Recent comments have been related to investment and investors, and I have noticed a phenomenon that surprised me. Several PPG investors mentioned the PPG model as an important reason when it comes to investing in PPG. Some people even think that the PPG model was the first one that founder Li Liang came up with.
This kind of statement makes me very confused. Forgive me, I can’t see how the PPG model innovation is. Simply put, the highly respected PPG model is a so-called “light company”. There is no factory, no store front, direct retail through the network, all orders are sent to suppliers for production, and their own brands are posted.
Is this way innovative? In my opinion, this is an old-fashioned one, but it works well. There are too many people who have been doing this for many years. Most of the famous brands under the line, especially clothing, shoes and hats, are mostly without factories. The production is completed by factories in China and other countries. In terms of products, they only have a strong design department. The brand is in its own hands and the production is outsourced.
Some less well-known brands are even more trouble-free. Even the design department does not want to have a mature and stable product design. It is directly produced in China, and its own brand is completed.
This model has been on the line for a long time. I have customers doing this online five years ago, selling shirts, own brands, retail, and purchasing from Chinese factories, which is almost no different from PPG business model. The difference is that there is no such thing as a PPG.
I have always suggested that the webmaster sell products directly . On the supermarket, most of the products can be moved to the Internet for sale. Some products have enough market capacity to make several listed companies. Pick a product that you are familiar with or have a reliable source of supply, and retail online. At first, you may not need your own brand. After a period of bargaining power, let the manufacturers directly stick their own brands.
This is a model that is not innovative at all, but it is realistic and will succeed.
Of course, this is not disrespectful to the founders of PPG. On the contrary, I admire the founder of PPG. The key is not model innovation, but whether there is ambition, connections, capital, resources, and execution. This is not something that a small webmaster like us can do.
If investors really think that this model is innovative and invest, I really don’t think so. Another point that investors have mentioned is more reliable. It is about peopled and teams.
Perhaps the so-called model innovation is to cover up the importance of the team? Because the model is called innovation, there are mistakes, losses, and new things, how can I not pay tuition? In order to cover up the execution and team judgment errors.