Xu Xiaoliang: Fosun’s Species, Fosun’s Ecosystem, Fosun’s Future
From 11 to 12 January 2022, Xu Xiaoliang, Co-CEO of Fosun International, delivered a speech at the 2022 Fosun annual conference, focusing on Fosun’s species and Fosun’s ecosystem.
As Chairman Guo said in his New Year's sharing, "Believe in the Power of Perseverance". "Perseverance" guided us through 2021, and we have achieved good results in all aspects. It is also the same perseverance that has accompanied Fosun for 29 years. In 2022, Fosun is turning 30. Twenty-nine years of perseverance have brought about great changes in Fosun.
When Fosun was founded in 1992, it only had a registered capital of RMB38,000. Today, Fosun is a Fortune 500 company with an annual revenue of over RMB100 billion and a net profit of over RMB10 billion. In addition to assets on the balance sheet, the number of Fosun's employees has also increased tremendously from the earliest team of Guo Guangchang, Wang Qunbin, several founding partners and dozens of colleagues, to more than 70,000 Fosun employees worldwide at the Group level today.
We are grateful for this great era, all sectors in the society who have supported and encouraged Fosun on the road of development, those who have doubted and spurred Fosun's continuous growth, and all Fosun employees for their perseverance every day for 29 years, including those who have left Fosun.
After 29 years of experience, the most precious thing of Fosun remains to be its original aspiration of“Self-improvement, Teamwork, Performance, and Contribution to Society”, and "society" represents global families. Our mission of creating happier lives for families worldwide has been further strengthened.
Great times create great enterprises, and great enterprises will certainly promote the development of the era. Fosun is determined to be a great enterprise, rooted in China, creating a global happiness ecosystem fulfilling the needs of one billion families worldwide in health, happiness and wealth, making great differences in the lives of one billion families.
In addition to the exciting qualitative goals, the Group's "1+2+7" plan also specifies the quantitative goal of ten-fold growth in ten years. It may seem like a lot, but I think we are confident about it. It took 19 years for us to increase our assets from RMB38,000 to RMB100 billion, seven years to expand our total assets from RMB100 billion to RMB500 billion, only four years to expand our total assets from RMB500 billion to nearly RMB1 trillion. It is obvious that we have gradually accumulated assets over the years. After twenty-nine years, Fosun already has established a global layout with industries in the health, happiness, wealth, and intelligent manufacturing segments. We are confident about our future development.
The united efforts of Fosuners determines whether we can become a "friend of time" to achieve ten-fold growth in ten years. In the era of the Internet of Everything, we must build a happiness ecosystem centered around family consumption industries.How do we define a happiness ecosystem?Fosun’s species determines its ecosystem, and Fosun’s ecosystem empowers its species. The formation of Fosun’s ecosystem depends on the species’ ability to evolve to become a species of Fosun. Without species, there is no ecosystem. In addition, once the ecosystem is established, it must practice altruism and empower all Fosun’s species.
Species refer to various industries of Fosun, such as Laomiao, Songhelou, AHAVA, Lanvin, etc., scenes are vertical platforms such as BFC, Atlantis Sanya, Yuyuan, etc., as well as TCP, Dongjia, Baihe Jiayuan, etc. A species of Fosun depends on whether it is FC2M.
"F" stands for FOSUN and FAMILY. At present, birth rates are decreasing globally, and the family structure has become more diverse. There are families with three children, as well as families with two children and families with one child. In modern society, there are families with pets, families without child, single-parent families and empty-nest families. In some countries, there are same-sex families. Of course, there will also be metaverse families in the future. Fosun’s ecosystem and services target different families, and we must study them thoroughly.
"C", which stands for clients are family members. The core of “client-end as top priority” lies in two aspects:the first aspect is membership. We must treat customers with a mindset of membership, operate customer relations as membership, and provide the ultimate products and customer experience.However, it is only a change in mindset and title. It is not actually operating with a membership system. The fundamental question lies in whether the membership is systematized and whether there is a membership classification by type and by tier. Consumer members, staff members and corporate members should also be divided into corresponding tiers in each type of membership. The goal of classifying membership by type and by tier is to better understand customer needs, and continue to create products and services to meet customer satisfaction.
After obtaining the C-end data, Fosun proposed to build the “maker-end as top leader”, which aims to create hot-selling products with high gross profit margin and high gross profit to maintain customer satisfaction. The hot-selling products are the manifestation of innovation and R&D capabilities. In terms of innovation, we should emphasize on the transformation of ideas and thinking, such asmodel innovation on the one hand. For instance, through the transformation of "people, product, and place" in our self-operated/jointly operated businesses, we jump out of the traditional thinking of "subletting" and serve customers directly.Another aspect is the need for innovation. Take Tong Han Chun Tang for example, based on the big data on the consumption behaviour and consumer habits, we discovered the China-chic trend, and saw young people’s reliance on the fast-moving tea and beverage and desire to achieve wellness, giving rise to the Chinese 24 solar term health tea and creating new demand. We must implement innovation on products. R&D is the embodiment of innovation and the implementation of products.
We must connect the C-end and the M-end through the supply chain. The supply chain must first be controllable in three aspects.The first is the core technology to avoid the crisis of serious threat and supply cuts. The second is multi-location closed loop. The supply chain must form closed cycles in different regional markets, especially with the pandemic, the previous global multi-connected and relay style production relationship did not perform well. The third is capacity usage. In our internal system, we must achieve capacity usage between regions and industries. For example, Tom Tailor can manufacture products for Wolverhampton Wanderers. On the basis of controllability, we must achieve higher flexibility with elasticity and individuality in the supply chain of Fosun’s species. The order size can be large or small, and there can be different sizes, colours and styles in the same batch of order.
Only when we realize FC2M, we can successfully create Fosun’s species to support Fosun’s ecosystem.When we talk about Fosun’s ecosystem, we must first understand Fosun Alliance. In Fosun Alliance, we are not selecting the goods nor the interests. The interests are the means, but not the goal. Fosun Alliance basically selects members, to gather members of different categories and tiers from various Fosun’s species into Fosun Alliance. Through AI and big data, these members can be effectively allocated. Thanks to Fosun Alliance, members can choose to join more suitable scenes, industries or platforms immediately, so as to enjoy and experience more good products and services of Fosun. Fosun Alliance hopes to help various species continue to expand the private domain of members and operate continuously. At the same time, the members of each species are empowered by each other, and they can grow and make great achievements together. Up till now, the entire Fosun’s ecosystem is expected to gain 400 million*N memberships.
Fosun Alliance's business logic has been thoroughly considered, but we have also discovered pain points in the process. If our species do not realize customer membership and membership systemization, Fosun Alliance can only be a dream without FC2M’s species.We can realize Fosun's future and achieve the goal of ten-fold growth in ten years by introducing Fosun’s species to Fosun’s ecosystem. Essentially, we do everything to create Fosun’s species.
The business logic of Fosun’s species and Fosun’s ecosystem is clear, and after all, we must implement it, so we need an organization with ecosystem characteristics. Fosun's organization is very much like a “Matryoshka doll”, ranging from large to small, from headquarters to industry, from enterprises to the smallest, the most excellent unit. However, such an organization alone cannot support Fosun’s ecosystem. The organization with ecosystem characteristics must be interconnected and three-dimensional. From last year to this year, we have been iteratively upgrading the organizational structure. Under the leadership of the Group’s EMC and the four major committees, we have formed a three-dimensional organizational structure. Vertically, there are BG, BU and PL business segments, and horizontally, there are industrial Internet, Hive, and investment and financing AMC. In addition, there is also the functional middle platform of COG, which fully empowers horizontal and vertical businesses.
Partners with entrepreneurial spirit at different levels, lines and dimensions are needed to form this kind of organization with ecosystem characteristics, connecting the latitude and longitude like ecological nodes and connecting all parties. Fosun now has 110 global partners and more than 600 partners at different levels, dimensions and lines. In the future, we hope that the number of Fosun global partners will reach 300 as soon as possible, and the number of partners in the entire partner system will reach 3,000.
The ecoystem mechanism is a key to the organization with ecosystem characteristics. Fosun is weaving a network of ecosystem mechanisms. The core of which is that the board of directors has been emphasizing that a multi-level and multi-dimensional incentive mechanism should be established from the top to the bottom, with the top level supporting the lower level and the left supporting the right. The second is the fission mechanism. Through level 3 fission, we can realize the rapid replication of combat units at all levels, promoting the rapid business growth.
Fosun hopes to become a great enterprise, creating happier lives for families worldwide. Such mission and vision resemble the sun, illuminating the entire ecosystem. Without the sun, nothing can grow. All Fosun’s species resemble sunflowers, growing towards the direction of the sun. Such ideals make our daily arduous effort, yearly arduous effort and arduous effort of each generation of Fosuners more meaningful.We believe in the power of "perseverance", insist on FC2M, insist on building Fosun’s species and Fosun’s ecosystem, and are committed to striving for glory and dreams.
Fosun moved on from "entrepreneurship" to "re-entrepreneurship" 20 years after its establishment. Today, as Fosun turns 30, the board of directors proposes “co-entrepreneurship”.
In the next decade,
we hope to achieve co-entrepreneurship, co-sharing and build a brighter life
with all Fosuners worldwide.
Let’s do this!