Share with Lao Gao Crown Regular Meeting - Some Explorations of E-commerce under the New Normal

　　Dong Sheng, chief strategic officer of Maternal and Infant Home, has worked at Huawei and served as a strategic consultant for many companies. In 2014, he officially joined Maternal and Infant Home. A pioneer of "sunshine overseas shopping" in China, and has led the transformation of Mother and Baby Home into a number of strategic layouts such as mobile e-commerce and open platforms.

　　At the regular meeting of Laogao Crown Club, Dong Sheng shared with members "some explorations of e-commerce under the new normal."

　　The following is a selection of full texts:

　　Say no to the behavior of "pure money burning"

　　Good afternoon everyone, today I will talk to you about "some explorations of e-commerce under the new normal". First, let’s briefly introduce the Maternal and Infant Home. It entered the maternal and infant industry relatively early, and established a physical store in 2003, gradually growing and growing. In 2010, the market changed greatly, and we gradually embarked on the road of e-commerce. In 2014, we officially released the mobile APP. After half a year, the sales on the mobile terminal have accounted for 80% of the total sales, officially entering the era of mobile e-commerce. Let’s slightly popularize the maternal and infant industry here. This is a relatively special industry, but it is actually a life scene for a person at a certain stage. Construct a large life scene, get pregnant, have children, and enter family life after marriage, that is, the three major stages of pregnancy, infant and child. Pregnancy means ten months of pregnancy, and infant means a child aged one to two or three years old. Children usually refer to 12 years old. In such a life scenario, there are many diversified products, including fast sales, non-fast sales, standard non-standards, food, use, and clothing. It also has many virtual products, such as maternal and child services, finding a confinement nanny when you are pregnant, postpartum repair, baby massage, etc. This is a cross-border and cross-industry state.

　　Since 2014, the maternal and infant industry has been particularly hot and competition has been fierce. But based on our 13 years of experience, the maternal and infant industry returns to the essence of business, this is a protracted war. Everyone should have a basic judgment on their own industry. Many Internet industries can burn money one round after another under capital drive to change the pattern of the entire industry. But there is no such case in the maternal and infant industry. This is related to its natural attributes. Every year, new pregnant women will come in and new users will leave every year. When a new mother becomes pregnant, she faces an unknown thing, and many things need to be re-learned and educated. Therefore, the well-known feature of the maternal and infant industry is that it often faces a new customer, and it is necessary to continue to acquire new customers to make better profits. So as an e-commerce company, we must say no to the behavior of "pure money burning".

　　Consumer market sorting

　　Let’s talk about consumption habits in the mobile Internet era. In such an era, customers' consumption behavior has undergone great changes, completely different from before. The first feature is that consumption radiation is shorter and more scenario-based. From the perspective of the maternal and infant industry, it is the specific changes in the consumption scenario. From pregnancy to delivery to newborn, the consumption demand at each stage is changing in specific and different ways. Second, the entire user purchasing behavior is instantaneous. Influenced by external media, users will buy things anytime, anywhere. So how do we position our vertical orientation here? First of all, from the perspective of consumer awareness, Alibaba is starting from the crowd, Tencent is paying more attention to individual users, Baidu is paying attention to traffic, while our Mother and Baby Home regards customers as a big customer. This concept is different from general consumer retail. A customer purchases organically during the maternal and infant cycle. The overall quality of consumers is very high. We hope that she will try to trade in our store when she needs it, so we will continue to follow it like a big customer.

　　再就是看我们的竞争对手在哪里。从电商行业来看，母婴行业的市场在两万亿左右，而母婴电商大概占值两千亿，占整个行业的10%，而母婴电商的80%是属于京东天猫这样的综合性平台的，20%是属于垂直品牌的。我觉得进入互联网时代后，有一个最显著的地方就是没有竞争对手，因为对手到处都是。从去年到现在，微商的量已经非常的大，还有个别微信公众号，人人都可以卖东西。

　　Regarding the core strategy, the maternal and infant industry is an accumulation process from the perspective of industry resources, and its industrial chain is relatively complex. Everyone has different approaches to entry, and it depends on the basic situation of the entire industry. After 13 years of integration of resources and industrial chains, our family also intervened in cross-border fields in 2014. Next, mother and baby have certain market advantages. Our advantageous market is mainly in East China, which is due to the accumulation of reputation. Judging from the current maternal and infant industry, there are about 80,000 offline maternal and infant stores in China, distributed in third- and fourth-tier cities across the country, and it is also accumulating the local reputation for a long time. Offline stores still account for a large proportion in every industry, so don’t ignore this. Our positioning for ourselves is that we cannot be broad and comprehensive. It is better to be different than better.

　　In what aspects should vertical e-commerce make breakthroughs?

　　As a vertical industry, what aspects do we need to make breakthroughs? There are several keywords.

　　First, we must integrate users' needs with industry resources, including goods, services, cross-border, etc.

　　The second is one-stop. We currently adhere to the self-operated method because users have one-stop shopping needs when purchasing.

　　The third is O2O. Online and offline interaction will be a point in which many chemical reactions can be made in the future.

　　Now there are two general directions in many industries: one is horizontal, expanding the diversified level; the other is vertical, where there are different needs in the maternal and infant customer base such as using goods and service products, and eventually it will become a provider of customer solutions. Regarding the integration of suppliers, there are many new brands and new suppliers in the maternal and infant industry. How can we make new brands accumulate good consumer reputation? We can work hard from market analysis, positioning, content, brand, fans, etc. to ultimately achieve the transformation of a commercial brand.

　　The crowd is heavily vertical, and extending the consumer life cycle provides one-stop maternal and child life solutions, which is another important point. From pregnancy preparation, pregnancy, delivery, childbirth, early childhood education to children, there are different needs at each stage. There are three main needs of maternal and infant users: one is the knowledge that mothers need, the second is the product needs, and the third is the needs of various services, including medical services, which need to be solved at a level. We have built a WeChat group so that mothers can communicate with each other, and there will be corresponding solutions for goods and services. Next is how to connect O2O behavior? We have done some activities online and offline in food products to promote the sales of goods. More, we use the online platform as an entry point, open up user data, and complete the delivery of products and services offline.

　　To sum up: We hope to build a vertical ecological system in the future, make the platform more open, share user resources and customer data, help suppliers do better marketing, and form an ecological win-win situation. These are a lot of things we do in this industry.

　　Finally, I would like to share with you the First Law of Godel: Any internal self-sufficiency system must be incomplete. Therefore, we need to constantly open up and collide to promote the development of the entire industry. This is what I share today, thank you everyone!

　　Q&A session:

　　Member 1: Maternal and Baby Home is an old brand for more than ten years and should have more than 10 million customers. I want to know how such a large customer base is built in CRM?

　　Dong Sheng: When it comes to the ecological chain, I think it is a bit big. For this, we define it as a marketing system for precise customers that is tempted by data. We hope to provide users with a detailed positioning throughout customer marketing to promote marketing activities. In the future, we want to open up this system. Our content partners can select content on it to give an accurate customer label, which is equivalent to allowing suppliers to directly see our user profile and build an interactive marketing situation.

　　Member 2: You just talked about how vertical e-commerce portrays users. What kind of thinking will you make between it and scene-based shopping?

　　Dong Sheng: The definition of scenario is not very detailed. Regarding this service, we will provide quick and helpful advice based on his shopping needs. Now we are doing something in operation.

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