The "fault" behind the fanaticism of e-commerce factories

OEM, an important bottom in the modern industrial system, is far away from ordinary consumers. During the "two sessions" that ended not long ago, manufacturing and industrial internet became hot topics, and the signal released by government policies was also obvious: in 20 19, social and administrative resources will tilt towards the real economy.

E-commerce factory is a form of integration of Internet and manufacturing. Nowadays, consumers pay more and more attention to the individual expression and quality of products themselves. Brands are no longer consumers' first choice, but more like an endorsement of product quality. Under the education of e-commerce platform, the business model of directly connecting factories, eliminating intermediate links as much as possible and bringing benefits to consumers is widely accepted, and even becomes another expression of "cost performance".

At present, e-commerce giants such as Ali, Netease, Pinduoduo, JD.COM, etc. are connected to the production of factories to varying degrees. Driven by the front-end consumption data, the uncertainty of production has been reduced, and a new commodity circulation model has been formed. The genes and audiences of each platform are different, and the extension to the manufacturing industry also forms different forms.

Talking about e-commerce factory can't avoid Netease YEATION. In 20 16, Netease YEATION was born, known as "the first ODM mode e-commerce in China", which directly connected with big-name manufacturers, excluding brand premium and intermediate links. Netease YEATION was controversial as soon as it went online because it was similar to the product style of MUJI.

The success of Netease YEATION is largely attributed to the "protagonist aura" of value marketing and OEM. For the first time, the industry information of ODM OEM and big-name OEM is brought to ordinary consumers, and the concept of big-name OEM is used to reduce the trust cost of consumers and highlight their core competitiveness.

Followed by Ali and JD.COM, they respectively launched Taobao New Selection (2065 438+May 2007) and Jingzao (2065 438+June 2008+10), which made their own brands parasitic on the platform like Amazon.

Domestic production capacity exceeds demand, and the foundry can completely meet the differentiation of different brands of products through modular design and production. In short, under the pressure of foreign trade, overcapacity and e-commerce platform, e-commerce factory is widely accepted as a business model that saves intermediate links as much as possible and brings benefits to consumers, relying on the domestic supply chain of "strong manufacturing and weak brand".

However, with more and more similar products, Netease YEATION began to feel uncomfortable. Netease YEATION's product design is simple, and it is difficult for consumers to have the desire to buy again. The decline in repurchase rate and the slow growth of new users will inevitably produce a large amount of inventory. Although the product life cycle is long, it will also hinder the development of new products. Last year, Netease YEATION began to settle in Tmall, JD.COM and even Pinduoduo. Due to vigorous promotion, the gross profit margin of Netease e-commerce continued to decline.

Netease YEATION has done too much, even surpassing traditional enterprises.

In the clothing industry with high Internet penetration rate, the mode of "buyer system +ODM mode" has become very popular, especially in online channels where consumers are more sensitive to price. Regardless of listed companies or online celebrity brands, ODM mode will basically save development costs and quickly respond to market demand.

According to the information learned by Tiger Sniffing Gao Jie Gaoshen, the department setting, product development process, contract with suppliers and accounting period of Netease YEATION are all within the framework of the same brand in the market. From the business model alone, the breakthrough of Netease YEATION is limited. In order to cooperate with big-name foundries and ensure quality, Netease YEATION directly signed a strategic cooperation agreement with suppliers for three to seven years. It is precisely the core value of buyer +DOM model to assemble goods quickly and flexibly to meet the market demand.

Ding Lei said that Netease YEATION is the integration of Internet and manufacturing industry, but Netease YEATION is more like the product of Internet people learning traditional industries, and it still has to follow the logic and rules of traditional industries in essence.

So Netease e-commerce came to the second stage: Netease koala factory store.

Netease Koala Factory Store was launched in September, 20 17. It is positioned as a brand incubator with high quality manufacturing. It uses data to guide the design and production of factories and provide nanny service and brand building for manufacturers. There are more than 200 cooperative factories worldwide, mainly covering 9 categories such as clothing, home, personal care and food.

Netease YEATION and Netease koala factory stores are very similar to Netease YEATION in positioning, and each category chooses 1-2 excellent factories for cooperation. However, compared with Netease YEATION, Netease Koala Factory Store solved three problems:

1. Inventory problem. The ownership of goods belongs to the factory rather than the platform.

2. Consistency of interests. There is bound to be temptation and game between brands and factories, and amateur internet companies may not be able to find problems in production. After the factory becomes the main body of commodity sales, the interests of both parties are the same. The factory is both a producer and a brand, which reduces the intermediate circulation links.

3. Development space. Netease koala provides platform resources such as warehousing, distribution, operation, customer service, IP design and content for the factory, which avoids the problems of Netease YEATION's heavy asset operation and uneconomical scale.

Also selected is Taobao's heart selection. In June 5438+February last year, Johnny, the general manager of Taobao's new election, said that Taobao's new election wanted to incubate the manufacturing retail brand, and it was also after testing the water and self-management that its operational capacity and platform resources were opened and realized.

According to the transformation process of manufacturing industry from OEM to ODM, and then to try to manage the market directly with its own brand (OBM), in order to increase the added value of production, the factory will meet the needs of its own brand. However, through observation, this cooperation model often has two unavoidable "double brands" problems.

A "double brand" is in the factory. Tiger Sniffing Gao Jie Gao Shen communicated with the factory staff when he visited the factory cooperated by Netease Koala, and learned that this factory which makes luxury cashmere garments has signed a long-term cooperation agreement with Netease, and its own brand launched on Netease Koala will be dedicated to Koala Channel, but this factory operates other brands in addition to its own brand.

Another "dual brand" is reflected in the retail side. Factory brands are not well known, and consumers' willingness to buy is largely due to the endorsement of platform brands. The design and price of factory brand products are affected by the platform. Just like channel customized products, these factory brands rely more on e-commerce platforms than "Amoy brands".

Obviously, factories don't put eggs in one basket. Their core needs are lower cost, higher price difference and bigger market. The fundamental reason for promoting their cooperation is the orders brought by the e-commerce platform.

In addition, the factory is willing to take risks and cooperate, and it is also betting on the possibility of the future. Netease koala factory store and Taobao may be more and more popular. For example, Netease koala sells goods to foreign markets, and Taobao chooses to open a large number of stores to become an offline "new chain". If so, the brand can also go to a higher level. But when it comes to that, most factories will consider going to the platform label and going to a bigger market.

At present, there are three e-commerce platforms that can touch the manufacturing end in the market: Essentials, Pinduoduo and Ali, all of which are telling the story of C2M. Interestingly, under the guidance of the theory of "fixing production by sales", two cases of necessity and Pinduoduo were born.

necessary

It should be known as "the world's first C2M e-commerce platform". Four years ago, Bi Sheng, the necessary founder, began to cooperate with the factory in C2M mode. The necessary way is to establish cooperation by selecting first-line big-name manufacturers, and then connect the necessary background with the production system of the factory, which is equivalent to the user placing an order directly with the factory, and then the factory produces on demand to realize zero inventory.

In order to balance cost performance and inventory, it often takes 3-7 days for a necessary shopping mall to produce goods after receiving orders from consumers. Moreover, the necessary threshold is very high. Bi Sheng has publicly stated that if the manufacturer wants to do C2M, it will take at least several years to invest tens of millions to transform the production line. This is doomed to be a small and beautiful platform, seeking stability instead of scale.

Pinduoduo

Like Bi Sheng, Huang Zheng also believes that inventory is generated because of the uncertainty of demand. Reducing circulation links and reducing production inventory with certain demand can reduce commodity prices. However, unlike producing necessary parts on demand, Pinduoduo will do mass customization production-assembly factory.

In Pinduoduo, the relatively definite demand for commodities is locked in a way similar to "collecting orders" through group pre-sale and delayed delivery, and then the factory conducts large-scale production to reduce costs and deliver them to consumers in the shortest path and time, forming a new commodity circulation mode and tending to zero inventory.

In February last year, 65438, Pinduoduo released the "New Brand Plan", and Pinduoduo said that it would tilt the flow and recommend resources to the foundry within a certain range to increase product exposure and support its brand building. Pinduoduo also said that the factories joining the "New Brand Plan" will also introduce a visualization platform, that is, the information flow between the production end and the demand end will be opened through live broadcast, so that the whole process of product design, production and manufacturing can be visualized.

Daily special sale

Ali's C2M project is similar to Pinduoduo's and looks like a defense against Pinduoduo. In June last year, 5438+065438+ 10, Taobao's daily special price was announced to be upgraded to daily sales, and small and medium-sized factories carried out digital transformation of the Internet of Things, saying that factory capacity data could be connected with online stores, front-end sales and back-end production could basically achieve zero inventory, and storage costs were reduced to almost zero.

But all marketing methods, such as collectivization, basically use low-priced goods to break through the low-end market. Low price and collectivization can quickly turn a product into an explosion and quickly digest the production capacity/inventory of the factory. On the positive side, Pinduoduo has given the low-end supply chain nowhere to put it. On the negative side, low prices are a dead end, and these low-priced factories have become the fuel of the platform.

The C2M model of the three major e-commerce platforms emphasizes the online visualization of factory capacity and real-time communication with platform sales data. However, although the theoretical direction is there, how to transform the factory is another matter.

First of all, we should do a good job in factory transformation as soon as possible. However, according to a necessary cooperative factory, it is necessary to instill the C2M concept in them and point out a direction for the factory, but it is impossible to transform the factory by itself, and the factory needs to purchase from a third-party software/hardware provider according to its own needs. A production line connecting this factory to the necessary platform was entrusted to Foxconn subsidiary for transformation, and it is said that only Foxconn has the real production line transformation ability in China at present.

Pinduoduo's current "transformation" mode is to put the mobile phone on the factory's Pinduoduo production line for live broadcast, and consumers can see the production situation of the factory through live broadcast. Mobile phone live broadcast has no technical content, but it is a successful factory transformation to build trust between factories and consumers in such a low-cost way. After all, the factory needs orders, and the transformation should serve the profit.

Compared with Pinduoduo, Ali's transformation plan is more mature: realizing the transparency of factory production and digitalization of production capacity through visual recognition. Ali provides cameras, switches, edge servers, gateways and other supporting hardware for the factory. Cameras equipped with various algorithms will continuously scan the production line, and the video data will be calculated collaboratively in the local and cloud, and then the structured core data will be uploaded to the cloud, and further connected with the consumer platform in real time.

I'd like to interject here. Because of the demand of platform sellers for OEM and ODM OEM, Ali contacted the foundry earlier. "Amoy Factory" was born on 20 13, which is a matching B2B platform built by Ali 1688 business department between sellers and factories. At present, there are about 30,000 amoy factories. Ali hopes to build the largest clothing supply chain service platform in China with the help of the natural advantages of business ecology on the platform. Ali's new manufacturing exploration began with the high-quality cooperative factory on the "Amoy Factory".

The renovation project is co-operated by Alibaba Cloud and Tian Tian Sale. Zheng Xu, the head of Alibaba Cloud Internet of Things Program, had previously worked in "the world's largest OEM" for more than ten years. Zheng Xu told Tiger Sniff Gao Jie Gao Shen that his team mainly focused on the transformation of manufacturing industries such as textiles, garments and mechanical processing. The goal is to provide a low-cost, rapid deployment and easy operation and maintenance lightweight factory digital solution, build a platform from 0 to 1, serve 80% of small and medium-sized enterprises in China together with partners, and realize the access of more factories.

Zheng Xu said, "China has a large number of small and medium-sized factories. When the numbers come up, the value of the platform can be reflected. Of course, relatively speaking, small and medium-sized factories are more willing to access the platform and accept non-customized applications. " Traditionally, bar codes or RFID are used to track processes. Camera reconstruction is a lightweight and non-invasive solution, which can make the factory realize a certain degree of digitalization of production capacity and make real-time information visual and interactive.

"Rebuilding a factory with about 100 people will cost about 50,000 hardware." Zheng Xu believes that this price can be accepted by most factories, and can also be extended by various algorithms. After the transformation, the scheduling efficiency of the factory is improved by 6%, and the inventory in the whole supply chain can be reduced by 10% due to transparent links and timely production and distribution on demand.

At present, team Zheng Xu has completed the deployment of 100 "amoy factories". He believes that the greatest value of transformation is the improvement of management efficiency and collaboration value brought about by the transparency of factory production.

Undoubtedly, compared with manufacturing, Internet companies know better how to trade/interact with consumers. E-commerce factory is an attempt to pull manufacturing from consumption. In other words, the e-commerce factory should be an e-commerce service factory and an Internet service manufacturing industry, but in every case, we all see that there is still a natural "fault" between the Internet and the manufacturing industry.

1. Supply chain failure

The cooperation between e-commerce platform and foundry is not as close as expected. The core demands of the factory are orders and production profits (lower production costs and higher delivery prices), but under the pressure of survival, priority is given to the stability of orders. Therefore, it is impossible for the foundry to give up the big orders of brands, which are the main source of manufacturing orders. At present, the cooperation between e-commerce platform and foundry is still in the experimental stage.

Take the necessity as an example. In the three cases of transforming the factory, the necessity is intensive cultivation, which requires the highest qualification of the factory. However, the foundry only transforms a production line to cooperate with the necessity, and the necessity can not really interfere with the production of the factory. In the final analysis, the cooperation between the two parties will still fall on the order. The more orders brought by the e-commerce platform, the stronger the right to speak to the factory. But on the whole, it is difficult to change the status quo that foundries receive big orders and serve the mainstream brand market.

2. Talent gap

There are too few people who know both the Internet and traditional manufacturing. For example, Ali, although the intermediate platform system has been precipitated from his own organization and management, there are more than a dozen people who can do the business of dismantling enterprises and building intermediate platforms. The Internet is farther away from the manufacturing industry, so that the "language" of the two industries is different. Everyone says "product", but they don't mean the same concept.

The industry exchange meeting begins with the exchange of talents, just as after OEM absorbed the designer group originally from the brand side, OEM transformed from ODM, and the form of cooperation with the brand side changed. The addition of new factors of production will inevitably lead to new relations of production, which involves the reform of wage distribution and organization and management of employees. At present, the establishment of new production lines and the running-in between factories and the Internet have affected the ability and enthusiasm of employees. Adapting to the new production relations requires a new organizational structure, which will be a huge challenge for family-run private enterprises.

3. The industry attribute is wrong

In September last year, Ma Yun expounded the concept of "new manufacturing" at the Yun Qi conference, and a stone stirred up a thousand waves. However, a commentary by the the State Council Development Research Center believes that the "new manufacturing" proposed by Ma Yun does not contain much new content.

As far as the integration of manufacturing and service industry is concerned, the process of manufacturing service has lasted for a long time, and informatization is still accelerating this process; Some large manufacturing enterprises started their manufacturing service process very early. In terms of "customization on demand, personalization and intelligence", "mass customization" and "unmanned factory" have become increasingly common in some advanced manufacturing enterprises in recent years. China Haier Company launched the "Connected Factory" many years ago to explore mass customization. As far as "making good use of Internet, Internet of Things, cloud computing and big data" is concerned, in domestic and foreign industries, related concepts such as intelligent manufacturing, industrial Internet of Things, industrial Internet and industrial big data have been heated up for many years, even in Beijing, many forums or seminars related to industrial Internet can be encountered every month, and these concepts have become a bit rampant.

China's new generation of information technology and informatization talents and resources are mainly concentrated in Internet companies such as BAT, and the Internet industry and manufacturing industry have completely different ideas in promoting industrial Internet.

Foxconn, Red Collar and Haier, which have made great achievements in intelligent manufacturing, can only make breakthroughs in a certain field and extend their capabilities to the outside world if they have sufficient industrial foundation and manufacturing experience. BAT wants to find 70% of the sexual problems in the industry first, and wants to come up with a general solution for large-scale promotion.

Panorama of Haier COSMOPlat business

Internationally, there are also differences about who will lead the reform of manufacturing industry. The United States reshapes the manufacturing industry from the information side "top-down" through big data analysis and other tools, while Germany starts from the manufacturing industry and uses information technology and other means to "bottom-up" to transform the manufacturing industry.

E-commerce factory is a "top-down" test for Internet service manufacturing. At present, there is no need for Internet companies to struggle with industry capabilities. China's manufacturing industry is characterized by "big but not strong", and a large number of small and medium-sized enterprises need affordable technology that can really bring benefits.

However, 30% outside the industry is the part that determines whether an enterprise can stand out. Therefore, Internet companies will inevitably encounter obstacles in industry knowledge in the future. If they can't understand the problem, let alone solve it, let AI solve it. By that time, internet companies need to really do manufacturing.

Note: Text/Fan Xiangdong, official account of WeChat: internal reference. This article is the author's independent opinion and does not represent the position of Yibang Power Network.