What is the nature of the Industrial Internet? Where is the biggest opportunity for the Industrial Internet? Is there a huge difference between the investment logic under the Industrial Internet and the investment logic under the Consumer Internet?
Editor’s note: This article is from WeChat public account “ Industry ” (ID: chanyejiawang ), Author Meng Wen.
Industrial Internet is undoubtedly the most frequently discussed and hot topic in the past two years. Entrepreneurs, investors, and practitioners are exploring new opportunities for segmented industries and want to take advantage of the value of the Internet in the second half to achieve second takeoff .
Abandoning the vague concept, what is the nature of the Industrial Internet? Where is the biggest opportunity for the Industrial Internet? Is there a huge difference between the investment logic under the Industrial Internet and the investment logic under the Consumer Internet?
With these questions, the industrialist invited Peng Zhiqiang, chairman of Shengjing Network and founding partner of Shengjing Jiacheng’s parent fund, to talk with us about the Industrial Internet he understood.
Key summary
Industrial Internet is the Internetization of the entire industrial chain B2B for supply and production. It is a kind of business logic that finally reaches c (consumer) through empowerment and connection of small b (small merchants) offline.
Industrial Internet pays more attention to the stock. The purely transactional platform dividends have bottomed out. The empowered industrial community appearing on the supply side and the demand side is the future upgrade direction and opportunity.
Industrial Internet is a restructuring of China’s 100 trillion GDP, and it is one of the biggest business opportunities in the next five years.
The digital tool can be used to connect the offline b to realize the digitalization, informationization, and intelligent supply chain upgrade of the whole process, and finally enter the transaction field is the true 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 grab a larger market share. Later, it was found that according to the total social retail sales, online accounts for 23%.Offline accounts for 77%. No matter how you fight, you will not kill each other. The two are not a “you die and live” relationship, but a cooperative symbiotic relationship.
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 with offline merchants as the basic operating unit is the industrial Internet. From the past hostility to the current 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 that S (supply chain platform) and small b jointly serve c , S and many small b are closely cooperated relationship, we can see that the Internet giants are also trying to take a share of the offline with a different attitude.
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 connected to the marketing, sales, and service links of the c-end, then the industrial Internet is the organization of the entire supply chain of supply and production and between the organizations.
Consumer Internet is mostly direct to c. I want to eliminate the middle b, especially the offline b (business). 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, SaaS Thinking of Industrial Internet
1. SaaS is dead, BaaS is here, but SaaS is the foundation
There is a phenomenon of “three highs and two lows” in the Chinese Saas market. SaaS companies are generally faced with operating pressures of high R & D costs, high sales costs, and high customer maintenance costs, but the annual fees are low and the renewal rate is not ideal.
Chinese people have a habit of thinking. They are unwilling to pay for services and pay for results.
The so-called BaaS (Capability more refers to the ability of digital and online intelligence, so it must be an entrepreneurial company with an old industry gun and 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. He has a strong Internetization ability, 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.
4. How to optimize industrial internet finance?
Finance has a narrow sense and a broad sense. The 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 is based on supply. Chain finance is the main entry.
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 of it. 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 Road are not good at it, and they need old industry guns to control it.
Fourth, the nature of the Industrial Internet: a re-construction of 100 trillion GDP
1. Where is the breakthrough point of BAT 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 an inextricable part of 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.
2. What is the nature of the Industrial Internet?
Only branch