Welcome to follow the WeChat subscription account of "Chuangshiji": sinachuangshiji
Text/Dong Xiaowei
Source: Yuanchuan Business Review (ID: ycsypl)
In January 2020, an unprecedented thing happened on the American e-commerce giant Amazon: the total number of Chinese merchants and the number of merchants with an annual transaction value of more than 1 million US dollars, both surpassed the number of American merchants. By January 2021, 75% of new sellers on Amazon even came from China. It is no exaggeration to say that Chinese merchants have already occupied Amazon.
The United States was the first country that gave birth to e-commerce. Amazon and eBay were established in 1995. Amazon entered China in 2004. Taobao was only a year old and JD.com was just launched. The market value of Amazon has exceeded $16 billion.
The first-mover position in the industry and the institutional advantages of US dollar funds and capital markets have allowed the Chinese venture capital circle to spend a lot of time thinking about how to bring mature foreign entrepreneurial models to China, which has opened the curtain of the Copy to China era. Renwang imitates Facebook, Youku imitates Youtube, Weibo imitates Twitter, Meituan imitates Groupon and so on.
But by 2019, there are 4 U.S. e-commerce companies with an annual transaction volume of 100 billion yuan, while 6 in China; there are only 1 in the United States and 3 in China with a trillion-level.
According to data from the National Bureau of Statistics and the U.S. Department of Commerce, China’s e-commerce physical retail sales in 2019 was 8.52 trillion, more than double that of the United States ($602 billion); China’s online retail sales of physical goods accounted for 20.7 of the total retail sales of consumer goods. %. At the beginning of 2020, the impact of the epidemic even exceeded 30%, while in the United States, the figure was only 11%.
At the end of 2020, Doordash and Wish, two new generation e-commerce companies in the United States, went public successively. As a food delivery company, Doordash wrote in its prospectus "Using mature delivery capabilities to serve more local businesses, and digital transformation of local businesses to serve the current consumers." It was written by Meituan without paying attention. of. As for Wish, a cheap e-commerce company, most of its businesses are from China.
After nearly two decades of rapid growth, the Chinese Internet is exporting "Chinese experience" to the outside world. The era of "copy from China" has quietly arrived.
This article focuses on two issues:
1. How do Chinese e-commerce companies go from imitating to surpassing?
2. How does the new generation of American e-commerce companies learn from the "Chinese experience"?
01 Imitation
The wave of Copy to China reached a small peak in 2010. This year, the number of Chinese Internet companies listed in the United States hit a historical peak. In 2010, China went to the United States to innovate up to 40 IPOs, accounting for 26% of the total number of IPOs in the United States that year.
This year, Renren.com, Youku Tudou, and Dangdang.com have been listed successively. They are called "China's Facebook", "China's Youtube" and "China's Amazon."
When Xu Chaojun did Diandian, he directly declared that "we admire Tumblr and imitate it religiously, down to every pixel." Wang Xing's successive entrepreneurial projects, the school intranet benchmarked Facebook, Fanfou benchmarked Twitter, and Meituan benchmarked Coupon, so Wang Xing was once known as the "King of C2C."
Plagiarism in the hardware industry can be prevented through patents, but it is difficult to apply for patents on appearance and functions for the imitation of Internet applications and models. It is precisely because of this that Chinese Internet entrepreneurs can imitate and then innovate.
Copy to China is popular in addition to the role model of Internet innovation in the United States for a long time, but also because its driving force capital is also in the United States. At the beginning of the 21st century, almost all of the large-scale financing of China's Internet was participated or led by overseas VCs. Due to the restrictions of China's listing rules, listing of domestic Internet companies was almost equivalent to listing in the United States.
At that time, if Chinese entrepreneurs wanted to gain the favor of American capital, whether it was financing or listing, they had to be packaged as "China's XXX", such as China's eBay, China's Amazon, and the "people's words" that US dollar funds could understand.
In fact, the original genuine companies did not sit and watch themselves being imitated and abandon the huge consumer market in China. They have worked hard and struggled, but overseas Internet companies have always been difficult to succeed in the Chinese market, except for policy restrictions and Chinese user culture. In addition to external factors such as consumption habits that are vastly different from those in Europe and America, the main reason for failure is that they are not good enough.
The localization needs of Chinese users have not been well met by these leading overseas Internet companies. The arrogant attitude and inflexible response strategies have given Chinese local Internet companies an opportunity. The most famous case is the battle between Ali and eBay.
In 2002, eBay acquired eBay and first introduced the American C2C online sales concept to a local company in China. It was renamed eBay.cn and became the industry leader in the newly emerging e-commerce market in China at that time, occupying nearly two-thirds of the national online shopping market. .
Taobao was established in May 2003, and in 2005, Taobao's market share surpassed that of China eBay. After that, Taobao kept advancing by leaps and bounds, until it occupied more than 80% of the national market share, while eBay declined all the way, and finally ended up withdrawing from the Chinese market.
The battle between ants and elephants ended with the victory of Taobao. It mainly relied on the "three magic weapons"-commission-free, Alipay and Alibaba Wangwang, respectively, to solve the problems of attracting merchants, consumer trust and communication between the two sides.
At that time, the Chinese e-commerce market was still in its infancy. Jack Ma knew that its most important customers were not shoppers, but third-party sellers who sold products on the website, so he decided that Taobao would not charge any merchants who settled in for three years. Field fees and transaction fees. At that time, eBay not only charged fees for product listings, but also charged a 2% handling fee for successful transactions. As a result, customers continued to switch from eBay to Taobao.
Taobao has won the battle and established its position in the industry by reviewing the market and itself, changing the rules of the game.
Copy to China seems to be a shortcut, but if copy does not do a good job of localization and does not meet the needs of users, it will only be a waste of money.
The “Dingdong Community” in 2014 is an example. It originally copied the American community social platform Nextdoor, and soon after it went online, it received an investment of 100 million yuan, with a valuation of 400 million yuan. It started from a very high starting point. It used to advertise in Beijing and Shanghai subway stations, but eventually broke the capital chain. The ending is over.
Nextdoor's main focus is "neighborhood social", which mainly provides mutual help activities between neighborhoods in the community. It is a community-based social platform. It is currently planning to go public with a valuation of US$5 billion. Nextdoor is a bit like 58 in the same city with a community as a unit, but the concentration of business information will be diluted a lot, and the social relationship will be much stronger [1].
Investigating the reasons for the failure of Dingdong Community, apart from its too fast access to merchants and various third-party O2O services such as housekeeping, carpooling, renting, etc., it failed to grasp the relationship between community atmosphere control and commercialization, and it was also affected by Meituan In addition to the competition of this more vertical O2O platform and other reasons, the main reason is that in China's big cities, there is actually a lack of acquaintances and neighbors, and there are more stranger-like neighbors, which lack the soil for the development of such neighborhood social platforms.
After several years of struggling and exploring various community life services, Liang Changlin, the founder of Dingdong Community, admitted his failure, but found a business opportunity for family grocery shopping, so it turned into today's Dingdong grocery shopping[2] .
China is a sufficiently large but unique market. Enterprises that thrive on this land need to be run by people who understand it.
02 Beyond
As China's venture capital market has more and more renminbi-based hot money, Chinese entrepreneurs no longer need to find mature foreign entrepreneurial models to explain themselves, and they are more confident in creating business models that are more suitable for China's national conditions.
Liu Qiangdong emphasized when listing that JD is not China's Amazon. "Foreign investors especially want to know'who are you?' and want to find a U.S. company to compare, but JD.com is JD.com-a technology-driven Chinese supply chain service company. There is no second JD.com in the world. There will never be a second Amazon."
Chinese Internet companies are undoubtedly lucky. They have not only grasped the trend of technological progress, but also because "Internet+" is a market dividend that belongs only to China. They have grasped this huge market dividend and have grown into the capillary of society today. giant.
On the road to find the "Internet with Chinese characteristics", mobile payment represented by Alipay is undoubtedly one of the best cases.
According to eMarketer's data, the scale of mobile payment users in China and the United States in 2019 was 733 million and 64 million, respectively, and the market size and penetration rate are quite different. But one of Alipay’s founding inspirations actually came from PayPal, which was acquired by eBay in 2002.
When PayPal and Alipay were established, they all benefited from the rapid development of e-commerce. Now Alipay and PayPal have similar revenue and profit scales. Ant Group has revenue of 120.6 billion in 2019 and net profit of 18.07 billion; Paypal has revenue of 124 billion in 2019, net Profit 17.15 billion, but the profit model is different.
In Alipay, digital payment and merchant services (receiving transaction service fees from merchants, accounting for 44% of revenue in 2019) and digital financial technology platforms (technical service fees for financial services such as Huabei borrowing and other financial services, accounting for 56% of revenue) and other value-added Service is a source of profit. Paypal's profit method is much simpler. The high service rates in the US payment industry are widely accepted, so 90% of its revenue is transaction commissions.
One of the important reasons why mobile payment is more popular and convenient in China than in the United States is that a large number of merchants in China actually do not have access to credit card machines, and the number of credit card populations and card-using habits in China are not as mature as those in the United States. China almost skipped the credit card stage and entered the era of mobile payment directly.
China's traditional industries are immature, and it is easier to overtake directly on a curve. The immaturity of PCs allows people without computers to access the Internet through cheap and simple smartphones. The immaturity of credit cards makes mobile payments easier to implement. Inadequate marketing of catering services and inadequate services make them see O2O as a life-saving straw. On the contrary, in the United States, the development of PC, credit card, and life service industries has been quite mature, and to a certain extent lacks the soil for the development of "Internet +".
This particularity on the basis of the industry allows "Internet +" to be developed in a large number of industries, attracting an influx of entrepreneurs, and then based on China's large and high-density user group, creating a variety of models, products and Function to form a mobile Internet format with Chinese characteristics. Some of these models are more feasible in China, and some models are beginning to be exported to overseas markets.
03 output
In December 2020, the US e-commerce platform Wish was listed on NASDAQ.
Wish’s prospectus states that “bringing an affordable and entertaining mobile shopping experience to billions of consumers around the world” and “we established Wish to serve consumers who value benefits rather than brand and convenience”.
In contrast, Pinduoduo writes “providing buyers with value-for-money products and an interesting interactive shopping experience”. Is it a familiar taste? It's no wonder that Wish is called "American Pinduoduo".
2013 was the first year of the outbreak of China's cross-border e-commerce. Wish encountered a huge amount of low-priced goods from China. It was this year that Wish's outbreak began. According to the survey data of Marketplace Pulse, Wish's Chinese sellers accounted for 94%, while US sellers accounted for only 4%, and the rest of the sellers are distributed all over the world. It can be said that Wish relied on Chinese sellers to prop up a market value of tens of billions of dollars.
Wish has an operating model similar to Pinduoduo: specializing in mobile apps, frantically grabbing users in the sinking market, creating explosive products, diluting stores, and using a gamified operation model to enhance user stickiness and increase conversion rates.
The two are very similar even in drainage methods. The rise of Pinduoduo is inseparable from WeChat traffic, and Wish relies on Facebook.
In the early days of Wish platform development, more than 90% of traffic came from Facebook. Wish uses ultra-low-priced products on social media such as Facebook to attract users, and encourages users to form fission through group joining and friend recommendations. For example, inviting friends to use Wish, after the friends download the APP through the link, both parties can get a 50% discount [3].
Although Pinduoduo's 2019 revenue was 30.1 billion, which was more than twice Wish's 13.3 billion revenue, Pinduoduo lost more than Wish. During the same period, Pinduoduo lost 7 billion and Wish only 900 million. Pinduoduo currently has 650 million monthly active users, and Wish has more than 100 million monthly active users in more than 100 countries. However, the market value of the two is even more different. The market value of Pinduoduo exceeds US$200 billion, while Wish is only about US$14.5 billion. .
The same is the "true fragrance" model, Chinese Internet companies finally walked ahead of the United States.
In addition to "Pinduoduo," the live broadcast e-commerce in China in the past two years has also spread to the United States. Amazon has added the AmazonLive live broadcast function to the app, and also launched an app similar to Taobao live broadcast-Amazon Live Creator, Google has launched Shoploop, and Facebook has also provided shopping portals on Facebook, WhatsApp and Instagram.
In the past 20 years of e-commerce, from imitation to transcendence, from transcendence to export, what is the basis of Chinese e-commerce?
04 Ending
Undoubtedly, China's huge domestic demand market, all types of manufacturing, the logistics speed that keeps pace with the times, and the 4G communication network covering the entire territory are all the foundations of e-commerce development and export experience.
China itself is a huge consumer market and labor market, which provides the best living soil for the Internet industry that depends on data-driven and needs constant iteration.
In this regard, the deepest experience may be Meituan.
In the spring of 2013, Meituan set up a research team within the company. The leader was Wang Huiwen, an old man of Yuan Dynasty. The team divided into three groups to study three delivery companies: the ancestor of the United States, GrubHub, and two rising stars in China. Home food meeting and hungry.
At that time, domestic Internet companies liked to directly target related companies in the United States to estimate the market and revenue scale. This led to the fact that domestic food delivery companies were satisfied with the growth rate of their orders. But Wang Huiwen is very puzzled: GrubHub has only achieved an average daily order volume of 100,000 after 10 years of operation. Is it possible that the volume of the Chinese food delivery market is not as good as that of the United States?
Immediately afterwards, Wang Huiwen sent two teams to study online and offline together to study the school market penetration rate at the time, is hungry. Online, Meituan counted the order information displayed on the website of Ele.me, and ranked the order volume of the 12 cities where it entered. The top four Shanghai, Beijing, Guangzhou and Hangzhou did not have many surprises, but the fifth The name is Fuzhou.
Wang Xing and Wang Huiwen, who have done the school intranet, immediately realized: If Fuzhou ranks fifth, it means that at least 20 cities have not done well. For example, in Wuhan, where there are 1 million college students, Ele.me has not moved in for 4 years. Offline surveys brought more valuable information: Ele.me just put online restaurants with takeaway businesses around the school. This strategy helped it quickly pass the start-up period of entrepreneurship, but it did not upgrade services in time.
What happened later was what was described over and over again by the media: Meituan used group buying to accumulate a large number of merchant resources and quickly killed the takeaway business. At the same time, they also allowed those restaurants that did not originally do takeaways to start takeaways. By increasing supply, let Users have more choices. It also allows latecomers to write directly on the prospectus that their positioning is to "use mature distribution capabilities to serve more local businesses, and to digitally transform local businesses to serve current consumers."
In general, China has created the world's largest e-commerce enterprise group to make life more convenient and export products and even business models to the world, which is simply unmatched. Behind this is inseparable from every worker who sweats on the production line, the merchants who work hard to pick and deliver goods in the warehouse, the couriers who work hard to deliver goods on the road, and the programmers who stay awake in the grid. The miracle of business is created by them, and it is not learned by other countries.
Reference materials:
[1] "Nextdoor plans to go public, Facebook follows the layout: How many opportunities are there in the seemingly hot neighborhood social market? ", Beluga whale goes to sea
[2] "Liang Changlin of Dingdong Community: He spent 100 million yuan before finding the right direction for entrepreneurship", Yiouwang.com
[3] "Wish on the other side of the earth is more like Pinduoduo than any company in China", Tencent University
This article is published by Chuangyebang authorized by the columnist, and the copyright belongs to the original author. The article is the author's personal opinion and does not represent the position of the entrepreneurial state. Please contact the original author for reprinting. If you have any questions, please contact [email protected].
(Disclaimer: This article only represents the author's point of view, not the position of CSDN.)