Recently, the two most lively in the Internet are Meituan and Ali.

Since Ali's $9.8 billion stake in Hungry Mou, it has been launched seven times against the United States Group, "10 billion subsidies". 8 January reports, Ant Financial Services CEO Hu Xiaoming personally came down to the field, will take the lead in the integration of the flying pig, Amoy Ticket, Hungry Mou word-of-mouth, the box horse, RT-Mart, Amoy Fresh, cat super and other local life-related businesses, so as to fully confront the United States group.

Ali this time is to move the real thing.

What about the US group?

Ali subsidizes the users, and Meituan lets the merchants choose one or the other: either follow Meituan to eat meat, or follow the hungry one to drink soup.

How did that work out?

Under the pressure of Ali's financial might, Meituan's market capitalization exceeded HK$636 billion, surpassing Baidu, Jingdong, and Pinduoduo for the third consecutive month. The takeout market share is close to 70%.

The winners and losers in the takeout market are no longer in doubt.

Why is Ali, who has money and people, unable to beat Meituan?

In fact, the root cause is that Ali chose the wrong competitive strategy. Before the opening of Ali's 10 billion subsidy program, the market share of Meituan in the takeaway market is already close to 60%, and it is the absolute dominant boss in the market.

In the face of the absolute advantage of the opponent, the correct way to compete is not to compete with the capital to burn money, nor is it better than the opponent, but differentiation.

The classic summary from Prof. Li Shanyou at Chaos University is: Instead of being better, be different.

(1) Why differentiation is the right way to compete

In conventional competitive logic, as long as one is better than one's rivals, one can win. But when it comes to the "giants", this logic fails.

The so-called giants are powerful rivals that are already market leaders and have more than half of the market. They often have 3 advantages: first mover advantage, cost advantage and value network advantage. These three advantages make competing head-to-head with the giants tantamount to hitting a rock with an egg.

01 First-mover advantage

It's easy to understand that the giants, with more than half of the market, have the majority of users. Users will form the habit of use, and this habit will become more and more solidified, difficult to be changed. This is the first mover advantage.

Now that we mention takeout, more people's first reaction is Meituan, not Hungry Mou, which is the positioning of the first-mover advantage in the user's mind.

02 cost advantage

The larger the scale, it also means the lower the cost. It costs less to develop new users and retain old customers.

It is not difficult to understand why Ali launched seven "tens of billions of subsidies" failed to shake the position of the United States.

But these two points are not the most critical reasons. The most critical is the third point: the value network advantage.

03 Value Network Advantage

What is a value network? Let's look at a case study of WeChat.

Back then, with the rise of mobile internet, more than half of the population was using WeChat to socialize. Ali and Xiaomi also wanted to challenge WeChat's position, and developed "Laixiang" and "MiChat" respectively. While the latter may be better than WeChat in some ways, it has, as you know, always failed.

The reason is that WeChat has all your friends and business relationships, and even if there was a product that was 10 times better than WeChat, you wouldn't be able to give up WeChat. These friends and business relationships make up a "value network". The "value network" raises the cost of moving users and locks them into the value network.

It's easy to see that Meituan is more than just a takeaway for users, but also has other value such as movies, group buying, and wine and travel, which is the first value network;

Meituan binds merchants and requires them to choose between Meituan and Hungry Mou, and merchants naturally don't dare to offend the market leader. The user is with the merchant to go, where the merchant where the user is, this is the second value network.

First mover advantage, cost advantage, and value network advantage*** constitute the moat of the giant.

04 Instead of better, it's better to be different

In the second half of the Internet, once commonly used competitive strategies, such as: more than the burning of money, more than the technology, more than the product, more than the user experience, are all invalid, and will not shake the giant's position in the slightest.

The only viable way to compete is to be different, not better. At the end of the day, it's still a competition of differentiation.

Instead of seeking to be better than your rivals in terms of capital and technology, you should do things differently from the start.

This reasoning is not complicated.

People with siblings at home should have experienced this.

For example, at home, the parents told the younger brother, you have to be like your sister, you see how hard she studies, how good her grades are. What about the younger brother? He will definitely find ways to be different from his sister. He may be even more mischievous, because no matter how good you are at studying, you are just a second sister, and everyone needs to be uniquely themselves.

(ii) How to differentiate?

01 The first: staggered competition

The so-called staggered competition, in accordance with the principle of combinatorial innovation put forward by Prof. Li Sun-You, is to rearranging and combining the elements of the supply side, the demand side and the connection side. to form a differentiated advantage over competitors.

Pinduoduo is a typical case of misaligned competition.

As the saying goes, you can't grow a big tree under a big tree! How did Pinduoduo grow up under the noses of the two giants, Ali and Jingdong?

Pinduoduo's misaligned competition is mainly reflected in three levels:

1) Supply-side differentiation: subversion of low-end products

l Low unit price: focus on 20-40 yuan of small items, this market in the eyes of the high-unit-price of the eyes of the Jingdong and Ali can not be seen because the gross profit is too low;

l low-end suppliers: most of the merchants who produce these small goods are small and medium-sized suppliers, who can't get a good living space in Taobao and Jingdong because of their own weak conditions, but they are like a fish out of water on Jinduoduo. Look at the following data

In May 2015, Taobao eliminated 240,000 "low-end merchants"

In July 2015, Jingdong eliminated pat

In September 2015, Pinduoduo on-line, just at the right time to collect this group of the big brother does not see the "low-end merchants"

2) Demand-side differentiation: subversion from low-end users

Most of Pinduoduo's users are third- and fourth-tier users, accounting for 65% of the users, who generally had less contact with online shopping before the popularization of smartphones. The convenient shopping experience and low prices make these users extremely sticky to Pinduoduo.

3) Differentiation on the link side: With WeChat's traffic, a new social e-commerce model was created

The big event of 2013 was that Taobao cut off WeChat's link, and consequently isolated itself from social e-commerce. Taobao may have forgotten: WeChat is a much larger pool of user traffic than Taobao, and Pinduoduo seized the opportunity. Utilizing WeChat social networking, single product grouping is a simple enough way to achieve exponential user growth. Compared to the e-commerce giant's customer acquisition cost of several hundred dollars, Jinduoduo's initial customer acquisition cost is only a few dollars.

The latest market capitalization of Pinduoduo in January 2020 showed 44.6 billion, surpassing Baidu and NetEase.

Relying on misaligned competition, Pinduoduo is among the third largest e-commerce giants after Ali and Jingdong.

02 The second: seek **** life

Even the biggest giants can not eat the whole market. Instead of becoming rivals with giants, it is better to change rivals into partners and become ****sheng relations with giants.

In the Internet world, companies that have succeeded with this strategy abound.

For example, all kinds of Taobao along with Taobao, such as the small program developed around WeChat, such as the rise of WeChat along with all kinds of public numbers, such as the new list of data services for all kinds of public numbers.

*** born relationship, not only can turn the enemy into a friend, but also with the potential of the giant for my use.

And the essence of building *** raw relationship is also to use differentiation. Where the giant is weak, do complementary.

03 The third: Give up the fight and run into the next battleground

Prof. Lee Sun-woo's First Curve Principle tells us that any growth will hit a limit point, and that there is no such thing as a market that lasts forever.

Instead of fighting the giants in a mature market, it is better to end the battle as early as possible and run into the next battlefield.

In this regard, Apple taught us a classic lesson.

In the PC era, Microsoft dominated the global computer market with its windows operating system, and became the giant with the highest market capitalization in that era. In the face of such a huge market temptation, countless upstarts jumped at the chance to challenge Microsoft's position, but invariably ended up failing.

Apple was no exception, and no matter how hard it tried, its share of the computer market was still less than 10%.

After Steve Jobs returned to the helm, he decided to abandon the PC battlefield and run into the smartphone era.

With the continuous launch of Iphone, Apple's operating system gradually occupied half of the smartphone, and Microsoft did not lay out in advance, in the smartphone era disappeared. This game, Microsoft completely lost the qualification.

Can't beat you, waiting for you at the next intersection.

Heroes, not to win every battle, but not to count the loss of a city or a pool; not to fight first and then to win, but only to fight the battle of certainty.

(C) Conclusion

2020 has come, the Internet really entered the second half. The various dividends that once brought us rapid development are disappearing.

The demographic dividend is no longer, the Internet's new user traffic has encountered a ceiling;

The catch-up dividend is no longer, in the past to copy the U.S. Internet model on the line, and now China has stood at the head of the queue;

The management dividend is no longer, our working hours have been elongated to 996, and then only 007;

The only dividend is: innovation. The only dividend left: innovation.

The only way to survive in the second half of the Internet is to seek new changes and create differentiation.

Instead of being better, be different. Instead of grabbing the cake from the rival's bowl, we should make a new cake ourselves .