- Xu Xiaoliang: Pin the C-end on top to create greater value
- Release Time: Apr 07, 2021
Xu Xiaoliang, Co-CEO of Fosun International
The past year has been a challenging year for Fosun, but it is also the most valuable year because it has allowed us to slow down our pace, reflect on the past, and plan for the future.
From harnessing China's economic momentum to set up the underlying industrial platform to availing itself of the same to link with global resources in developing into a globalized conglomerate, Fosun has now ushered in its third stage of development, i.e., the "two-way connectivity between China and the rest of the world".
In 2018, Fosun set a tech innovation-driven strategic orientation for its Family Consumption Group, thereby making clear its ambition to “Contribute to the Society”, i.e., the one billion households across the world. Fosun commits itself to building a family-centric C2M happiness ecosystem around health, happiness, and wealth.
Cementing the M-end and pinning the C-end on top
When pushing for the C2M model, Fosun had concentrated on the competitiveness of its products on the M-end, believing that outstanding products are underlain by innovation.
Examples of these innovative products include Han-Qu-You, the very first domestically produced monoclonal antibody biosimilar in both China and Europe batches, and FCN-338, a selective small-molecule BCL-2 inhibitor that Eli Lilly has been licensed to sell in all countries and regions except Mainland China. Besides, Fosun also has a bounty of innovative offerings in happiness, wealth, and intelligent manufacturing businesses.
Nonetheless, "good wine also needs advertising." Fulfilment of C2M is possible only by gaining a deep understanding of customers. Therefore, in addition to cementing the M-end, we put forward the idea of pinning the C-end on top. The path to do this is crystal clear: AI-driven to build a three-tier platform, and marketing activation to build an ecosystem.
Tier 1 basic platforms: This is the entrance to Fosun's massive business segments and scenarios. With gross customer traffic hitting a number as huge of 470 million, we have a registered membership of approximately 358 million.
Tier-2 vertical platforms: Deep coupling with products was accomplished through vertical platforms such as idongjia.cn, baihe.com, Thomas Cook, etc. Customer traffic can be aggregated on different platforms, and individual needs of customers will also be funneled to the M-end, thereby improving both profit margin and customer satisfaction.
Tier-3 topmost platform: To create a unified membership platform which brings together all loyal customers and where customers can buy from a mind-boggling mix of selected products offered by Fosun.
Digitalization and AI algorithms are inseparable to the development of a three-tier membership platform. Meanwhile, through online and offline membership services and marketing tools such as ecosystem-wide point redemption, customer traffic is funneled across different tiers of platforms forming an unobstructed membership ecosystem flooded with loyal customers.
Reinforce investment and adhere to globalization
Pinning the C-end on top and pushing for in-depth operations does not necessarily mean the waning of our investment capabilities. In the forthcoming years, our investment will be dedicated to further strengthening the family consumption ecosystem. Through primary and secondary market transactions, industrial acquisitions, hive industry-city integration and other investment options, multiplier effect will be forged to bolster our in-depth operations.
Globalization is equally essential for in-depth operations and reinforced investment. Fosun is the beneficiary of globalization and practitioner of dual circulation. Against the current backdrop of dual circulation, Fosun's ability to foster globalization is taking on a quality of preciousness.
Constantly evolving organization and ever-upgrading mechanisms
The greatest change in Fosun’s organizational structure in 2020 was the transformation from a loosely organized and fragmented institutional investor into a well-organized, full-fledged, and coherent ecological organization.
At the top level is stable leadership composed of the chairman, co-chairmen and two co-CEOs, and an EMC core management team consisting of a group of resourceful CXOs with strong passion and extensive industrial experience. Vertically, the architectural design featured by five-pillar BG-BU-PLs allows the classification, tiering and full authorization of operation and management. Horizontally, the three major AMCs and the headquarters functional units have linked up to empower a string of business segments. In the meantime, Fosun has also set up industrial Internet units from top to bottom in order to empower customer management with Internet thinking.
Aside from changes in organizational structure, the lineup has also been upgraded. Fosun's partner-led approach helps build up its talent pipeline. At the top level, Fosun's accomplished team of 18 global partners “established” in 2016 has now grown to include more than 110 global partners. In particular, more than 60 employees from different business segments and units were promoted to global partners earlier this year, the highest number in the history of Fosun. The purpose is to fight big and tough battles with more talents.
In parallel with the expansion of our global partners, we have also established a partnership system which consists of different dimensions and levels. On the one hand, we have a total of 305 partners for different business segments and 220 partners for different functional units. On the other hand, we have also appointed 38 Fosun Innovation Partners in technology innovation, creativity, and master craftsmen.
Partners must be willing to share weal and woe and complement each other. In addition to thinking from the perspectives of the chairman and CEO, they must be intent on addressing the difficulties which prevent Fosun from further growing, thereby creating an ecological synergy.
The key to enlivening an organization lies in various mechanisms, and the Fosun’s biggest gain in 2020 was the establishment and continuation of its wartime mechanism which has also contributed to the formation of battle strategies at different levels. Battles keep the organization in wartime state and help enhancing combat effectiveness. In the meantime, through 42 "Star Battlefields", we have replaced training with combat to promote the sustained evolution of our organization.
Where there is battle, there is co-opetition. Even global partners are subject to annual comprehensive assessment in the form of rankings. This "survival of the fittest" mechanism continues to inject vitality into Fosun. In conjunction with co-opetition is a job rotation system aimed at fully stimulating the combat effectiveness of the organization and fostering versatile talents.
Meanwhile, we must forge and polish multi-level and multi-dimensional short-, medium- and long-term incentive mechanisms, including holding equity in subsidiaries, co-investment, equity participation, etc. In particular, we must manage to promote the "fast fission" of our core operations and key talents through the "three-level participation of interests".
A company must improve its products, refine its organization, perfect its mechanisms at the core, and polish its culture to seek long-lasting prosperity. By pinning the C-end on top, whether the family happiness ecosystem will continue to thrive hinges entirely on our adherence to culture. In 2020, the "eight matters" of Fosun ushered in another iteration, with "customer first" being put in the first place to better guide Fosun through the new strategic tasks.
For the 29 years since its founding, all changes made by Fosun were aimed at fulfilling its original aspiration of "Self-improvement, Teamwork, Performance, and Contribution to Society". In echoing that aspiration, we took the lead in mustering a global response to COVID-19, and we engaged ourselves in global vaccine research and development regardless of the huge investments and formidable risks involved. Fosun was also in the vanguard of China's future-oriented drive to shake off poverty. In 2017, we kicked off the "Rural Doctor Poverty Alleviation Program" to help fortify the primary medical system in rural areas and was thus awarded the national honor of "National Advanced Collective for Poverty Alleviation".
As Mr. Guo and Mr. Wang have said, philanthropy is neither whim nor empty talk for Fosun. It is born of Fosun's mission and aspiration to "contribute to the society", a tenet that has been deeply embedded into the DNA of every staff member of Fosun. In the years to come, Fosun will keep devoting itself to "creating happier lives for families worldwide" and rewarding more to our shareholders, investors, customers and friends from all walks of life who care about and support Fosun's development.