Exclusive Interview With Zhao Jiazhen, A Co-Founder And Senior Vice President, I Believe People Who Buy Iphone With Subsidies Will Come Back.

On the night of double 11, there was not much noise outside of the noise. They said in an open letter, "if there is no corresponding cost performance, double 11 is just a very ordinary day. It is users who create festivals, not festivals.

In November 14th, Zhao Jiazhen, a co-founder and senior vice president, revealed in a exclusive interview with the economic report reporters in twenty-first Century, "we opened the meeting to three a.m. that evening. The most talked about topic for the two 11 is the series of strategies launched before. Do consumers feel bad? How to improve?

Data will give answers. In November 20th, the third quarter earnings report was released in 2019. As of September 30, 2019, the number of active buyers in the platform reached 536 million 300 thousand, a 150 million 800 thousand increase over the same period last year, a 53 million 100 thousand increase over the previous quarter, the largest single quarter growth since the launch. The quarter's revenue was 7 billion 513 million 900 thousand yuan, up 123% from 3 billion 372 million 400 thousand yuan a year ago.

Although compared with Alibaba and Jingdong, there are still a lot of homework to be done at the age of four. However, the mode of social networking and electric business, which is the first attempt, is widely imitated in the industry. Alibaba's Juhuasuan, which was reopened last year, is attracting new users through fission. The Jingdong has also launched a Beijing based competition based on special sales, which is a positive competition.

Cao Lei, a senior business observer, told reporters on twenty-first Century economic report that with the spate of more strategic investments for users and businesses in the future, and continue to expand profits and subsidies, the potential for consumption in the sinking market will continue to be released and drive the rapid growth of the global user scale. "The bonus of social e-commerce is still very large, and the best way to do it is still a lot of spells, but there is still much room for improvement in brand, category and quality."

Zhao Jiazhen, a co founder and senior vice president. Data map

Social networking providers to upgrade again

In a lot of prospectus, it describes itself as a "Costco" and "Disney" driven by a distributed intelligent agent network. In short, it is a combination of cost-effective products and entertainment. It is not only to attract customers to purchase, but also to provide a strong interaction fun.

"We have both the genes of the electricity supplier and the products. There must be many different needs in China. We can't judge simply by going higher, but we have a certain marketing strategy for different people. Zhao Jiazhen explained.

It is also because of its powerful product gene that we can absorb enough dividends and nutrients on the mobile Internet. Industry analysts said that as a new business model to form a scale, a lot of inspiration for the industry is enormous. Both at the same time, the emergence of micro business mode, network Hong electric providers, members of the electricity supplier, have made many attempts to social electronic business, but they all responded evenly. "The essence of this model is fragmentation, and the emergence of too many spells is not an accident."

Through tens of millions of subsidies, a lot of transformation is being carried out. The battle of increasing the dimension of the electricity supplier is inevitable. In October 11th, Gome officially launched the official flagship store, becoming another heavyweight brand of many brand hall. At present, Gome sells more than 127 official flagship stores, covering all kinds of household appliances, such as color TV, washing machines, refrigerators, air conditioners, etc.

This is also a platform for many well-known electronic business players, after Xiaomi, Dangdang, NetEase and other platforms. As a matter of fact, the third tier electricity supplier surviving in the cracks also began planning transformation. In a recent open letter, the founder and CEO Xiao Shang Liang said that the gathering is strengthening the core positioning of its "member business", which is a new track and the mainstream form of "social business" in the future.

Even mogujie.com, which has been playing the fashion shopping platform for many years, will redefine itself as a social business. However, it is not so much about transformation as survival. Mogujie.com valued at $3 billion. Its market value fell to $1 billion 500 million on the first day of its listing in 2018. As of November 19th, its market value was only $223 million. After the second quarter earnings report released in 2019, its stock price rose more than 70%, and its market value surpassed Baidu in one go. It even surpassed Jingdong and became an electronic business platform of China's market capitalization of second.

The reason can be said to conform to the trend of Internet development. Prior to that, Sun Huifeng, President of Sai Di consulting Limited by Share Ltd, told the twenty-first Century economic report reporter that behind the rise of the US mission, millet and spells, there is also a big background of the times. "These three enterprises were founded in 2010 and were born in the mobile Internet era. They own the mobile Internet gene, which makes them more adaptable to the fragmentation, centralization and scenario based mobile Internet features in the development strategy."

As of September 30, 2019, the number of active buyers in the platform reached 536 million 300 thousand, a 150 million 800 thousand increase over the same period last year. - Data pictures

Challenges for the next four years

In November 20th, a report released by QuestMobile showed that on the day of double 11, a total of 660 million consumers were "chopping hands" in the mobile shopping industry, and the major business platform DAU (daily active users) surged, among which mobile Taobao DAU4.6 billion, spelled more than 220 million. Although the figure of the latter is 84.8% higher than that of last year, there is still a gap between Taobao and the latter. At present, the sinking market has become a new engine for the growth of e-commerce giants. Alibaba and Jingdong have stressed that the sinking market performance has played an important role in the growth of their performance.

The QuestMobile report believes that this year's double 11, the obvious change of the electricity supplier in playing is: from "how to sell more goods" to "how to recommend more suitable products to consumers", this is the electricity industry's reflection and action on the past sales logic and flow thinking. Under the guidance of this kind of thinking, the distribution logic of the electricity supplier has changed greatly. The essence of the traditional electricity supplier "people looking for goods" has turned into "goods looking for people" in the era of live broadcast, short video and social relationship chain, and the logic has been upgraded in an all-round way.

"We have done a good job in some industries, and at least the lowest price of the whole network has won a lot of praise from users. This is the best place I feel. The bad thing is that we are not enough to dig for some niche demand. For some partial stylized demand, we are not satisfied. In the future, we will try some better ways of showing. " Zhao Jiazhen disclosed that for example, adding clothing such as Hanfu and other commodities, actually do not need to look at sales data, users' needs are met, the number will naturally go up.

Of course, short market fluctuations and double 11 figures can not fully show the current situation of the electricity supplier industry. For the future, there are still many challenges to be faced with. In the capital market's concern about traffic, users and ecology, the following is the exclusive dialogue between Zhao Jiazhen and the twenty-first Century economic report reporter:

Twenty-first Century: during the double 11 period, each platform has its own promotion and promotion. Why do users want to help you share?

Zhao Jiazhen: when we started to do a lot of work in 2015, we found that the whole Internet had changed, and the speed of mobility was very fast. In this process, you find that user migration is actually characteristic. For example, in the early days, you must have computers in the PC era. This is the threshold for users. After the mobile Internet, everyone has smart phones. When users enter the mobile Internet on a large scale, there will be new characteristics, and there will be new needs, including shopping, entertainment, games and so on.

The old generation of electricity providers, which is based on the mode of search, the new business is based on social networking. Therefore, the new mode is to break the previous concept of traditional Internet enclosure. In my view, the essence of social interaction is also entertainment, and this part of the user also has a large demand for shopping. At present, China's mobile Internet users have 1 billion 100 million, but only more than 600 million of online shopping users, and more than 400 million of the people do not have shopping, we believe that these two points must have room for integration.

Twenty-first Century: does social interaction play a decisive role in growing up a lot? At the same time, the outside world has been doubtful whether these games and sharing have hurt user experience.

Zhao Jiazhen: it must be born in the background of this era. There is no big background to talk about the birth of many spells. It is indeed a bit strange. When it comes to sharing the impact on users, we need to talk about data. In fact, we send out about 1 million pounds of fruit in the orchard every day, selling about about 2000000 Apple mobile phones through subsidies. Regardless of any promotions and interactions, the first thing to look at is whether they are really discounted. Have you fooled consumers? If we really enable consumers to really buy affordable and cheap products, they will satisfy their core needs.

Second, we reduce the threshold of users through sharing, and they actually enjoy playing at the discount. We want consumers to have both benefits and fun. He also finds it fun, playing and shopping. If you really discount, you won't think this is a routine.

Twenty-first Century: from the point of view of marketing cost, is this social mode helpful? Does it cost internally?

Zhao Jiazhen: we can see the cost of each new user from our earnings report. Our cost is still much lower than that of our friends. Speaking of reasons, it is not only related to the operation of our products, but rather to the whole variety of species. The traditional electricity supplier is equivalent to the network commercial real estate, which has built a building, and has recruited many merchants to come in so that users can come in to find the goods. The logic is to find people. We are essentially different. We encourage people to play together and play together. The cost of bringing A into B will be reduced. The mobile Internet era is not in fact a few years, and there is still a lot of space behind it.

Twenty-first Century: what is the difference between the number of user portraits and the Taobao Jingdong?

Zhao Jiazhen: more and more users become mobile Internet users, breaking the threshold of the PC Internet before. It's hard for old people to use a computer, but now it's very simple to buy things in WeChat. Our user distribution is very close to the trend of China's population distribution. For example, the number of users in the first tier cities does not add up to more than 100 million people. The remaining 1 billion 300 million are in the other 234 tier cities, with less than 10% of the first line.

Many of the former electricity providers did not reach the users, they did become our users. Our APP's entire purchase link is also very short, which is upgrading the cost and efficiency, making the purchase very simple.

In addition, the number of women in our users is more than that, which accounts for more than 50% of the total number of users.

Twenty-first Century: do you learn a lot from the game?

Zhao Jiazhen: entertainment is a very important demand for human beings. The satisfaction, pleasure and respect you get in games are also needed on a shopping APP. Therefore, when we design products, we will also take into account the diverse needs of users, such as entertainment, social networking and so on. And from the shopping point of view, we are most important is to meet the new needs of users, for example, you want to buy a cell phone today, may be directly to go, this is the purpose of demand, but a large part of the demand for human consumption is not purposeful, maybe just shopping with friends just to see, on a piece of buy home, and we just met this part of the demand.

"Twenty-first Century": in fact, the combination of business and gaming, before the platform has also invested a lot of costs, why do we find a lot of such a point?

Zhao Jiazhen: first, we need to make the demand for entertainment more pure. The more pure you do, the more consumers like to buy things spontaneously. It becomes an additional thing. All of our ideas do not mean that we must buy things, but let users feel happy. Second, in the future, a pure electricity supplier APP will encounter traffic bottlenecks. After you add entertainment scenes, you can actually make your products bigger. He is not a pure shopping. You can come in and play.

In addition, we make entertainment more direct, you see, all our entertainment products are in the main station of the platform, and the user interaction is not bad. That is to say, we really put entertainment in a higher position. We do not want consumers to play games alone, but rather hope that he can play with more partners, and finally cause group effect, in essence, increase user interaction. Social tools only help us magnify this effect.

Twenty-first Century: how much cost does it cost? For example, let users help click and get 100 yuan cash. Is the pull cost a bit too big?

Zhao Jiazhen: when we design these products, we all consider it. Whether each product can have enough interaction, can produce enough social effects, all of which should be specially designed and developed, not to say that an ordinary water or money can satisfy users. On different products, everyone's demand for entertainment is different. Many users are tired of routines. They like to get 100 yuan in cash directly. We are developing different games and pushing for different people.

Whether this product finally helps us pull new users, or to promote user shopping, or even improve the user's interest in us, this is its added value.

Twenty-first Century: for businesses and users, the number of short messages is much less. Is it because their enthusiasm is not enough or for other reasons?

Zhao Jiazhen: now we have many tools at the platform level, many orchards, and many cash. These are the users between the platform and the users. In the future, some platform tools will be opened to businesses so that they can interact with consumers themselves. There are some applications that encourage interaction. Now we are already doing it. However, at this stage, some large brand businesses will be more taboo to send text messages to users directly because they are afraid of being asked to "2 pick 1".

In twenty-first Century, we said that the subsidy problem that we all care about very much. Since the listing of Jingdong and Alibaba in 2014, the competition in the industry is no longer purely a price war, and has returned to a relatively rational competition. Why do we need to launch billions of subsidies on this node? How long can the price war last? If the user can not survive?

Zhao Jiazhen: I think it's mainly about how you fill it up. What direction do you want to fill? If subsidies are only to increase the volume of transactions, this direction and strategy is wrong. We believe that we should subsidize real users' needs, so long as they fill in what they want to buy, you fill in the demand point.

For example, when we subsidize iPhone, 70% is sold to the sinking market, which is good for consumers because he is upgrading his consumption. In addition, 70% of our subsidized agricultural products are sold to cities. It also makes urban users feel good. In this case, I think that as long as we are solving their pain points, then the retention rate index must be good.

Twenty-first Century: subsidizing iPhone users at least 300 yuan per unit, which can be said to be very much. Now that 70% has arrived in the sinking market, will you go back to see these people again? Or am I going to spend a lot of subsidies on it, and I'll leave when iPhone buys? One result is that if I buy more subsidies, I will buy them. In the final analysis, what is the most fundamental competitiveness?

Zhao Jiazhen: we can look at this problem in several aspects. First, there must be a user to go away. This is definitely there. I think it is undeniable. Second: we hope that we can make a user know more about it. Such as a user, he came to buy clothes, furniture and the like, may be worried about buying more brands or high-tech goods. I can buy him a iPhone through subsidies. If his experience is good, the door of this classification will be opened. He will not worry about buying products such as household appliances or furniture later.

Another is a second tier city user, he naturally has a demand for high-end brand products, if I can let him at a more appropriate price and good experience, buy the goods he wants. Whether he is coming or not, I think there will be some changes in the consumer's perception of how much he knows. Our ultimate goal is to satisfy users' more needs, not just to buy clothes, to buy homes, but also to buy mobile phones, digital, home appliances and furniture.

Twenty-first Century: is this a process of upgrading many platforms? Can you break the customary impression of users?

Zhao Jiazhen: more and more consumers of first tier and second tier businesses are beginning to receive more spells. I remember the last financial data, and 48% of our GMV came from users in the first tier cities. There are more and more users in the second tier cities. In order to meet the needs of these people, I definitely want to make branding. If he can't buy what he wants to buy, it must be the wrong platform.

In addition, we must realize that users' needs are diverse. They will buy 19.9 yuan slippers, or 10 thousand yuan mobile phones, while buying 9.9 yuan apples. It's hard for you to judge whether he is high consumption or low consumption. But we can't let him buy La Mer or anything like that. This is not our intention to upgrade, but the needs of users of our platform. We must provide goods to meet the needs of users.

Twenty-first Century: from the sales point of view, has the subsidy promoted the sales of your 3C and mobile phone categories, has it improved your SKU?

Zhao Jiazhen: our game has changed a lot for the entire mobile phone industry. There are other brands taking the initiative to make subsidies. The feedback is also good. The growth rate of related categories is very exaggerated. Our original intention is not to compete, but since competition has come, consumers will surely benefit. I think the impact on the industry is positive.

Twenty-first Century: I see a lot of products shipped from overseas. How do you guarantee that they are genuine? What is this channel?

Zhao Jiazhen: we have very strict examination of the merchant companies purchased from overseas. Personal purchasing is not allowed to open stores. We have formulated the most stringent penalty clause for counterfeit goods in the whole network, which is called fake ten. You sell a single fake, we give consumers 10 times, merchants to give this batch of all consumers to pay.

For example, you reported today that a commodity was fake, and the platform side also confirmed that it was not just the whistleblower, but the 1000 consumers who could be the same batch of the whistleblower. The threshold of this margin is much higher than that of domestic businesses.

Twenty-first Century: how many subsidies have been added so much? How should we consider the profit? Is the loss controllable?

Zhao Jiazhen: because we are still young, we are only 4 years old. You can see that the profits of Amazon and Alibaba are at least 10 years. We should first expand the scale of users to meet the needs of users. This is the main direction. Profit is not urgent at this time, which is the consensus of the whole board and the company.

Twenty-first Century: are there many layering for business service fees and commission marketing?

Zhao Jiazhen: it's all zero Commission now. The channel cost of our entire platform is the lowest in the whole network, and the traffic cost of the original business on other electronic business platforms is 30%. Now we hope that the business can make profits to 30% consumers. The total investment of businesses will not increase, but on the contrary, they will have better sales. In addition, the cost of acquiring new users by social networking is certainly cheaper than the traditional way. In comparison, you can attract 100 people for 100 yuan, but the cost of advertising in traditional channels is more than that.

Twenty-first Century: according to the low price strategy advocated by many, how can we earn money in the future if we want to make money?

Zhao Jiazhen: the entire commercial structure of the electricity supplier has changed. We do not have to go through the road of others again, which does not conform to the characteristics of this era. Now the mobile Internet has broken the boundary, building a building to enter the brand circle is no longer appropriate. So we are thinking about how to continue the innovation of products and modes in the existing ecosystem.