Author: Qin Qin Original: Chutou Finance (chutou0325) Foundries that have been behind the scenes for many years are accelerating to the front.

Author: Qin Qin

Original: Deep Eye Finance (chutou0325)

Foundries that have been behind the scenes for many years are accelerating to the front.

Since this year, news about the listing of foundries has continued one after another: in January, Jiangsu Taimus Knitting Technology Co., Ltd., the foundry of Decathlon , was listed on the Shenzhen Stock Exchange; in February, it was listed on the Shenzhen Stock Exchange for Philips , Bear and other well-known electrical brands. OEM Biyi Electric announced the winning result and will soon be listed on the Shanghai Stock Exchange motherboard; in June, Xiaomi Delma Delma IPO was held.

Of course, this hardly represents the large-scale rise of Chinese foundries, and it is even harder to compare with the glory of the reform and opening up more than 40 years ago. The emergence of the private sector economy just provides new ideas and new directions for the transformation of traditional factories in the new era.

Recently, at the MENLO 2022 conference, Youzan announced the upgrade of its business from "store marketing solution" to "private domain operation solution", and released the first artificial intelligence engine based on private domain scenarios Youzan Jarvis .

As the brand’s “strategy behind the scenes”, Youzan is helping Chinese factories quietly stage a counterattack.

01 The ups and downs of Made in China for 40 years

The most glorious moment for China's manufacturing industry was during the period of reform and opening up.

In 1978, the establishment of Taiping Handbag Factory kicked off the development of domestic OEM companies, and "made in China" became a representative label. Since then, a large number of foreign brands have come to my country to build foundries, attracted by low-cost labor, and the manufacturing industry has prospered.

At that time, the huge industrial chain of consumer electronics and clothing, shoes and hats became the two poles of manufacturing in China, and China was also called the "Beast of the Far East".

The golden age of China's manufacturing industry is undoubtedly the best opportunity for factory owners to create core technologies and transform and upgrade. Unfortunately, only a small number of people have awakened. More foundries have not realized the importance of technological innovation and have chosen to continue to trade cheap labor for growth. China's factories are beginning to diverge.

Entering the 21st century, giants represented by Foxconn and Shenzhou International rely on scale and innovation to determine the survival rules of top OEM companies and have absolute "right to speak", while a large number of other small and medium-sized OEMs Enterprises are in an existential crisis. Among the latter companies, there are many well-known brand foundries that we are familiar with.

Lianjian Technology, one of the OEMs of Nokia components, was in trouble due to the acquisition of Nokia by Microsoft . The warehouse is full of brand-new mobile phone buttons prepared for Nokia, which are difficult to sell. The same is true for Shenghua Technology, which provides iPhone4s front panels for

and apple . Since Apple has adopted the in-cell mode for panels since the iPhone 5, the traditional panel production line that Shenghua Technology invested heavily in has to accept the fate of being idle and gathering dust. The change in the

market trend lurks too much uncertainty. Just like before the birth of Apple, no one could have imagined that there would be such an epoch-making product that would continue to lead the mobile phone market. When these uncertainties fall on consumers, they may be new fashion trends, but when they fall on foundries that do not have core technologies, they become a catalyst for the changing times. The transformation of

foundries has reached an urgent stage, but there are more than one obstacle standing in the way.

02 "New test questions" for traditional factories

In the new consumption era, a large number of cutting-edge brands have emerged that are good at marketing but neglect the supply chain. Their emergence has undoubtedly injected new vitality into foundries.

But this is still difficult to solve the urgent needs of some factories. At present, raw material prices and labor costs are rising. Except for a few leading factories that are able to cope with the changes, most small and medium-sized factories are facing threats to their survival due to low bargaining power.

Looking further, it is not easy for traditional factories to complete the transformation in the new era.

On the one hand, the brand power of the foundry is weak, and it is difficult to obtain the same high gross profit as the toC brand just by relying on the Made in China label. Most factories have still not gotten rid of the "tool man" attribute and are lingering near the low-profit survival zone.

Lianjian Technology and Shenghua Technology, which were once famous, lacked innovative core technologies and found it difficult to rely on big companies for a long time. Once the market changes direction, they will be submerged in the waves of change.

essentially reflects the problem of the foundry’s weak brand power. Because they do not have the ability to talk directly to consumers, they are quite passive in every aspect except OEM. It does not have strong bargaining power, and it is difficult to obtain the high gross profit of selling brands.

Taking the cosmetics industry as an example, industry insiders revealed that the gross profit margin of the cosmetics OEM process is only about 10%-30%. However, in the brand sales process, the sales can be as high as 70%, especially for leading brands such as L'Oreal and Estee Lauder .

If factories want to shorten the distance with C-end consumers, the private sector economy is actually a good choice.

Under the general trend of the integration of public and private domains, the importance of the private domain economy has become increasingly prominent. For factory brands, the first step in transformation is to follow the development laws of the private sector and establish a "consumer-centered" operating philosophy.

This actually coincides with Youzan’s newly upgraded business philosophy. Youzan’s new “private domain operation model”, is consumer-centered, opening up the consumer journey of “connection, reach, conversion, loyalty”, also clarifies value creation, key indicators and key points of each link Actions to help customers connect online and offline business scenarios and enhance consumers’ end-to-end experience.

On the other hand, the factory's long-term production model makes it difficult for it to establish a set of toC methodology in a short time. From market insights and production planning to brand building and customer service, these are all new questions facing the factory.

The private domain economy does provide direction and ideas for the transformation of foundries, but not everyone can play with the private domain economy. Factory brands have to face toC consumers directly, and they even have to start polishing the basic skills.

On the market side, there will no longer be demand orders from brands, and factories need to make their own decisions based on changes in consumer trends; on the production side, toC order quantities are not only small but also not concentrated, which requires factory production and sales estimation, inventory management and other capabilities. It is a new test; on the brand side, how to plan marketing expenses during the brand building period to ensure the delivery effect; on the client side, how to respond in a timely manner to a series of trivial needs such as logistics and consulting.

Therefore, for factory brands in transformation, they need someone to provide full-process guidance so that they can more quickly adapt to this new era of rapidly changing consumer demands.

Based on factors such as merchant industry attributes, development stages and business goals, Youzan has launched five core services for the three stages of merchants' private domain operations "basic training, private domain startup, and private domain operation consulting": basic delivery Services, e-commerce private domain launch services, store private domain launch services, brand private domain management consulting services, store private domain management consulting services.

Taking the national edible oil brand Arowana as an example, Youzan helped it develop a "three-step" strategy for private domain operations, including building a customer acquisition system, building a refined private domain operation model and exploring Innovate private domain value model. With the help of Youzan's method, Arowana's annual sales are expected to exceed 10 million, and it has successfully created a one-stop healthy food service system for multiple scenes and groups of people.

When the value of the private domain economy has been verified, the transformation of Chinese factories has also ushered in a new dawn.

03 The private economy brings a "new dawn"

The private economy is not simply digital, nor is it a single-link tool. It requires both strategies and precise play methods that can form a closed loop, as well as effective full-scenario endowments. product portfolio. In addition to providing the overall idea of ​​the brand DTC solution covering the entire process,

also provides brands with product portfolios such as Youzan Advertising, Youzan Micro Mall, Qiwei-Shopping Guide-CRM, and marketing canvas. For factory brands, this is more effective than their lack of direct-to-consumer experience.

"Siliya Group" in Yibin, Sichuan, is a raw material supplier for well-known brands such as Luolai , Monna, Kingba , etc. It is a typical factory brand.In the transformation process of wholesale and retail integration, Youzan chose to start from employee distribution, leveraging marketing nodes such as store celebrations, and using Youzan’s salesperson function to bring in new customers from the old to achieve rapid customer expansion and conversion in the private domain. It is understood that Siliya’s distribution GMV exceeded 100,000 during the event, and the current annual private sector output has reached one million. Although

is distributed by employees, Youzan still does not forget the responsibility of "the master leads the door." Youzan will work with customers to complete the planning of the employee kick-off meeting in the introduction stage, distribution business training in the proofing stage, and benchmarking teams and individuals in the promotion stage. We will also rely on Youzan's strong salesperson product capabilities to help merchants achieve business goals in stages. .

Even if "cultivation depends on oneself", Youzan will protect it and save the brand from worries. As mentioned before, Youzan not only provides solutions, but also provides brand private domain management consulting services and e-commerce private domain launch services. It implements with practical actions that "you only need to focus on managing your own customers, and all other complex matters will be taken care of." Leave it all to Youzan" concept.

In addition, Youzan Jarvis, who made his debut at the press conference, will also become the "right-hand assistant" of the factory brand in its transformation.

Youzan Jarvis is the first artificial intelligence engine based on private domain scenarios. It includes artificial intelligence , big data and process automation and other capabilities. The core goal is to make Youzan's products smarter and more reliable, and to better open a variety of technical capabilities to merchants.

The advantage of artificial intelligence is that it not only facilitates brand operations, but also allows continuous iteration through self-learning. Youzan Jarvis has built-in many models and algorithms based on the actual operation of the private domain. Not only can brands use it right away, but it can also be continuously improved and upgraded with every subsequent use, helping brands iterate on the models that best suit them.

It can be said that Youzan Jarvis can give brands reasonable suggestions in terms of sales, operations, services and later long-term operations, helping brands improve the efficiency of private domain operations.

04 Conclusion

At present, economic development urgently needs to inject new vitality, and the transformation of traditional factories in the new era is increasingly important. This actually means that Youzan, who develops good strategies and plans for the factory brand, has also shouldered a heavier historical mission.

What is certain is that the private sector economy will definitely change China’s factories, and Youzan will become an irreplaceable “strategist behind the scenes.”