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Vitality forest keeps the secret of 2-3 times growth every year.
What is the foundation of digitalization?
“Algorithm is not the foundation.” Huangxiaofeng, CIO of Yuanqi forest, said bluntly.
If the basis of digitalization is not algorithm, what will it be?
“If you want to do a good job in digitalization, you need to do a good job in infrastructure construction and operation, taking data as the entrance and indicators as the skeleton, so as to form an iterative strategy combined with business processes.” Huang Xiaofeng gave his answer.
“Many companies are still brain driven.” Luo Xu, founder and CEO of Fanxiang marketing, admitted that, by contrast, Yuanqi forest’s data-driven decision-making concept seems to be more rational.
In a FMCG industry wrapped by Coca Cola, Pepsi Cola, Nongfu Shanquan and other established beverage manufacturers, the vitality forest created out of thin air was once called the strongest dark horse in the beverage industry.
Being imitated, studied and compared seems to be the plot that the new favorite of each era must experience.
Talking about the biggest difference between Yuanqi forest and traditional companies, Huang Xiaofeng said: “in a sense, it is the easiest to make new products, but it is the hardest to identify the success and failure of new products and exit quickly.”
“Yuanqi forest prefers to use the market rather than theory to judge the exit or retention of a product, so that its judgment and standard of exit, and even its decision-making, will be faster than traditional companies.”
As a representative of China’s new consumer brands, the success of Yuanqi forest cannot be separated from its own accumulated digital transformation methodology. It can be said that Yuanqi forest is the first batch of enterprises to receive digital dividends, such as data-driven testing, construction of Zhongtai, digital operation, etc. the digital methodology and development path of Yuanqi forest can provide a sample worth studying for latecomers and the whole industry.
This issue of the high-end interview program “Zhijian”, jointly created by Fanxiang salesmen and Netease technology “digital planet”, is presided over by Mr. Luo Xu, founder and CEO of Fanxiang salesmen. Huang Xiaofeng, CIO of Yuanqi forest, is invited to discuss the past experience and future thinking about digital growth.
In the dialogue between Luo Xu and Huang Xiaofeng, perhaps the most impressive thing is not Yuanqi forest’s understanding of digitalization, but the deep thinking of this seemingly young and immature company about its underlying logic of business innovation, the trade-offs between new and old businesses, adhering to the Internet and returning to traditional companies.
In the process of digitalization, Yuanqi forest’s trade-off between advance and retreat reflects the company’s recognition and awe of data.
Replace brain decision with data-driven decision
Luo Xu: how to interpret the positioning of Yuanqi forest’s “Internet innovative beverage brand company”?
Huang Xiaofeng: innovation is the essence of the survival and development of Yuanqi forest.
The reason why Yuanqi forest can stand out from the traditional fast-moving industry is related to product and operation innovation. For example, it is an innovation for us to make the traditional bubble water of 3 yuan at the price of 5 yuan for white-collar workers.
In addition, the Internet emphasizes digital drive and rapid iteration, which is the biggest difference between Yuanqi forest and traditional companies. Therefore, we often put “innovation + Internet” on the positioning of the characteristics of Yuanqi forest itself.
Luo Xu: innovation and Internet are also very relevant to today’s theme. How do you use data to drive product innovation?
Huang Xiaofeng: compared with traditional enterprises, the strongest point of vitality forest is not a certain technology or taste, but the formation of a complete set of innovation systems and systems.
In a sense, it is the easiest to make new products, but it is the most difficult to identify the success and failure of new products and exit quickly. Traditional enterprises will spend a year to develop dozens of products, and eventually breed a formed product. Decision making is faster than traditional companies because we prefer to use the market rather than theory to judge the withdrawal or retention of a product.
Luo Xu: we often say that only by taking customers as the center, understanding, perceiving and connecting customers, can we make products that customers like. The huge fast-moving goods crowd, preferences shift very quickly, but the vitality forest has formed a very agile reflection arc. How do you do it?
Huang Xiaofeng: the first is the contact, that is, the test tools and places; The second is the mechanism. I think both are indispensable.
First of all, from the perspective of test scenarios, traditional companies use two more ways: the first is to lay Ka or lay customers, and submit test information through sales. But in this way, the labor cost will be very high, so the company can only rely on sampling, and even go to companies such as Nielsen to obtain new product sales data and consumer feedback, which is a large category of offline.
The second category is online. Many companies are foreign and private enterprises, but no matter what, they will have many constraints on KPI assessment. When testing, these companies pay more attention to the corresponding KPIs.
Especially when the product manager is in charge of a product, it is difficult for him to make up his mind to quit the product. Even if the online or offline data is bad, he will place his hopes on various reasons such as weather, channel and time. Therefore, when a product manager makes a complete judgment on the mechanism, it is particularly difficult to make decisions.
Yuanqi forest has two characteristics. First, of course, we will also be online and offline, and there may be more online. There are a group of online colleagues in the company who are originally from e-commerce or Internet. They use Internet thinking to make consumer insights.
The biggest point of offline innovation is the intelligent freezer of Yuanqi forest. From a technical point of view, the biggest difference from the traditional freezer is that our freezer can judge whether this product has left the freezer by identifying whether it is taken from the freezer or put it back after taking it out, and then infer its sales volume. It is not only a contact for selling goods, but also a contact for testing.
From the perspective of mechanism, Yuanqi forest does not decide whether to stay or not unilaterally by products, but the result of combining the sales, supply chain and products of both sides and jointly discussing based on data.
Luo Xu: if the data is OK or not, you can’t vote if the data is not OK.
Luo Xu: in fact, you put forward a very good concept called data-driven decision-making. Many companies are still brain driven decision-making.
Abandonment and persistence:
Dare to give up, but also have persistence
Luo Xu: what is the biggest hole that Yuanqi has ever walked through in the whole process of digital driving?
Huang Xiaofeng: the construction of the whole project, which we call RTM (route to market) digital construction, must be business driven rather than technology driven. The biggest lesson is that we used to be so far away from business.
Therefore, we made the most painful decision: completely abolish the shop inspection 2.0 system that has been developed for a long time, and then disassemble it into our self-developed platform to connect with dealers and directly use part of the functions of Fanxiang selling customers. According to our needs, we have made two openings to solve the real business scenarios and business problems. After the truth returns to the nature of the business, we can surpass it.
Luo Xu: what is the overall thinking and framework of Yuanqi forest in the process of digital construction of the whole business? I think you are a business team, I don’t think you are an IT team.
Huang Xiaofeng: the underlying logic of Yuanqi forest to promote digitalization is that we have always called it digital operation, rather than calling ourselves a digital department or digital team. So back to the organizational structure, we will have sales operations, supply chain operations, and industrial and financial operations, which are the three major operation departments touched by the whole supply chain.
It and development constitute our industrial CNC, which can be understood as the overall digital operation Department. Among the more than 200 people, perhaps 60% are product development and 40% are operation colleagues, all of whom are business oriented. We divide our products into two, one is technical products, the other is business products. Business product personnel think more about BPM (Business Process Management), and they recite operational indicators.
Therefore, digital operation is not about NPs (Net Promoter Score), but about service satisfaction, but more about business results. I want to start with the end. This is the biggest difference between Yuanqi forest and traditional companies.
Luo Xu: This is a very simple truth, but it is actually a very profound truth. Whether we are responsible for the result or the form. In fact, many enterprise IT departments are responsible for the form, not the result.
Huang Xiaofeng: Yes. So what is the foundation of digitalization? I have always said that algorithm is not the foundation. Who can calculate Baidu algorithm?
To do a good job in digitalization, we must do a good job in infrastructure construction and operation, taking data as the entry and indicators as the skeleton, so as to form an iterative strategy combined with business processes.
Luo Xu: how to evaluate which systems should adhere to self-study? Which systems should introduce third-party products?
Huang Xiaofeng: all systems actually do two things: how to eat data and how to spit it out. Who can help me eat and spit out the number most accurately, we should first consider what kind of product to use.
We have an internal principle, which is to see the cost performance of the whole self-study. If it is a blue ocean, then I will go. If it’s a red sea, why go? In this case, it is more suitable to find a product with relatively small changes, fast growth and high maintenance in the market, and our energy will always be on the blue ocean.
Luo Xu: therefore, outsourcing and self research are just channel choices. The ultimate goal is to ensure the efficient access and integration of data, so as to guide operations and drive business. This is the core.
The end of intelligence is the data coverage
Luo Xu: president Tang (Tang Binsen) put forward a slogan that Yuanqi forest will return to the traditional company in 2022. I think it’s very strange. Why do you put forward this statement?
Huang Xiaofeng: a really good company should combine data and indicators, form indicator strategies, and manage with indicators. Large traditional companies are the strongest in the refinement of indicators. In the past, we used to talk more about data speed at the Internet level, but now we need to add indicator logic at the same time. When we need to consider operational strategies, it is a traditional company.
Of course, we won’t abandon the Internet, because it’s best to use technology when operating and landing strategies. For example, what I dislike most is the Bi of traditional enterprises, because no actual operator of a company depends on a large screen hung on the wall or a small screen placed in the mobile phone to decide the work of the day. Bi is cool, but it’s all face saving projects. People who really do operations will not stare at BI every day.
Luo Xu: in the field of production, you have built your own factory. What are the characteristics of Yuanqi forest driven by data?
Huang Xiaofeng: we will be more careful to do the digital system layout of the whole factory. The digital factory is divided into two parts: the industrial Internet part and the data retrieval part. This part of data can be entered into the data warehouse for index management.
Another part involves the management of the whole factory, so now we are more cautious about MES (Manufacturing Execution System) itself. It is not that we don’t do it, but that we should grind out the best practice and do it again.
Whether digital twins or refined operations, the essence is not the system itself, but the system itself is icing on the cake. Successful systems often come from best practices.
Luo Xu: what cognitive obstacles and selection inertia should traditional fast-moving product companies overcome to move towards digital operation?
Huang Xiaofeng: first, team positioning, assessment, talent composition and organization construction of digital teams. What the team is going to do in the future is digitalization, sharing and operation? Or is it just a service that provides digital tools?
If the digitalization team of an enterprise only focuses on the tools to provide digital services, rather than the complete transformation of operations, I think it will be greatly restricted.
Luo Xu: what is your vision for an agile and innovative company like Yuanqi in five years’ time?
Huang Xiaofeng: as far as the fast-moving industry is concerned, I think the ultimate intelligence lies in the coverage of data. Who can realize channel digitalization in CRM system can establish industry internet.
In other words, only by serving the products that can provide the Internet of the industry can we truly change the digitalization of this industry. For example, in the fast-moving industry, with the gradual expansion of brands, channels will become more and more complex. At this time, channel digitalization has become a rigid demand.
As a CRM, what we need to solve is: where are customers and channels. For example, provide services such as fast-moving companies: in a specific city, which customer has sold farmers, coke, and also wants to sell vitality forest. This means that fast-moving enterprises present the sources of customers and channels in a digital way through CRM. In essence, this changes the way an enterprise operates.
Will it happen? I’ve seen it happen step by step. When did it happen? I think it may be possible in five years.
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