaaS business model is still being explored and practiced. It is unclear where it will go in the future. But even with the most basic SaaS annual fee business model, this market still has the opportunity to create a unicorn.
In terms of market scale, the data released by the Ministry of Industry and Information Technology shows that the main business revenue of domestic textile enterprises above designated size was 683.6 billion yuan in 2017, and the number of domestic textile factories in 2008 was 400,000 to 500,000. Due to the complexity of the apparel industry chain, there is currently no authoritative data that can accurately count the number of domestic textile companies.
Rough estimates given by several school co-founders Zhou Wenyu show that: The number of domestic textile traders with annual revenues exceeding 100 million is in the hundreds of thousands. In hundreds of thousands. If all of these enterprises use textile SaaS, the annual textile SaaS market size will start at 10 billion based on the annual cost of 10,000. These numbers do not include large and microWorkshop-type textile enterprises. Of course, these two markets are also areas where textile SaaS is temporarily difficult to break through.
It’s just a textile SaaS business, enough to cultivate a unicorn enterprise. However, it is still difficult for textile SaaS to continue its asset-light model.
First, At present, whether it is textile SaaS or B2B platform, the service target is small and medium-sized textile enterprises, including textile mills, traders, clothing factories.
From the perspective of products, some pure-textile SaaS companies like Taipai first customize a full set of warehouse management system WMS, transportation management system TMS, supply chain management system SCM, product data management PDM, data collection and monitoring control for textile traders. System SCADA. After further deepening in textile factories and clothing factories, it is necessary to provide advanced planning and scheduling APS and manufacturing execution system MES.
Compared with the general SaaS systems of SAP and Oracle, the new textile SaaS directly integrates software and hardware, and automatically enters information to maximize automation and reduce manpower. This has a good competitiveness in the face of small and medium-sized enterprises that have not yet adopted intelligent equipment and software services. However, for large enterprises that have long used overseas corporate service software giant products, related software and hardware have already been equipped, making replacement difficult.
The living environment of industrial SaaS has always been worse than that of office SaaS: Based on the domestic closed market environment and unique user habits, international corporate service giants have not exerted influence in the office SaaS field. There is less competition pressure; however, there are no major differences in industrial standards and regulations around the world, and there is little incentive for large industrial enterprise groups to change service providers.
Second, while the problem of horizontal development is difficult to solve, it is not easy to make product depth vertically. Due to the need for corporate tax avoidance, textile SaaS has encountered difficulties in the development of more oil and water fields such as electronic bills and accounting.
In deeper electronic bills, companies are reluctant to adopt them due to complex tax avoidance issues. The direct problem caused by the failure of electronic bills to be implemented is that the product traceability network cannot be promoted, and the operational efficiency between production, warehousing, and trading links will not change qualitatively.
This has hidden dangers for the further expansion of textile SaaS and the continued transformation of the asset-light business model. While maintaining a trillion industry, textile SaaS does not focus on asset trading business, and investors will not agree.
At present, regardless of whether it is B2B or enterprise service SaaS, cloud factory, shared textile factory, the goal of market practitioners is still very clear-is to cut into the transaction . So how can we cut into the transaction and harvest the market?