Print E-Commerce Breakthrough: Pinpoint the Pain Point Before Delivering the Solution

[China Packaging News] 'Pain point' is a common term in Internet marketing. At the fourth China Printing E-Commerce Annual Meeting held not long ago, it was mentioned again and again. Most printing e-commerce players that perform well first identify an industry or customer pain point, then develop a corresponding 'painkiller.' Among them, some are traditional printing companies that have actively pursued Internet transformation as the industry faces pressure on all sides; others were born online and entered printing during their growth to seek opportunities. As changemakers, what lessons can these two groups offer companies preparing to enter printing e-commerce?

Traditional printers 'attack' the Internet

'Internet Plus' is often described as being forced by external pressure, but companies should not wait for Internet firms to push them. Zhang Hongmei, CEO of Sunshine Printing Network, knows this well; she founded Beijing Baofeng Printing Company in 2008. Amid the Internet wave, traditional printing firms are taking action and looking for breakthroughs in Internet + printing.

Build a supply chain for shared success

By 2015, Sunshine Printing Network had partnered with more than 3,000 printing plants across over 300 Chinese cities, with a service reach covering more than 1,400 counties and townships. Zhang Hongmei said she hopes to build an Internet ecosystem through the platform so supply-chain partners can earn well. Yintong Tianxia is also pursuing an ecosystem layout. Chairman Zhang Hongbo said it aims to create a holographic ecosystem for the printing industry in the Internet era and achieve shared, win-win results with printing peers.

According to Zhang Hongmei, Sunshine Printing Network now receives quality orders from well-known Internet companies such as Alibaba, Baidu and Meituan. Its IT system can directly deliver RMB 20 million in orders each year while reducing 5 to 10 salespeople and 5 to 10 order-tracking staff, saving more than RMB 2 million in labor costs. She wants to make Sunshine Printing Network the 'JD.com for enterprise purchases of customized printing products' — building the strongest supply chain, achieving win-win outcomes, and creating a powerful in-house logistics and service team. 'JD's self-operated service standard is the benchmark, and we must strive to reach it,' she said.

Zhang Hongmei disclosed that in 2015, 56 printing plants on Sunshine Printing Network each received annual orders exceeding RMB 5 million. In 2016, the platform aims to have at least 50 suppliers with annual order volumes above RMB 20 million. She stressed that such suppliers must have strong factory informatization, excellent quality, good management, and a certain level of price competitiveness.

A small niche can become a big business

Guangdong Jinguang Technology Co., Ltd. has long performed well in printing, but its chief executive Wu Dengmi felt the existing path was not right and kept asking where electronic printing should connect. He eventually chose small orders for color box packaging, which were initially overlooked. At that time, printing companies moving online favored commercial printing more than packaging printing.

Wu Dengmi saw the pain points in small color box orders. For customers, these include difficulty finding a printer, a troublesome transaction process, uncertain quality, high prices, long lead times and complicated design. For the industry, they include high transaction costs, high proofing costs, low efficiency and high regional barriers. He cited figures: in 2015, China's paper packaging market reached RMB 1 trillion; small color box packaging printing orders accounted for 30%, about RMB 300 billion-plus, and were growing more than 10% annually. Yet because such orders are low in value and high in cost, printers often declined them and treated them as a chicken rib.

Customers placing small packaging printing orders have many fragmented and personalized needs that are hard to satisfy. Based on these data, Wu Dengmi imagined what would happen if his company exclusively solved the small color box order pain point and efficiently met fragmented packaging printing demands. That led Jinguan to invest heavily in 2015 to build the color box packaging e-commerce platform e盒印 (e-Box Printing).

e-Box Printing is driven by technological innovation. It aggregates small color box orders online, uses big data to reclassify and recombine products and personalized elements, and groups order files with common elements for large-scale manufacturing. It also has an intelligent prepress document processing system and an intelligent ERP production order management system. The platform sets and exports standards while integrating regional partners nationwide, enabling nearby production and delivery and rapid response to fragmented demand. Wu Dengmi said e-Box Printing can now take orders 24 hours a day, quote in 1 second, generate die-cutting drawings in 10 seconds, produce a proof in 90 seconds and ship products within 72 hours. Its goal is to reach RMB 10 billion in sales by 2020.

Use traditional business to incubate new industries

As traditional printing faced pressure on all sides, veteran printer Hucai Printing Art Co., Ltd. targeted personalized imaging and on-demand publishing as its digital printing breakthrough. Hucai Chairman Chen Chengwen believes the future belongs to companies that operate in traditional industries while understanding the Internet.

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Chen Chengwen argues that traditional enterprises have a market before a factory, while Internet companies rely on heavy venture capital and cash burn to scale. In his view, Internet Plus means using traditional business to incubate new business. Hucai therefore sees its digital printing core competitiveness as advanced equipment, a complete IT system and innovative R&D and design, and has long invested in internal capacity. In 2011, Hucai visited the United States three times to inspect HP digital printing equipment and ordered two HP Indigo7500 digital presses at the China (Guangdong) International Printing Technology Exhibition.

In 2012, Jinghua Hucai purchased an HP T300 color and T350 black-and-white rotary inkjet press to begin book printing. Hucai has now established four digital printing bases in Beijing, Shandong, Shaoxing and Dongguan, with cumulative equipment and IT investment exceeding RMB 300 million. From 2013 to 2015, its digital printing business grew 3 to 5 times — a case of building depth before releasing strength.

Internet DNA 'merges' into printing

'Printing is the thirteenth industry I have worked in; before that I was at a listed company,' said Xing Kai, founder of Beijing Yisite. He feels lucky that deep Internet-driven change gives online-born companies like Yisite a chance to remake a traditional industry in a new way. This is also the shared view of Internet-origin players such as Printing Jun and Bajie Printing. They see connection as their mission and apply Internet models to thinking, products and behavior. What they bring to printing is not only product disruption but also disruption in business thinking.

The biggest advantage is not being an industry insider

The thrill of tearing a carton in three seconds helped Xing Kai generate RMB 20 million in sales within two years of founding the company and attract major clients such as Jumei Youpin and Vipshop. To Xing Kai, which industry you come from does not really matter; he simply applied his business thinking to a small carton.

Xing Kai is also a product manager at Yisite. He believes his greatest advantage is not being from printing and not knowing how the industry traditionally thinks, which allows him to redefine it. In an object-based design mindset, packaging exists to make contents safer and more attractive. But in the Internet era, people are the center of manufacturing; products should be built around people, and customer experience matters most. 'Connecting alone is not enough. When a transaction involves an object, think about the distinctive experience people have in that moment,' Xing Kai said.

Turn complex demands into simple touchpoints

Xiao Haotian, CEO of Printing Jun, also entered printing as an Internet professional. He has heard industry players discuss how to transform printing with the Internet, but in his view, transformation cannot exist if an industry's infrastructure is not well built. So he identified printing equipment as the pain point for printing companies.

Xiao Haotian believes something valuable must cleverly condense a complex, massive business demand into a simple touchpoint presented to customers: one light tap can solve a long-standing problem. Printing Jun was created to address printing companies' service needs related to equipment and production. By optimizing the entire supply chain, improving response speed and lowering industry service costs, it helps printers resolve their pain points.

Printing companies have four major needs: more orders, production assurance, lower costs and higher efficiency. In production assurance, equipment-service pain points include many equipment types requiring all-inclusive service; fast problem-solving requiring one-stop support; opaque service processes that rely only on good faith; and limited, narrowly skilled service personnel.

Service providers also face pain points: key staff leaving to become malicious competitors; excessive management costs and long-term service losses; limited service resources and slow response; and high inventory costs with frequent parts shortages. Printing Jun's answers include intelligent scheduling (one-stop manual service plus parts service), service visualization and supply-chain synchronization, offering a one-stop solution to printer equipment problems.

Concentrate resources on single-product breakthroughs

On January 28, Zhubajie.com made an initial investment of RMB 50 million to form the Internet printing platform 'Bajie Printing' with Nasdaq-listed printer Zhejiang Shengda Group and Foshan Caiyintong. For Bajie Printing General Manager Chen Wanping, the new printing ecosystem advocates large-scale socialized collaborative division of labor, which can better serve small, medium and micro enterprises and help ease the conflict between production efficiency and consumption efficiency.

'Bajie Printing' upgrades the traditional printing model through targeted delivery of massive orders, improving efficiency, reducing costs and effectively controlling printer service quality. It also uses an efficient logistics system to improve the customer experience from order placement to receipt, thereby building a new printing ecosystem.

Chen Wanping says the new printing ecosystem model is: aggregate orders, produce single items, and make everyone more specialized. He further analyzes four priorities for printers in the sharing economy. First, specialization: choose one product in printing and strive to be the most professional and efficient; only by concentrating resources on a single-product breakthrough can a company win. Without expertise, opportunities for cooperation will shrink. In the Internet era, every single product can gather sufficient business volume, and only by specializing can printers become strong and then large.

Second, informatization. The Internet is essentially information transmission; interconnection of information changes business models, and cooperation in the new ecosystem is based on information sharing. The first step for printers embracing the Internet is therefore to informatize people, objects (equipment) and events (operating processes). Third, a cooperative mindset. The new printing ecosystem advocates a new division of labor; cooperation covers weaknesses. While specializing and informatizing, companies need a cooperative attitude — the point is not who controls whom, but maximizing mutual interests.

Fourth, demand orientation. In the new ecosystem represented by Internet Plus, all partners exist to better meet and serve customer needs. Value can only be tapped from customers, and single products developed around customer demand can generate value across the ecosystem.

Investors' view of Internet + printing

Yan Feng, CEO of Xinwen Capital: 'The Internet is the standard, the tool and the direction.'

Before 2013, the Internet was only a tool and traditional industries were the main body; after 2013, the Internet became the standard, finance became the tool, and emerging industries became the development direction. The four operations of Internet + printing: addition means adding advantages and upgrading the industry (technology, data, consumption and environmental upgrades); subtraction means removing drawbacks and reducing costs; multiplication means using financial tools to maximize profits; division means high risk with high returns, while avoiding 'black swan events' (extremely unpredictable, unusual events that often trigger chain negative market reactions or even disruption).

Ling Daihong, co-founder of Danen Venture Capital: 'The opportunity lies in related promotion and technology embedding.'

Today is an era of explosive mobile Internet growth. Mobile Internet development is driven by three areas: finding new platforms, intelligent robots and driverless vehicles, and the Internet of Things connecting everything. For the printing industry, opportunities lie in promotion related to packaging demand and technology embedding, such as QR code traceability technology promoting consumption in printing and packaging.

-- This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-322212.html