Chapter 107 E-Commerce Is Difficult

Cao Shen was not notified of Xiao Gang's move.

After all, this matter is easy to say, but the process of handling it is cumbersome and complicated, and it cannot be done in a short time. And there may be various uncertainties, especially when it comes to overseas transactions. No one dares to pat his chest and guarantee anything before everything is settled.

Before things are done, Xiao Gang will naturally not jump out to draw cakes.

Cao Shen is also thinking about his e-commerce business. With Mr. Cao's current situation, he will naturally not want to do e-commerce by creating a "Taobao brand" and be done with it. He will naturally do a platform-type enterprise.

But e-commerce is difficult, it is really difficult. Otherwise, there would not be a saying that entering e-commerce is like a deep sea.

If you want to do this well, the investment is huge, and it is impossible to do it lightly just by getting some traffic.

Back then, Xiao Ma's father, who had the largest traffic entrance in the country, did not do e-commerce.

And Da Ma's father, who seemed to do it lightly on the surface, actually did not do it lightly at all. In order to engage in e-commerce, a series of seller tool software has been developed, such as Alipay, cloud computing, and Cainiao Network. A large number of companies in the logistics industry have set up a fund to invest in them. Of course, many of them have gone bankrupt and paid tuition fees...

Not to mention the man who drinks milk tea, who built a whole set of logistics and warehousing systems by himself.

As for Pinxixi, which relies on the social traffic of WeChat, it picked up the loophole of Xiao Ma Dad blocking Da Ma Dad from inserting traffic blockade, and ate the cheap social e-commerce traffic dividend. If you want to take a few more steps in the future, you can't do without investment in redoing.

But he is more fortunate that he doesn't have to make a lot of repeated investments by relying on Da Ma Dad's promotion of express delivery network efficiency. As the saying goes, drinking water makes the well digger die.

The difficulty of doing e-commerce platform is different from that of doing pure 2C products.

For pure 2C products, you only have one customer, that is, your C-end users, and you just need to serve them well. However, there are also difficulties here. If the product does not have strong stickiness, it is easy for C-end users to be ruthless and unused in minutes.

Therefore, C-end products must keep pace with the times and keep up with the changes of users at any time. Once they can't keep up, it will be difficult for users to come back, and there will always be new and fun products that will attract users' attention. You are competing with all products to grab users' time.

Pony Ma is a typical pure C-end product player. If you look closely at Pony Ma's product matrix, all the more successful ones are products that kill users' time. WeChat, QQ, games, videos, reading.

Other non-time attention-occupying products all use investment to occupy points, such as e-commerce, taxis, takeout...

So, when another time-killing player appears, Pony Ma is particularly nervous. Because this player's Douyin, Toutiao, and free novels have occupied a lot of users' time.

E-commerce is different from pure C-end products. It has to serve two users, consumers who buy things and merchants who sell things. And the needs of these two users are actually opposite.

Consumers hope that the goods are rich, cheap, the service is good, and convenient, and try to buy less things and spend less money on the premise of meeting the use needs.

Sellers don't like too many SKUs. They hope that they can make one product that covers everything. The higher the gross profit, the better. The more you buy, the better. It's best to fall into the trap of consumerism. Good service requires costs, and the lower the cost, the better.

Therefore, it is extremely difficult to serve both parties on the same platform.

Either you find a balance point, but this balance point may also mean that both parties are not satisfied.

Or you have thought about who you want to serve.

In this regard, almost all e-commerce companies choose sellers. Everything they do is to make sellers have more traffic. All shopping festivals seem to be a carnival for buyers, but in fact, they are means to increase traffic and make sellers ship.

The introduction of convenient payment tools is to lower the threshold for consumers to make purchase decisions.

The introduction of lending services allows everyone to have more money to shop.

Logistics services improve inventory turnover and make consumers more convenient and frequent.

Not to mention the large amount of consumer data and big data provided to sellers to "kill the familiar".

From a business point of view, there is nothing wrong with this.

To do business, you must first think clearly about who your customers are.

Only in this way can we provide a series of services around customers.

Whether it is commission, traffic advertising, or data services, e-commerce platforms earn money from sellers, so sellers are the real financial backers of e-commerce.

Providing good services to consumers is just to undertake some of the services that sellers should do, so that they can sell products more easily.

If you don't believe it, just look at the products.

For example, WeChat, every new function, every time it makes money, is relatively restrained, considering the user experience.

When you open Alipay, you can see a variety of functions piled up, as long as it can give you all you want. Moreover, the commonly used functions are often still at the secondary entrance, you have to find them.

This is obviously not a design for the user. It thinks that the functions you often use are just needed anyway, so you have to click on them. It is better to use various services to attract attention when you open the product, and maybe you will use them.

If it is just to make money, Cao Shen will not do e-commerce. The chain involved in this matter is too long and it is really troublesome. With Youxin, it is the most comfortable choice to go directly to the path of Xiao Ma Dad.

It is not worth it to take on all the responsibility for revenge against Taotao Technology.

But Cao Shen wants to do it!

There are two most powerful companies in the world that do public cloud.

One is AWS, which was born out of Amazon.

The other is Alibaba Cloud.

These two companies have one thing in common: their father is an e-commerce company.

E-commerce has a large amount of data, rich data types, large transaction volume, high concurrency, etc., which have extremely high requirements for the efficiency, cost, security, reliability, and stability of cloud computing. This is the experience gained in practice.

The customers of e-commerce, the majority of sellers, are the backbone of the secondary industry. Their industrial chain is further upstream, and there are more secondary industry industries and material manufacturers.

Cao Shen wants his cloud computing technology to fully penetrate and enter all aspects of social production services. E-commerce is a good entry point and can accelerate the pace of advancement.

The first wave of using cloud services is the Internet, followed by sellers who are subtly influenced and don’t know they are using the cloud but are very happy to use it. Then, in order to improve the efficiency of the supply chain, the sellers are forced to use cloud computing and various SAAS applications upstream.

From the perspective of industry, the penetration of cloud computing is the Internet, communications and finance, education, electricity, and manufacturing.

E-commerce has advantages in the cloud, which can actually be used as a reference. In the original world, there was no e-commerce in the Little Pony Cloud, and it was only later that it was eager to bet on cloud computing, but it was still a little bit worse than the Big Pony Cloud.

As for why we need cloud, cloud is an important cornerstone for realizing dataization, intelligence, and abstraction of the entire world. Technology changes the world, but first, someone has to use it!

On the other hand, Cao Shen is also thinking, you e-commerce companies are fighting for development in front, and I will do traffic, cloud, and payment to provide you with an arsenal in the back, okay?

This way I can save some trouble.

So, Cao Shen started to do serious research.

The conclusion is, no!

Dongguo is now mainly B2C e-commerce, which is different from the original world where Milk Tea and Ma Papa together accounted for more than 70% of the e-commerce share.

Taotao Technology here accounts for less than 20%, while hundreds of other large and small B2C e-commerce companies account for more than 80%. In other words, the e-commerce market here is extremely fragmented.

Among B2C e-commerce companies, the top ten only have a combined market share of 20%. Moreover, they are very competitive with each other, and it is not clear who will win the game.

All platform-based companies pay attention to the scale effect. If e-commerce companies cannot expand their scale, increase their voice over sellers, and reduce their own costs, it will be difficult to make a profit. In the end, they will close down after burning all their money.

In other words, although there are hundreds of companies now, Cao Shen rushed to provide services and was very excited. But maybe there will be 50 companies next year, 30 companies the year after, and only a few companies in two years.

There will be fewer and fewer customers. Although the number of customers is getting bigger and bigger, when the number of customers is large enough, cloud computing may be done by itself. Even if it is not done by itself, Cao Shen counted on his fingers that his cloud computing will only have two or three big customers in the end. Is it just a lonely game?

Moreover, the sellers on these e-commerce platforms are not customers of Tongcao Technology. If they want to make some tools based on cloud computing and let cloud computing services fully penetrate, or even penetrate into the upstream industrial chain of sellers, it is basically difficult to control because Cao Shen has no voice.

So after thinking about it, I decided to do it myself.

So the question is, how to do it?

In the original world, Ma's e-commerce gave birth to a large number of excellent sellers. Under sufficient competition and profitability, they forced the supply chain to grow with them, allowing the entire supply chain to continuously upgrade its capabilities, giving birth to an efficient and low-cost manufacturing industry that is unbelievable to other countries in the world.

But now, there is no!

Taotao Technology is far less developed than Ma's back then, which leads to the fact that most of the products on Taotao are not high-quality supply chain products.

Therefore, if you do the long-tail market, the dilemma Cao Shen faces is that there are neither high-quality sellers to operate nor high-quality goods to support the supply.

Moreover, the current express delivery business in this world is really not good.

In the original world, the development of e-commerce has made the entire express delivery business advance by leaps and bounds. By 2019, nearly 70% of the express delivery business was taken over by e-commerce.

The speed of logistics is a speed experience issue in front of consumers.

But in essence, it is a delivery issue. The length of time will seriously affect the inventory turnover rate and capital turnover rate.

The faster the delivery, the faster the turnover, and the faster the feedback.

Ma Papa's initial logistics delivery was 5-7 days, and Milk Tea House achieved two days, which made the entire company's development speed significantly faster than that of Ma Papa. In the food delivery industry, the delivery time became half an hour, so food delivery developed faster.

Later, taxis and small yellow cars, a service was completed in more than ten minutes, and the development speed was even faster.

Therefore, if Cao Shen wants to surpass other companies and develop e-commerce, he must greatly improve logistics efficiency.

Now express delivery is about five days, which is an improvement from six or seven days a year ago, and it is also thanks to the development of B2C e-commerce. Now, Taotao Technology and a large number of B2C e-commerce companies actually use express delivery networks.

The reason why express delivery is not fast enough is, on the one hand, because Taotao has not developed. In the original world, Ma Papa's family accounted for more than 70% of the e-commerce express delivery business.

On the other hand, although the current B2C e-commerce claims to ship goods nationwide, it is actually very regional.

Because they basically sell standardized products, the things are homogeneous, and consumers will choose e-commerce companies that are close to them when they buy.

This leads to B2C e-commerce companies using more regional express delivery networks, which is not very helpful for improving the efficiency of national express delivery networks.

And precisely because of the regionality, many e-commerce companies also set up their own warehousing and logistics nearby, sharing part of the express delivery business.

This pattern also leads to another problem. E-commerce companies are clustered in regions. There are many e-commerce companies in first-tier cities or economically developed areas, and the e-commerce penetration rate in cities below the third tier is basically very low.

In other words, everyone is grabbing the same group of users, and the price competition is becoming more and more fierce, while the traffic cost is getting higher and higher.

Therefore, there shouldn't be so many B2C e-commerce companies, Cao Shen complained.

But unfortunately, e-commerce is hot, and investors are desperately spending money, which has become a concentration of entrepreneurship.

Everyone's development is similar, and it is hard to see who will become big. Every investor thinks it will be the one under his hands, so he continues to spend money.

Cao Shen analyzed it and felt that the conditions for doing the model of Dad Ma are really not met. The sellers, goods, and logistics are not good, and it is not something that can be improved in a short time.

Is it okay to do business with brand sellers?

Now many brand sellers have followed the trend and have Youxin official accounts. Can we directly provide them with sales tools so that they can sell things on Youxin through mini programs?

Then set up a logistics and warehousing company to provide them with services?

Cao Shen thought about it carefully and it seemed that it would not work either...

The B2C e-commerce boom has only been a thing in the past two years. Brand manufacturers have just "touched electricity" and have not yet mastered the e-commerce system.

Now B2C e-commerce is basically a purchase model. Sellers are suppliers who sell goods directly to e-commerce platforms, rather than opening their own stores in e-commerce to operate.

In other words, the current brand e-commerce has no ability to operate e-commerce by themselves, and they don't know how to sell goods online!

In the original world, the first wave of brand manufacturers who touched electricity and sold themselves were basically dragged down. Later, Dad Ma supported a group of people who knew how to do it and specialized in "agent operation" business, and then gradually pulled up the brand e-commerce business.

By 2020, Jack Ma already has nearly 900 agents in operation.

In fact, there are still many mature ones, such as Baozun, a comprehensive agent, Lily & Beauty, Yiwang Yichuang, a fast-moving consumer goods company, and Yuewei, a lingerie company...

But now, there is nothing, nothing!

E-commerce is difficult to do, and there seems to be no shortcut...

Now think about it, you can't just stand and talk without backache and complain about Taotao Technology's poor performance, it's really too difficult.

It was also born at the wrong time. Before it could gain a firm foothold and find a model for sellers to grow bigger and stronger, B2C came out to grab the job, making it very passive now.

After thinking about it, it seems that if you want to do e-commerce, you can only do it from beginning to end by yourself. It's really a huge project.

Now the question is, what to do first and how to do it?

Although the challenge is great, Cao Shen is very excited. How can he not be excited when he needs to burn his brain!