Author | Zhang Nianchao
Original title | Business inspiration from selling houses and building cars
I read an article today titled "The Dilemma of Great Wall Motors: There is no hot model after Harvard H6, the transformation to high-end is frustrated, and the overseas expansion is not smooth", and I think of it. The news about Evergrande and R&F making cars a few days ago is very interesting and worth learning from.
Great Wall is not the only one facing difficulties in the automotive industry. Why do companies engaged in real estate develop automobiles in a high-profile manner? Are they sure that the car will be better than the house? A series of problems are waiting for the market to test, and we can only wish them the best.
Evergrande Real Estate is one of the top three real estate companies in China. In addition to building and selling houses, it has also been successful in investing in the field of football. However, its investments in Evergrande Bingquan and Grain and Oil have not been very successful. There are so many bright spots, and now we are starting to invest in building cars again. If we look at it according to traditional business logic, when established car companies are facing market difficulties, they may not be optimistic. However, from the perspective of the new economy, this may be a good opportunity. After all, real estate has passed its golden decade. Especially in the context of the country’s multi-level control of capital inflows into real estate, cross-border new fields and borrowing ships to go overseas are both at the same time. It's a good idea. An engineer from BMW once said to me: "Electric vehicles are not cars, but electrical appliances. The future is smart electrical appliances. It will subvert the technical barriers and industrial chain of traditional automobiles." From this perspective, it is not difficult to understand Evergrande's motivation for making cars. In terms of business logic, in the face of new energy vehicles, the real estate industry may be much worse.
Traditional investment is nothing more than expanding production capacity and obtaining returns; in the new economic environment, the purpose of investment may become more complex, perhaps to obtain funding channels , drive enterprise transformation, obtain marginal effects, integrate resources and obtain traffic benefits, etc. As far as investment is concerned, its business logic is different from that of manufacturing.Especially today with the rapid development of the Internet, many technology companies have suffered serious operating losses, but their market value and stock price are very high. Those that are not listed are generally optimistic, and even receive relevant support and encouragement, such as new energy vehicles.
The market environment has changed, and all business logic has changed. From small to large is the trend, and from large to small is also the direction. For example, the country now promotes community convenience stores instead of large supermarkets. This is a typical evolution from large to small. There are also designer brands for clothing, high-end small categories of electrical appliances, and Vertu for mobile phones.
In general, the future industry will develop in the direction of liberating the labor force, and future sales will shift to a low-cost, light-startup model. Therefore, no matter how the market changes, business must still continue. However, for traditional industry distribution, the direction is from franchise to integration. In the future, it is not suitable to switch too many brands in the same industry, especially the agency of leading brands with large investment, the refinement, complementation and completeness of product categories, the precision and efficiency of consumption channels, and the separation of product use and purchase. Globalization is the new direction of the circulation industry, and there is a business model with many complementary small categories under one brand.
Evergrande has built cars, R&F has also built cars, but they are not expansions in the real estate industry chain. Why not dig deeper into the real estate industry chain, but enter a new field? Their business logic is very imaginative and valuable for thinking.
