LeEco and Evergrande: Two Ecosystem Benchmarks in China

Evergrande and LeTV are two great examples of counterattack in different industrial fields. The starting point of their rise was not their main business, but the results were surprisingly consistent. They eventually started from the starting point and moved towards industrial ecological clusters, and then led the whole ecological chain to take off together. They have become the few benchmark companies in China that have achieved rapid brand appreciation through ecological synergy effects. Their business philosophy, which is similar to "openly repairing the humble road while secretly marching through Chencang", is enough to enter business textbooks.

Recently, LeTV released its financial report for the first quarter of 2014. The report shows that LeTV's total revenue in the first quarter of 2014 was 1.03 billion yuan, of which advertising revenue was 360 million yuan, a year-on-year increase of 143.2%, ranking first in the industry.

If we only discuss the data itself, there is nothing much to say, because this is not a surprise, and this number will be even bigger in the future. After all, LeTV now has a dominant position on more than one screen. LeTV's services are available on five screens: PC, Pad, Phone, TV and Cinema. LeTV Pictures is already the largest film and television production company in China. The sales volume of its own brand of super TV will reach 1.5 million units this year. It is said that there will be its own brand of mobile phones in the future... So, compared with other video websites, winning so many advertisements is somewhat unfair. As Jack Ma said, no matter how good you are at Baguazhang or Tai Chi, once you pull out a pistol, even the most skilled martial artist will fall flat on his face.

LeEco’s Pistol - LeEco Ecosystem

Among the Internet video companies, which are all martial arts masters who were either born with a silver spoon in their mouths or married to rich second-generation men, LeTV, a young man who has grown up purely on his own, just happens to have a small pistol. This pistol has a name, called LeTV Ecosystem.

LeEco's own explanation of the ecosystem is "platform + content + terminal + application". To be honest, it is difficult to understand something that is too condensed. For ordinary users, it is more convenient to compare LeEco to COFCO. From spring planting to autumn harvesting, COFCO can solve all problems. As for LeEco, with its unique five-screen advantage, whether you are at home, at work, or on the way to get off work, LeEco can accompany you throughout the whole process. Even when you talk about a LeEco movie or a hit drama with your friends at the wine table, LeEco will be by your side when you are in high spirits and toasting, because LeEco's red wine website, Wangjiu.com, has entered the top three domestic wine e-commerce websites.

LeTV grew up in a wild way. It does not have a prominent family background like Tencent Video and iQiyi, nor does it have a good godfather like PPS and PPTV. I wonder if LeTV boss Jia Yueting has ever thought about not developing independently. If so, he should be thankful now. On the free Internet, it is better to die than to be unfree. Look at those rich second-generations who either do not make progress or find godfathers but see their age fade away. Ecology comes from freedom. If you have to look at the eyes of your biological father or godfather everywhere, what is the luxury of talking about ecological construction?

Co-branding on Ecology

LeEco is almost the only player in the Chinese Internet industry that has achieved its dominance independently. Just like people, those who have established their own business are always extraordinary, with thunder in their chests but calm faces. In a word, they have dreams, persistence, counterattacks, and personality. Because they can endure loneliness and swallow bitterness, they can naturally bear success and stand up to praise.

Precisely because of LeTV's unique background, its somewhat rebellious personality cannot be concealed, so that even long-established brands such as Mercedes-Benz and Tuborg Music Festival are trying hard to dance with it, which can be said to complement each other.

Friends are a person's trump card, and co-brand cooperation is a brand's trump card. Who has ever seen Chanel and LV looking for non-famous people to cooperate? Some things are hurtful if you say them directly, but the fact is that none of Mercedes-Benz's partners are empty shells without brand spirit and connotation.

LeEco's ecosystem is a closed loop consisting of nodes. LeEco.com, LeTV TV Super TV, LeEco Pictures, and Wangjiu.com are all nodes. Each node leverages each other to drive the entire closed loop forward. This is a very smart approach in business and is called the ecological effect.

In fact, when humans entered the era of large-scale collaborative machine production, this effect began to take effect, and the assembly line is the best interpretation of this effect. By breaking down each production action and finally merging them together, Ford Motor Company used this method to make its Model T enter almost every American family in 1920. At that time, the Model T was priced at $290, while the price of a horse-drawn carriage was as high as $400.

This scene is very similar to the current smart TV industry. Before LeTV Super TV was launched, the large-screen products of traditional TV manufacturers such as Samsung not only had mediocre performance, but also extremely high prices. After benefiting from the huge collaborative power of the ecosystem, the traditional TV industry has transformed from a simple manufacturing industry to a cloud-to-end film and television industry chain. TV has become a terminal in this industry chain. The added value of products has greatly increased, but the price has plummeted due to the unprecedented extension of the industry chain. As a result, LeTV dared to make large-screen TVs twice as good as products of the same generation and level at half the price. China's TV industry was thus broken and rebuilt. Now, LeTV has launched the 4K revolution relying on a complete vertically integrated ecosystem, becoming the overlord of China's 4K content, and promoting the transformation of 4K from a concept to user value, which makes users feel very happy.

LeEco Ecosystem and Evergrande Model

In China, there is another brand that, like LeTV, has established an ecosystem and formed an ecological effect cluster, and then expanded into other fields, becoming another benchmark for China's ecological effect. This brand is called Evergrande.

Before dominating Asia, Evergrande under Xu Jiayin was just the richest football team in China; looking further back, before taking over Evergrande Football, Evergrande Real Estate was just a second-rate real estate developer that always lingered in the suburbs of third- and fourth-tier cities.

But now, Evergrande is not only famous for real estate and football, but even if it produces a bottle of mineral water, it can make competitors who have been deeply involved in this industry for more than a decade nervous.

Why is Evergrande so big? Is it just because big companies are big? I'm afraid that's not the case. Looking at Evergrande's history of success, compared with Vanke and Wanda, Xu Jiayin, a former technician at Henan Wuyang Iron and Steel Plant, can't seem to get around the word "grassroots".

In fact, the success of LeEco's ecosystem and Evergrande's model is not accidental. Both have a detonation point. Evergrande's secret is football, and LeEco's breakthrough is super TV. By connecting with elements that seem to be unrelated to the main business, the brand influence has exploded and extended to other fields, and the ecosystem has been established.

When Evergrande was in the real estate industry, its influence in China was not top-notch, and it was still a long way from being the top group. However, one year after entering the football field, Evergrande Real Estate's operating income increased by 7 times, and the growth rate far exceeded that of other real estate companies in China. By the first half of 2013, Evergrande Real Estate had entered 140 cities across the country, with a total of 262 projects, making it the leading real estate company in China with the largest number of cities entered and the largest scale.

Before LeEco's ecosystem was completed, LeEco had been in a state of challenging the first group in the field of video websites. However, after completing the integration of the industrial chain, it successively established LeEco TV Super TV, LeEco Pictures, Wangjiu.com and other related nodes, and not only did its market value increase significantly, but also reached a valuation of RMB 40 billion, becoming the video website with the highest market value in China. Among them, LeEco's ecosystem, which formed a line from dots and then formed a radiation advantage, played an indispensable role.

The final blow behind the ecology

Of course, establishing an ecosystem is not a one-day task. Before the tipping point appears, the basic work must be consolidated. Otherwise, even if the tipping point comes, it will be difficult to grasp the opportunity.

If LeTV is not well prepared in terms of video copyright and CDN construction, even if there is a super TV, the experience will not be very good; if Evergrande Real Estate is still just a regional brand and the product quality is worrying, even if Evergrande wins the Asian championship, what can it do? In the final analysis, ecological construction is an iceberg. The volume of the iceberg under water is much larger than the part exposed above the water. This is a process of planning and accumulation. The sentence that Jia Yueting saw in the Spurs locker room said, "When everything seemed irreversible, I ran to see the stonemason repeatedly hammering the rock in front of him a hundred times, and the stone did not even show a crack. The next 101st hammering, the stone split in two. Not because of this hammering, but because of your consistency."

"Not because of this blow, but because of your consistency."

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.