The Best Practice Case Of Industrial Internet Landing: Huicong Group'S "Vertical Track" Mode

On the one hand, under the demand of reducing capital and increasing efficiency, more and more enterprises are pushing forward digitalization as a top priority project, seeking data to be efficient and making incremental use of technology. On the other hand, the bonus of consumer market is less and less, and the B end has become a new increment of technology industry.
Tencent put forward the strategy of industrial Internet at the end of 2018, and is pushing ahead with the development of the Internet strategy. Tencent cloud revenue in 2019 has broken hundreds of billions of people and rewarded the new iPhone. Baidu regards AI industrialization as the core direction of AI strategy, Baidu intelligent cloud is making efforts; Ali constantly strengthens the concept of business operation system, and actively assists in the intellectualization of all trades and professions. Although BATJ's B side strategy names are different, they are essentially doing industrial Internet.
　　 01
2020, industry Internet players are full of confidence.
In 2020, 5G went all the way to commercialization, and AI industrialization entered the deep water area. The industry will accelerate the outbreak of the Internet, the giants are complacent to prepare for a big fight.
Lenovo, millet and other technology giants CEO's new letter released in the new year emphasized the B end strategy. Lenovo Group Chairman and CEO Yang Yuanqing at the end of the letter said: Lenovo set up a new business networking division (CIoT), and the establishment of data intelligence service (DIBG) in June 2019 to strengthen cooperation, strengthening Lenovo's leading position in the trend of intelligent change. Millet CEO Lei Jun announced the major strategic upgrade in 2020 in its internal letter of January 2nd. It put forward the strategy of "AIoT" 10 billion yuan at the beginning of 2019, and upgraded it to 5 yuan for "5G+AIoT" for 50 billion yuan. Lei Jun indicated that he hoped to transform the sustainable advantages of AIoT and intelligent life into the absolute victory of the intelligent whole scene, and establish the status of the king in the intelligent age of millet in 5.
Ali carried out the structural adjustment on the first day of 2020. The Tmall spirit upgraded to an independent business unit. It was responsible for the cloud / terminal and B/C collaboration of the IoT cloud leader by Chen Lijuan, the head of the cloud cloud, and the original Tmall business leader, Tmall, will lead the other businesses of the AI Lab into cloud intelligence. It is also responsible for the product solutions and the website Division, promoting and building the cloud intelligent to B product system. The two adjustments are closely related to to B business.
Outside the consumption side of technology giants, such as Huicong, Kingdee rooted B players for many years, are also actively embracing the industrial Internet to achieve leapfrog development. In December 30th, Liu Jun, chairman of the industrial Internet forerunner, chairman of the board of directors of Huicong, released the internal letter of the whole staff. This is the first time that Liu Jun released the internal letter second times within a year after adjusting the internal structure of the organization in the beginning of the year. In the letter, Liu Jun recalled the achievements of the Internet transformation of HC group in the past 23 months. According to the financial report, Huicong group achieved a revenue of 6 billion 964 million yuan in the first half of 2019, up 84.3% compared to the same period last year.
In 2020, all players were confident and full of confidence in the industry's Internet. However, unlike the consumption Internet, the industrial Internet has many characteristics such as "slow", "heavy" and "miscellaneous". Although the technology companies have put forward many B strategies, they still have a lot of problems in landing. Many companies have great strategic voice, but they do not feel smooth when landing. How should the industrial Internet fall?
　　 02
Industrial Internet landing, methodology is being formed
After two years or so of development, there is no difference in understanding the concept of the industrial Internet, which is different from that of Internet + stock improvement and physical overlay. The industry internet emphasizes refactoring industry, integrating with retail, trade, finance, manufacturing, entertainment and other industries, creating incremental market through chemical reaction, and helping industrial transformation and upgrading. The knowledgeable people in traditional industries have realized the value of the industrial Internet, and began to actively utilize the tools, capabilities, programmes and services provided by the third party industry internet platform to achieve transformation and upgrading.
On how to land, the mainstream industry Internet players have formed their own methodology, and there have been different schools.
The first is Tencent and Baidu's "point to point" model. The core of Baidu's industrial end layout is only one, that is, AI, Baidu is not called the industrial Internet, it is called AI industrialization. It solves the intelligent demand of all walks of life through the AI capability. The Tencent takes WeChat and Tencent cloud as the two major starting points, and provides more services to B terminal enterprises based on core competence and promotes the landing of industrial Internet.
The second category is the chassis mode of Ali's "commercial operating system". Ali B2B, like Huicong, belongs to China's first batch of B2B business platform, started in B2B, has developed the to B strong business, such as ant gold clothing, Ali cloud, rookie, Ali mother and so on, forming a unique digital economy, has B client resources, has the ability of serving B side, has the chassis capabilities of data, technology and platform, so it has formed the ability of all aspects in the industry internet landing. No matter what industry's number intellectualization, Ali emphasizes the integration of all BU resources together to meet, this is summed up by Ali as "commercial operation system".
The third category is the "single point mode" adopted by many Internet Co. Based on its core competencies, it only makes industrial Internet for specific industries. For example, the US group takeaway puts forward the "next generation store" solution, focusing on catering industry's Internet needs; and then, for example, "Xiaoman finance", based on its accumulation in the financial and technological field, focuses on solving the needs of intelligent financial transformation of financial institutions. "Weak water three thousand I only take a drink", for the Internet giant in the vertical field, the single point mode is a wise move.
The fourth is Huicong's "vertical track" mode. The industry internet market is too big, and all trades and professions plus the superposition of scenes, the demand is huge and complex, doing everything will give people a sense of nowhere. On the first day of its industrial Internet, Huicong thought clearly about its strategy: concentrate resources and do a good job in the few industries that are best at it. Jingdong and other players are targeting a small number of industries, and Huicong's uniqueness lies in incubating the leader of the vertical industry internet.
Initially, HC based on its own accumulation at that time aimed at three big head industries: 100 billion cotton market, five hundred billion building equipment and trillions of chemical industry, and three industries were not directly responsible for HC net, but instead they were sent to cotton, middle and international buyers. In 2015, Huicong group incubated the plastic industry supply chain service platform to buy plastic products in the mode of internal entrepreneurship. In April 2018, it invested 50 million of the strategic control of the whole cotton industry chain, the integrated service platform of cotton, and the holding of July 2018 was located in the international mode of China construction mould bank.
Today, there are six vertical runways in Huicong. In the three big head trading platform, the MD takes the product identity as the breakthrough point to provide the product lifecycle management solution to the enterprise, and become the leading provider of digital transformation solutions for the manufacturing industry in China. The 2 billion 500 million valuation of Zhongguancun Online has successfully transformed from a technology media company into a new technology retail companies. The online shopping mall in 2016 is located in the national household electrical appliance retail store comprehensive service platform.
Huicong's six vertical tracks cover the interconnection of core industries such as cotton, industrial products, chemical and plastic, new technology retail, home appliance retail and manufacturing industries, and have become leaders in the corresponding field. Liu Jun disclosed in his internal letter that in 2019, HC's six vertical track companies had made good progress, and Zhongguancun online refinancing in 2019. In recent years, CIC also launched a new round of financing with the valuation of the first 1 billion RMB yuan. Since 2016, the compound annual growth rate of cotton joint venture has exceeded 100% annually, and there has not been a bad debt. In 2019, the number of digital solutions increased to 50% over the first time in the case of MW, and the revenue growth in 2019 was more than 100%.
　　 03
Is there any best practice for landing the industrial Internet?
HC's "vertical track" mode has many advantages:
1, the B end market has a "slow" characteristic, each industry player has the precipitation of time, later it is difficult to copy, the most effective way is to invest in mergers and acquisitions, spend money for time and space, the vertical track is very suitable for investment and merger and incubation, so the vertical industry's customer resources, technical capabilities, solutions and professionals will be quickly incorporated into the system.
2, different vertical platforms operate independently, and have higher degree of freedom and flexibility. They can fit in with industrial characteristics, formulate strategies and adjust rhythm, forming their own brands and small ecosystems. Different vertical platforms will grow along with the growth of the industry. Each of them has a huge imagination. Everyone will be more willing to fight. The track company is catching up with each other. This is summed up by Huicong as the "Mongolia army's way of fighting."
3, the industrial Internet must allow professional people to do professional things, such as mountain crossing, and different industries have their own characteristics. The essence of Huicong's vertical track mode is to focus on superior forces and destroy them, and to spread resources to the core industry to achieve professional development.
4, different vertical platforms together form a huge industrial Internet service ecosystem, so as to achieve a crisscross resource sharing. The industry segmentation is obvious, so the players with different vertical platforms and parallel tracks only have cooperation space but no competition relationship. Huicong's six vertical track companies can share information with Huicong net, share the underlying financial technology, IT technology, industrial data and other resources. The vertical track strategy is to break up the whole area, while the ecological collaboration is piecemeal, forming the whole of HC industrial Internet. Huicong's vertical track mode is not pure investment mode, but will provide platform + resources support, and accelerate the development of enterprises by incubating mode, so that each bamboo can form a bamboo forest together, and bamboo forest is a big ecosystem.
Huicong's vertical track mode is very similar to the ecological chain mode of millet. Different ecological chain companies are responsible for a category, single click to wear, make the product the ultimate, do the head in their respective fields, and support and cooperate with each other under the support of IoT and other technologies, and share the resources such as millet zero sale, together constitute the millet IoT ecosystem. In the letter of December 30th, Liu Jun interpreted hicong's industrial Internet methodology: "in the field of supply chain with opportunities to reshape, in the field of heavy services, in the field of innovative business models, Internet tools are applied, and" start-ups "have the chance to win!
The "vertical track" mode of the industrial Internet is not necessarily suitable for every company, and the industry internet is landing. There is no best methodology. Only the most suitable practice for them is that the industry Internet players have to choose their own way. Huicong's "vertical track" mode is not created rigidly, but it has been worked out for many years in the actual business grope.
Many players who have ploughed the B end for many years are embracing the industrial Internet. Huicong is a textbook case with the help of the industrial Internet to achieve "new shoots of old trees". Huicong net was founded in 1992. It was the first B2B electric company in China. It landed on Hongkong gem in 2003, four years earlier than its rival Ali B2B. At the end of 2017, Liu Jun took a bold step in reforming Huicong after he took up the CEO, subtracting the business of the group and focusing on the industry internet strategy. He put forward the vision of "becoming the leading industry internet group in China" and became the forerunner of the industrial Internet. HC is not only the earliest strategic layout of the industrial Internet, but also explored the unique "vertical track" mode.
In 2018, Huicong had already hatched and sold plastic products in the course of its investment and acquisition. The predecessor of the former is Huicong net plastic industry, with a large market and strong demand for transaction, data and other services in the extension of information services. Based on this, independent purchase and plastic molding is provided, providing professional specialization, information exchange platform for new materials, one-stop enterprise business services, and using technology to provide interactive marketing, consulting research, commodity trading, supply chain and financial services to the upstream and downstream enterprises of the industry chain, and to upgrade the service industry, and to cover nearly 100 enterprises in China's chemical rubber and plastic industry chain, and become an industrial Internet platform for the plastics industry.
Cotton, industrial products, home appliances, technology products and other vertical tracks are similar logic: there is Yu Huicong net in demand itself, and the specialized operation of vertical track can be bigger and stronger quickly. HC has already covered 63 industries and will have the possibility of producing vertical track companies in the future. The vertical track companies are developing their own industries in depth. Huicong network is developing towards the infrastructure platform, focusing on the SME business service platform. Based on the accumulation of 27 years' history, 63 industries and 25 million registered users, Huicong network is a super platform for the industrial Internet. Through the SaaS and other industrial Internet tools, it outputs the connection service, and becomes the operation and service workstation of the small and medium-sized enterprises, providing the underlying capabilities for the vertical track companies. In the internal letter, Liu Jun pointed out that HC is the two stage rocket of Huicong group, and is the key to realize the leap from 10 billion to 100 billion. If the vertical track company is the millet ecological chain company, Huicong net is the millet mobile phone and MIUI system. It is the foundation and core of the whole ecosystem.
According to the information disclosed by Liu Jun's new year's internal letter, HC is not only early on the layout of the industry, but also groped for its own methodology, making every vertical track company keep abreast of the overall industrial Internet strategy. 2018 was the first year of the strategic transformation of Huicong industrial Internet. In the year, HC's revenue was 10 billion 580 million yuan, an increase of 185.8% over the same period, the total assets size was 8 billion 770 million yuan, an increase of 19.5% compared with the same period last year, and the profit of equity holders was 276 million yuan, up 2.9% over the same period last year. In 2019, HC based on the vertical track mode to further promote the landing of the industrial Internet, and the transcript is also worth looking forward to.
The industrial Internet will be a bigger market than the consumer Internet. The B terminal market will become a new increment of the Internet industry. For the Internet giants like BATJ, after the success of the B terminal transformation, half or even higher market value will come from the B terminal service. The two rise of Lenovo and other companies will also lie in the B side. In foreign countries, Microsoft and other companies that started on the consumer side are relying on B transformation to achieve the two rise beyond apple to become the most valuable company in the market, while Salesforce's B based SaaS giant has a new market value of up to US $147 billion 700 million. Starting from the B terminal, the strategic layout of the industrial Internet, and exploring the unique vertical raceway mode, Huicong is ushering in the second spring, and the future can be expected.