The traditional industry will really be subverted by the Internet

First of all, let's sort out the two main modes of combining traditional industries and the Internet:

Internet companies take the initiative to enter traditional industries

The typical representatives of this type are DDT and Balance.

Dropshipping cultivates users' habits and fosters the market scale by offering free or even subsidized services, and then connects the demand for cabs with the demand for hitchhikers to make both passengers and drivers sticky, and finally these people can't get away from the cab software to take a cab, and they are tamed by the convenience of mobile payment.

BalanceBalance solves the problem of long returns and poor visibility of traditional financial products. It minimizes the transaction threshold and transaction costs, and greatly makes the returns visible and tangible. The same captured thousands of users, a time of universal fund financial fever.

This type of combination of **** the same characteristics is, by solving the traditional industry's inherent pain points, with free strategy to rapidly expand the market, and finally from the market dominance of direct or indirect profit.

Traditional companies set up IT departments to embrace the Internet

The typical representatives are Ping An's Lujinshi and Suning's e-commerce.

Ping An, as a Fortune 500 company with strong capital power, has an advantage in its knowledge of the financial sector and its accumulation of channels.

Suning's e-commerce was once very strong, Suning's core advantage in doing e-commerce is the channel advantage, brand awareness, and the understanding of users accumulated over the years.

This type of combination of *** with the same characteristics is to rely on the original brand advantage, leading existing users to accept the concept of Internet-based products.

Which model is better suited to the times?

The current situation can be seen through a few trendsetters. First of all, Ping An Bank's Lujinshang, Ping An Bank's business mechanism, compared to the system of banks is considered lively and aggressive. Even so, Lu Jinshou is little known to the world, and almost no one around to use. When I wrote this article, I deliberately went to the official website to understand, and found that the whole product packaging introduction, not at all attractive, for the incoherent 10% -15%, the user is really willing to complete the operation of the high cost of the "registration process"?

Looking at Suning's e-commerce, the advantages of traditional stores have become its baggage, which is inconsistent with the operating costs of the two products, to achieve price uniformity is really a problem. If you don't unify the two interests of each other. Are pro son, Suning electricity supplier is also difficult to forge ahead to squeeze subversion of the traditional stores of established interests, which is where the contradiction lies.

In contrast, Ali's balance treasure has become the world's top ten funds, the group of people financial management into the wind. Tencent's drip taxi has also raised the user dependence, do not use taxi software can not hit the car.

Overall, it seems that the traditional industry's Internet activity is more of a thunderstorm, the rain is small, made into a finger can be molded. The reason I think is: the traditional industry is bound by the traditional interests of the model, in the new model is not able to break the wrist, to do a real change; Secondly, due to the inertia of the traditional business philosophy of thinking, the larger the volume is not easy to turn around, into the dilemma of the innovator, difficult to extricate themselves.

So in this game of Internet companies and traditional enterprises, Internet companies take the initiative to enter the traditional industry model advantage.

What kind of industry will be subverted?

First of all, industries with high gross profit and high capital turnover will be the first to be invaded, followed by the long-tail low gross profit industries.

From the industry classification, entertainment, service and retail will be the first to be Internetized. The main role of Internet thinking is to act as an intermediary between the product and the user, maximizing the cost of stripping out intermediate channels, improving the experience process, and promoting the role of user loyalty. As the balance of the treasure, do not have any fees, deposit and withdrawal, no barrier to entry is a typical example.

Of course, the traditional industry will not die out, the balance of the treasure is strong, but also to cooperate with the fund company, the drop taxi cattle, but also will not set up a team of drivers, and will not go to build cars. Because entering these markets is not something that Internet companies are good at, and the input-output ratio is very low.

How should traditional industries help themselves?

As I said earlier, in the process of Internetization, the traditional industry out of a relatively passive position, although not dead, but the interests of the objective share will be taken away. So how should traditional industries save themselves?

Real self-subversion

HP is a good case of tenacious inventory in the face of subversion. When inkjet printers came along, HP was the leader in the laser printer market. Inkjet printers were eyeing the home market with their cheaper price tags and smaller footprints. Traditional laser printers also have the advantage of low cost per print and printing efficiency. In the face of such a situation, HP's approach is to set up an independent inkjet printer subsidiary, and their own laser printers to form a head-to-head confrontation, independent of their respective KPIs, so the result is that no matter what the market trend, HP will not be abandoned by the times. The key here, of course, is not simply to create a subsidiary, but to have the courage to let that subsidiary operate independently and use it to go head-to-head with the company's established interests.

This example is like the Internetization of traditional companies today, which will eat into some of the established interests of traditional channels, harming the company's short-term interests, but in the long run it's a real trend. If a traditional company dares to go head-to-head with its past self, and completely reinvents itself, it may be able to kill its way out.

Being a good supporting actor

Since the Internet has its own advantages in intervening in the traditional market, and it can't be separated from traditional companies, it's actually a good choice for traditional companies to be a good supporting actor in it. Such as Wanda to do e-commerce, before the fanfare had engaged in a time, but light thunder does not rain. Reorganize this year, combined with Tencent and Ali, is a wise decision. The two sides each offer their own professional advantages in order to form a climate. Of course, the key to this combination, depending on whether Wanda is able to rest assured to do a good supporting role, if only the surface of the cooperation, the bottom of the bottom still can not let go of the face, seize the dominant not to let go, the result is still a serious internal friction, it looks very beautiful, but can not eat meat.