Li Chengjie, Chief Data & Intelligence Officer of Mengniu Group, and Chen Siting, CEO of New Distribution, engaged in an in-depth dialogue titled "Reforging Data Intelligence". The discussion was structured around two parts: "Reforging New Growth" and "Reforging New Momentum", combining the practices and reflections of Mengniu, a leading enterprise in the industry with a revenue exceeding 100 billion, to provide a profound and comprehensive professional interpretation for all attendees at the 5th China FMCG Conference. To this end, New Distribution has compiled the highlights of this dialogue for our readers (with some deletions).
Chen Siting: Mengniu's first-half performance announcement showed a 30% increase in profit. In the course of Mengniu's development, what role has data intelligence played? From digitalization to data intelligence, there is a one-character difference; what is the distinction between them?
Li Chengjie: Data intelligence, first there is data, then there is intelligence. Every aspect of operations must be able to obtain data. From digital capability to data intelligence, it is essentially about the insights behind the data being able to empower. In my view, data intelligence plays a role in Mengniu's growth in three aspects:
First, as is often said, it is about using data insights to assist operations. For example, consumer insights help R&D, sales data helps production scheduling, and store simulation helps operations. Each company has its own methods, but being able to collect data is key. This means that when planning business activities, one must approach them with a data mindset, rather than blindly completing an action.
Second, all consumption is based on scenarios. Today's data, under certain technical means, can actually be shared. For example, to understand single-point sales performance, one can obtain it through scenario-based desensitized data cooperation. In a breakfast scenario, milk and eggs are complementary products. For afternoon tea, coffee and biscuits are a complementary scenario. For leisure, are cola and potato chips a scenario? For a gathering of friends, it is beer and fried chicken. Different brands and categories can exchange data in a desensitized manner.
Furthermore, consumption is nothing more than goods, people, and places. We have data on goods, you have data on places or people, and when combined, it provides operational assistance.
Third, the state allows data to be recorded on the balance sheet. This is a tangible matter that can help us in our operating statements. ** Today, data can become intangible assets, and data products can generate revenue through transactions. All of this requires the reserve of data intelligence. It is necessary to ensure data ownership, ensure that the value of data can be predicted and assessed, and ensure a certain level of technical reserve.
Chen Siting: As a leading enterprise with a revenue exceeding 100 billion, what explorations and practices has Mengniu undertaken in data-driven approaches, and what results or experiences can you share with the more than 1,000 guests present?
Li Chengjie: Mengniu started relatively early in digitalization. I can share three things:
First, ensure that there is data for everything; this is a process of accumulation. Mengniu's digital transformation can be traced back to before 2015. From a blade of grass on the pasture to a glass of milk on the table, if you deconstruct the entire process, a glass of milk generates about 170 megabytes of data. This is the logic of "goods" in data accumulation.
Once the entire lifecycle of goods is understood, the ultimate core competitiveness of every enterprise is to move from controlling goods to controlling people, that is, to provide personalized services to people.
From the perspective of person identification, if all consumers who have come into contact with Mengniu are considered together, removing duplicates, we can identify approximately 220 million people.
These people all have tags, behaviors, and cognitions. The first level of use I just mentioned, from insights to empowering subsequent actions, all starts with data accumulation. This is the accumulation level; the first thing is to have data.
Second, data must be usable; it cannot be garbage in, garbage out. Data must be governed and used through certain tools and standards. In the AI era, companies that are not as large as Mengniu also have certain opportunities. Previously, data pursued quantity; only with scale could there be volume.
Today, even without a particularly large volume, having particularly rich dimensions is also valuable. Because data is now being generalized, a relatively smaller amount of data can produce insights of the same effect.
Third, truly return data capabilities to frontline personnel. Previously, when we talked about data, experts made reports, and professionals produced reports, which was called PGC (Professional Generated Content) of data. At its peak, Mengniu had over 5,000 reports; now we are slimming down reports, and truly valuable reports are drilled down to the bottom.
Moving to UGC (User Generated Content) of data, data forms a marketplace, and through drag-and-drop methods, business personnel are helped to form reports. It is more flexible, providing services based on different scenarios, and users produce reports themselves.
But in the AI era, the most valuable thing is AIGC (AI Generated Content) of data. Frontline personnel truly understand their own business scenarios; it is best to give them the simplest way, lower the technical threshold, and allow them to ask "what, why, how" through natural language interaction, thereby generating reports. Through technical means, coupled with certain data accumulation, data becomes truly easy to use.
Enterprises often start digitalization from a tool perspective, focusing on what actions to complete and what applications to design. But the truly valuable thing is that all applications you design should carry a data mindset: What data does this application generate? What insights can this data provide me? And what actions can it guide?
Designing applications with a data mindset ensures that the data collected can be used later. Technology that is business-minded and forward-looking can truly provide greater assistance to the business.
Chen Siting: The last question is also related to AI. Just now, Teacher Cao Hu talked about the changes brought by AIGC, and you also mentioned generative AI. How does generative AI specifically empower marketing and Mengniu's practices? Mengniu has built a nutrition and health domain model, MENGNIU.GPT. It is quite cross-border for a milk company to engage in such cutting-edge technology. What is the logic behind it? And what impact will this large model have on the entire FMCG industry?
Li Chengjie: I think there are three levels.
The first level is in daily work, from increasing efficiency to reducing costs. From increasing efficiency to reducing costs means that with AIGC tools, efficiency in many business scenarios can be greatly improved. For example, in marketing and creative content generation, the technical and usage thresholds are greatly lowered. With insights, the content generated achieves true personalization for each individual, so this is definitely about increasing efficiency.
After increasing efficiency, the cost to be paid is reduced. This is the first aspect.
The second aspect is whether a company can do well; behind it are people. Can people's capabilities be improved? AI combined with people empowers people together. It is not that people are replaced by AI, but that people who do not use AI are replaced by those who do. This is a change that will occur throughout the entire organization.
Mengniu is already doing this. We have built our own scenario factory, we conduct employee training to make them qualified prompt engineers, so that everyone can use AI and find suitable ways in their own work scenarios.
Once a person's application is well-developed, it is shared in the application marketplace for everyone to use, and the creator's points increase. This enhances the capabilities of all employees. This is the second thing that can be achieved in enterprise applications.
With the addition of tasks and people, the overall intelligence of the enterprise can be improved.
What is the value of Mengniu's cross-border move?
The greatest value is truly increasing consumer stickiness. No matter how high-frequency or low-priced the product is, it cannot achieve real-time interaction with consumers. Especially for FMCG, a large amount of cost is in advertising, which is about making consumers recognize me and being able to reach me quickly. What is the essential logic behind this?
Consumers rarely have true loyalty. If the packaging changes and novelty increases, consumers will choose new things. What can help us stick with consumers in real-time?
Besides products, we need to provide consumers with some services. But we are manufacturers of goods; goods are our core competitiveness. To produce a service again is a high threshold.
But today, AIGC can change this.
For example, choosing milk is essentially about health. We have created an AI nutritionist that provides nutrition and health services for the entire family of consumers. For instance, if there is a child at home who wants to grow taller, it can predict their height and tell them how to exercise and what to do; if someone wants to lose weight, it can tell them how to do it in 21 days or 7 days, with very intelligent output. This is based on understanding consumers and a service-oriented concept based on scenarios.
This is how services help enhance product stickiness, keeping consumers with the brand, not by relying on discounts to impress consumers, but by using services to bring them closer.
What help and change does AI bring to the entire industry?
In addition to moving from increasing efficiency to reducing costs, and then to enhancing the capabilities of all employees, the arrival of AI will change the structure of industrial supply, especially the supply structure of suppliers. Brand owners choose suppliers and services, but many integrated services will be empowered or replaced by AI. Many practices in the industry will change, and therefore the operational logic of the entire industry chain will change.
PS: Friends interested in the content of the on-site speeches can follow the recent posts on the WeChat official account of "New Distribution". We will compile and publish the speeches of all guests for our readers.
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