10-Step Guide - The Initiation & Approval of a B2B Product

The Initiation and Approval process helps you to start off your project on the right foot. Find out how you can achieve it in 10 steps.

Project managers are accountable for many decisions that affect the research and development (R&D), testing, design, operations, and even the overall growth of the company. A good product manager should leverage the Initiation and Approval process of projects to examine the associated risks and mitigate them right at the start. Such a process is even more crucial for big projects that may affect the company's growth and its survival.

 

What kind of products/projects need Initiation and Approval?

 

It depends on the size and risk of the project.

 

The Ansoff Matrix can help us decide whether a project needs Initiation and Approval. The market here means customer group. From the table below, we can conclude that projects involving new markets, or a new type of product are high risk and therefore need Initiation and Approval. Existing products for the existing market do not need such a process. However, if it is for a large project (requiring more than 30 man-days), Initiation and Approval is needed. 

 

Initiation & Approval of a B2B product in 10 steps

 

Step 1: Industry Value Chain Research

 

Industry value chain research provides a complete understanding of the industry, and it happens before customer research and competitor research. The research can be conducted through analyzing macro data, microdata, industry and consumer segments, as well as business processes of some typical companies in the industry. 

 

Through macro data analysis, we can analyze the Political, Economic, Socio-Cultural, and Technological (PEST) changes in the industry. Microdata analysis provides deeper insights into customer groups, markets, channels, operations, marketing strategies, and purchase orders. Analyzing each sector of the industry helps us understand where the company stands in the process flow and what service it provides. Take the B2C e-commerce export industry in China as an example.

Step 2: Customer Journey Analysis

 

A product manager must have a perfect understanding of customers' existing problems and business processes. It is essential to closely examine how the customer does business, or even work at the customer’s site for some time. This will allow us to identify their pain points, the software they use, and other details instead of making assumptions based on secondary information. Without a thorough understanding of a customer’s current business operations, there will never be a practical product. 

 

Step 3: Customer Needs Analysis

 

Through a customer needs analysis, we can identify what motivates different types of customers to buy a product or service based on differing needs. This allows us to map out the attributes and benefits relevant to each customer profile. Afterwards, we can get to the bottom of “who and what” – finding out what the different customer profiles want, their willingness to pay, or how many of them are already existing customers. 

 

It is important to segment customer types according to distinct needs and creates a detailed customer profile for further insights. How many different customer profiles are there? What are the sizes of each group? Which of them are more able and willing to pay? Answering these questions allows us to focus on potential customer profiles that are worth looking into.

Step 4: Competitive Analysis 

 

Competitive Analysis illustrates the strengths and weaknesses of a product compared to its competitors. We can use this method to identify opportunities to outperform other competitors.

 

Studying the competitors’ websites, social media, and the product itself forms the foundation. For deeper insights, always learn about the distributor and direct user feedback, as well as the investment and financing of competing products.

 

 

Step 5: Exploring Opportunities

 

Now that you have a thorough view of the industry, customers, and competitors, it is time to exploit market opportunities. What is considered an opportunity? 

 

An opportunity is when you can identify clear customer needs that are aligned with the competitiveness of your company. Generally, you can find opportunities from the market trend or pain points in customers’ business operations. 

 

 

Step 6: Product Planning

 

Product planning, which includes the product architecture, functionality, and differentiating factors that make it stand out in the market, should be an ongoing process instead of a one-off consultation.

 

The diagram below is an example of Amazon Web Services (AWS) product planning (for reference only):

 

Example: AWS smart product solution architecture

 

Step 7: Business Model

 

While product planning is about figuring out what to do, the business model focuses on monetization and commercial value – something the company's senior management cares about. What kind of services do you provide? Who is receiving the services? What is the monetization process? How to stand out among your competitors? Answer the following questions to understand your business model. 

 

 

Step 8: Value Analysis

 

Value analysis is based on the business model, but it addresses a higher-level question: why are we doing it? Explain your company’s customer value, business value, and strategic value for both the short-term and long-term.

 

 

Step 9: Project Planning

 

After answering the questions of what and why the next step is project planning. This includes product planning, product operation strategies, and monetization timeline. Try to make each stage of the development independent and each version of the product available for trial. Generally, larger projects take longer to develop and implement. There will be more risks if customers are not involved in each stage of testing. Project planning provides an overall view on manpower, timeline, delivery scope, and quality requirements. The table below is a project planning template for your reference. 

 

One page plan for project basics by KigoSpace.com

 

Step 10: Risk Management

 

The last step of Initiation and Approval is risk management. This step estimates, identifies, analyzes, and responds to any involved risks. Put together a list of potential risks and give solutions to each of them before starting the next phase. For each major risk identified during the development process, create a plan to mitigate it based on prioritization.

Social Commerce in China – Going Beyond Shoppable Content

The definition of social commerce in China extends way beyond shoppable content due to the emergence of complex models over the years.

While scrolling through social media, you might have experienced spending money on something you did not even intend to buy. From Facebook to Snapchat, all the western social media platforms have implemented the "store function" that allows you to purchase what you see in the post without leaving the app. Although TikTok, the popular video-sharing app, has just recently rolled out its live-streaming shopping features, its Chinese version Douyin is actually one of the social commerce pioneers. Compared to its Western counterparts, China is far ahead with a much more advanced social commerce ecosystem.

China has the world's largest social commerce market, ten times larger than that of the US, and it is still rising. The Chinese social commerce market is estimated to reach RMB230 billion (US$47.6 billion) with 780 million buyers, creating 79 million jobs by 2020.  

Going beyond shoppable content

In the Western market, social commerce is defined as shoppable content on social media apps. For example, when we click on a product featured in an Instagram post. The Western definition draws a massive contrast to how social commerce functions in China. With many mobile internet users and advanced mobile payment systems, the Chinese players are taking it to the next level. 

There are mainly five types of social commerce models in China: group buying, membership distribution, content/live streaming, affiliate marketing, and community group buying.

Group-buying: Individuals collate their orders into a bulk order on the platform for a lower price. Users are also encouraged to rally their networks to sign up for coupons and cashback. Pinduoduo is an example of group buying platforms.

Membership distribution: an S2B2C model in which the platforms provide product supplies, logistics, and after-sales services for individual members and small businesses to distribute.

Content/live-streaming: the most common way to market a product online. From lipsticks to excavators, there is nothing you cannot buy in live-streaming. Douyin and Kuishou, China's top two short video sharing apps, aggressively compete in this sector.

Community group buying: the group buying model taken offline in the community. People who live within proximity join a group to buy groceries in bulk and get next-day delivery.

Traditional e-commerce VS social commerce

While the social media firms are racing to monetise through e-commerce, traditional e-commerce giants, like Alibaba's Taobao, are not falling behind. Taobao has been leveraging live-streaming to boost its sales since 2016. There are nearly 1,000 live streaming "rooms" on Taobao with transactions exceeding RMB100 million (US$15.5 million), according to Taobao Live Streaming Annual Report 2021. About 90% of their new brands have been live streaming, and their transactions have increased by 329%. Compared to traditional e-commerce, the live streaming model perfectly combines the "people, products, and scenes" to optimise the user shopping experience. It also allows brands to achieve better marketing results and higher conversion rates.

The rise of Douyin

Douyin is the most well-known Chinese social commerce platform to the West, thanks to its global equivalent TikTok. Within three years, Douyin has made it to the top three social commerce apps. It first rolled out the shopping cart function that redirects users from its platform to the Taobao app.

Luo Yonghao, the former Hammer Technology CEO and broke entrepreneur, set a record high on Douyin with 48 million views during his e-commerce live stream debut. Within three hours, he managed to sell goods worth more than RMB110 million (US$15.5 million). As of May 2021, Luo has more than 17.7 million followers on the platform and goes live at 7 PM every Wednesday to Sunday. 

A new way of grocery shopping during lockdown

Compared to the live-streaming model where celebrities sell clothing and beauty products, community group-buying is more down-to-earth, focusing on typical households' daily activities. According to iiMedia, China's community group buying market is expected to reach RMB72 billion (US$11.2 billion) in 2020. It is estimated to exceed RMB122 billion (US$19 billion) by 2022. Hundreds of community group buying brands that provide next-day delivery are surging in lower-tier cities, making the lives of the elderly more convenient. 

The future

There is no doubt that China's population and integrated online payment systems are critical to its social commerce success. With an increasingly competitive social commerce market, companies should explore how to retain customers with their market advantage. 

 

中国社交电商不仅是社交和电商

当你打开手机，刷起Facebook，Instagram, YouTube，Twitter，或者Snapchat时，是否留意到，它们已经开通“shop”功能了。或许你倍感新奇，跃跃欲试，抑或者踌躇观望，甚至不甚看好，瞧瞧资本市场的反应。消息一出，Snapchat的股价一度上涨了5%。而这一切才刚刚开始。你更无法相信的是，这些还是从中国的社交电商们抄袭来的。

移动互联网时代带来的流量市场演变，让社交电商的优势日益凸显，利用社交渠道的裂变流量，成了更多企业的选择。据电数宝的数据分析，2019年，中国社交电商的用户规模达7.13亿人，行业从业者4800万，交易规模20605.5亿元。而到2020年，这些数据变成了7.8亿人，7900万，和23000.5亿元，社交电商在中国电子商务渗透率已接近70%。

 

 

依托庞大的移动设备用户群体和完善的电子支付体系，中国的社交电商们已经发展得风生水起，五花八门了。目前社交电商大概可以分为五个品类，分别是拼购类、会员分销类、内容直播类、导购类、和社区团购类。

拼购类社交电商是拼购平台通过特色、低价的商品吸引社交流量参与社交电商平台的拼团、砍价消费的行为。如拼多多。

会员分销类社交电商是以S2B2C模式运作实现商品流通。平台组建商品供应、物流、售后等零售服务能力，并通过会员用户/小B进行分销、分享裂变等引流变现。

内容直播类社交电商指经销售商内容（文字、短视频、直播等社会化媒体传播方式形式）创作后，分享购物体验、商品特征等，吸引新增用户，以触发消费者体验和购买并最终实现销售为目标的电商模式。如抖音电商等。

社区团购类社交电商的模式围绕线下生活社区，以社群为主要交易场景，以熟人社交关系为纽带，平台通过团长触达社区用户，完成销售。目前主要有美团优选、多多买菜、兴盛优选、十荟团等。

某些社交电商的优点也吸引传统电商来效仿，比如直播类社交电商对人与场进行创新，融入主播、MCN机构等参与者，在“商品详情页”的基础上丰富营销场景，推动三要素更为紧密的结合。与传统电商相比，直播电商对“人、货、场”的优化，驱动用户购物体验升级，在营销效果与用户转化层面优势明显。从2016年试水直播带货功能后，淘宝，这个中国最大的电商平台，销量成倍增加。《淘宝直播2021年度报告》显示，2020年淘宝上诞生了近千个成交突破1亿元的直播间，90%的新品牌都已在淘宝直播间开播，而且这些新品牌的成交增幅达到了329%。

对非大陆群体来说，最为熟悉的中国社交电商应该是抖音了。从2018年3月的百万粉丝账号上线购物车功能跳转淘宝，到2020年10月的切断第三方平台链接独立运营，短短三年，这个视频平台的直播交易规模从100亿元增加到5000亿元。如今抖音已经占据中国直播电商排行榜的第三名，成功走出了自己的电商之路。

 以2021年3月的抖音电商榜首“罗永浩”为例，如同广大明星、主持人和网红一样，这位锤子科技CEO自从发现直播带货的巨大商机后，果断加入。2020年3月26日，罗永浩正式宣布抖音成为其独家直播带货平台，并于当年4月1日晚完成了直播带货首秀。数据显示，首次直播支付交易总额超1.1亿元，累计观看人数超4800万人。如今， 罗永浩每周三到周末19点开始直播，平均每场六小时，粉丝数（全平台）已有1750.21万，共获赞3233.9万次。2021年3月，罗永浩以销售件数218.2万，成交金额4亿元的成绩列抖音电商榜首。在刚过去的五一黄金周，罗永浩直播间的预计销售收入为1.05亿元。

而与明星达人云集，专长于服装美妆等“颜值类”的直播类社交电商相反的是，社区团购紧盯着的是普通生活里的一日三餐，帮家庭主妇们省时省钱省事。这种2016年在中国湖南地区兴起的“预售+自提”的购物模式，以低廉的价格和高效的配送，成功俘获三四线城市以及广大农村用户的心。尤其是在疫情期间，基本零接触的操作方式使得其在大江南北迅速地火起来。如今，中国的社区团购已经拥有750亿元的年交易规模和4.7亿的用户量，并且这个数字还在爆发式地增长中。

如今，“低头族”群体愈发壮大，敏锐的开发者们也与时俱进地把各种购物渠道转移到了智能手机里，让消费更加便捷。比起传统电商，社交电商在是在社交的前提下发展消费，也就是在信任的基础上开展交易。然而高速的发展暴露出来许多商家管理上的不足，质量问题等负面新闻很容易让消费者尤其是新试水网购的群体产生信任危机。此外，社交购物的巨大市场也吸引得很多互联网巨头纷纷下水，砸钱扩大经营抢占市场。早期的低价厮杀惹得战局一片火热。然而当热度褪去，如何留住消费者，在某个细分领域拥有自己的优势，中国的社交电商们还在探索中。也希望海外的玩家们引以为鉴，少走弯路。

Black swan - thoughts

Book " black swan"

Even though we're constantly making predictions about the future, we're actually terrible at it. We put far too much confidence in our knowledge and underestimate our ignorance. Our over-reliance on methods that seem to make sense, our basic inability to understand and define randomness, and even our biology, all contribute to poor decision making, and sometimes to "Black Swans" –  events we believe to be impossible but which end up redefining our understanding of the world.

Perhaps the best defense against falling into the cognitive traps we've seen is a good understanding of the tools that we use to make predictions, and their limitations.

While knowing our own limitations certainly won't save us from every blunder we'll ever make, it can at least help us to reduce our bad decision-making.

For instance, if you're aware that you are subject to cognitive bias, like everyone else, then it's much easier to recognize when you're only looking for information that confirms what you already believe to be true.

Likewise, if you know that we humans like to organize everything into neat, causal narratives, and that this kind of approach simplifies the complexity of the world, then you'll be more likely to search for further information to gain a better view of the "whole picture."

Just this small amount of critical self-analysis can help you gain a competitive advantage over others in your field.

It's certainly preferable to be aware of your shortcomings. For example, if you know that there will always be unforeseeable risks in pursuing any opportunity, despite how promising that opportunity seems, you'll probably be less inclined to invest heavily in it.

While we cannot triumph over randomness or our limited capacity for understanding the vast complexity of our world, we can at least mitigate the damage inflicted by our ignorance.

Community Group Buying as China’s Next Battlefield – Who Will take the Lead?

Understand what contributes to the success of the Community Group Buying model in China and who are the major players in the market.

While citizens worldwide wear face masks and queue up in grocery markets, the Chinese homemakers are getting fresh grocery deliveries within a few taps on their phones. Community group buying (CGB), a contact-free model started in 2016 for online grocery retail, took off during the pandemic. It now has all of China's tech giants looking for a share of the pie. In 2020, the total transaction value of China's CGB market more than doubled to RMB72 billion (US$11.2 billion).

Source: data.iimedia.cn

A CGB service collates small orders from households living within approximate locations and form bulk orders to lower the unit price of the items, working as a decentralized Costco. A designated community leader, such as a convenience store owner, will form a WeChat group to list available products for delivery. Products on the platforms can range from fresh shrimps to face masks. Individuals can order through affiliate links in the group, and the orders are collated into a bulk order for the community leader. The next day, orders will be delivered to the self-pickup spot users choose, usually at the leader's convenience store. The leader gets 10%-12% of the sales commission per order through this process while bringing extra visitors to the store. 

Key factors contributing to the success of CGB

 

1. An integrated ecosystem

 

The WeChat ecosystem, which consists of WeChat Pay, WeChat mini-programs inserted into WeChat App, and 1.2 billion monthly active users, allows the efficient and scalable spread of CGB. A complete supply chain, with takeaway businesses harnessing their warehousing and distribution capacity (built from fresh grocery e-commerce, for example), makes it possible for next-day delivery and early procurement. 

2. Effective Customer Strategy

Customers in large cities value efficiency, while consumers in lower-tier cities are more price sensitive. The price sensitivity of customer groups in lower-tier cities makes CGB more attractive, which is why it became the main battlefield for CGB companies. Compared to young people living alone, a family of three tend to look for cheaper goods and stock up. Considering the buying habits of different consumer profiles, companies target bigger family sizes for CGB.  

Major Players

Statistics on demographics and consumer behaviour 

The 2020 China Social E-Commerce Consumer Shopping Behaviour Research Report from Internet Society of China showed that CGB consumers are mostly housewives aged 25 to 50 and living in second to fourth-tier cities. About 78% of the community leaders are female, married, home-based with extra time, and looking to improve the family's quality of life.  

Frequency: more than half of the CGB consumers order at least once a week, and 11% order daily.

Average Transaction Value (ATV): more than half of the orders are below RMB100 (US$15).

Category: fresh products are the most popular. 

The CGB process starts from suppliers to central warehouses, warehouse networks, pickup points and finally reaching the consumers. Such a model introduced by the CGB platforms eliminates the middleman and minimizes costs. CGB offers a vast range of product choices and contact-free and fast delivery at affordable prices during the lockdown period. Despite its rapid growth, businesses have encountered many problems in the past year:

· Many CGB start-ups tend to recruit more community leaders than they can handle to seize the market, causing unhealthy competition. 

· The market tends to be homogeneous due to the similar product structure of each brand.

· Many community leaders registered with multiple brands and promoted the most profitable one.

· The low-price strategy at the beginning impacted the traditional businesses, which called for government intervention.

· The model of online grocery shopping still poses a risk to consumers. Product quality cannot be guaranteed due to next-day delivery, while the process for refund or return remains complex.

· Most brands do not offer direct after-sales customer service. They often rely on one single community leader to support the entire group, resulting in a poor customer experience.

At the moment, the business model of CGB is at the starting phase. Replicating a successful model is impossible as major brands are still figuring it out themselves. Through sound data analysis, improvement of internal management, and customer service enhancement, companies can better understand user demand and optimize resource allocation. These factors are critical to winning a place for themselves in the CGB market.

社区团购的百团大战

当你即使全副武装，却依然担心去超市的途中感染病毒时，中国的农村大妈们已经熟练地在手机上买菜买水果了。社区团购，这种零接触的电商模式，正悄然改变人们的生活。2016年在中国兴起，期间几次被唱衰，一场疫情又让它成为市场的新宠，引得互联网巨头们纷纷入场。艾媒咨询所发布的数据显示，2020年中国社区团购的交易规模为720亿元，比上一年多出一倍以上。

数据来源：艾媒数据中心（data.iimedia.cn）

社区团购是一个社群预售+次日门店自提的零售模式。将每个小订单合并成大订单从而获得更低的价格，可以理解为一个去中心化的Costco。具体而言，团长，例如一个便利店老板，在微信群里发布商品的链接，群友们通过该链接下单拼团，隔天去指定的地点自提，自提点通常就是团场的便利店。团长可从订单中获取10%-12%的佣金，同时也给自己的便利店带来了额外的客流量。平台提供的产品种类从新鲜鱼虾到50公斤装的猪饲料，满足大小家庭的日常生活需求。社交、营销和下单整个流程都在微信一个APP上完成。

社区团购的发展离不开两个方面：

一是基础设施的完善

1. 微信生态。微信支付、流量传播、分销逐渐被大家接受，而且小程序的出现，使得各种各样的服务在微信社群中更容易使用。1.2亿的月活使得微信可以覆盖各种圈层的用户，特别是低线城市中微信几乎是除了智能手机这类硬件外渗透率最高的触点。拼多多的快速增长也验证了微信生态的强大。
2. 供应链完善。外卖、生鲜电商等模式带来的仓储配送的前期建设，使得次日达、原产地采购对效率要求得以实现。

 二是消费者决策要素。

1. 消费分层。一二线城市消费者更看重效率，三四线城市消费者时间充裕更看重价格，所以三四线城市是社区团购重点发力的方向。
2. 社交化购物。小红书、拼多多、微商等社交电商的发展，验证了圈子对消费者决策的影响力。
3. 场景化消费。在高榕资产的零售模型中讲到，不该用人作为最小粒度来理解购买行为，而应该从场景去看。比如三口之家的购买习惯和独居青年的购买习惯完全不同，三口之家更讲求实惠往往会囤货，这是社区团购的受众。 

社区团购主要品牌对比

从消费群体来看社区团购

中国互联网协会社会电商工作组发布的《2020中国社交电商消费者购物行为研究报告》显示，从性别来看，社区团购的用户主要为2-4线城市的中青年女性，具体来说，主要是25-50岁之间的已婚女性，负责采购家庭饮食日常，对价格敏感。该研究称，83%的社区团购用户为女性，其中已婚比例占到92%。同样社区团购的女团长们也占到78%。她们多为3-4线及以下的25-45岁的女性，普遍已婚，居家赋闲，对提高生活质量水平需求强烈。 

从频次上看，34.4%的用户偶尔在社区团购消费，12%每月消费1-2次，29.6%每周1-2次，13.3%每周3-5次，有10.7%的人每天至少一次消费。

从金额来看，20%的人单次购买金额小于50元，消费在50-100元的占35.1%，100-300元的占36.4%，300-500元的占5.8%，500元以上的占2.7%。

从产品品类来看，48.9%为水果生鲜，45.3%为粮油调料，41.8%为零食饮料，34.2%为家居用品，33.3%为洗护用品，13.8%为母婴用品，4.9%为其它。 

社区团购平台 “供应商—中心仓—网格仓—自提点—消费者”的流通方式，极大的缩短了中间环节，节约成本。低廉的价格，丰富的品种，快速的配送，无需接触过多人群，使得社区团购能切中消费者的软肋，尤其是疫情当前。然而社区团购这几年的发展也暴露出不少问题：

1.                  不少企业为了抢占市场，盲目扩张，自身供应链却跟不上，团长招募过多，素质参差不齐，易出现内部竞争。

2.                  各大品牌的产品结构类似，同质化严重。目前各品牌的收入60%-70%来源于生鲜产品。

3.                  全凭团长推广市场，客源掌握在团长手里。不少团长同时代理多个品牌，通常优先考虑自身利益来选择品牌推销。

4.                  初期的低价抢占市场让实体企业怨声载道，公众反响差，政府出手收紧行业管控。

5.                  从线上采购生鲜这类易损坏产品对消费者来说依然具有一定风险，品质不稳定，退换不方便，单纯靠低价来吸引顾客不是长久之计。

6.                  没有直接的售后服务，全靠团长来沟通联系，反应链条过长。

目前社区团购的发展模式依然不成熟，基本没有成功的经验可复制，各大企业都在努力走出自己的路：如“兴盛优选”最初的口号“复兴门店”；“同程生活”并购广东本地生鲜连锁品牌“千鲜汇”，在湖南推出B2B批发业务，入驻“抖音”；“橙心优选”开出自己第一个线下门店；美团集团来个“美团买菜”+“菜大全”+“美团优选”的组合拳。比拼完资本、品牌和流量的狂热过后，只有利用好数据分析，完善内部管理，提升服务，才能更精确的把握市场需求，优化资源配置，在细分市场打造出特色，赢得自己的一席之地。