Since 2000, China's steel industry has gone through two stages in terms of output. One is that the output has increased year by year before 2013, and the other is that it has entered the peak platform area after 2013.
In terms of profits, the steel industry has gone through 3 stages. From 2000 to 2007, the profit increased year by year from the bottom, and the profit increase was basically the same as the output increase. The profit reached the first peak in 2007, and the steel output reached a new high at that time.
From 2008 to 2013, affected by the outbreak of the world financial crisis and the subsequent stimulus policies, profits decreased and then increased year by year, and reached the second peak in 2013, and the steel output reached a new high at that time during the same period. Since 2014, the output has changed relatively little, and the profit has fluctuated sharply. In 2015, the profit hit a new low in the previous years. In 2017, the profit increased significantly year-on-year.
This is mainly due to two "dividends": one is the comprehensive ban on "strip steel" and the resolute reduction of production capacity, which has led to a significant reduction in the total production capacity of steel on and off the balance sheet and optimized the competition order; the second is more and more stringent environmental protection requirements , various long-term and short-term measures lead to uninterrupted supply constraints. The price of steel has returned to a reasonable level, and the profit margin of the industry has gradually approached the average level of the industrial industry.
However, judging from the current attention and investment of various provinces, cities and iron and steel enterprises in environmental protection, it is expected that the iron and steel industry will eventually achieve ultra-low emissions, and the "bonus" of environmental protection will gradually weaken after that.
After the "bonus" period, the steel industry's requirements for efficiency and quality will be further improved on the current basis, and industry competition will face a new situation. In the past, competition in the steel industry relied on price wars. Obviously, future competition cannot follow the old path, otherwise it will fall into a loss-making situation. In general, the competition of future iron and steel enterprises depends on the ability to respond more quickly and meet customer needs, as well as the ability to provide higher value-added products.
Compared with the previous focus on expanding production capacity and increasing investment in quantity, the future development of the steel industry will pay more attention to the qualitative aspect - optimizing production efficiency and upgrading product structure.
The efficiency of the traditional steel production and sales model is approaching the peak. To achieve higher efficiency in the future, new technologies and new models such as big data and the Internet of Things must be introduced. The degree and level of integration with "Internet +" will determine the future competition of enterprises. force. This also puts forward new requirements for steel-related e-commerce platform companies, which are both opportunities and challenges.
According to the tracking statistics of China Metallurgical News for 3 consecutive years, the total transaction volume of major domestic e-commerce platforms above designated size (annual transaction volume of more than 1 million tons) in 2015 was about 223 million tons, accounting for 20% of the steel output in that year; 2016 The total annual transaction volume was 222.568 million tons, accounting for 19.6%; the total transaction volume in 2017 was 230 million tons, accounting for 22%.
The spot market has more transactions and higher frequency, and the actual transaction volume of domestic steel is much larger than the output. Therefore, the proportion of the total transaction volume of the e-commerce platform to the social circulation of steel is lower than the above proportion.
At the same time, the concentration of steel e-commerce has further increased. In 2015, CR4 (the ratio of the top 4 transactions to total transaction volume) was 63.7%; in 2016, CR4 was 66.7%; in 2017, CR4 was 74% and CR5 was 81%. The degree of concentration has increased year by year, and the “competitive landscape in which giants coexist and other small and medium-sized regional and professional platforms develop together” continues to consolidate.
From the point of view of transaction volume, the era of rapid growth of steel e-commerce platforms has passed, and growth of around 20% or even a small amount will become the norm. Compared with the same caliber, the growth rate of steel e-commerce platform transaction volume in 2016 was 21.6%, and in 2017 it was 19.3%. However, this mainly comes from the contribution of Ouyeel Cloud Merchant. After deducting the transaction volume of Ouyeel Cloud Merchant, the increase was 5% in 2016 and 6.4% in 2017.
In terms of profitability, e-commerce platforms have shown positive changes. The number of profitable companies has increased. Judging from the published data, the profitability of platforms such as Qiangang, Gangyin, and Gangbao.com increased significantly in 2017, and the loss of loss-making platforms also decreased significantly.
At the same time, supply chain-related services and supply chain finance business have developed rapidly, with a large increase. Some platforms have increased by more than 100%, and their proportion in the platform's operating income has increased. For example, Ouyeel Cloud Merchant’s supply chain financing in 2017 exceeded 30 billion yuan; Tianwu Bulk Platform has lent a total of 3.6 billion yuan in 2017, and has completed a total of 10 billion yuan in loans since the platform was established.
The integration of online and offline will be further accelerated, and the comprehensive service capability of the platform will become more and more important, which will become a key factor in the success or failure of competition.
Since 2015, China Metallurgical News has conducted a survey on the participation of domestic large and medium-sized steel enterprises in e-commerce for three consecutive years, in order to interpret the other side of the development of steel e-commerce from the perspective of steel enterprises.
The 21 steel companies surveyed this time are located in various regions of the country. In terms of product structure, there are 7 steel companies that focus on long products and the proportion exceeds 50%, and steel companies that mainly focus on flat products and the ratio exceeds 50%. There are 11 steel companies and 3 steel companies with similar ratios of long products and flat products.
In terms of output, the total steel output of the 21 steel companies surveyed in 2017 was 370 million tons, accounting for 58.4% of the steel output of key large and medium-sized steel companies according to the statistics of the China Iron and Steel Association in the same period, and accounting for the national steel production statistics of the National Bureau of Statistics of the same period. 35.4% of production. The average steel output of the 21 steel companies in 2017 was 17.66 million tons.
Overall, the product structure of the sample companies in this survey is relatively reasonable, which to a certain extent can reflect the cognition of key large and medium-sized steel companies on e-commerce.
2013 was called the "first year" of steel e-commerce by the industry. After nearly 5 years of development, at present, steel companies have a consistent understanding of e-commerce, their awareness of the maturity of steel e-commerce development has also been significantly improved, and the development direction has also changed significantly.
Judging from the data of the 21 surveyed steel companies, their understanding of e-commerce is very consistent. 18 steel companies believe that the development of e-commerce is the general trend, and the steel industry is no exception, but it is very difficult to do; 16 steel companies believe that mature e-commerce can have a positive impact on the steel industry; 1 steel company believes that electricity Chamber of commerce will have a negative impact on the steel industry; no steel company believes that the steel industry does not need e-commerce.
In terms of understanding of the current situation of steel e-commerce development, the answers of 21 steel companies showed certain differences. 2 steel companies believe that steel e-commerce is still in a chaotic or immature state, but 11 steel companies believe that less than 3 e-commerce platforms are mature and trustworthy. Eight steel companies believe that there are currently a large number of steel e-commerce platforms, but they are still in the state of their own exploration, and it still takes 3 to 5 years to develop and mature.
In general, most steel companies have recognized the general trend of e-commerce development to a considerable extent, and believe that a few e-commerce platforms have matured, and the number of trustworthy companies has increased significantly. This figure has increased from 5 in the 2016 survey to 11 in this survey.
In terms of the direction of developing e-commerce, 7 steel companies choose the completely self-built method, accounting for 33%; 9 steel companies choose the completely third-party method, accounting for 43%; another 4 choose the self-built and The combination of third parties and the proportion of self-built, one company chooses the combination of self-built and outsourcing, and the proportion of third parties is more.
On the whole, in terms of the development direction of e-commerce, according to the follow-up survey in the past three years, the number of enterprises planning to use third-party platforms as the direction has increased significantly, and the number of enterprises that plan to build on their own has decreased slightly. . The development direction of e-commerce is obviously related to the scale of the enterprise. Large-scale enterprises tend to build by themselves; small-scale enterprises tend to use third-party methods.
Among the 21 steel companies surveyed, there are 15 steel companies with a steel output of more than 10 million tons in 2017, of which 6 choose to build their own e-commerce platforms completely, and 4 choose a combination of self-build and third-party platforms. , Self-built accounted for more; and among the 6 companies whose steel output in 2017 was less than 10 million tons, 4 chose the completely third-party method.
The survey data shows that among the 21 steel companies surveyed, 16 steel companies sell steel products through e-commerce platforms (third parties, the same below) accounted for less than 5% of the total output, and 1 steel company’s steel products The proportion of steel e-commerce sales of three steel companies is 15% to 20%, and the proportion of steel e-commerce sales of one steel company is 20% to 50% (see Figure 6). ). If compared with the average level of 22% of the e-commerce sales of steel e-commerce platforms above designated size in China, the overall level of e-commerce development of large steel enterprises is still at a relatively low level, and the proportion of e-commerce sales of most steel enterprises is still lower.
At the same time, on the whole, 21 steel companies have plans to increase the proportion of future e-commerce sales, but the overall plan ratio is still not high. 5 steel companies plan to increase the proportion of e-commerce sales to more than 20%, 12 steel companies still plan to control the ratio within 10%, and the other 4 steel companies hope to keep this ratio at 10%~20%. As shown in Figure 7.
The current and future planned e-commerce sales ratio of steel enterprises is related to their dependence on traditional steel sales channels. Among the 21 steel companies surveyed, no steel company believes that the existing traditional steel sales channels can be completely replaced by e-commerce. However, as shown in Figure 8, 3 steel companies believe that these channels can be replaced by most of them (the ratio is 50%~80%), and 8 steel companies believe that they can be replaced by a small part (the ratio is within 10%). 8 steel companies believe that it can be partially replaced (the ratio is 20% to 50%), and 2 steel companies believe that e-commerce cannot replace traditional sales channels at all.
On the whole, at present, large-scale steel enterprises are still highly dependent on traditional sales channels. The reliance of steel enterprises on traditional sales channels directly determines the proportion of their current and future planned e-commerce sales.
The survey data found that currently, steel companies with a high proportion of e-commerce sales have a relatively high proportion of planned e-commerce sales; steel companies with a low current e-commerce sales ratio also plan a relatively low proportion. There is a clear correlation between the two. Among the 21 steel companies surveyed, 16 steel companies whose current e-commerce sales ratio is less than 5%, 12 of which plan to have e-commerce sales ratio within 10%; 5 companies whose current sales ratio is more than 10% For steel companies, the proportion of e-commerce sales planned in the future is all within 10%, and 3 of them are above 20%.
On the whole, the 21 steel companies surveyed currently rely less on e-commerce sales, while relying on traditional sales channels is relatively high. However, most steel companies have clearly realized the trend of e-commerce development, and to a certain extent have recognized the general trend of e-commerce development, and are willing to put more resources into e-commerce platforms, thereby increasing the proportion of steel e-commerce sales. However, in general, there is not much room to increase the proportion of e-commerce sales, and most of them remain in the range of about 10%.
Due to different product and business attributes, steel enterprises may have self-built and third-party coexistence in the development of e-commerce, and the bottlenecks they face are also reflected in both self-built and third-party development. Among the 21 steel companies surveyed, 5 believe that the biggest bottleneck facing the current development of e-commerce is that there is no mature platform worthy of complete trust; 4 believe that the self-built platform lacks relevant technical talents; 2 believe that company leaders do not pay attention to it Platform construction, reluctant to invest. In addition, 17 steel companies believe that the bottlenecks in developing e-commerce include conflicts with traditional channels, steel futures cannot be sold on e-commerce platforms, customers' trading habits, leadership concepts, and corporate development strategies and plans.
At the same time, 14 steel companies surveyed put forward specific suggestions on how to promote the better development of steel e-commerce, including the following 9 aspects:
1. In order to promote the development of the iron and steel industry and e-commerce, the deep integration of the industrial Internet and the iron and steel manufacturing entities can be used to support a number of innovative and effective platforms and application projects, and to explore the formation of replicable and popularized new formats and applications. New model, build a supply chain ecosystem, enhance the production and sales capabilities of the steel industry, and promote industry integration and innovative development.
2. Vigorously expand channels, develop users, actively promote through online and offline publicity and other methods, constantly explore potential customers, and cooperate with business departments to communicate with each other. The current e-commerce platform is limited to the sale of circulating materials, and it is necessary to strengthen the construction of a personalized product sales system, improve customer-customized service capabilities, and increase the sales of various types of steel and customized products.
3. Compared with the traditional e-commerce industry, the e-commerce of iron and steel enterprises has its own particularities, such as capital-intensive and highly specialized in the industry. Iron and steel e-commerce is not only as simple as a platform for resource transactions, but also an integrated service for the upstream and downstream of the entire steel industry, especially for downstream direct supply end users, steel enterprise e-commerce needs more service and guarantee. content and smarter, more personalized development.
4. Under the environment of "Internet +", steel e-commerce companies should not blindly follow, but should recognize their own positioning, clarify the company's development strategic plan, and closely integrate their own business. Maximize efficiency. In the long run, the steel e-commerce industry will also face a round of reshuffle, and only those platforms with a clear profit model and a complete industrial chain can finally win.
5. Although the model of steel e-commerce platform is not yet fully mature, the development of online business of steel transaction model is of great significance to the steel industry. It is hoped that the e-commerce platform will actively connect with the resources of major steel mills and develop mature business; while improving the e-commerce transaction model, it is committed to providing diversified and customized services for large, medium and small enterprises, and at the same time, based on the future mature business model. Complete online integrated business processes such as transaction, logistics, financing, and marketing. It is believed that the steel e-commerce industry will develop better and better with the promotion of various start-up companies.
6. Provide more support in taxation, supervision, innovation, etc., and support diversified trading methods for the purpose of spot settlement. It is recommended to establish and improve the e-commerce infrastructure, legal environment, and credit and security system, and build a safe and convenient online payment service platform. The steel mill system and the e-commerce platform are connected with relevant data, such as warranty information, logistics and warehousing, etc., which can greatly improve the sales efficiency; the e-commerce platform should better verify the authenticity of the goods and ensure the openness of the transaction.
7. To meet customer needs as the center, provide system solutions, and focus on: first, focus on ensuring the safety of platform funds, second, safe and efficient logistics and distribution, third, effectively solve the problem of temporary shortage of customer funds, and fourth, quickly respond to customer needs.
8. E-commerce is a new platform and a new marketing model. In order to develop better, steel e-commerce needs to solve the following problems: First, steel e-commerce must solve some problems in the traditional sales process, such as: logistics and transportation problems, small quantities, miscellaneous problems, etc.; second, steel e-commerce must have A convenient and easy-to-learn interface is suitable for users at all levels; third, steel e-commerce should not be purely for profit, but must have the mind and vision to promote the development of the industry; fourth, steel e-commerce must develop under the guidance of industry associations , the industry association should also choose a powerful e-commerce platform to support.
9. Iron and steel e-commerce is not only conducive to the integration of various resources, but more importantly, it is conducive to the interconnection of information and the formation of big data accumulation, which will become the basis of service-oriented manufacturing. It is recommended to take steel e-commerce as a breakthrough in service-oriented manufacturing, encourage steel mills to interact closely with downstream users, facilitate smooth connection between different types of steel users and non-ferrous metal material users and steel mills, and encourage steel mills to carry out large-scale customized production according to their needs , to promote the high-end development of the steel industry chain.
Data from the platform and steel mills show that, in terms of transaction volume, steel e-commerce has generally developed better than three years ago, but the era of high-speed growth may have passed, and the future will inevitably enter a medium-low-speed growth.
Taking the total transaction volume of 30 million tons+ as an example, the number of cooperative steel mills exceeds 100, and the average number of each steel mill is 300,000 tons, accounting for a relatively low proportion of the output of steel mills. It is difficult to have a fundamental impact on the optimization of steel production.
In general, large and medium-sized steel producers regard third-party platforms as an auxiliary channel for sales, and are not yet the main or important channel. Platforms generally face the challenges of high debt ratios and low gross profit margins, and it is particularly critical to control inventory and speed up turnover.
This also indirectly shows that the development space is still broad. On the one hand, the proportion of steel mills planning to sell through e-commerce is increasing, and on the other hand, steel consumption and social circulation are still large.
In the current context of deleveraging, the concentration may further increase in the future, as larger platforms may have comparative advantages in terms of bank credit and capital costs.
The space for third-party steel e-commerce comes from the degree of substitution of the existing distribution channels, branches and retail of steel mills, and also from changes in the social circulation of steel.
The social circulation of steel depends on the steel trade environment, especially changes in prices and profit margins, capital costs, etc. In the past two years, as prices continue to return to a reasonable level, the steel trade environment has improved significantly.
Different steel products have different channel characteristics, and changes in consumption structure affect channel changes.
More importantly, the completion of steel transactions covers finance, warehousing and logistics and other links. The stock of these is far greater than the increment, providing a broad space for the development of steel e-commerce-related businesses.
Development model and profit
The model itself is not good or bad, but from a financial point of view, it can be divided into two types. Similar to JD.com's "platform + self-operated" model with high revenue, high cash flow, low gross profit margin, low net profit or loss, and a pure platform model similar to Alibaba's high gross profit margin and high profit.
Although the amount and amount of profit of the steel e-commerce platform have increased, the sustainability of profit remains to be seen, and the quality of profit supported by negative cash flow and high debt ratio still needs to be improved. Some platforms are still in the red.
The regionality of the steel market and the professional characteristics of steel products enable the corresponding e-commerce platforms to have the same development opportunities to coexist with the giants.
For steel e-commerce, whether it is a third party or a second party, it is essentially the optimization and better coordination of supply chain management. It is nothing more than the steel mill itself, or with the help of external forces, or go hand in hand.
Relatively speaking, the higher the proportion of large steel mills planning to sell through e-commerce, the more advantageous it is to develop second-party platforms; small steel mills do not need to build their own platforms, but can rely on mature third-party platforms.
For the second-party steel e-commerce platform, the greater role is to promote the overall coordination of the steel mill supply chain through the construction of the platform to connect the enterprise supply and the production end information system, and improve the steel mill's own order processing efficiency and efficiency. Responsiveness, lower costs.
The development of foreign third-party steel e-commerce platforms began in the late 1990s and reached its peak in 2001. By the end of 2007, it either died out or became a second-party platform for steel mills, and foreign steel companies developed second-party platforms (large The effect of the supply chain system integration platform) is obvious and it is worth learning from.
E-commerce cannot change the relationship between supply and demand. The most fundamental role is to force the improvement of production and supply and demand by improving the efficiency of matching between supply and demand. The development of steel e-commerce should serve the development of the steel industry itself.
The future pattern of the steel industry may form a situation similar to that of the home appliance industry. There are big giants (Gree, Midea, Haier), several large enterprises (TCL, Changhong, etc.) on the production side, as well as some distinctive small home appliances and customized enterprises.
At present, the steel industry has formed several giants, several large enterprises, and some small and medium-sized enterprises with distinctive products or obvious cost advantages in the region, and the concentration may be further improved in the future. The emergence of giant enterprises has higher requirements for the overall coordination of the supply chain, and there is a large space for second-party platforms.
The home appliance industry is a fully competitive industry. In terms of sales channels, there are not only e-commerce platforms such as JD.com and Ali, but also traditional distributors and their e-commerce platforms such as Suning and Gome, as well as a channel system built by home appliance companies.
In the future of iron and steel e-commerce, or a similar pattern, various channels coexist, a diverse structure, and the power of different parts will dynamically adjust with market changes.