The rapid development of Internet technology has spawned all kinds of new industries and new formats characterized by “Internet plus”.

Spontaneity: grab the first pot of gold in the entrepreneurial drive

The Staff Entrepreneurship Development Center of the Shougang Co., Ltd. (hereinafter referred to as the Entrepreneurship Center) was established in July 2016 to adapt to the transformation and upgrading of iron and steel enterprises and improve the labor efficiency of all staff.

“In this case, we came up with an online auction sales mode, allowing customers to decide the transaction price through auction, which was also the way out  at that time. Our idea is very simple. The customers in the market are smart, and they have a better awareness of price and value than we do.”

A price committee was set up to calculate the cost of each piece of scrap steel to be exported, and determine a benchmark price. With the base price as the bottom line, the scrap steel was auctioned on the Internet. Whoeveroffered a higher price could get the scrap steel. At the same time, in order to avoid the risk of illegal bidding which would be damaging to the government, colluding behavior in bidding and accompanying bidding among customers, a stipulation that at least three customers must participate in each auction was put in place. Before each auction, the information of customers was kept strictly confidential to ensure the success of the current bid and the current deal. So, by starting with scrap steel sales, we became involved in “Internet plus”, which was already being used at that time. To put it in a more straightforward way, we needed this method of trade due to our incapability. Zhou Fengming recalled the initial scrap steel sales and development experience.

Competition in the modern market is a multi-player game as opposed to a zero-sum one. “The market has the final say in all aspects.” This is the basic principle for business operation development. By using the simple motives of setting up a new undertaking for transferred personnel as a spontaneous driving force, the Entrepreneurial Center simplified and streamlined the process, beginning its “Internet plus” exploration and practice in the process of conscious or unconscious trial and error.

--In January 2017, from information capture to scheme formation and project approval, with the support of the Party committee of Shougang Co., Ltd., the “online steel sales platform” of the Entrepreneurship Center was put into operation on the 5th day of the same month after two months of preparation. On the 12th day of that month, the first batch of 384.49 tons of hot rolling inspection waste coils was sold, with a transaction amount of 1.278 million yuan and a premium benefit of 178,000 yuan.

--In March 2017, following the successful online trading of several batches of hot-rolling scrap coils from different brands and specifications, the Entrepreneurship Center tried  a higher value auction of cold-rolling scrap coils for the first time, connecting hot-rolling and cold-rolling scrap steel online trading categories. The further enrichment and expansion of online resources have enabled the platform to attract more users.

--In April 2017, the auction transaction total of scrap steel exceeded 10 million yuan. It took 93 days to reach this amount from zero. As it had a stronger selling ability than expected, entrepreneurs could further see the huge potential and broad prospects of the e-commerce trading market, and were filled with confidence and passion.

--In December 2017, the first year of the online auctioning of scrap steel of the Entrepreneurship Center was completed, with 327 bids sold over the whole year, a sales volume of 72,000 tons and a sales revenue of 269 million yuan. Shougang’s online trading platform earned its reputation in the market and among customers for its low threshold, fast delivery, simple procedures and considerate service. At that time, 175 customers were registered on the platform, and the market area was expanded to 9 provinces and cities, including Beijing, Tianjin, Hebei and Shandong. In helping Shougang Co., Ltd. to increase value and revenue of scrap steel, the transferred personnel grabbed the first pot of gold through “Internet plus” and increased their own value.

Self-consciousness: speed up to be better and stronger in terms of innovation and expansion

“The popularity of online auction sales of scrap steel in 2017 was unexpected and enlightening. A bolder idea made us more eager to try. Since scrap steel began to be sold online to increase income and profit, could the same method solve problems that were troubling us for a long time, like the disposal of solid waste in the production process, and the warehouse resources and capital resources wasted on some overstocked spare parts due to the upgrading of production lines to achieve the goals of reuse and more added value? ‘Waste’ is often referred to as misplaced resources. Although the idea is great, the key is finding the right way of getting them to the right place. In light of this idea, we proposed to Shougang’s Party committee in early 2018 to expand the auction sales category, from scrap steel and production process solid waste to overstocked spare parts.” 

The development direction of “Internet plus” must meet a combination of online and offline advantages. As a century-old iron and steel enterprise, Shougang has incomparable offline advantages over ordinary “Internet” enterprises. Following this idea, from the initial entrepreneurial and spontaneous drive, to the conscious combination of the “offline” advantage of abundant material resources and market resources within the enterprise, and the online advantage of remote, fast and transparent internet-based transaction, a new business platform with the “Internet plus resource trading” as the basic structure sprang up. Guaranteed by self-developed sufficient customer groups, the platform aims at adding value and improving efficiency by exploring and integrating the overall resources, resource increments and efficiency of the Shougang Co., Ltd. and Shougang Iron and Steel Plates It provides customers with corporate image displays, transaction management, business processing, value-added services and other functions; and combines sales, bidding and procurement. The platform, as a new e-commerce platform, has seen a boom in development.

--In August 2018, the online transaction volume of the platform exceeded 500 million yuan.

--In September 2018, the monthly trading volume of the platform exceeded 100 million yuan, setting a daily trading volume record of 11.57 million yuan.

--In November 2018, replaced waste motors, waste reducers and other waste spare parts of the production lines were successfully auctioned for the first time. From the sale of scrap steel to the recycling of waste spare parts, the residual value increased, and the development of the platform took a new step.

--In December 2018, Shougang’s well-known “Internet plus resources trading” was highly involved with the Beijing Municipal Commission for Discipline Inspection. The special news report entitled the “Online Auction for Building a Clean Government Firewall” was successively published on the website of the Beijing Municipal Commission for Discipline Inspection, and in “Right and Wrong” Magazine, and was also broadcast on the “Qingfeng Beijing” Program on BTV9. Since its attempt to “cross the river by feeling the stones”, the “Internet plus resources trading” of Shougang Co., Ltd., with its distinctive characteristics of mode innovation, system innovation, and concept innovation, has gained high recognition from the authoritative department, as an “efficient way to maintain and increase the value of state-owned assets”, and has also strengthened Zhou Fengming’s confidence and determination in making the platform better and stronger.

--In February 2019, the strategic product-oriented silicon steel tail coils of the Shougang Co., Ltd. was put online for the first time, and the highest bidding price of 11,020 yuan/ton was achieved in a single bid. The “online popularity” effect helps attract more quality users.

--In March 2019, the trading platform and the newly launched production and marketing integration system of the Shougang Co., Ltd. were successfully connected. The auction data and production line data were integrated and shared, allowing the platform’s technical support, data support and system support to grow to a new level.

--In March 2019, in combination with the need to reduce office expenses, the platform tried to package the annual insurance premium of Shougang’s office vehicles to carry out online reverse bidding. Three insurance companies participated in the bidding, and the transaction was finally completed at a price lower than the base bid price of 160,000 yuan. The total insurance cost decreased by 56.2%.

--In March 2019, the Jingtang Company and Tonggang Company’s waste products landed on the platform for the first time. From the Shougang Co., Ltd. to the steel plate base, cross regional online transactions further highlight the efficiency and advantages of “Internet plus”. Subsequently, the Mining Investment Company, Shuicheng Iron & Steel Company, Changzhi Iron & Steel Company, and Guiyang Special Steel Company applied to trade waste materials one after another. From the entrepreneurial platform of the Entrepreneurship Center, the stock trading platform of the Shougang Co., Ltd., to the Shougang Iron and steel plate resource trading and sharing platform, “Internet plus resources trading” of Shougang Co., Ltd. fills the gap of both it  and the iron and steel plate unit products in the secondary steel sales market, and completes genuine steel products with high efficiency and high benefits, increasingly favored by steel plate bases.

--In May 2019, entrusted by Shougang’s Procurement Center, the online auction platform organized procurement bidding for 37 air conditioners. The base price was set referring to the current listing price of the whole machine on JD.com, and the winning customer needed to provide one-stop service. One of the seven customers who participated in the one-time quotation won the bid at a price of 43,085 yuan below the base price, with a decrease rate of 14.7%. From sales auctions to procurement auctions, the platform business was improved in the expansion.

--In July 2019, entrusted by Shuicheng Iron & Steel, the online auction platform conducted bidding activities for the procurement of raw materials and fuels for bituminous coal injection. The Procurement Center and leaders of Shuicheng Iron & Steel watched the whole bidding process through the network. The final total transaction price decreased by nearly 5% compared with the base price. The infinite possibilities of “Internet plus” are inspiring and refreshing.

--In December 2019, the total revenue of Shougang’s “Internet plus resources trading” exceeded 2.4 billion yuan, up nearly 9 times compared with that of 2017. The platform resources covered Shougang’s 14 plate units, and the customer group covered 25 provinces and cities in China. It became an influential high-end resource e-commerce platform in both the North and all of China focusing on the trading of steel products and derivatives, and integrating sales, procurement, bidding and industrial supermarkets.

In 2020, the unexpected COVID-19 epidemic greatly impacted the operation of Shougang Iron and steel plate. We’ve given full play to the advantages of the platform's online transaction, remote transaction and non-contact transaction, promoting the quality and efficiency of platform work, and minimizing losses caused by the epidemic.

Following the updated concept of “intensive resourcings, procurement socialization, transaction transparency, price marketization, service standardization, and benefit maximization”, while strictly implementing the requirements of epidemic prevention and control measures, the platform staff have closely tracked the relevant business market conditions, continued to increase the online efforts of new varieties and expanded the types of online trading materials. Through the network, over the telephone and by other means, they have strengthened information communication with industry-related personnel, continued to develop new customers and expand customer groups, promoted business competition among customers, and made innovative breakthroughs, so as to make every auction possible.

--They organized and carried out the “joint procurement” project of ultra-high-power graphite electrodes for Shuicheng Iron & Steel and Changzhi Iron & Steel, promoting the joint procurement and preparation of all units in the steel plate industry to help each other overcome difficulties.

--They also completed the online procurement bidding of 5 categories, power tools and tarpaulins, etc. and 122 kinds of general standard materials entrusted by the Procurement Center, and promoted the online procurement business expansion, outperforming the procurement cost of the market, reducing costs and increasing efficiency.

By the end of May, the trading volume of the platform was 1.54 billion yuan. Of this, the sales business was 1.133 billion yuan, the procurement business was 401 million yuan, and the bidding business was 5.33 million yuan. The sales volume of the Shougang Co., Ltd. was 504 million yuan, the transaction volume of the procurement bidding business was 241 million yuan, and they profited 65 million yuan by reducing costs and increasing efficiency.

“Internet plus” is characterized by sharing, including information sharing, data sharing, resource sharing, market sharing, and even capital sharing.

Where there is a will, there is a way. On June 4, 2020, with the theme of “Keeping Abreast of the New Economy in the New Win-Win Era”, the signing ceremony of Shougang Iron and steel’s industrial products e-commerce platform procurement cooperation contract initiated by the Shougang Co., Ltd., and five domestic leading industrial e-commerce platforms, including ZKH, ehsy.com, Grainger, Shanghai Aixun and Suzhou vipmro.com, was held in Shougang’s Qian’an Conference Center via live streaming. Leaders of the Shougang Co., Ltd. and the “big names” of the five e-commerce platforms all appeared on the stage at the same time, witnessing this exciting moment together.

At the signing ceremony, Zhou Fengming introduced the platform’s e-commerce procurement cooperation on behalf of Shougang. Zhou Fengming said: “Since the implementation of the procurement business expansion in May 2019, the ‘Shougang Internet plus resources trading’ has completed the whole-process B2B one-stop e-procurement mode architecture from supplier (online retailer) matching, ordering, approval, implementation, to the subsequent delivery, settlement and other areas. It has become a fast and efficient way to purchase 84 kinds of iron and steel production public and auxiliary materials in 6 major categories. It has promoted the remodeling of the supply chain, and played an active role in reducing procurement costs, shortening the procurement cycle, improving procurement efficiency, and implementing sunshine procurement. The introduction of 5 domestic leading industrial e-commerce platforms, including ZKH, ehsy.com, Grainger, Shanghai Aixun and Suzhou vipmro.com, has formed a framework cooperation agreement on the exclusive shopping mall, exclusive price and exclusive payment mode of Shougang on the basis of development and sharing. It is a major measure seeking win-win development in many ways, and a major boost to the transformation and upgrading of Shougang’s supply chain. It is bound to create a cooperative win-win supply chain ecosystem built and shared by many agents.”

Shougang Auction will go steady and far. Come and join us!