Original title: after the reconstruction of cognition, the sinking market increment excavates the "trilogy"

Article | Internet jianhu

From the well-known "Little Apple Inc" in the past, to the "most dazzling national style" that triggered the whole people's "hip-hop" to now, such as "Disco of the Wild Wolf", a huge, mysterious sinking market has been recognized by people, and in the eyes of investors, the cognitive subversion brought about by the growth of more and more has pushed the sinking market in front of investors.

Then, investors realize that if the market below the third tier is divided into a sinking market, then, in terms of population, this market is twice as large as that of first-and second-tier cities in terms of population, and in terms of total GDP, the sinking market with long tail is no less than that of first-and second-tier cities, so investors realize that the sinking market is a new increment in the stock era.

In November this year, People's Daily published a series of reports focusing on the sinking market, saying that tapping the sinking market is of great significance to promoting the formation of a strong domestic market, continuing to play the role of consumption as the first engine of economic growth, and promoting high-quality economic development.

In a speech at the 2019 annual meeting of Chinese business leaders, Zong Qinghou, chairman of Wa, said that in the future, it will need to rely on 1 billion of the less well-off people to boost domestic demand.

"China has a middle class of 400 million, and their consumption has supported the rapid economic development in the past, but now they have what they should have, such as houses and cars, so what they can really stimulate domestic demand is the remaining 1 billion people who are not very well-off." Zong Qinghou said in his speech: "if each person increases the consumption of 10,000 yuan per year, that is, 10 trillion of the consumption, it can boost the consumption."

From the rise of Pinduoduo to the sinking market, to the sinking of the Internet giant and the recognition, encouragement and expectation of the state media, the sinking market gradually bears the pull of the new consumption growth in the era of stock economy. In the domestic economy from "exogenous growth" to "endogenous growth" environment, the sinking market gradually from the edge to the mainstream.

Taking root and sinking the market requires the cognitive reconstruction of "de-dogmatic".

Previously, according to the statistics released by the enterprise survey, the number of users of China's sinking market exceeded 600 million, and the population of first-tier cities in the north, Shanghai and Guangzhou accounted for less than 6% of the country's population, while in 90% of the country, there are more than 2000 counties and nearly 40, 000 townships, and the potential of this market has not been fully tapped in many fields.

Under the domestic urban-rural dual system structure, the consumer market between first-tier cities and cities has different consumption characteristics, and the consumption itself is also dynamic, therefore, the structural difference leads to the great difference between the first-tier consumer market and the sinking market.

In the observation of the consumer market in first-and second-tier cities, people sum up the universal laws such as "scale effect" and "28 law", but in the sinking market, there is no standard answer is the real answer given by the sinking market. Behind this fundamental difference is the complexity and diversity of the sunken market population.

Therefore, taking root in the sinking market requires a "dogmatic" re-understanding of the diversity and complexity of the sinking market, and the key to understanding the sinking market lies in the depth and breadth of understanding of the sinking people.

From the perspective of the composition of the population in the sinking market, there are mainly young people in small towns, silver-haired economic people, new town residents and well-off families in rural areas, but in fact, due to the influence of factors such as differences in income levels and educational backgrounds among different families and individuals, even among different individuals of the same population, there may be great differences in consumption concepts and habits.

From a vertical point of view, the sinking population is not limited to third-and fourth-tier cities, there are also sinking people in first-and second-tier cities, and there are also consumption upgrades in the third, fourth and fifth-tier markets. therefore, the first-tier market and the sinking market are commercially separated and integrated.

Horizontally, in the sinking market, the correlation degree of people in different cities is relatively low, which determines the differences in consumption concepts of sinking people in different cities due to the differences in cultural background, customs and economic development level.

Therefore, in the view of the Internet ID:VIPIT1 team, the sinking market is actually a decentralized market with low external relevance of "decentralization". In popular terms, the domestic sinking market is more like a "sinking market collection". Therefore, it is relatively easy to succeed in some areas where "sinking commonness" is obvious.

Take the online education industry as an example, due to the scarcity of high-quality educational resources in third-tier and lower-tier cities, parents in third-and fourth-tier cities begin to be willing to spend more money on their children's education investment due to educational anxiety. Online education tracks have "sinking commonness", making it easier to integrate scattered sinking markets.

In addition, the sinking of consumption and the upgrading of consumption are not completely separated, the so-called separation is the separation of front-line consumer groups and sinking consumer groups under cognitive differences.

In fact, the sinking market is synchronized with the consumption upgrading of the first-tier market, and the consumption upgrading of the first-tier market is the unity of perceptual value and rational value, and sometimes there is even more demand for perceptual value, such as Haidilao International Holding's temperature service. and the value satisfaction brought by light and extravagant brands, while the consumption upgrading of the sinking market is the pursuit of the ultimate performance-to-price ratio.

Deeply explore the "trilogy" of sinking market increment

After the reconstruction of the cognition of the sinking market, we can further find that in order to fully explore the quantity of the sinking market, we need to go through three "sinking" stages with increasing capital intensity: from the sinking of pure online products to the "ivory mountain model" of the sinking of capital and services and the monetization of ecological resources in the final stage.

First, the sinking of pure online products

Pinduoduo released its third-quarter financial results on Nov. 20, which revealed that Pinduoduo had a total of 536.3 million annual active users, while revenue, GMV and annual active user growth were at an all-time low.

Pinduoduo's US shares fell 20 per cent on the day of the announcement. Behind the slowdown means that Pinduoduo, as the number one e-commerce merchant in the sinking market, has basically achieved coverage to the population in the sinking market, and after that, Pinduoduo will continue to "drive into the Fifth Ring Road" to seek new growth space.

Qutoutiao, the second quarter financial report shows that the number of daily active users in that quarter increased by 207% compared with the same period last year, and the average daily use of the market by the number of daily active users was 60 minutes. The average daily use of the market was 62 minutes in the last quarter and 63 minutes in the fourth quarter of 2018. Compared with the data of the previous quarter, as the mobile Internet traffic dividend gradually disappeared, the growth rate of Qutoutiao's users slowed down, of which MAU and DAU increased by only 7.2% and 3.2% respectively, and the average daily use time of daily active users was lower than that of 62.1 minutes in the previous quarter. By the end of the second quarter, the integral cost of Qutoutiao's daily active users was down 40.6% from the same period last year, 25.8% from the previous month, and has declined for three consecutive quarters.

The third-quarter results were slightly better than before, but were immediately shorted by WolfpackResearch, a short seller in New York. "our analysis and field due diligence show that about 74 per cent of Qutoutiao's income in 2018 is fake, and nearly 78 per cent of his current cash balance does not exist," the report said.

Kuaishou Technology, due to his huge size and being in a short video tuyere, has not obviously slowed down, but his anxiety has undoubtedly been revealed. For the second spring of traffic, he launched the super-fast version and heavily sponsored the Spring Festival Gala, digging deep into the sinking market.

Although the three giants of the sinking market cut into different fields, they all have an obvious characteristic, that is, the mode is relatively light, and pure online operation is dominant. With the exhaustion of pure online flow dividends in the sinking market, the sinking market giants are facing growth difficulties, and it is also difficult for pure online products in other areas to rise.

Today's sinking market is about to enter the second phase.

Second, the deep sinking of capital and services (supply chain, operation)

The sinking of capital and services has been started since investors entered the county seat. After the continuous improvement of social infrastructure and the high penetration rate of mobile Internet, the relatively scattered and separated county economy and town economy show signs of capital sinking.

Taking local life services as an example, the development of Meituan ele.me in the county seat is actually a successful example of the successful infiltration of capital and services into the sinking market, and in this process, the originally scattered sinking market has been reunited, making it possible to scale and efficiency.

As a result, the sinking market began to get more attention, and at the same time, the capital intensity of the sinking market increased. The giant accelerates to enter the market, and the competition of sinking market also enters the stage of deep competition such as supply chain and operation.

At this stage, it is possible to give birth to enterprises of the same magnitude as Pinduoduo in other areas such as online education. There is a saying in the education industry: English has created New Oriental Education & Technology Group, mathematics has achieved learning and thinking. And the next unicorn may be hidden in the blue sea of the big language.

The big language track, which has been very hot in the past two years, is most expected to rise in the sinking market, and whoever occupies the big language track is most expected to win the giant.

After the education reform, the degree of differentiation of the college entrance examination is mainly in Chinese, not only the difficulty of mathematics and English is reduced, but the difficulty of Chinese is improved, but also the Chinese level of students will be examined in all subjects. Chinese is gradually becoming the subject with the highest score / the highest degree of differentiation.

And Chinese is a strange subject, unlike Mathematical English, which can be promoted rapidly in a short period of time. What is needed is to cultivate it from an early age and develop a good habit of reading. Parents in big cities have a relatively high level of education, and they also have the opportunity to improve their cultural literacy. Relatively speaking, they have a good Chinese foundation and rise abruptly based on their accumulated strength. Under the pressure of going to school, students in big cities have a higher proportion of getting high marks.

For example, in the small county where the composition of the college entrance examination in Zhejiang Province was VR in 16 and the fifth or sixth line in 16, how many students have experienced VR equipment, and how many students have heard of VR technology?

Subjects such as English and math are not closely related to reality, and with talent and diligence, students in the sinking market still have a chance to stand on the same starting line with children in first-and second-tier cities. Nowadays, with the education reform, the difficulty of Chinese examinations has soared, not by three years of hard study in senior high school, but by accumulation since childhood, but the more the market sinks, the more parents attach importance to education. After all, they have a chance to go out only by examinations.

Therefore, the big language track, in the sinking market is the real rigid demand, if only one tutoring class, then it must be Chinese.

The education industry is a mode of integration of online and offline, which requires extremely high content, and the mode is extremely middle, and pure online flow thinking is impassable, as exemplified by the failure of BAT in the field of education.

Therefore, in the view of the Internet jianghu team, after the sinking troika of Pinduoduo, Qutoutiao and Kuaishou Technology, there will be a deep sinking of capital and services (supply chain, operation), focusing on the field of education.

Third, the "Ivory Mountain Model" of monetization of ecological resources.

In fact, there are not only flows and markets in the sinking market. As an important part of the sinking market, the rural market has been neglected by the Internet for a long time, and the success of Puduo is only the beginning of the release of the consumption potential of this "invisible growth space".

At the macro level, the main problem facing the domestic economy is overcapacity, and there are two ways to solve it: one is to export to the outside world, and the other is to digest the growth of domestic demand. corresponding to it is the macro-level policy level of "Belt and Road Initiative" strategy and "rural revitalization" strategy.

In this sense, Pinduoduo's coverage of the sinking market is essentially the expansion of e-commerce channels in the process of transferring excess capacity to the sinking market.

The ceiling of the sinking market is the ceiling of the purchasing power of the sinking people, so the key to releasing the potential of the sinking market is how to release the purchasing power of the sinking people.

Of course, agricultural products are only part of the vast number of ecological resources. when economic crops, economic forests and other ecological resources can further realize the transaction of the secondary market through monetization and securitization under the principle of collective economy, the sinking market capital density increases and the collective economic purchasing power increased by ecological resources investment, so as to realize the virtuous circle of sinking market economy.

The essential reason for the great consumption potential of the city is that the city has a high degree of monetization and the consumption power is transferred to the centralization of the city under the scissors difference between industry and agriculture. Under the policy guidance of the rural revitalization strategy, in the future, through the monetization and securitization of ecological resources, it is expected to achieve the release of rural consumption potential, so as to further realize the consumption upgrading of the sinking market.

The Internet jianghu team believes that the key to fully releasing the purchasing power of the sinking population lies in monetization and securitization of "ecological resources", increasing rural purchasing power, and realizing the sinking of "purchasing power," so as to expand the consumption potential of the sinking market step by step. in order to achieve the further release of the vitality of the sinking market economy.

In the popular TV series "country Love" in recent years, there is such a passage in which the secretary of Xiangyashan Village Guo develops rural e-commerce, and Liu Neng is chosen as the "village waiter". Liu Neng hung the mountain goods of the Guangkun family, the dried bean curd of the Xiaomeng family, and the flowers of the Zhao Sijia family to the same town of 58tongu. The water of Ivory Mountain was turned into an ice spring of Ivory Mountain, and Ivory Mountain itself was developed into a tourist attraction.

From the point of view of the Internet, the monetization of resources in Ivory Mountain will be the ultimate mode of sinking the market, and the protagonists of the third part of the sinking market will be real estate developers and tourism companies.

Take the Zhengzhou market as an example, the city itself does not have any interest to speak of. Many developers have built amusement parks around Zhengzhou, such as Jianye Huayi Town in Zhongmou County around Zhengzhou. Jianye football town around Zhengzhou and water park in Xinmi County are engaged in cultural and tourism projects in the nearest sinking market from the big city. I believe that not only Zhengzhou, but many cities across the country are doing so.

Conclusion

To sum up, the sinking of the market is not only the sinking of the relationship between people and goods, but also the sinking of purchasing power. From a macro point of view, the transformation of the domestic economic structure from "exogenous growth" to "endogenous growth" will make the sinking market outside the first-and second-tier consumer market become the receiving force for future consumption growth, therefore, after the disappearance of the demographic dividend, how to realize the exploration of sinking market increment after cognitive reconstruction is the key to the survival and development of enterprises under the cold winter of capital.