and O2O Intelligence Driving Global Innovation and Entrepreneurship Forum: O2O Intelligence Driving
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1 President Lu Feicheng s Speech at the 6 th ICSB China Annual Meeting and O2O Intelligence Driving Global Innovation and Entrepreneurship Forum: O2O Intelligence Driving Dear guests, I will focus on sharing the O2O intelligence driving. My team started to study entrepreneurship ten years ago and applied to the Education Administrative Department for the entrepreneurship major, being sneered and scorned at that time. Eventually, innovation and entrepreneurship have been Chinese strategy, and my team for more than ten years research advance gains a little. In recent 5 years, it is difficult for college students to carry out the entrepreneurship. First, college students are young without experience, second, the entrepreneurship resources are not sufficient, third, it is not short time for venture success. Especially in recent years, my team wish to find more venture projects for young people, especially for college students to carry out the venture. 5 years ago, we had been strategic alliance with Alibaba Taobao University, exploring to train the college students to do E-commerce. Venture success of E-commerce can be achieved quickly owning to the college students are good at computer and internet technology. As a result, college students achieve good result by opening online shop. During the recent 2 years, many large enterprises like Wanda, Suning are busy with O2O, 99% of the O2O enterprises have huge confusion, and confusion to what extent? Let s look at Suning, the report at the end of 2012 shows that there is still around RMB 4 billion net profit, quite good performance. In 2013, Suning entered to Suning could business, officially announced the O2O operation, at the end of 2013, the profit dropped to RMB146 million with the net profit fell 95.5%. In the fist half of last year s report, Sunning had a loss of RMB 790 million without profit, and estimated more than RMB 1 billion in the next half year.
2 Besides, the report at the end of the year is very strange, Sunning s main business had lost RMB 1.6 billion, then they turned to innovative operation in the fourth quarter and earned back RMB 2 billion quickly. They make lost of shops with financial trust found through 5~10 years rent processing, the net profit of 2014 is more than RMB 400 million, so it is 285% increase than RMB 146 million of This data shows that now in China, O2O is a mighty trend, no matter old enterprises or new enterprises, they fought. The second point: why it is so difficult for O2O, thinking about it and finally find out that in China or even in the world, no real theory system of O2O industry chain and ecological environment has been built; failed to build regular, refined theory, and no enough talents. The most typical representative is that president of a group has retired 3 times, the annual salary for this position is RMB 8 million, the recruitment has been 5 months and no people is qualified. All people envious of this annual salary, but nobody goes for this recruitment, it is because the real lack of talents. So, for O2O, many Vice President of ICSB China put forward in the council last night: what s the plan of ICSB China for the next 5 years? What will we do in the future? Today, I want to give you a clear direction: one is to lead the innovation and entrepreneurship research education well; the other is that now O2O is a trend. This trend is unstoppable. In my wechat, I wrote: O2O is a golden hill, we all want to go to mining, but there are crocodile lake around the golden hill, all the pioneers fell into the crocodile lake, they can t go forward or move back, now the only way is to feed the crocodile or going forward by stepping on the crocodile. Another way is to fill the crocodile lake, then everybody can go to the golden hill safely. O2O intelligence driving is a very important theme, there is no organization in China to study it systematically, there is also no university to do this research. Zhejiang University is relative advanced in this field, so my team come to Zhejiang University
3 and found the O2O center, hope to extract some rules from O2O theory system, especially from the key points of O2O industrial chain and ecological chain, then use the rules to build some systems, then sort out some important positions from these systems to do personnel training, which is also the big event of ICSB China s next step Five Year Plan. The key point today is to share intelligence driving, 80% of American economy is intelligent economy, most part of Chinese economy is consuming resources, include human resource, mineral resource, land resource, so the air pollution is serious, 60% of crude oil, 70% of coal had been consumed by China, but our GDP is only 10% of global GDP, this is the current Chinese economy. After thinking about the O2O intelligence driving, we will carry out our work from the next aspects: 1. Study First, to extract the rules from the O2O new enterprises or traditional enterprises O2O transition into theory system or practical ability for better growing. Second, intelligent O2O has a dozen key points. Key point 1: The trend is due to technological change and technological innovation across the globe. Key point 2: I have shared the researched and explored O2O strategy with Dean Wu. Last year, he had done relative thinking and research, in the current trend, how to locate the O2O trend? What tools, methods to be used and how to find out O2O strategy? Like Suning, Suning is the giant in private enterprise, and the incoming is RMB 200 billion for continuous 5,6 years, but after entering into the cloud business, why the development efficient so low? So, we want to do good job for O2O strategy.
4 Key point 3: I explored O2O business mode with Ms. Xia of Wuhan University owning to the mobile internet technology. The most simple example is that in Qing dynasty, we still use knife and stiff, but western countries use guns and bombs, if we still use the method of knife and stiff to practice the aiming and technology of guns and bombs, it is certainly useless. So the O2O business mode is different. In this year, the output of Meituan is over RMB 100 billion, but also needs to spend USD 100 million every month, finally, there is huge profits but can t survive, indicating the business mode has problem. So, the O2O business mode is very important. Key point 4: drawings need to be designed after confirming the strategy and business mode. Like Fuchun Silicon Valley, there shall be a concrete construction drawing before building, if there is no drawing, nobody can build the Fuchun Silicon Valley. And it needs the enterprise itself to do. Key points 5~8: like O2O project, O2O operation, O2O marketing and O2O management, all these shall be done by the enterprise itself, after finishing all these, it needs talents of every aspects in intelligence driving field. There are also several key points in these things, President Tang Bin is an Internet expert, China has a very big private organization, the Internet Financial Thousand People Association, the representative is young man, now the activity of this association is very powerful. There are 4 very important basic backbones, the next step is also the key point of the whole ecological chain. First backbone, big data analysis and application. Second backbone, recently, we discussed with may people about the cloud storage, cloud computing, cloud service etc, and think use cloud technology to describe is more reasonable, it can calculate, apply and store, so finally, we call it cloud technology.
5 Third backbone, President Tang Bin has done the internet finance, this is very important, because it requires payment, balance, cash flow and experience in more efficient and accurate transition process. Fourth backbone, intelligent hardware. 2. O2O Talents Training: Now, Zhejiang University O2O center plans to train following talents. Top level: the first talent is O2O CEO, this position is very difficult and important. Recently, Suning worked with Alibaba, and Suning had changed many personnel. Second is O2O chief operating officer, the third is O2O chief director. Middle level: O2O needs to have structure, just like the design sketch in project, there needs a designer to design the drawing, then there shall be engineer to take people to build, in the building, there shall be supervisor, called O2O supervisor, there shall be O2O big data expert, cloud computing expert, O2O financial expert, intelligence expert, these are important position in middle level. Low level: like the electrical workers, carpenters, cement and brick workers in house building, just like Taobao, training personnel to open online shop, design the website, promote the activity, customer service, this needs a large number of talents, and the talents training will involve 3 levels, try to make some positions, which is intelligent comparison talents training. 3. Strategic Collaboration We have signed strategical agreement with Insigma, Ego recently to do O2O strategical consultation together. As Insigma with technology, President Zhang is the founder of Hangzhou citizen card, now he hopes to lead his team to do O2O consultation.
6 4. Project Design Now, we have a team, next is to do project design, to design the drawing. In this case, to train the talents and let them to construct, operate, manage and upgrade, to bring more successful hope about intelligence for everybody. We will promote this at the end of this year and next year. We have invited talents who are sensitive or interested in this field, or who is expert in this field, include President Wang Zhijun of Beijing University, he had done a lot of strategic consultations, and had O2O management consultation in last year and the year before last year. But in China, specially the O2O intelligence, Dean Wu also said that now it is cross-border, integration and no industry difference, and even after the Internet economy, the industry that overture you is not your industry, taxi companies, like Uber, has nothing to do with you, if you never drive a taxi car, you do not know what it is doing, in the future of the Internet economy, you will not know what kind of people will overturn you. In such a social background, the O2O will definitely be the trend in the future, recently, there are sayings. If this trend to be carried out, it has to become a system project. As it is a system project, it needs to research every point clearly and reasonably. Now, many enterprises are spending money. Now the internet economy has no sequence, spending money has been the representative, this is not good. Meituan s output has reached RMB 100 billion but still needs to spend money, now it merged with Dianping. At first, JD wanted to acquire it, but failed. Then, it seeks financing USD 500 million in America, etc, but failed too. Finally, it merged with Dianping, this is the first stage, it is hard to say that will the effect be, because there is no intellectual support. Now this trend in China is very terrible, enterprises go to do this vigorously, but nobody goes to research, nobody support intellectual support and nobody can provide successful method. Tomorrow, I will talk about the O2O six successful elements in World
7 Entrepreneurship Forum, as O2O is more difficult than ERP, these six elements is indispensable. 10 years ago, Lenovo carried out ERP firstly, and failed. Alibaba makes O2O for Haier at first, not failed but can t move now. Then it makes O2O for Intime, Hangzhou, but can t push forward any more. In this case, we have to do more theory and intellectual working to push forward and promote success O2O, to train more talents and do more business mode. The discussion yesterday is heated, we mention a lot of things that have not been thought, but they are very pertinent. I hope there are 2 directions for the ICSB China s next step, first is innovation and entrepreneurship and the second is based on Chinese characteristic. The future of the original Internet from are from developed countries like United States, but the internet application in China will soon become the first in the future. There is no theoretical basis, and people here have this obligation and responsibility, and have a desire to carry out the practice, research and induction, and eventually make them become a system, and to give more guidance in the future. These were the two major directions discussed yesterday. In 2019, the president of ICSB China needs to be a Chinese, China is a big county and now Chinese innovation and entrepreneurship have been paid more attentions than the United States, it is unprecedented, we have to have such a chance to promote, many aspects are base on promotion, and also to bring more people to go out to exchange and learning. Originally said entrepreneurial seeds, seed germination, seedling, millet theory system, first, second, multiple and continuous venture theoretical system, ideas, creative and innovative theory, ternary overlapping strategic entrepreneurship theory. I have participated in the four global annual meeting for continuous four years, and published 4 times more paper speech more than half an hour, we still have done some things. In this council, we can communicate O2O thoroughly. I hope ICSB China will be
8 special, especially in intelligence, we have positions. Practice is for businessman, but for the intellectual support, ICSB China will do more things. We are carrying out about O2O slowly, like Fuchun Silicon Valley, we hope to have O2O project in Hangzhou, the project in Qingdao has completed the bdding work and is carrying out, we are trying, not just saying. I put my old university campus to do O2O online business operation office, second is to do O2O's intelligence platform, do research, personnel training, strategic consultation, project design. Third, also to do O2O's ecological platform. I go nearly with Director Guo and President Tang, because they understand Internet finance and big data better than me, I want to invite more companies and advisers,to build the ecological o2o platform in the future. If 3 platforms being built, competitiveness can be made up later, because we all know that Wanda mode is very good, at present the life force is fragile because in addition to providing physical platform, no intelligence platform has been provided, and no ecological platform. We hope that in the future for O2O, the intelligence platform is the access point. Second, the ecological platform, hoping there is a better company to do service support, the operation of these two supporting platforms to be here will be better for future growth and expansion. Everyone is trying, this is new, and we are trying, entrepreneurs to eat, then we will try hard to move forward. As long as the direction is right, we shall go all out. Thank you!
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