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With these questions, we invited Peng Zhiqiang, chairman of Shengjing Network and founding partner of Shengjing Jiacheng’s parent fund, to talk about the Industrial Internet as he understood it.

Key points summary

• Industrial Internet is the Internetization of the entire industrial chain B2B for sales, supply and production. And the small b (small merchants) below the connection line finally reached c ( Consumer) business logic.
  

  • Industrial Internet pays more attention to the stock, pure transaction-type platform dividends have bottomed out, and the enabling types appearing on the supply and demand sides The industrial community is the future upgrade direction and opportunity.

    • The Industrial Internet is a restructuring of China’s 100 trillion GDP, and it will be the largest business in the next five years. Opportunity.

      • Able to connect small offline b based on digital tools to realize the digitalization and informationization of the whole process The upgrading of intelligent supply chains, and finally entering the transaction field is the real industrial Internet.

        
        

        I. TO logic of the Industrial Internet

        1. How to understand the Industrial Internet?

        Industrial Internet is a very broad concept. Different companies and different people have different understanding of it. In Peng Zhiqiang’s view, a relatively large and fundamental change in the Industrial Internet lies in the transition from pure online e-commerce logic such as Taobao, Tmall, and Jingdong to new business logic of online and offline integration.

        I used to think that the emergence of e-commerce was to “kill” offline stores in order to seize a larger market share. Later, I found that in terms of total social retail sales, online accounts for 23% and offline accounts for 77%. No matter how you fight, you will not kill each other. The two are not a “you die” relationship, but a relationship that can cooperate and co-exist.

        Ali’s HK $ 22.4 billion acquired 36.16% of Suntech Retail and HK $ 5.37 billion invested in Intime. The two established a joint venture company to open up the online and offline commercial infrastructure system. JD’s strategic investment offline evaluation of the life of home chain stores is worry-free, and the establishment of supply chain joint ventures by both parties to sink the market and other giant actions are evidence.

        The internetization of offline merchants as the basic business unitIt ’s the Industrial Internet. From the past’s hostility to today’s enabling cooperation, the Industrial Internet’s perception of offline merchants has also undergone a fundamental change.

        2, why is the Industrial Internet a direction and trend?

        B2B has been in China for many years but has not run out of a truly powerful company. The reason behind it is that it lacks the power of C-end consumers.

        The added value brought by pure B2B exchanges is limited, just like the S2b2c model mentioned by Alibaba Zengming, its biggest innovation is S (supply chain platform) and small b together serve c, S and many small b have a close cooperation relationship. It can be seen that the Internet giants are also trying to take a share offline with different attitudes 羹 .

        The reason why the value of the Industrial Internet is far greater than the value of B2B is that its connection to the c-end makes it have explosive power and great pulling power.

        In this round of competition for small b merchants, the Industrial Internet finally connected to c-end consumers, grabbing a larger market share of 77% of the total social retail offline. Therefore, for capital and enterprises, the Industrial Internet will have a larger imagination space and can achieve a larger scale.

        3. What is the difference between the Industrial Internet and the Consumer Internet?

        If the consumer Internet is more of an Internetization of marketing, sales, and service links that are directly related to the c-end, then the industrial Internet is the organization of the entire industrial chain of supply and production and the Internet between organizations < / strong>.

        Consumer Internet is mostly direct to c. I want to eliminate the middle b, especially the offline b (Merchant) . The Industrial Internet wants to connect c through offline b, which is a logic of empowerment and blessing.

        This is the most essential difference between the consumer Internet and the industrial Internet.

        Second Thoughts on SaaS for the Industrial Internet

        4, SaaS is dead, BaaS is here, but SaaS is the foundation

        The “three highs and two lows” phenomenon exists in the Chinese Saas market. SaaS companies generally face operating pressures of high R & D costs, high sales costs, and high customer maintenance costs, but annual fees are low and renewal fees are high. The rate is not very satisfactory.

        Chinese people have a habit of thinking. They are unwilling to pay for services and pay for results.

        The so-called BaaS (business-as-a-Service) has come, which is to provide SaaS tools for free or at low prices, and there are stock orders Xiao B, deeply involved in the transaction link, and then gradually extended a set of deep empowerment systems to empower the supply and demand sides, and create brand-new value through services such as trading, logistics, and finance, which has a wide replication significance Industrial router b2f model.

        “ The essence of industrial routers is that the supply chain is strong and not that you gave me a free digital tool .”

        If the SaaS company can enter the transaction link and become an industrial router, the imagination space will also be very different.

        5, why is SaaS the foundation?

        SaaS is data driven based on it. The reason why it is more efficient than traditional selling is because it is data-driven, the entire link has less inventory, less receivables, and the efficiency of the logistics and financial services it can provide. The term is called: low friction Economy.

        In the past, operations were all high-friction economies, and various black-box operations occurred during the transaction. Nowadays, after digitalization, the processes are transparent, and the benefits of each link are redistributed. Whoever is close to the user can earn more, who Whoever has scale will sell less.

        “ Make the neural unit of each society more efficient than in the past , this is a new commercial civilization.”

        The original purpose of dealers was to sell goods, or even to “sell unscrupulously”, to treat people who buy goods downstream as sewers, but for the empowered communityxt-remarks “label =” Remarks “> (Integrated Supply Chain Commodity Collection) ,” Finance + “ (Funding Services) , “Community +” (Fan operation management tools, training, etc.) , “Activity +” (Customized event planning, integrated marketing, marketing resources, etc.) Provide more cost-effective supply chain services for offline small businesses, making store revenues higher, lower costs, and faster goods turnover. p>

        In the long term, Huitongda may empower 200,000 township stores in the future, an increase of about three times, and a monetization rate of more than 30%. Proportion of stores purchased through Huitongda) , which is another three-fold increase, and the two are multiplied by about nine-fold growth opportunities, coupled with higher unit prices such as new energy vehicles and prefabricated houses Expansion opportunities to logistics and finance are expected to impact 100 billion market value in the future.

        Alibaba’s investment in Huitong reached 4.5 billion, which is also based on the recognition that the empowerment system of 100,000 rural couples’ wives stores is stronger than the traditional e-commerce to c direct selling logic.

        The companies that can be called industrial routers have the most in common: they are connected to c by enabling b, and share the traffic of small b. There is no need to burn money to get traffic, so the financial model is more healthy and sustainable.

        7. What kind of industry has a greater chance of success in the Industrial Internet?

        The flow side and the supply side must be fragmented. There are two criteria for this fragmentation: The market share of the top ten in the market does not exceed 20%, and the total scale is 100 billion.

        Empowered communities are friends of time. In the future, there will be opportunities to create vertical platform companies in every market segment. If you want to be a platform, you must have enough market size to be able to carry it, and then there is the possibility of making this new platform industrial router.

        8, how to think about the role of digitization in the Industrial Internet?

        Digitalization is an industrial interactionThe first element of networking advancement is then online and intelligent. In essence, the industrial Internet is to build and seize the status of “industrial brain”.

        At present, digitalization may be one of the shortcomings of everyone, but digitalization alone does not make store revenue higher, lower costs, and faster turnover. It is only one of the means, so we advocate a comprehensive Three-dimensional ability.

        The ability of the supply chain is the most important part of empowerment. The essence of consumer purchase is “buying products”. Whether it is a tangible product or a service product, the essence is the supply chain. logic.

        The ability of Internetization refers more to the ability of digitalization and online intelligentization, so it must be an old industry gun and an entrepreneurial enterprise with the integration of the Internet team to be more successful.

        The old industry gun has a deeper understanding of the industry and supply chain, but it is often weaker in the ability to Internet. However, the entrepreneur in the fifth ring is just the opposite. His Internetization ability is strong, such as a small program , Traffic operations, etc., but may be completely insensitive to the supply chain.

        Without industrial resources and risk control measures, you cannot go deep into the supply chain. You cannot call it a platform but an Internet-based tool.

        9, how to optimize industrial internet finance?

        Finance is divided into narrow and broad sense. Broad sense involves issues such as accounts receivable. In a narrow sense, finance refers more to consumer finance and supply chain finance. In some projects, supply chain finance is used as Master cut in.

        Supply chain finance is a higher-level and smaller option. For example, Huitong reaches 100,000 stores, and 100,000 store owners need to pay for delivery. A small part of it will be given an account period, and there may be a part Supply chain financial services will be provided, which is a “funnel” logic.

        Behind it is a kind of data-driven, based on the observation of your data for one year and two years to decide to provide you with credit or supply chain finance. Under such complicated circumstances, how to ensure effective payment collection? How to solve the problem of invoice tax points can only be solved by the industry’s old guns.

        In the past, there were many links in the circulation chain of many industries that were not invoiced. Now it is necessary to allow enterprises to standardize their operations and cover your operating costs after issuing invoices to get good goods. It is cheap and can also standardize and even generate profit in the supply chain.

        These entrepreneurs in the fifth ring are not good at it.Old guns to control.

        Essence of the Industrial Internet: Reconstruction of 100 trillion GDP

        10. Where is BAT’s breakthrough point in the Industrial Internet?

        Alibaba has a trading gene, which can penetrate into the trading link through the S2b2c model. Tencent is more focused on digital tools, like a to c social game gene. It takes a process to transfer to the transaction. This time is three years. Five years still, it depends on Tencent’s own evolutionary logic.

        “Shangyun” is a link that cannot be bypassed by the Industrial Internet. If the cloud battle is to succeed, it must acquire digital tools. The platform can generate strong connections through investment and acquisitions. For giant Internet companies, eventually they will mainly do infrastructure such as “cloud”.

        However, with a mass like BAT, they have sufficient resources and funds. In the future, they can also be involved in the supply chain or transactions through investment, mergers and acquisitions, etc. The industrial Internet battle will definitely have their place.

        11. What is the nature of the Industrial Internet?

        Only technological innovation can bring about a revolutionary decrease in costs. If technological innovation is regarded as the internal driving force of enterprise development, then the Industrial Internet can be used as an external driving force of enterprise development, or a representative of market driving force.

        The essence of the Industrial Internet is the re-deconstruction of 100 trillion GDP. This is a matter that needs to be mobilized from the whole society. In the future, the Industrial Internet will also need to be viewed at different levels and from different angles.

        For store retail companies, offline stores are very valuable for private domain traffic management. How to serve customers within three or five kilometers of you and improve the ability to continue repurchase is the first consideration. Especially for industries with a large proportion of non-standard mixed services that are nerve endings, it is suitable for small bosses to do it themselves.

        For large-scale platforms, it is the most convenient way to find the old artillery that has been in the industry for many years.

        Huitongda, Aijia Life, and Yidiandi are representatives of Shengjing’s highly optimistic Industrial Internet. One point one drop completed a 60 million yuan A round in June this year