Online Transaction Of Household Entity Transformation: "Trinity" Is The Key

Compared with physical supermarkets, shopping malls and other retail formats, the home circulation industry has been lucky to avoid some Internet shocks due to its emphasis on experience, after-sales and other reasons. Although offline business has not been greatly impacted, there is no doubt that the proportion of online business has gradually increased under the tide of "Internet+". Tmall and JD continue to make efforts. Suning and Gome have also made plans. Baidu has invested in Qijia.com, and Tuba Rabbit has expanded rapidly. At present, the household circulation giant Macalline is also ready to take a big hit.

According to the report of China's Household Style Consumption Preference Insight released by CBNData, the scale of online furniture expanded by about 2.3 times from 2013 to 2015, and the growth rate of total turnover in 2015 remained at about 40%.

The Internet transformation of the pan household industry is accelerating. Tmall and JD continue to make efforts. Suning and Gome have also made plans. Baidu has invested in Qijia.com, and Tuba Rabbit has expanded rapidly. At present, the household circulation giant Macalline is also ready to take a big hit.

Recently, on its 30th anniversary celebration, Che Jianxin, the founder and chairman of Red Star Macalline Group, announced that it would implement the "1001 strategy". This household circulation enterprise, which has been deployed in more than 100 cities nationwide, will build 1000 household malls in the future, and deeply embrace the Internet, aiming to achieve online and offline integration and mutual empowerment, Build China's largest pan household consumption service platform.

Whether it is "Internet+" or "+Internet", business forms that existed only offline in the past are now coming online. The difference is that some industries are impacted by the Internet and have to choose transformation, while some industries are hoping to use the power of the Internet to make things better. What kind of household industry does it belong to?

Limited impact from e-commerce

In fact, compared with retail formats such as physical supermarkets and shopping malls, the home circulation industry has been lucky to avoid some Internet shocks due to its emphasis on experience and after-sales.

"The impact of the Internet on the retail industry of home building materials is relatively limited, because most of the products of home building materials need installation and after-sales service, and some even need more complex construction, so it is impossible to achieve complete online sales." Wang Hongbo, the partner of Hejun Consulting, said in an interview with China Business Daily, The standardization of home building materials products is also relatively low, and there is no unified standard for product pricing, which will also affect their sales on the Internet. Currently, the products mainly sold on the Internet are mainly furniture products, such as tables, chairs, benches, mattresses, etc., because they are relatively standardized and do not require much after-sales service. Therefore, the impact of the Internet, especially e-commerce, on the home furnishing industry is relatively limited. Even the mobile Internet home decoration, which has become popular in the past two years, has not had a great impact on offline stores.

"These are more of a gimmick or a concept. It doesn't change anything, but the trading platform has changed a little. What might have needed to be done through newspaper ads and TV ads has now become an app," said Wang Hongbo.

Data may more directly illustrate this situation. Take IKEA, another household giant, for example. In fiscal year 2015, IKEA's Chinese market achieved a record sales of 10.5 billion yuan, with sales growth of more than 18%. At the same time, IKEA Club members increased by 42% to 13.5 million. The number of visits to the official website reached 53 million, an increase of 52.5% over 2014. More than 75 million people visited IKEA China Mall. At present, IKEA has 19 stores in China, and has opened three shopping centers in Wuxi, Beijing and Wuhan.

Red Star Macalline is ambitious

Although offline business has not been greatly impacted“ Internet plus ”There is no doubt that the proportion of online business is gradually increasing under the tide of ".". According to the report of China's Household Style Consumption Preference Insight released by CBNData, the scale of online furniture expanded by about 2.3 times from 2013 to 2015, and the growth rate of total turnover in 2015 remained at about 40%.

How to get a share in the rapidly expanding online household consumption market? Not long ago, IKEA announced that it would launch e-commerce business in China. The relevant person in charge of IKEA China once said in an interview with the reporter of China Business Daily that online business is only a supplement to its offline business, and according to IKEA's existing plan, its e-commerce business will only be piloted in cities with IKEA stores.

The "1001" plan of Red Star Macalline is obviously much more "grand".

Li Bin, president of Red Star Macalline, introduced that Red Star Macalline will build 1000 home furnishing malls by self construction and cooperative operation, and expand vertically from first and second tier cities to third and fourth tier cities and key counties. On the online side, build an Internet platform, and take home as the core to carry out cross-border extension of five business platforms, namely, real estate transaction, home decoration, commodity transaction, service and finance.

Red Star Macalline gave specific explanations on the five business platforms:

Real estate transaction platform: starting from the purchase of a house by a user, we should be an independent and pure real estate consultant model to solve the problem of information symmetry and trust between buyers and sellers; At the same time, based on the design aesthetic concept, through the analysis of users' big data, intelligent recommendations are made on the matching degree of geographical location, architectural style, surrounding environment, etc.

Home decoration platform: build the largest Internet home decoration platform in China. Based on the understanding of the industry and the integration ability of the supply chain, re-establish the industry decoration standards, train basic workers, truly solve the decoration troubles of users with design and sense of quality, and be responsible for the environmental protection of users' families.

Commodity trading platform: at the commodity level, it will maintain the advantages of furniture and building materials and expand steadily to household decorations, including curtains, vases, tablecloths, household appliances, furniture accessories and other commodities, which is also an important means to increase the consumption frequency of users in the future.

Service platform: In addition to the service of the store, it will expand to maintenance, repair, and even domestic business, community entertainment, community activities, etc.

Financial platform: financial products are integrated into the above series of businesses to provide systematic financial services such as family financing, payment, consumer credit and family safety insurance.

Consolidating the main business is the best policy

It can be seen from this grand plan that Red Star Macalline will almost extend its tentacles to every possible field, which is really ambitious. However, at present, there are few real enterprises that have fought back on the line and made good use of O2O. Li Bin also pointed out that the biggest problem of China's current so-called O2O model is that there are two pieces of skin online and offline, and the left and right are mutually beneficial. A large number of enterprises have not found a compromise or lack of determination to break through barriers. Can Red Star Macalline overcome this problem? Where does Red Star Macalline's confidence come from when it wants to enter such fields as real estate transaction and finance that it is not good at?

Xue Shengwen, a senior researcher of CIC Consulting, told the reporter of China Business Daily that Red Star Macalline intended to take physical stores as a fulcrum and realize the overall digitalization of physical stores through the application of Internet technology. At the same time, it set up platforms for real estate transactions, home decoration, commodity transactions, etc. on the Internet platform to conduct cross-border operations and business extension, This will break the O2O model that enterprises used to simply superimpose physical stores and online channels, which is conducive to giving greater play to the synergy advantages of physical stores and the Internet, and can extend the enterprise's industrial chain and expand the profit space. The development of physical stores can also guide its pan family consumer services and improve user stickiness.

"I think this strategy is not very pragmatic." Wang Hongbo told our reporter that if all the ideas of Red Star Macalline were implemented, its cash flow would be very tight. Moreover, in the field of e-commerce, especially platform e-commerce, the remaining space is very small under the encirclement of e-commerce giants such as Tmall and JD, and the genes of traditional enterprises are not in this area.

"If you want to give Red Star Macalline some valuable advice, I think it should treat its main business more conservatively, focusing on consolidation, and then be more active in capital." Wang Hongbo said that from the current situation of the home building materials industry, if Red Star Macalline can upgrade the existing more than 100 stores, it will be very powerful, and there are too many stores in some cities, Either close the store or transform, and make each store become No.1 in the city. In addition, efforts should be made to innovate the existing store model, so that as many people as possible can come to the store in addition to decoration. For example, IKEA is no longer a shopping place for consumers to buy furniture. It has even become a place for leisure and eating. Of course, Red Star Macalline must find its own way, not imitate IKEA.

Key to transformation: "trinity"

Xue Shengwen believes that the characteristics of experience and service in the home furnishing and home decoration industry determine that O2O will become the inevitable direction of this industry in the future. It is worth noting that the O2O transformation effect of many home furnishing and home decoration enterprises is not optimistic at present. This is mainly because most enterprises do not have a deep understanding of "Internet+", the transformation mode is biased, and the integration of online and offline is relatively extensive. In the future, the O2O development of the industry will enter the era of "Internet+" 2.0, and online and offline will show a closer integration.

In Wang Hongbo's view, given that the overall Internet is approaching an irreversible state, all enterprises should make full use of the Internet, but this does not mean that the Internet can become its main marketing channel for all industries.

"The Internet can be a way of communication, but it does not mean that it is a way of sales, which is not necessarily successful." Wang Hongbo said that for the home building materials industry, its many characteristics determine that it has no way to make a very good combination with the Internet for the time being, and it is difficult to internet To achieve full sales, after-sales service and other actions.

"We have no problem in turning it into a very important platform for communication with consumers. At present, many enterprises have done well, but they cannot rely solely on it to do sales."

Wang Hongbo believes that the sales of home building materials actually need to build a "trinity" platform based on people, rather than a product based platform. The first person is the consumer, the second person is the seller of household products and building materials, and the third person is the person who provides installation and after-sales service of household building materials. In fact, it is very difficult to build such a "trinity" platform, and at the current level of economic and technological development, it is difficult for such platforms to survive on the Internet.

"Let's go buy Home building materials We need to go to the scene to have a look. At present, the two-dimensional state that the Internet can reach is not clear, and consumers' perception is limited. In the future, the three-dimensional state may be perceived better. According to the promotion data of "Double 11" every year, the sales volume of household building materials brands exceeded 100 million a day, and their return rate basically reached more than 30% and 40% within two weeks. This means that there may be various problems in it. "

Wang Hongbo judged that in the short term, the concept of Internet home furnishing and home decoration will still be popular, but in the medium and long term, the biggest challenge facing the industry is still the "trinity" platform. If this platform is not well developed, it will be difficult to survive.

"Because whether he is a home decoration company, designer, home decoration construction team, or a product dealer, he can open a physical store by himself in the actual scene, not necessarily relying 100% on your network platform." Wang Hongbo stressed.