Uncovering the park industry choice under the veil of great health

On December 1-2, 2018, the China International Health Technology Innovation Industry Development Summit was held in Chengdu, hosted by the China Association for the Promotion of Rehabilitation Technology Transformation and Development, and the Sichuan Investment Promotion Bureau*** Mr. Chun Liang, the Executive Director of Park China, as a speaker, was invited to participate in the parallel forum of the summit's health industry and urban development.

As this forum is related to the health industry and urban development, the invited guests include the leaders of the National Development and Reform Commission's Center for Urban and Small Town Reform and Development, as well as COFCO Real Estate, Fosun Group, BGG and Jindi Group, four traditional real estate companies involved in the health industry and related project development, and the eco-office service operator - NashSpace, and property consulting agency DTZ. Park China, as a professional investment bank in the field of industrial parks, was also invited to speak at this forum.

China Parks has always had its own knowledge and understanding of the healthcare industry and similar concepts and industry choices, but this forum did not start to talk about them for various reasons, so we would like to use this article to give a brief account of them, in order to share them with our peers in the parks field.

Big health and big health industry is very popular in recent years, according to some health industry research institutions, the scope and scale of its coverage is unimaginable, in addition to the traditional medical and pharmaceutical, bio-engineering, these have been trillions of dollars of industry, but also includes health food, health, health, health counseling, health care, sports health, family rehabilitation, and health concepts of real estate, tourism, agriculture, Clothing, leisure and so on, it seems that everything related to people's daily lives can be crowned with a big health industry.

But I don't know if you've noticed, whether it's the State Council's decision to accelerate the cultivation and development of strategic emerging industries issued by the State Council in 2010, or the National Development and Reform Commission's recent publication of the "Guide Catalog of Strategic Emerging Industries Key Products and Services" in 2017, there's no such thing as a major health industry.

It is also difficult to accurately trace where the concept of big health industry came from, but we have noticed that in 2011, Yunnan Baiyao took the lead in proposing the strategy of "New Baiyao, Big Health" in order to enter the field of toothpaste industry, and another case is that Guangzhou Pharmaceutical Group successfully recovered the brand of Wanglaoji in 2012, and immediately established the Guangzhou Wanglaoji brand. Another case is that the Guangzhou Pharmaceutical Group in 2012 successfully recovered the brand Wanglaoji, immediately set up the Guangzhou Wanglaoji Health Industry Company Limited, specializing in the operation of the red pot of Wanglaoji herbal tea, and put forward the Wanglaoji products as the core of the "big health industry plan.

These two pharmaceutical companies in the past production and operation of pharmaceutical products, never mentioned the concept of health, and when one of the toothpaste series into the daily chemical industry, the other not hesitate to fight the lawsuit to recover the original has been authorized to cede the brand of beverages, have been put forward the concept of health, this is why?

Obviously this is all for marketing, in order to expand the market and win the eyes of consumers, and to carry out business means. Pharmaceutical companies into other industrial sectors, in fact, can be crowned with the concept of health, which undoubtedly has an inherent advantage, and is a descending blow, but if only interpreted as a health product, it is still difficult to cause the market **** Ming, after all, at that time, the concept of health has been used, the Sun God, three plants oral liquid, cardinal K, Haci, Angli one, ants and other products that are now basically forgotten by the market at that time. At that time in fact, consumers were already quite disgusted. So the concept of "big health" came into being, and it also became a drug companies do not do drugs, but to do other products to extend the "cloth of shame", after all, although the pharmaceuticals seem to have a large market demand, but in fact it is a smaller industry category, especially in the tightly regulated area of health, it is necessary to do a lot of things. In order to gain access to the huge market, pharmaceuticals are actually a relatively small industry, especially in the heavily regulated health sector, which requires a huge investment in R&D costs and an unpredictable development cycle. Therefore, once a pharmaceutical company jumps out of the constraints of the pharmaceutical industry and interprets its development strategy in terms of the concept of "big health", the choice of industries to be covered becomes very flexible, and if it is able to penetrate the traditional market in any industrial node, and replace the old industry leaders with products packaged under the concept of "big health", it will be equivalent to opening up a brand new market for itself.

If big health can be an industry, then all the adjectives describing the state of mind and body, as long as you add a "big" word can be an industry, than "big safety industry, big happy industry, big sweet industry, big happiness industry, big freedom industry

Just as health is a marketing concept that plays a role in most industries related to the daily lives of residents, health also plays a role in marketing in relation to industrial parks.

For example, if a developer goes to acquire land, it is essentially a marketing effort to acquire the scarce resources of the government's land supply, so it needs to be packaged with a variety of marketing concepts, such as big health; and then, if the government invests in or develops the lease and sale of park properties, it is also a marketing effort to transfer the ownership or use rights of the enterprises that are located in the park, which needs to be packaged with a variety of marketing concepts; and finally, in the operation of the park itself, the ongoing lease and sale efforts and the marketing of its products and services are also important. Finally, the operation of the industrial park itself, its continuous rental and sale work and the value-added services provided, also need to be targeted at the face of the segmentation of the industry to carry out marketing, so also need to be packaged marketing concepts.

In the above marketing process, if you can top a big health industry hat, there will be a lot of stories to tell, there is an infinite market space can be imagined, to facilitate our marketing work. However, it can be predicted that in the park construction and operation, the concept of a big health industry to speculation, the actual situation of its landing is bound to be very different from the picture painted, and industrial parks in the final analysis is to continue to operate, which is different from those who are sold through the speculative marketing regardless of the residential real estate.

So whether it's the government's industrial policy, or the development and operation of industrial parks, or the location of our businesses, we need to be able to identify the differences between marketing concepts and industrial substance, or else we may lose ourselves in various marketing concepts, just as in the story of "oil found in hell".

Industry

The concept of industry has a clear definition, and can not be used arbitrarily, in the "Industrial Economics" of this applied economic discipline, the industry is so defined:

Note: the above two points are very good to understand, the third point of the so-called stages of economic activity refers to the flow of the entire process of goods, including R & D and design, supply of raw materials, energy and infrastructure, processing and manufacturing, marketing and distribution, after-sales service, and so on. processing and manufacturing, market distribution, after-sales service, and so on.

Obviously, the so-called big health industry itself does not belong to any of the above divisions, as a beverage herbal tea and daily products of toothpaste, is not the same class of goods, and health food, medical equipment and pension real estate between there is no similar technology and process, even if it is a medical institution and biomedical enterprises, which seems to be closely related to the two industries, in fact, only business intersection. The company's business is also only intertwined in the business, in the operation of the two different areas and logic.

So how do we determine whether it's a marketing concept or an industrial substance? Just through the above definition of industry in Industrial Economics, we are still easily confused by the complexity of the marketing concepts around us, and here is another tool and theory that allows us to quickly identify.

All marketing concepts are simply to cause customers to desire or to avoid or both, to get healthy and to avoid suffering aptly illustrates this theory, in short, desire and avoidance are the embodiment of demand, there is a market where there is a demand, but the demand and the market is not the industry, to be able to satisfy the demand and the market is the industry.

With this identification tool, we can easily identify marketing concepts and industry substance. When we hear a word or a concept, we can put this word into the above diagram for comparison. Is this word depicting demand or pointing to a specific product, service, or infrastructure that supports the product or service?

For example, senior living is a demand, so it is not an industry, but senior living real estate is an industry because real estate is the spatial infrastructure that underpins senior living products and services. There are also some conventional concepts that actually mislead our decision-making, such as "culture industry" , what is culture? In the broad sense culture is the sum of human material and spiritual civilization, covering all economic and political and all spiritual activities; in the narrow sense, culture is the social needs on which human beings rely for survival. Culture originates from society, society originates from the division of labor and cooperation and synergy, for independent individuals, culture is actually a demand, to meet this demand is the industry. What are the specific industries? For example, literary and artistic creation, music creation, photography, dance, industrial design and architectural design, etc., these can be said to meet the cultural needs of the industry, but as the development and construction of industrial parks or operators, we need to pay attention to the introduction and service of the above specific industries in the end? Instead of vaguely generalizing cultural industries, it will be difficult to guide our specific work. For example, music creation requires space form, hardware facilities, software services, distribution channels and copyright protection, which is completely different from industrial design or literary creation. Assuming that we want to build a music town or a music industry base, we know very well the direction of the industry we want to face, as well as the spatial features and services we need to provide, and once we face the cultural industry or the so-called culture and creative industry in general, it will be very easy for us to take the cultural industry into consideration. Once we generalize to face the cultural industry or the so-called cultural creative industry, then it is easy to make the music town or music industry base into a commercial street selling music products and services, and the essence of its industry will also become retail industry.

All of the above is based on the development and construction of industrial parks and operational scenarios to explain the differences between the marketing concepts and the substance of the industry, the reason why we have to deliberately understand and identify, in order to better development, construction and operation of industrial parks, rather than playing word games.

Of course, all the parks and spaces carrying the industry is not static, or even a blend of multiple industries, and constantly evolving, but as an industrial park operator, in the early stages of construction and the later operation and management, it is always necessary to make clear that we are targeting the core industry is what? Which industry is the ecology we need to focus on building? Do not let a bunch of marketing concepts to the mind, so that the park serving the industry finally became a land or marketing gimmick, and finally rely on the sale of houses to gain revenue.

The reason why industrial parks have their value of existence is to be able to meet the needs of specific industrial segments, reduce their costs and improve their efficiency, so when we face certain words with industrial suffixes, we should have a clear understanding of the marketing concepts attributed to the marketing work, and industrial concepts attributed to the landing service.

So how do parks choose industries and create value for such industries?

First of all, we have to understand the two most important factors for the survival and development of industry, one is cost, the second is efficiency, only low cost and high efficiency at the same time, in order to win the market. And all the cost and efficiency depends on two factors, one is the division of labor, the second is technology, in the same technical conditions, specialization and division of labor is the essence of reducing costs and improving efficiency.

Adam Smith (Adam Smith) divided the division of labor into three kinds:

The second form of division of labor and the third form of division of labor is the industrial park is committed to creating and building, so a park in doing industrial selection or industrial positioning, the first consideration is the node of the resident enterprises in their industrial division of labor, which they need to be supported by other industries and social division of labor. Secondly, it is also necessary to consider whether there is any mutual promotion of the specialized division of labor among these enterprises.

Let's use a figure to understand the industrial choice of the park. From the above figure, we can see that there are two reference quadrants for the park to make industrial choices, the first one is the park foundation, and the second one is the enterprise synergy. The base of the park refers to the park itself and the sum of social infrastructure services, such as the spatial form of the park's property, water, electricity, gas and other energy sources, transportation and means of transport, distance from raw materials and markets, industrial policy and other relevant factors to build the basic functions of the park. Enterprise synergy refers to the synergistic effect between the upstream and downstream enterprises of a certain type of industry.

For example, the platform-based e-commerce industry, which requires a very high degree of synergy with other external enterprises, from design, production, to sales logistics and after-sales, it can be said that the platform-based e-commerce is actually integrating a number of other enterprises to achieve their core competitiveness, so the platform-based e-commerce industry, enterprise synergy operation capabilities require a high degree of, but the e-commerce itself is not a high demand for the park's infrastructure, only the need for office space, network bandwidth, and the need to build the park. It only requires office space, network bandwidth and corresponding transportation facilities, and does not require the park itself to provide special energy, raw material supply and logistics.

However, it is important to note that similar platform-based e-commerce industries often have core competencies in industries other than Internet technology, such as lower-cost supply channels, more convenient logistics, or the distribution of rental and sales channels in the name of the ****sharing economy. In short, the enterprise synergy of the industry, its influence is also greater, the park can be introduced through the introduction of such industries to drive the development of other industries, but such industries because of the park's basic requirements are not high, not enough adsorption, so it is easy to transfer to other parks with lower costs.

Another example is the small and medium-sized manufacturing industry, whose requirements for the park's foundation are relatively high, in addition to low-cost property space, the load on the plant, transportation capacity, energy and waste disposal, etc. There are certain requirements, and such enterprises have a strong adsorption to the park, which can be said to be the park's leasing of a reliable cash-flow industry, but the synergy of such industries is not very high, and they only cooperate with very few external enterprises, and do not need to go out on a wide scale. They work with only a few outside companies and do not need to integrate outside companies on a large scale.

With this illustration, parks can choose their industries more rationally, and can more easily understand the relationship between the industry and the park, as well as the relationship between the supply chain nodes within the industry. This example can also be applied to the government's industrial policy and investment attraction process by replacing Park Base with City Base.

The above are some superficial thoughts on the choice of park industry through the summit, there are still many factors to be considered in the actual choice and matching of park and industry, and in general, it is necessary for park operators to clarify the concept, innovate the method, and find a solution that is more in line with the law of the market.