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Cool-headed reflections on the "Internet Plus" boom in the recycled resource industry
Release time:
26 May,2015
Since Premier Li Keqiang first proposed the "Internet +" concept at this year's Two Sessions, various "approaches" derived from "Internet + Recycling Resources" have been booming. Among them, Sander Recycling Resources O2O has taken a different approach, deploying both online and offline to solve the three major problems of "venue, capital, and channels" for enterprises, both "looking up at the stars" and "being down to earth". Recently, this strong wind has also blown into the recycling industry. The "Internet + Recycling Resources Industry Innovation Development Forum" was held in Changge, Henan, with representatives from all walks of life gathering together to discuss "Internet + Recycling Resources". Various ideas and viewpoints "took turns on stage", instantly opening up an industry think tank era of "a hundred flowers blooming and a hundred schools of thought contending" for "Internet + Recycling Resources". It seems that if you don't play "Internet +", you're embarrassed to greet people in the industry. However, has the recycling industry already lightened its load and entered the fast lane of development? Is the industry development synchronized with the "Internet +" express train? What good models can promote the implementation of "Internet +" in the recycling industry? These questions deserve a rational, cool reflection after the enthusiasm for "Internet +" in the recycling industry.
Since Premier Li Keqiang first proposed the "Internet +" concept at this year's Two Sessions, various "approaches" derived from "Internet + Recycling Resources" have been booming. Among them, Sander Recycling Resources O2O has taken a different approach, deploying both online and offline to solve the three major problems of "venue, capital, and channels" for enterprises, achieving both ambitious goals and practical implementation.
Since Premier Li Keqiang first proposed the "Internet +" concept at this year's Two Sessions, an unstoppable wave of the internet has swept through the technology, entrepreneurial, financial, and investment circles. From small-scale micro-businesses selling face masks to large traditional industry giants, everyone is talking about "Internet +". For a time, it seemed that as long as a company hopped on the "Internet +" bandwagon, it had found a "magic bullet" for transformation and upgrading, a cure-all solution.
Recently, this strong wind has also blown into the recycling industry. The "Internet + Era, Recycling Industry Innovation and Development Forum" was held in Changge, Henan, bringing together representatives from all walks of life to discuss "Internet + Recycling Resources." Various ideas and perspectives were exchanged, instantly ushering in an era of "blooming flowers and a hundred schools of thought contending" in the recycling industry's "Internet +" think tank. It seems that if you don't engage in "Internet +," you're almost embarrassed to greet others in the industry. However, is the recycling industry ready to embrace development at full speed? Is the industry's development keeping pace with the "Internet +" express train? What good models can help "Internet +" take root in the recycling industry? These questions deserve rational reflection amidst the fervor surrounding "Internet +" in the recycling industry.
Rapid Development, Persistent Problems
As an important component of the circular economy, the recycling industry has indeed achieved rapid development in recent years, as evidenced by data. According to statistics from the China Association of Recycling Resources Recycling and Utilization: In 2014, the domestic recovery of nine categories—scrap steel, scrap non-ferrous metals, scrap plastics, waste paper, waste home appliances, scrapped vehicles, scrap rubber, scrap textiles, and scrap glass—reached 178 million tons, a year-on-year increase of 5.96% compared to 168 million tons in 2013. Imports of scrap steel, scrap metal, scrap plastics, and waste paper totaled 40.62 million tons. Combining domestic recovery and imports, the total recovery of the nine categories in 2014 reached 219 million tons, with a recovery value of 613.2 billion yuan. Despite this growth and development, the industry still faces numerous problems, mainly in three areas: an unregulated recycling system, with over 18 million recycling workers, decentralized and low-level recycling, fragmented and disorderly operations; low concentration of downstream processing and utilization, with over 130,000 waste utilization enterprises nationwide, over 80% of which are small and medium-sized enterprises, with large-scale enterprises accounting for only about 10%; and unreasonable tax arrangements, with heavy tax burdens on the recycling industry, leading to increased costs for waste utilization enterprises. These problems have become obstacles hindering further development of the industry.
In addition, the recycling industry faces another significant problem: fewer and fewer young people are entering the field. Current practitioners are generally older, with lower overall educational levels and a limited knowledge structure, resulting in a shortage of new blood. As a trading platform manager mentioned during the forum, after contacting numerous recycling industry practitioners, they found that the industry's awareness of the internet is very low. Over 80% of frontline practitioners, especially those over 40, have limited understanding of the internet, or even cannot use it, and use traditional non-smart phones. In some traditional markets, 80% of merchants do not know how to use the internet. The recycling industry is far from ready to discuss online transactions and internet thinking with frontline practitioners.
Initial Signs, Limited Organic Integration
Take Dazhou Town in Changge City as an example. Just five or six years ago, the Dazhou market still used traditional pricing and trading methods, failing to keep up with the times. After the 2008 global financial crisis, the Dazhou market suffered a severe blow, and coupled with information isolation, talent shortages, workshop-style production, and lagging planning, it faced a development bottleneck. At that time, not only was the Dazhou market bleak, but its merchants were also uncertain about the future. It raised doubts about whether Dazhou, once a hot spot in the recycling industry, would decline. Fortunately, Dazhou has continuously promoted industrial transformation and upgrading, adapting to the new economic norm and market structure, and has now become the largest scrap metal distribution center north of the Yangtze River and a nationally renowned non-ferrous metal market, creating a recycling network, market trading, and smelting processing integrated recycling system. At the same time, Dazhou has reached a strategic cooperation agreement with the Dalian Recycling Resources Exchange through the Getian Recycling Resources Trading Market in the park, creating the largest spot electronic trading center for recycling resources in central China.
Markets like Dazhou, where the "Internet + Recycling Resources" model is emerging, are few and far between. In most cases, the "Internet" and "Recycling Resources" are developing separately, without organic integration. Specifically, many internet companies that have emerged in recent years due to the rapid development of the recycling industry have the name of internet but not the thinking, only online operations without offline deployment, and their revenue model still relies on traditional methods of collecting information fees by technically blocking information content. Many old recycling distribution centers or trading markets remain stagnant, clinging to traditional pricing and trading models, detached from today's rapidly expanding information highway, and are shocked by the "Internet +" express train. Sowing the seeds of "Internet +" and allowing it to take root, blossom, and bear fruit in the recycling industry remains a long and arduous journey.
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