The diva and I cross each other

Chapter 484 Vertical E-commerce Platform
"Mr. Rong is young but very knowledgeable. Yes, my initial plan is to engage in vertical e-commerce." Mr. Li said with a smile.

Rong Mu was not surprised by Mr. Li's answer, because after so many years of doing business, Mr. Li must know that the current Taobao cannot be shaken by any new e-commerce platform. Directly challenging Taobao would be a pure waste of money and energy.

Today, the rise of mobile Internet has given the shopping market huge opportunities. There is no need to fight to the death with Alibaba at this stage. It is better to find another way.

Mr. Li came to this conclusion after experiencing several failures.

Baidu has tried a lot to enter the e-commerce field, but it just couldn't succeed. In fact, Baidu has already analyzed this point a long time ago.

There are actually many reasons for failure, but the main reason is actually only one: on the surface, Baidu failed because Alibaba had already laid out the shopping market and cultivated user habits very early, but deeper down, Taobao had almost met the needs of the domestic market.

That is what is commonly known as the market is saturated.

For example, a small village with dozens of households only needs one small supermarket. If you open another one, the two stores will share the business and the end result will be that both stores will go bankrupt.

The same is true for e-commerce platforms.

But now, with the rise of mobile Internet, the number of Internet users is increasing.

This is equivalent to a lot of immigrants suddenly coming to the village and settling down. One supermarket can no longer meet the shopping needs of so many people, so a new supermarket needs to be opened.

Mr. Li and Baidu’s senior management are also very clear about this. Although the number of Internet users was constantly increasing in the previous PC era, the speed was not fast.

Nowadays, in the era of mobile Internet, with the popularization of smart phones and 4G networks, the number of Internet users has shown explosive growth, which provides an opportunity for the second supermarket to appear in the village.

Of course, Alibaba will also seize this opportunity! In the past two years, Taobao's turnover has almost doubled every year, and the Double Eleven sales have increased several times a year.

But strictly speaking, this is not Alibaba seizing the opportunity, but Alibaba enjoying the dividends of the development of mobile Internet.

Alibaba has almost monopolized the e-commerce industry, so Alibaba will naturally benefit from the development of mobile Internet.

This is the benefit that Alibaba is bound to gain, but Alibaba itself was blinded by these benefits, so that now Alibaba has made a big mistake, which is what Luo Ming just thought of, Alibaba also wants to go higher.

Baidu naturally discovered this mistake, but before that, Baidu did not have the big data algorithm of Zhiguang Technology, so even if it wanted to do anything, it was powerless.

But now it’s different, they have obtained the big data algorithm of Zhuoguang Technology.

This made Mr. Li and Baidu's top management's ambitions grow wildly, and they felt that new opportunities had arrived.

It is for this reason that Baidu decided to give up the food delivery market so decisively.

"Mr. Li, I understand what you mean, but I feel that this will not be so easy to succeed." Rong Mu said after organizing his words.

"Mr. Rong, do you think vertical e-commerce cannot be successful?" Mr. Li asked with a frown.

"No, with our big data algorithms, we can definitely do it, but the scale is too single, and we can't get much meat even if we snatch food from the tiger's mouth."

“We can build a few more vertical e-commerce supply chains!”

"In that case, why not just become a mid-to-low-end shopping platform? Grab the market share that Taobao has abandoned." Luo Ming, who had remained silent, spoke up. Mr. Li and Rong Mu looked at each other, and then Rong Mu said, "Luo Ming, Taobao is only showing a trend of abandoning the low-end market. If we exit now, it will make Taobao react and give us a chance to rectify the situation."

“Then wait a year or two before doing it. Before that, you can start vertical e-commerce as you wish and lay a solid foundation. However, when doing vertical e-commerce, you need to cover a wider range, at least including fresh food.

Then we adopted the group buying model of that year, exchanging quantity for low prices, to provide consumers with the cheapest products.

Consumers will choose to continue to consume on new shopping platforms only when they have truly enjoyed the discounts, which is more direct than spending money to attract traffic," said Luo Ming.

"Group buying?" Mr. Li frowned. He was very familiar with the group buying model.

Don’t forget that Baidu has also participated in group purchasing subsidies.

Mr. Li is very clear that in the early stages of the development of the group buying industry, the initial model was not the service industry but commodities. However, due to the constraints of logistics and Alibaba's Juhuasuan, the entire group buying industry was eventually forced to change its business and start group buying in the service industry.

However, in recent years, the express delivery industry has developed rapidly, and there seem to be some opportunities again?

Rong Mu also thought of this, and he felt that Luo Ming’s idea was worth a try.

Luo Ming smiled and said, "It seems that you all understand what I mean. Let me continue. We are engaged in the vertical e-commerce of fresh food in the early stage.

Fresh fruits, vegetables, meat, eggs and milk are necessary in everyone's life.

In the early days, we started with fruits and vegetables, and our shopping platform ensured that all kinds of fruits and vegetables came from their places of origin. We put aside all distributors and emphasized the principle of small profits but quick turnover.

At the same time, we can also adopt the same model as group buying, allowing netizens to buy things in groups. The more people buy, the cheaper the price. "

"Luo Ming, is our platform taking the low-price route?" Rong Mu asked.

"Yes, we take the route of the lowest price and win by volume. Tmall and JD.com are now taking the high-end route, while Taobao itself belongs to the mid-range. Although Taobao has made a mistake, it will not work if we take the same route. If we want to avoid Taobao, we must take a different route."

“Indeed, group buying is a way to lower prices comparatively speaking.

In addition, there is also a way to purchase directly from manufacturers. We open up the supply chain at the lowest cost, allowing users to shop directly from manufacturers.

As long as we have enough traffic, countless users combined can still bring enough volume to manufacturers and help them get rid of all kinds of dealers." said Mr. Li, who has done group buying.

When Baidu was doing group buying before, Mr. Li learned about this and found that many times it was not that the prices of goods were high, but that the dealers made too much profit from the price difference.

This manufacturer is unable to deliver products directly to consumers. The first reason is the lack of transparency in information, and the second is that the purchase volume of a single consumer is too low.

Therefore, they can only turn to dealers for help, and in the era of online shopping, they can turn to online shopping platforms for help.

With a fixed vertical e-commerce sales channel, all middlemen are eliminated and all procedures become a straight line connecting fruit and vegetable farmers - platform - users.

The prices of fruits and vegetables will naturally come down.

(End of this chapter)