How to develop the internet of white goods

Tiege’s previous article on the e-commerce of the liquor industry has attracted widespread attention. Today, I would like to share with you the problems and challenges of the internetization of home appliances, especially the white goods industry. On April 2, Alibaba announced the establishment of the Smart Life Division, integrating the three business departments of the group, namely Tmall Electric City, Alibaba Smart Cloud, and Taobao Crowdfunding. It also signed a strategic agreement with Midea in 2015, claiming to create a new model for the Internet. At the same time, JD.com has “JD.com Helper Service Stores” in third- and fourth-tier cities, integrating traditional home appliance sales channels through the Internet and seizing the home appliance market in terms of fast logistics. But which model can truly transform the current home appliance landscape?

Different patterns of black and white appliances

Although black and white appliances are both home appliances, their market structures are different due to their different products and degree of Internetization.

Due to the heavy entertainment attributes of televisions, represented by black appliances, many Internet companies are competing in this area, aiming to make televisions a new shopping, entertainment scene and traffic portal.

So we see that Internet companies such as LeTV and Xiaomi have produced their own branded TVs, and Internet giants such as Tencent and Alibaba have also cooperated with traditional TV companies. Therefore, the representative companies of black home appliances represented by TVs are no longer the traditional manufacturing companies ten years ago. Here, Tie Ge would like to ask everyone to pay attention that various TV boxes are also important weapons for Internet companies to transform traditional manufacturing companies.

Compared with the fierce competition in black appliances, white appliances are relatively calm. Internet companies have not penetrated much into air conditioners and refrigerators. Taking air conditioners as an example, Gree and Midea still occupy most of the market. The reason is that on the one hand, the threshold for manufacturing white appliances is relatively high, such as the frequency conversion technology of air conditioners, which cannot be easily copied; on the other hand, Internet companies have not paid enough attention to the Internet transformation of white appliances. Only scattered and unsystematic voices have been heard, such as refrigerators automatically identifying food preservation and placing orders, etc. Many of them are still at the stage of talking.

However, with the rise of mobile Internet, the intelligentization of home appliances has become an irreversible trend. The improvement of black appliances is more about improving users' entertainment, while it is white appliances such as refrigerators and air conditioners that really improve users' quality of life. Therefore, we can actually predict that the Internet transformation of white appliances will become more in-depth in the future.

Three connections for white goods internetization

E-commerce companies participating in the Internet transformation of white goods are very likely to fall into the misunderstanding of sales. E-commerce companies believe that they have users and traffic, and as long as they help companies sell goods, they can help companies do a good job in Internet and e-commerce transformation. JD's "JD Help Service Store" is an example of this, entering the home appliance market through logistics and distribution.

This is inconsistent with our analysis above that white goods must take on the goal of improving the quality of life of users. In Tiege’s opinion, the Internet transformation of white goods should be carried out at three levels:

First, data connection

The offline sales of home appliance companies are traditional sales models that only sell products but not users. After the products are sold, there is no way to query the user experience and the user's personalized tags and other information. However, e-commerce platforms have a data base of massive users. Based on the user's basic information, browsing habits, purchase status and other data, data models can be built to describe the user's interest behavior tags. Based on this, companies can clearly understand the behavior and hobbies of their target users.

But the prerequisite is that the e-commerce platform must be large enough, with a full range of categories and a large number of users, so that the dimensions of the information collected are sufficient and the results are more accurate.

Second, behavioral docking

Traditional manufacturing companies often have an engineering mindset, where products are designed by engineers and sold by sales staff. Users have no involvement at all and can only passively accept the products.

E-commerce companies can allow users to participate in the product development process based on the results of user behavior analysis and online interaction, which we also call the C2B product production model. This is the shortcoming of traditional manufacturing companies but the strength of Internet companies.

Third, channel connection

Tiege listed this last because he sincerely felt that channel connection was the least important in the entire transformation. Although the sales of home appliance companies are increasingly dependent on the Internet, for example, Midea’s sales on Tmall alone reached 461 million on Singles’ Day last year, an increase of 100%. However, Tiege believes that due to the particularity of large home appliances in logistics and delivery, it is difficult to simply complete it through express delivery, but requires the cooperation of the company’s dealers and even the terminal customer service team. Therefore, Tiege believes that the e-commerce of the home appliance industry requires the traffic support of the e-commerce platform, and the joint efforts of both parties are required in logistics and customer service. How to upgrade the offline channels of traditional home appliance companies to adapt to the development of the e-commerce industry is the top priority of the entire work.

From the above text, we can easily see that Internet companies will not establish white goods brands independently, but will cooperate deeply with traditional white goods manufacturers to complete: Internet companies cooperate on data and business models and provide sales platforms, while traditional manufacturers focus on manufacturing and upgrading the entire offline sales channel. The Internetization process of white goods is also a microcosm of China's entire Internet movement.

So the question is, who can better transform China's white goods market, Alibaba or JD? I hope everyone can leave a message to tell me.

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.