Suning has given the answer to the biggest problem facing Xiaomi and OPPO

The advent of the Internet changed the rules of all games as if overnight.

The last time China's economic structure faced such a huge and profound change was probably during the reform and opening-up period. It was under the protection of policies and in the torrent of globalized economy that China's economy ushered in a brand new look.

But under the Internet, everything is more thorough and decisive. On the highway of the Internet, you either charge forward bravely or get trampled cruelly. There is no third choice. The scene of countless once-solid giants collapsing in an instant has shocked all entrepreneurs. How to implant Internet thinking into traditional enterprises and keep up with the times has become an unavoidable problem.

However, in the face of China's flourishing and thriving Internet economy, there is no longer any so-called "international advanced experience" to learn from.

"I would like to exchange the family business I have accumulated in the first half of my life for a successful transformation", more than one entrepreneur has said this. Unfortunately, there are only a few successful ones.

The emerging Internet economy has pushed the traditional business system to the brink of a cliff. The "Internet + Everything" model has spread rapidly, creating one business miracle after another, and the traditional retail industry has entered a cold winter.

Things will inevitably reverse when they reach their extremes. The counterattack of the offline economy

Compared with the sales model of traditional retailers that is extremely restricted by geographical location, the online retail enterprises are more simple and crude. With low profits close to costs and high sales relying on the explosive reputation of the Internet, the online marketing model focusing on cost-effectiveness is all the rage.

The best among them is of course Xiaomi, which is well known to everyone. Xiaomi mobile phones, which are known as "making smartphones affordable for everyone", have repeatedly refreshed the industry's price bottom line and also created a sales legend.

However, since last year, the drawbacks of this model have begun to become apparent. The cost-effective strategy of low price and high configuration has resulted in low-end brand recognition among the user base. Manufacturers that are locked in on cost-effectiveness have quickly lost their ability to command a premium for their brands and can only struggle on the edge of profit and loss, gradually becoming marginalized as users are demanding consumption upgrades.

In contrast, OPPO, which does not rely on online sales and has early on laid out its offline channels, has relied on its outstanding sales force and precise advertising positioning to firmly secure the top spot in China's mobile phone market share. It has also easily joined the ranks of mid-to-high-end mobile phones, and its single-machine profit margin is far ahead of other domestic mobile phone camps.

This is not an isolated case. The signal of offline economic recovery is clear and unquestionable. Tmall and JD.com's offline stores have long been on the agenda, and even Amazon and Google abroad are investing more and more energy in the real economy.

Online e-commerce and the real economy are not incompatible. On the contrary, they complement each other, like two sides of the same card.

Suning.com: A controversial and successful transformation

The genes of a company are often initially set by the founder and are difficult to change. Just as Xiaomi's mobile phone genes hindered its TV business, LeTV's video genes also failed to make LeTV mobile phones successful. The transformation of a company is a feat that goes against its genes, but it also determines its fate of being unsuccessful.

It was under such circumstances that Suning completed its transformation with great difficulty and became a rare existence.

In March 2009, Zhang Jindong, chairman of Suning Commerce Group, returned to Nanjing after attending the two sessions in Beijing. He sent an urgent telegram to call all the senior executives from all regions of the country back to the headquarters. They gathered at the Sofitel Zhongshan Golf Hotel on Nanjing Purple Mountain and held a closed-door meeting for three consecutive days and nights. Suning's fate took a turn for the better, and it successfully completed its transformation amid criticism and doubts.

Although the process was extremely difficult, Suning, which successfully transformed, bridged the gap between online and offline. As the first in the home appliance 3C industry to go through the transition period of online and offline integration, Suning has undoubtedly obtained a pass to the highway.

The 2016 financial report shows that its operating income last year was 148.68 billion yuan, a year-on-year increase of 9.69%, of which the online business line grew rapidly, a year-on-year increase of 60.14%; the chain store sales per square meter increased by 19.49% year-on-year, and more than 80% of Suning.com's direct stores achieved monthly profits in December last year.

It’s time for both traditional retail and Internet retail thinking to change.

Home Appliances 3C Global Summit Suning's trillion-dollar retail ecosystem supports suppliers

On March 1, the 2017 Home Appliance 3C Global Summit was held in Nanjing under the leadership of Suning. More than 100 industry leaders from China and abroad, including Liang Haishan, Executive President of Haier Group, Liu Hongxin, President of Hisense Group, Gerke, President of BSH Home Appliances, Liu Fengxi, Chairman of Konka Group, Ding Wei, Senior Vice President and President of China of A.O. Smith, Guo Dexuan, Chairman of Changhong Multimedia Industry Group, Jin Youhua, Chairman and President of Whirlpool (China), Li Huixiong, President of LG Greater China, Mao Zhongqun, Chairman and President of Fotile Group, and Wang Xuning, Chairman of Joyoung, gathered in Nanjing to discuss the future and development of the home appliance 3C industry.

The retail industry has undergone tremendous changes in 2016. With the momentum of consumption upgrade, new products have emerged in an endless stream, and the mid-to-high-end market is booming. The overall trend of online to offline migration and offline embracing the online market in the home appliance 3C market also shows that the trend of online and offline integration is unstoppable.

In the face of consumption upgrades, Zhang Jindong said, "The spring of O2O integration and scenario-based sales has arrived. Any unilateral channel will not be able to meet the personalized consumption needs of users. As a retail cluster with the richest online and offline channel forms, Suning will surely help suppliers reach users more accurately and efficiently."

Suning's vast resources in online and offline, urban and rural areas have undoubtedly stimulated the market ambitions of suppliers. During the five-day summit, more than a hundred bigwigs intensively negotiated cooperation with Zhang Jindong: As soon as the summit opened, Honor mobile phones sold more than 20,000 units online at Suning.com in 72 seconds! Subsequently, AUX announced a small goal of 4 billion yuan, Konka customized 200,000 4K color TVs and sponsored the Suning.com team, and Whirlpool, Midea, Haier, Hisense and others all expressed their intention to accelerate growth in Suning channels.

Moreover, in response to the high R&D costs and time consumption of home appliance 3C products, as well as the high risk of market misjudgment, Suning, as a retailer with a large amount of consumer data, decided to open up big data to its partners. He said: "Suning hopes to break the traditional upstream and downstream relay model of 'production-sales' with all suppliers, and work with everyone to analyze and explore user consumption habits through Suning's big data, and reverse customize quality products that meet user needs through C2B. For these customized products, we will accurately reach them based on previous consumer research, achieve rapid sales, and greatly shorten the path from R&D to users."

As for the unilateral channel problem of suppliers, Suning has relied on its own advantageous resources to provide offline brand zones for pure Internet retail companies such as Xiaomi and LeTV, and to build online flagship stores for traditional retail companies such as Samsung and Haier, thus realizing integrated marketing. In addition, Suning will also open up data, funds, logistics and other resources to its partners, and even collaborate on promotion, event promotion and development planning.

Hou Enlong, COO of Suning Commerce Group, said at the meeting, "One person can walk fast, but a group of people can go far."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.