Introduction: What is deemed "new" doesn't guarantee a win in the future, while what is considered "old" may demonstrate resilience and longevity. Entrepreneurs like Wang Chuanfu, Li Shufu, and Yin Tongyue have showcased their exceptional business acumen. In contrast, the newer generation of entrepreneurs, including Li Bin, He Xiaopeng, and Li Xiang, have yet to prove their mettle. They face the dual challenges of strategic experimentation and the long-term growing pains associated with immature corporate management skills.

Author: Lu Yan Producer: Leestone Business Review

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Mobile phones, televisions, and automobiles are all hallmark technological products of the 20th century. As we entered the 21st century, the integration of internet and intelligent technologies has spurred significant functional upgrades in these products: traditional mobile phones have evolved into smartphones, traditional televisions into smart TVs, and traditional automobiles into smart electric vehicles (EVs).

Amid these transformations, numerous new entrants have emerged, viewing such changes as a once-in-a-century industrial opportunity. The public has also placed high hopes on these new players, believing they will disrupt traditional industry giants.

However, as the industry matures, a significant gap has emerged between public expectations and reality. The competitiveness of these new entrants is not as robust as the public imagined, nor are the traditional industry giants as vulnerable as perceived.

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During the transition from traditional mobile phones to smartphones, China's mobile phone industry saw the rise of new entrants like Xiaomi, Meizu, LeTV, 360, Smartisan, and Xiaolajiao. Yet, the ones that ultimately succeeded were primarily traditional feature phone era leaders such as Huawei, OPPO, and Vivo. Only Xiaomi, leveraging the personal talent of its founder Lei Jun, strategic first-mover advantage, and differentiated innovation in the smartphone field, survived as the sole representative among the new entrants.

Similarly, during the transition from traditional televisions to smart TVs, China's television industry witnessed the emergence of new entrants like Xiaomi, LeTV, Whaley, Storm TV, PPTV, 17TV, and Kanso TV. However, the ones that ultimately thrived were traditional feature TV era leaders like Hisense, Skyworth, and TCL, with Xiaomi again being the only survivor among the new entrants.

This phenomenon persists in the era of smart electric vehicles. Although China's automotive industry has seen the emergence of numerous new car manufacturing entrants, after nearly a decade of competition, the sales leaders remain the automotive giants from the traditional automaker era. Some of these new entrants have already gone bankrupt and exited the market, while others are still struggling to survive.

According to the latest sales figures released by various automakers for June, BYD, Chery, and Geely Auto secured their positions in the industry's top tier with sales of 403,472, 256,612, and 240,799 units, respectively. In contrast, the sales of the representative new car manufacturing entrants, "NIO, Xpeng, and Li Auto," were only 40,597, 40,126, and 30,895 units, respectively, lagging far behind the traditional top three represented by "BYD, Geely, and Chery."

The gap is not just in absolute sales figures; more critically, the capability improvements and growth momentum of BYD, Chery, and Geely Auto in recent years are in no way inferior to those of "NIO, Xpeng, and Li Auto," and are even superior in terms of growth, leaving the new car manufacturing entrants far behind.

For example, BYD's two sub-brands targeting new car manufacturing entrants, Denza and Fangchengbao, achieved sales of 20,352 and 35,607 units, respectively, in June, totaling 55,959 units. Geely's two sub-brands targeting new entrants, Zeekr and Lynk & Co, sold 35,169 and 19,066 units, respectively, in June, totaling 54,235 units, both surpassing the June sales of "NIO, Xpeng, and Li Auto." Not to mention the stable foundations of BYD and Geely's main brands, even their sub-brands are expected to gradually establish absolute advantages over these new car manufacturing entrant brands in the future.

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Why are most of the "new entrant" enterprises that the outside world has high hopes for unable to shake the business foundations of traditional giants? The most crucial reason behind this is the gap in "systematic capabilities."

When these new entrants first emerged, the public was often misled by their partial highlights and exaggerated marketing, failing to rationally assess their numerous capability shortcomings. Conversely, for traditional industry giants, the public tends to underestimate them due to their partial weaknesses and conservative tactics, overlooking their many capability strengths.

For instance, BYD, Geely, and Chery Auto all emerged during a period when China's independent automakers had virtually nothing. Breaking through the industrial monopoly of multinational giants during that era was far more challenging than starting a business in the new energy vehicle era. In this context, Wang Chuanfu, Li Shufu, and Yin Tongyue have respectively led BYD, Geely, and Chery Auto to break through the monopoly of multinational automotive giants and survive, amply proving their outstanding entrepreneurial talent and earning them recognition as some of the most exceptional entrepreneurs since China's reform and opening up.

With the advent of the new energy vehicle era, entrepreneurs of the caliber of Wang Chuanfu, Li Shufu, and Yin Tongyue have similarly remained calm and proactive in driving their companies' strategic transformation towards new energy vehicles. These companies also possess highly mature refined operational capabilities, enabling them to swiftly implement strategies once the direction is clear. In contrast, the new generation of entrepreneurs such as Li Bin, He Xiaopeng, and Li Xiang have yet to prove their entrepreneurial talent. On the one hand, they have to undergo a process of strategic trial and error, and on the other, they must endure the long-term growing pains associated with immature corporate management skills.

When the entrepreneurs of these new car manufacturing entrants fail to demonstrate business acumen surpassing that of top entrepreneurs like Wang Chuanfu, Li Shufu, and Yin Tongyue, and when these new entrants fail to exhibit systematic capabilities comparable to those of BYD, Geely, and Chery, they appear extremely naive and face numerous difficulties when confronting established automotive giants.

From smartphones to smart TVs, and then to smart electric vehicles, the evolutionary transformation processes in these three major industries amply warn us not to blindly believe in so-called new entrant enterprises. Being "new" doesn't guarantee a win in the future. Instead, it is essential to discern the essence and analyze which enterprises possess the key success factors that truly determine outcomes from the perspective of systematic capabilities.

Currently, China's artificial intelligence industry is also thriving, giving rise to a host of highly regarded unicorn enterprises. Similarly, it is worth noting that when the industry reaches its conclusion, the last ones laughing are likely not the currently high-profile new startups but mature enterprises like Alibaba, Tencent, and Huawei, which possess greater entrepreneurial talent and systematic capabilities. If any exceptional enterprise ultimately emerges from these new entrants, it will be because it is fortunate enough to have a remarkable leader whose overall capabilities are on par with those of Ren Zhengfei, Jack Ma, and Pony Ma, or at the very least, an outstanding entrepreneur like Lei Jun who combines talent and diligence. Only then can it truly stand at the center stage of its industry.