Brief Description Of China's New Retail Opportunities

Before discussing the new retail business, let's first review the background of China's Internet rise over the past decade.

Ten years ago, if we looked at the ten top companies in the global market (below left), we would find that they were basically traditional industries. Only Microsoft was the only IT company. But by 2017, the top ten companies in the market capitalization (the right picture) were basically high-tech companies.

And there are two high-tech companies in China in the top ten.

And Tencent.

Today we mainly discuss three topics: the first topic is global.

The second is the fact that new retail originated in Japan. Third, according to these two backgrounds, let's discuss China.

Opportunities.

We compare the market changes in the United States, Japan and China in the past five years from the market value of all kinds of retail companies.

We analyzed all kinds of retail companies in the United States, such as electricity suppliers, supermarkets, department stores, dollar stores and discount stores, and compared their market value in 2012 and the market value in 2017.

After comparison, it is obvious that all department stores in the United States are now living very badly, basically losing money over the past five years. Meanwhile, the market value of electricity providers has risen fastest. Amazon has almost become a dominant company. Its market value has grown by nearly five times. In the supermarket, the fastest growth is in the cock market, or in the low price mass market companies, especially the Costco; discount stores and one yuan stores are growing relatively well.

So we find that the retail market in the US is a polarized market, the high-end market is more high-end, but the mass market is actually bigger. The mass market companies are good at both online and offline, while department stores are more seriously injured.

Just now we are looking for a channel company. Let's take a look at the change of the market value of the brand making company.

We compared the fast fashion Brand Company as the mass market and the high-end luxury goods companies.

We found that some mass market companies, such as ZARA in Europe, Muji and UNIQLO in Japan, GAP and Guess in the United States, took only 30 to 40 years, and their market capitalization was close to or even surpassed that of luxury market companies that had been established for more than 100 years, such as Hermes, LOUIS VUITTON.

Therefore, the argument that won the world is not only universal at home, but also common in many parts of the world.

Cost-effective products is a very good and important point to create brand value.

What is the market like in Japan? The Japanese market is very strange.

If you use the Japanese retail companies to do the same analysis, compare the electricity providers, convenience stores, one yuan stores, department stores, cosmetics stores, etc., you will find that in Japan, the growth rate of e-commerce is not so fast. The Lotte of the first Japanese electric supplier has not changed much from 2012 to 2017.

Convenience stores do well. You can see the whole family or 7-11 at any railway station or subway station in Japan.

One dollar shop does well, whether Daiso or Kendo, they perform very well.

People who go to Japan will buy things at the Japanese drugstore.

We can definitely understand the above retail formats.

But why can Japanese department stores perform so well? Whether it is Hankyu or Marui department store can do so well? In fact, it is worth discussing in depth. We will talk about this later.

The following is the same comparison between the Chinese market and the electricity suppliers, supermarkets and department stores.

Chinese electricity providers, such as Alibaba and Jingdong, perform very well.

Yonghui is the best in the supermarket. After that, we will talk about it in particular.

But most of China's department stores, like American department stores, perform relatively badly. Only Wangfujing department stores do well, relatively speaking.

According to the world clothing and shoe net, when eBay moved to China in 2005, I claimed that Ali would be killed.

The logic of eBay is: because Ali does not charge paction fees, its paction is unsafe, and trading on eBay has Commission, so consumers know that eBay sellers are more serious.

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This theory is applicable in the United States, but failed in China. The main reason is that the experience under the Chinese line was so bad at that time. Taobao's service was much better than that of offline retailers. So we were more willing to take the risk of going to Taobao on Taobao, gamble on their luck and see if they could find a good product.

At first, Taobao had to wait for a few weeks to get the goods. But the quality of the whole service has been rising continuously for a long time, and the goods can be delivered on that day, so the changes in the past ten years are enormous.

In the past 05 years, the penetration rate of China's electricity providers is less than 1%, and now there are about 17%, creating a huge market of trillions of dollars.

Why did Japan grow so slowly on the electricity supplier? I will make an analysis later.

Since the beginning of this year, after the new retail concept mentioned by Ma Yun, Lei Zong of millet has also said that millet has pformed into a new retail companies.

New retail is not only to move the electricity supplier to the line, but in fact, it is the spirit and practice of the electricity supplier and the Internet, that is, the focus, the extreme, the word of mouth and the fast. This seven character formula moves to the line, making a change in the whole retail business.

Like Yonghui and hippo, we hope to make the user experience better, surprise and have more choices, so that the whole efficiency can be improved.

1. craftsman spirit

Why did the new retail business come from Japan? Because we believe that the real good experience comes from the craftsmen spirit of Japan.

In 2015, many people went to Japan to sweep goods and bought many different products, of which the toilet lid was the focus of attention.

Wu Xiaobo mentioned that the Chinese made tomorrow is not in his place, but only in the ability to make a moving product, so that our middle-class families do not have to buy the toilet lid in the ocean. This should be the goal of everyone.

The toilet lid of Japan has all kinds of advantages, antibacterial and washable. Its cushion can be heated instantly, and even music can be overlaid.

When you can spend more money than before, but experience has several times different times, why not try it? In fact, it inspires a lot of businesses and brands in China.

Where does the spirit of Japanese service come from? On the Internet, many people mention the spirit of Japanese craftsmen. For example, you see Ono Jiro, the God of sushi in Japan, he has a saying that I speak very well, that is, the real spirit of industry, the need to treat works with love beyond time, and the non profit cultural demands that are higher than commercial interests.

Notice that works are used here instead of commodities. He is not just for business. If you are just doing business, you certainly want the lower the cost, the better.

However, if the cost is very low, your gross margin must be very high, but the products produced by this way are hard to touch the hearts of users.

Ono Jiro's efforts to do the same thing over the past few decades have been done with the utmost perfection of his sushi, so that he has been very focused and achieved excellent reputation. You can be moved by it, saying that what it is doing now is a focus on Japanese culture.

It is a pursuit for a life and a mission of its own. It is not just for making money.

Of course, it makes a lot of money, which is a fact, and it is not necessary to say that it is a celestial being. However, its spirit and pursuit of this kind of spirit are still admirable.

When you are in a Japanese department store, you will feel that you are an emperor.

In China, you play the game as an emperor. In Japan, when you go shopping in a department store, you feel like an emperor like a queen. This feeling has created Japanese retail.

But because of this, the development of electricity providers in Japan is slow because it is hard to achieve online experience.

Ma Yun mentioned the data to compare the average life expectancy of Chinese enterprises and the life span of Japanese enterprises.

According to the data in 2012, the average life expectancy of Chinese enterprises is 2.5 years, and the number of group enterprises is 7 to 8 years. In Europe and America, it is pretty good. The average life expectancy of enterprises in China is 40 years, but Japan can do 58 years.

There are many shops in Japan for a hundred years. If you go to Tokyo, Nagoya, Osaka or Kyoto, you can see that many shops on the street have been handed down in 100 years, 200 years and 300 years.

This centenary only does one thing, achieves the ultimate goal, pays great attention to it, and does well in public praise. It is exactly the same as many methods that we do now in the Internet, that is, people are more patient and do more time.

How did Japan develop its service spirit? Actually, it came from education.

Japan's service has been nurtured since childhood. Children in Japan will work hard together in schools, including washing toilets, cleaning the floor and so on.

No one can live alone with his emperor. We must unite and cooperate to accomplish one thing.

Ma has mentioned that the past 100 years are the era of knowledge and technology, but the next 100 years will be a wise and service era. If we do not let our children experience it, he can guarantee that children will not be able to find work after 30 years.

We can design products and design services by experience. This method can not be replaced by simple artificial intelligence.

I think China's market is very large, and there are many opportunities.

Now let's talk about big opportunities.

Because now the consumers after 90 and 95 pay more attention to the quality of life, many of them not only make rigid consumption, but some non rigid personalized consumption, and their requirements for the quality of healthy life are also getting higher and higher.

So although the cost performance is very important, but it is not enough, we must have a way to improve the consumption level in a comprehensive way, so that we can better attract the attention of users after 95.

In fact, we find that many people in China live longer and longer after the 90s and 95.

It is not only in China that we have invested in the United States for a long time, but also find similar situations in many large cities of the United States.

According to 58 data, similar services have been seen in the United States no matter whether on-site cleaning services, on-site maintenance services and Yuesao services are increasing.

Therefore, the level of consumption in China is the same as that of the developed countries in the world, and the pace is as fast as that of the developed countries.

Because we have made such a different investment, for example, I was very lucky to be the investor and director of Xiaohong book in 2014. Therefore, after seeing the growth of Xiao Hong's book, we found that the consumers after 90's 95 were very active on the above, and enthusiastically published their opinions and opinions, paying special attention to different brand names.

They are willing to go to Hongkong, to Southeast Asia, to Japan, to Korea, to Europe, to different cities in the United States, to see what the world looks like, to experience products with local characteristics, and then be willing to share with you the new brands you find in the little red book.

So now, if you do not know how to operate social media, do not know how to run your WeChat public address and Sina micro-blog, you will be very difficult to make things bigger.

These social media should pay special attention to our traditional industry friends, and suggest that we should recruit more excellent post-90s and 95, because they can help us understand the mentality of this generation of consumers better.

We talk about two points of new retail sales, one is the analysis according to the new product and new experience, and the other is the analysis according to the new channel method.

With regard to new products and new experiences, we notice that the new brands that are doing well now have ways to increase user participation, to play high, and have some customization capability to do some customized production.

The characteristics of products, the efficiency of production and the participation of users are three very important elements of the growth of new brands.

Our analysis not only looked at the Chinese market, but also compared the users in the big markets of the world, including the United States, Europe, South America and Southeast Asian market, and found that 00 of the users in the world were very concerned about the recommendation.

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No matter what friends or family members recommend, or the recommendation of weak relationships in social networks, even the comments written by strangers on the commenting website have a relatively high impact on their decision-making.

These are all things that traditional brands must pay attention to. The effect of advertising is limited. If there is no way to arouse the attention of others in social media and induce users to share their buying experience, the growth rate will be affected.

Besides, we paid close attention to UNIQLO and MUJI products ten years ago. At that time, we invested in customers. We know that we can do well in Muji or UNIQLO, and there is absolutely a chance in China.

In the past two or three years, whether it's a famous product or a good choice of NetEase, it has shown that opportunities still exist. As long as you make the product the best, then the price is high, and the kinds of choices are enough, consumers will still like it very much.

Some examples just now are new products and new experiences.

In the next part, we will talk about new channels and new methods.

In fact, it is to let products and services get closer to consumers, and then through some member management mode to enhance the user's viscosity, at the same time, get users' data, help you make the experience of consumption better, and then according to the needs of users can launch more customized products.

We have always compared China with Japan and why it did so. One of the reasons is that the process of industrialization between the two countries is actually very high.

When I first went to Japan in 2008, I went to see the subway map at the Jingdong subway station. I counted it. There were probably more than 20 lines and all kinds of colors. One day, 8 million people would take the subway in Tokyo.

There are about 35 million to 40 million people who take the high-speed rail to Tokyo every day, because the rent in Tokyo is very high, so the result of decades of industrialization is that many people move to Tokyo outside to take the high speed rail to Tokyo every day.

In the future, big cities like Beijing and Shanghai may also become Tokyo.

When it first came to Beijing in 2005, the subway line was almost three lines. In 2015, it was nearly 20, and there were 9 million people taking the subway every day, which is very similar to Tokyo.

What's the result? When you go to the various subway stations in Tokyo, you will find that he has a lot of goods, and there is a strong logistics system behind them to support all kinds of stores in the subway station.

China has not yet seen such a situation, but we believe that in the next five years, there will be at most ten years, because when you are busy, it will be very convenient if you can buy a lot of things when you go through the subway station.

And in China, because of the growth of the electricity supplier, the logistics system in the whole ten years has also done very well.

From the point of view of Ma Yun, the logistics industry is the greatest opportunity in the past ten years.

In the United States, Amazon did a good job. You went to Amazon's warehouse to see all kinds of automatic delivery robots everywhere, which also promoted the development of cutting-edge technology.

With the development of the logistics industry, you can improve the whole rear service, make new services on the basis, and make a lot of things more automated, which is a good opportunity for the development in the next ten years.

What will be the final result? The new channel will become all kinds of important scenes, whether it is subway station or office or your district, there should be quite a lot of convenience stores, and by the way of ofo, HelloBike, hungry, and the United States will send all kinds of ordered goods to you.

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