Introduction: Facing growth opportunities, think from first principles, returning to the essence of business and rethinking the logic and framework.

The market has not yet recovered. The market in 2023 is a tale of two extremes, with pessimistic and optimistic sentiments coexisting, creating a strong sense of conflict. From a pessimistic perspective, there are two constants worth noting: first, supply glut. In 2023, the market has an oversupply, and I believe it will take three to five years to fully digest. Moreover, the homogenization problem in the consumer goods industry is difficult to solve in the short term, and industry involution will only intensify. Second, negative population growth. In 2022, China's population entered a phase of negative growth, and it is expected to become an aging society by 2025. The new generation of consumers has insufficient spending power and low brand loyalty. The second thing worth noting is the 'scar effect.' That is, after major events, human behavior undergoes long-term changes. In 2022, amid overall economic downturn, a large number of people lost jobs, businesses closed, and people deposited money in banks. By the end of September 2022, urban residents' deposits increased by 13.21 trillion yuan, the highest on record, compared to 9.9 trillion in 2021, meaning in the first nine months of 2022, we had 3.31 trillion more than the whole of 2021. A major shock affects people's lives for at least three to five years, sometimes up to ten years, and overall economic recovery takes time. The third thing worth noting is the impact of global geopolitical tensions and the pandemic on the economy. The Russia-Ukraine conflict and US-China confrontation will cause price fluctuations in a series of commodities, significantly affecting domestic companies' supply chains. Additionally, new COVID variants like 'Cerberus' may spread widely in China after the Spring Festival. Furthermore, US inflation will lead to global economic downturn, and next year's global economy may not be particularly ideal. The fourth thing worth noting is the current operational difficulties of enterprises. In recent years, channel fragmentation and traffic peaks have led to rising customer acquisition costs. In such circumstances, enterprises must pay attention to all channels that can obtain traffic. Many companies still hold a negative or conservative attitude towards B2B channels. In fact, if there are new channels, enterprises should guide rather than block. Therefore, I suggest that in 2023, enterprises should focus on short-video live streaming, Meituan Flash Delivery, community group buying, B2B, and other digital fields to alleviate operational pressure.

The overall trend is improving. From an optimistic perspective, securities analysts in the secondary market estimate that China's GDP growth in 2023 will be between 4.5% and 5.2% without policy stimulus. Considering that the state will introduce policies to expand domestic demand, it is expected that GDP growth will be higher. Specifically, regarding the overall positive trend, I summarize seven points: First, the transition from the post-pandemic era to the post-COVID era, with people returning to normal life, is an unstoppable trend. Second, some scholars have proposed issuing cash to low-income groups. In the future, the state may provide direct support to grassroots people through policies like digital RMB, fully boosting consumption. Third, the state has proposed developing new individual economy since last year, benefiting individual entrepreneurs like mom-and-pop stores. Fourth, consumption upgrading in lower-tier cities is evident, with products like new energy vehicles and home appliances penetrating lower-tier markets. Fifth, the state will build a unified national market, helping to reduce local barriers in logistics, supply chains, and market taxes, and build a more efficient national supply chain system. Sixth, starting from 2023, China may enter a seven-to-ten-year low-growth phase, and it is possible that supply chain finance interest rates may decline under policy guidance. Seventh, the state may increase opening up in domestic demand to stimulate consumption. Overall, the recovery of the economic fundamentals is the theme for 2023, but the difficulty of natural recovery may be underestimated.

Returning to the essence of business. In this context, I believe that in 2023, new consumption will also usher in new opportunities. The so-called new consumption is not just consumption upgrading, but more importantly, the 'newness' of consumption values. In the context of oversupply and severe involution, consumers have also changed: from materialistic consumption values to spiritual ones, from useful consumption to beneficial consumption. This requires enterprises to provide emotional value that generates premium pricing far greater than functional attributes. At the product design stage, one cannot start solely from function but from consumers' emotional value points. However, how to make consumers perceive the non-physical value of products also tests the 'skill' of enterprises. Secondly, building digital capabilities is also an opportunity for new consumption. Undoubtedly, digital capabilities can enhance productivity and help enterprises improve competitiveness in the stock market and heavily involuted market competition. Therefore, enterprises should continuously explore and experiment in digitalization, because whoever completes digital capabilities first will have a first-mover advantage in future competition. This capability maps to distributors in two directions: one is transformation and upgrading to B2B; the other is enhancing full-domain coverage and reach capabilities through user operations in private domains, short videos, live streaming, e-commerce, etc. In terms of new channels, new consumption also has new opportunities. The market has entered a mature stage and is booming. Distributors/brands should self-check which new channels like community group buying, B2B, private domain e-commerce, and front warehouses are not covered. For distributors, the B2B ecological niche opportunities in the market are limited. If you don't occupy them, others will. In the future, a large number of distributors will be eliminated by B2B. Many people are pessimistic about community group buying, but I think it will return to the essence of business in the coming years and mature, so it's worth attention. Also, Meituan's Flash Delivery: we have calculated that a single flash delivery store in Guangdong has a daily order volume of about 18,000, and in Beijing it can reach over 12,000. What does such a high order volume mean? If Meituan prioritizes its own flash delivery stores online, it will lead to a decline in the operational capability of mom-and-pop stores. Therefore, distributors should pay more attention to this aspect, and even open their own flash delivery stores to cooperate with Meituan, directly reaching C-end consumers. New demographics and new scenarios are also opportunities for new consumption development, such as laying out products around Generation Z consumers and creating revenue under the rise of the night economy. Facing these growth opportunities, I provide distributors/brands with a thinking framework: think from first principles, that is, return to the essence of business and rethink the logic and framework. Consumers' basic consumption needs have not changed, but consumption logic, consumption paths, consumption mindsets, and consumption capabilities have fundamentally changed. So we must start from the origin, rethink user needs, logic, paths, and scenarios, understand why consumers consume, where they consume, and what their consumption logic is, and then rebuild our own marketing capabilities and logic. This is not complicated in itself; what is complicated is the existing organizational inertia and adjustment of existing operations. In 2023, if I must give some advice to enterprises, I think there are four points: First, have a clear understanding of the stock market; Second, do full-domain operations, especially same-city O2O channels; Third, consider digitalization to reduce costs and increase efficiency;