The Internet changes products and services

After the arrival of the Internet, “X as a Service” becomes very popular. For example, X in “X as a Service” represents software, platform, infrastructure, mobility and healthcare. Let us imagine that we enjoyed “Mass production, mass consumption” from 1950s to 1980s. At that time, the reasons why people purchased products were to be cheaper, more convenient and higher quality.

However, thanks to the Internet, we are able to receive benefits from not only products themselves but also “X as a Service”. For instance, when we lived in 1980s, we were satisfied with buying and riding vehicles made by Toyota, General Motors and Volkswagen. However, when we purchased electric vehicles such as Tesla and BYD now, we can enjoy update of their products.

Criteria for purchase

Therefore, our criteria for purchase becomes more complicated than before. Thus, the game of the manufacturing industry is changing now. As a result, market capitalization of Tesla is bigger than that of Toyota, Volkswagen or BYD. Of course, some experts say that monetary easing policy affects this outcome and it is possibly bubble. However, we have to pay attention to the game changers. It also means that manufacturing companies take the fact that production itself can be less valuable into consideration. Or, it better for them to try to find other products or earn money by services for their survival.

Enhance capabilities

In fact, collaboration and partnership become more critical and important to innovate products or services. For example, Chinese IT giant, Alibaba group, collaborates SAIC motor. Another example is that most Japanese valuable company, Toyota, makes a partnership with Singaporean unicorn, Garb. Big automobile companies like Toyota and SAIC motor understands As-a-Service model has already changed the industry. However, is it true for small medium automobile suppliers? The answer might be “No”. Therefore, these companies should keep eye on how the industry is changing drastically and rapidly.