Mountain Capital Xu Shi: Decoding The Consumption Investment Key In The Tide Economy Era

"At present, China's supply chain, logistics and other infrastructure facilities are constantly improving, and digitally driven industrial upgrading is irresistible, which gives China the opportunity to create an international consumer brand." Recently, Xu Shi, founder partner of mountain capital, said in an interview with the twenty-first Century economic report.

In her view, despite the impact of the epidemic this year, the global market is facing the risk of economic recession, the Chinese market has downward pressure on the economy. But there is still much room for China's domestic demand market. As the economy slowly returns to normal, people's consumption demand will gradually release, which is full of opportunities for the rise of new brands.

In this wave of consumption, many new brands are growing fast but dying fast. Only entrepreneurs who have strong systematization capabilities in supply chain, brand, channel, traffic operation and so on can become the tide makers of the times.

New opportunities: the awakening of brand awareness of the younger generation

With the 1990s and 00 becoming the main consumers, the insight into their consumption psychology has become the basis for grasping the trend of new economy. Xu Shi believes that compared with the parents, there are several distinct characteristics in the consumption habits and consumption concepts of the young people after the 90s and 00.

First of all, in 1990, China's per capita GDP was around 350 dollars, while the average GDP per capita in 2000 was less than US $1000, but now China's per capita GDP has reached about US $10 thousand. After 90 and 00, along with China's growth dividend, the rich sense and security of the economy are very strong. The brand awareness of all aspects of clothing, food and housing is awakening, which brings the opportunity of the birth of the national consumer brand.

Second, after 90 and 00 are the aborigines of the Internet and mobile Internet. Because of the technological dividend, they have better information symmetry and stronger parity ability, and are more aware of their self-worth. They are willing to spend more money on their favorite products.

Third, due to the existence of urban stratification, young consumers in different cities show different consumption trends. For example, the consumption level of North Shang Guang Shen is similar to those of New York, Paris and other cities, and the updating consumption of the international tide brand is almost synchronous. But in the two or three tier cities, the entry of international brands may still be difficult. However, due to the development of infrastructure such as the Internet and logistics, some brands with reasonable price can develop rapidly from the first line to the low level cities, and the circulation efficiency of goods is higher.

New challenge: entrepreneurs should have strong systematization capability.

Because of social changes, economic development and intergenerational migration, every generation of young people has their own trend of consumption, which brings new opportunities for venture capital.

At present, mountain capital is making systematic research on the consumption track, and plans to increase investment layout in this field. Xu Shi introduced that the team as a whole divides consumer goods into necessities and non essentials. Necessities refer to the relatively rigid products related to clothing, food and housing. Non essentials refer to the opportunities for new brands and national tide goods related to consumption upgrading and consumption classification.

Specifically, first of all, mountain capital will focus on the areas with high repetition rate, high loyalty and large market space, such as tea, coffee, wine, snacks and so on. As a result, the company has invested in the electronic cigarette brand.

Second, the younger generation has greater enthusiasm for the pursuit of beauty, and more attention should be paid to personalized appearance and individualized lifestyles. From this, fitness, beauty, cosmetics, dental correction, hair transplant, pet economy and other sub fields are also the focus of mountain capital.

Third, some consumer related transaction platforms and channels are also worth noticing as infrastructure. As a result, Shan capital has invested in the flash delivery of the city express delivery platform.

Xu Shi explained that the younger generation has gradually developed a habit of instant consumption in the mobile Internet environment. When we see a red cake in a loud voice or a new milk tea shop, we immediately want to buy the order. One hour delivery service can quickly meet their rigid demand.

For specific projects, mountain capital has two criteria for screening. First, whether the company has enough track on the ceiling, and the industrial concentration in the track is not so high. It has the chance to produce absolute leading parts.

Secondly, the comprehensive nature of the company's own moat is also very important. Over the past more than 10 years, many start-ups have grown on fertile land for mobile Internet dividends, making it easy to achieve high growth. But today, the demand for the comprehensive ability of entrepreneurs is higher and higher. Especially for the entrepreneurs in the field of consumption, it is only in the supply chain, brand, channel, traffic operation and so on that they have strong systematization ability that can stand out.

New focus: promising fresh business opportunities under the influence of the epidemic

In the current market environment, not only high requirements for entrepreneurs, but also more tests for investors. In addition to some super head integrated organizations, it is difficult for most organizations to achieve full track coverage in real sense. For these institutions, the division of specialization and the formation of cognitive compounding in areas where they are good can improve the success rate of investment.

Mountain capital has enough attention in the vertical field. In the first few years of its establishment, the company mainly cultivated in the field of travel and online education, and invested in the company of second-hand cars, cars and homes, sparking thinking and so on. In the past two years, the mountain capital is gradually increasing the layout of the consumption field. At present, the fund's investment in the consumer domain accounts for 20%-30% of the total portfolio. The company plans to expand the proportion of consumption investment to 40% in the future.

Xu Shi believes that in terms of consumption and investment, the two founders of mountain capital have complementary advantages. As the founder of many car groups, Yang Haoyong manages the second-hand car trading platform with tens of thousands of employees, and has first-line experience in how to systematically spend money on brand promotion, how to improve commodity trading and the efficiency of circulation of goods, and so on, which has a stronger practical significance for consumer brand entrepreneurs.

Xu Shi himself was the founder of NetEase news APP, and experienced the process of APP platform from 0 to 400 million users. At the same time, he led the development of APP such as NetEase open class. In this process, Xu poetry has accumulated more observations on the characteristics of traffic users, upgrading of traffic conversion efficiency, and community management.

"We've all been fighting in the first place, trampling holes, spending money and making money, and have a personal understanding of brand expansion rhythm, spending efficiency, organization and management, product innovation and so on. So many CEO like to talk with us, and we can really offer advice from the bottom logic. " She said.

Since the beginning of this year, the new crown pneumonia epidemic has changed people's inherent life style and lifestyle, and has also brought some new trends in fire. Fresh distribution, online education, online collaborative office and other industries all pressed the fast forward key in the epidemic situation. Specifically in the consumer sector, mountain capital is particularly optimistic about the opportunities for fresh electric business.

Xu Shi said that the retail industry is very large, for example, in the field of fresh electricity, many entrepreneurs and investment institutions have entered, and the industry has experienced a round of burning money development. But at present, its economic model is still not fully running through the verification process, and the scale effect is not so obvious. A few well developed fresh electric business enterprises, the overall market share is still at a relatively low level, there is a relatively large room for development. Moreover, the dispersion degree of these enterprises is relatively high, and there are few national companies. Mountain capital believes that there are still structural opportunities, and will continue to pay attention to the retail and fresh electricity business.

"We now have early funds and growth funds, and may invest in new racers or existing head companies in the future." Xu Shi said. Mountain capital will not be used to measure the investment value of a company, whether it is cheap or not. It is mainly based on the efficiency of capital utilization and the possibility of ten times growth of the underlying company's future business.

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