Zhang Ruimin is a highly admirable entrepreneur, not only for transforming Haier from a small enterprise into a world-class company in the past, but also for his keen insight into the development of the internet society, which led him to transform Haier from a traditional manufacturing enterprise into an internet enterprise a few years ago. Recently, I read Zhang Ruimin's views on the present and future, which are indeed thought-provoking. I would like to share my superficial understanding of the following viewpoints with you. Zhang Ruimin: *Only small and micro companies can face market uncertainty and users' personalized needs. Analysis: This viewpoint is indeed worth deep reflection for many large-scale manufacturing enterprises and chain retail enterprises. The rapid development of the previous economic cycle gave birth to many relatively large enterprises, whether in large-scale manufacturing or chain retail. Any enterprise development model must be based on the corresponding external environment, especially closely aligned with the consumer demand environment. In other words, different market environments and different consumption environments will produce different enterprise development models. In the previous economic cycle, the foundation for these enterprises' rapid development was built on a large market consumption environment where consumers had more common consumption needs. In this environment, enterprises could organize production according to large-scale industrial thinking and organize marketing according to unified needs and large market potential. Manufacturing enterprises could position their products: facing numerous consumers, an enterprise could use one product to meet the needs of different consumers. Therefore, they could organize large-scale production in a standardized product manner and organize marketing according to a unified marketing model. Enterprises could achieve relatively rapid development under this standardized and unified model. Chain retail enterprises, through highly standardized store models, product models, and marketing models, achieved rapid and replicable development. But now, the market has indeed changed. As Zhang Ruimin puts it: market uncertainty and users' personalized needs. Overall, the stratification, fragmentation, and personalization of consumption have become very important realities. Therefore, the external environment for enterprise models based on previous large-scale production and standardized chain retail is changing. This may also be an important reason for the current difficulties faced by many brand enterprises, especially large-scale production brands like Coca-Cola, P&G, Nestlé, and large chain retailers like Walmart, Carrefour, and Sears. According to Zhang Ruimin's viewpoint: Only small and micro companies can face market uncertainty and users' personalized needs. Therefore, in the face of the severe problems of current enterprises, especially large enterprises, enterprises need to first consider whether they should judge that the main characteristics of the current consumer market are stratification, fragmentation, personalization, and high uncertainty. If they agree with this judgment, they need to consider whether the previous concepts of large-scale production and chain standardized retail can adapt to the current market changes. In fact, the market characteristics of consumption stratification, fragmentation, and personalization are already very obvious. Many enterprises have also strongly felt this significant change. However, in the face of this significant market change, some enterprises are either unwilling to abandon previous concepts or still harbor illusions. Therefore, the key now is to further see clearly the characteristics of this significant market change and its future development trend. How to adapt to this change? Zhang Ruimin's answer is to transform into small and micro companies. That is, to quickly abandon the previous concepts of large-scale production and chain standardized retail, transform the enterprise organization, and create smaller, more flexible organizational units to cope with the new market characteristics of stratification, fragmentation, and personalization. This transformation is very complex and involves all aspects of the enterprise. However, the environment has changed, and the environment for previous enterprise models and concepts is changing. Enterprises must undergo organizational transformation to adapt to the environment. Haier has transformed itself from a traditional manufacturing enterprise organized for large-scale production into a systematic transformation under the internet environment, with networked and micro-enterprise organization and employee maker system. Zhang Ruimin: *For large enterprises to succeed, they can only rely on their corporate culture. But once corporate culture is formed, it is difficult to change. Our past success was due to an execution culture, but the 'RenDanHeYi' model is precisely contradictory to execution. Many of our middle and senior managers say: I execute well, but if you ask me to start a business, I really can't. In fact, if you want to do it, you will find a way; if you don't want to do it, you will find an excuse. Analysis: In the current environment, while enterprises are undergoing organizational transformation, the most needed is to simultaneously transform corporate culture. In the past, under the hierarchical enterprise organizational environment, the core of corporate culture created by most enterprises was execution culture and obedience culture. Enterprises also strengthened this execution culture through well-established processes, standards, and systems. The goal of execution culture is to pursue high efficiency in the internal team operation of the enterprise. In this cultural environment, the positioning of general managers and employees is to execute and obey. In this cultural environment, to a large extent, it constrains the creativity and innovation of internal organizational units, general managers, and employees, hindering the innovative development of the enterprise. The social environment and employee environment faced by enterprises are changing. In the new environment, enterprises especially need to be more innovative and creative to achieve innovative development. Overall analysis, in the new internet environment, employees' ideas and concepts are also changing. They are no longer fully accustomed to standardized and process-oriented work environments, and have a stronger desire to express their own value. The transformation of corporate culture is a very complex and difficult process. It requires the transformation of the boss's and managers' concepts, and also requires grasping the relationship between innovation and standardization. Innovation will not be a complete overthrow and restart, after all, the original intention of standardization and process is to improve enterprise efficiency. Cultural transformation is necessary, but it must be closely combined with the actual situation of the enterprise. Zhang Ruimin: *What is strategy? Strategy is to always seek the second curve, not to strengthen the existing state. Analysis: This is a very philosophical sentence. In the process of development, enterprises must constantly seek new paths and new breakthroughs, and cannot always be limited to existing thinking and existing models. Especially in the current environment where enterprises face many problems, it is even more necessary to change thinking and seek the second curve. If we always think about transformation under the traditional model, it is afraid it will be difficult to find a better direction. For example, current FMCG brand manufacturers and retail enterprises, in the face of declining performance, market shrinkage, and customer flow loss, especially need to change traditional thinking. Indeed, they need to find direction, path, and method from the second curve. For example, manufacturers still based on previous product concepts, channel models, terminal tactics, and marketing methods will find it difficult to get out of the current predicament. Retail terminal enterprises still based on previous product-centric retail concepts and marketing methods will find it difficult to overcome current problems. Zhang Ruimin: *What is community economy? It is that the enterprise becomes community-centered, integrates with users, and users are also members of the enterprise. *Is there still a way out for the entire home appliance industry? Certainly there is no way out. It can only go from selling products to acquiring lifelong users, and it can only be community economy. *The main income of an enterprise is external, not internal, that is, the community. It mainly depends on the size of the community and the lifelong value of community members. Analysis: Community has become a very important form of social organization. The new community economy generated by new community influences is continuously playing an important role. I greatly admire Zhang Ruimin, such a high-end master, for his keen insight into market changes. He has made such judgments on the understanding of community, its value in future enterprises, and the shift of current enterprise marketing focus to community. Market insight is the core competitiveness of enterprises and business owners. What business owners need is to accurately grasp subtle market information in the face of subtle trend changes, make their own value judgments, and take effective transformation in a timely manner. So far, there seems to be no second person among high-end enterprise managers who has such an understanding of community. Enterprises indeed need to accurately grasp this market change and achieve their own transformation and development. This shift is a systematic transformation, not just a change in concept. It requires enterprises to shift from product-centric to consumer-centric; from self-centric to customer-centric; from only focusing on products and sales to how to acquire customers, how to acquire more customers, and how to create lifelong value for community members. Zhang Ruimin: *In the internet era, it is not too big to fail, but too big to easily fail. So I think we should not do enterprises, but only do platforms, that is, networked organizations. In the internet era, there are no enterprises, because enterprises are self-centered. Future enterprises will definitely be networked organizations, nodes of the internet, not self-contained systems. Connected to the internet, you may get unlimited resources; but disconnected from the internet, you may be nothing. Analysis: This is a very thought-provoking statement. The current society has been internetized, and the future society will be even more internetized. If enterprises have not deeply understood the internet and have not fully integrated into the internet, they will inevitably be eliminated by the development of the internet. The current development of the internet not only provides people with more convenience, but the internet is changing people's concepts and lifestyles, and the internet is continuously generating new business models. Enterprises must understand the internet from a deep level, not just stay at the level of connection means and technical means. They need to recognize the new changes brought by the internet from a deeper level and the new opportunities generated by these new changes. Enterprises need to fully integrate into the internet society as soon as possible. Zhang Ruimin: *In the traditional era, we only sold products, and customers were anonymous. But in the internet era, your users must be named and interactive. Whatever requirements users have, we must continuously iterate to meet them, thereby creating a lifelong relationship. *The essence of big data is small data, that is, data about users' personalized needs. After high efficiency, we must solve high precision. Analysis: Redefining the relationship with consumers is the primary prerequisite for current enterprise model transformation and transformation development. Whether it is the market shrinkage caused by the decline in brand penetration of brand manufacturers, or the performance decline caused by the decline in customer traffic of retail enterprises, it strongly warns us: the simple relationship between traditional enterprises and consumers/customers, lacking effective connection, can no longer support the healthy development of enterprises. To achieve better development, enterprises must reconstruct the relationship with consumers and create a 'lifelong relationship'. The development of the internet society and the technical means provided by the internet have helped achieve this goal. Enterprises can fully use current internet social means, media, etc., to achieve real-time connection and real-time online with consumers, maintaining strong communication. Therefore, in the current environment, enterprise transformation and FMCG enterprise model transformation must start with reconstructing the relationship with consumers and reconstructing new terminal models. Especially for retail enterprises that directly face consumers, they must deeply understand these new changes. Without reconstructing the new relationship with consumers, FMCG enterprises and retail enterprises will not achieve true transformation. Zhang Ruimin: *The pilgrimage path of Chinese enterprises: first GE, then Microsoft, then Google, now Tesla. In fact, worshiping Buddha is not as good as worshiping yourself. *China has a very bad thinking habit: reversing cause and effect. If a person lives to 100 years old, and you take his recipe and eat according to it, can you also live to 100 years old? Analysis: Up to now, many enterprises, especially retail enterprises, still have some 'lack of confidence'. Including the description of the current status of Chinese retail enterprises by Alibaba Research Institute when releasing the new retail research report some time ago: 'There is a large gap with European and American retail represented by chain forms, and a large gap with Japanese retail represented by convenience store forms.' This is completely a lack of understanding of current Chinese retail. Even within the retail industry, there has always been a trend of 'worshiping foreign things'. It seems that if it is Japanese or European and American, it is how good it is. Of course, retail enterprises in any country have aspects worth learning. But at present, we must clearly see that global FMCG enterprises and retail enterprises are all having problems. Some globally renowned enterprises have problems, such as P&G, Nestlé, Walmart, Sears, including Japanese convenience stores, whose customer traffic has been declining for twelve consecutive months. Therefore, at present, all enterprises, indeed, as Zhang Ruimin said: worshiping Buddha is not as good as worshiping yourself. Independent innovation is the only way out for enterprise transformation. We can no longer wait for models provided by others to imitate and copy. Zhang Ruimin: *As Kevin Kelly said, 'The largest e-commerce in the future will definitely have the largest physical stores.' That is, without experience, e-commerce will not exist in the future. Now there is a saying, 'It is not O2O, but O+O', which must be the combination of online and offline. But to do experience stores, you must sell solutions and the whole process, otherwise who will come to watch your performance. Analysis: I believe in Zhang Ruimin's analysis and judgment. The core of future products and retail stores will definitely be experience; The transformation of future FMCG will definitely be to highly value and satisfy consumer experience; The successful model of future new retail will definitely come from offline retail. Bao Yuezhong Column: Special contributing writer for New Distribution Senior Economist Expert of the Ministry of Commerce's 'Ten Thousand Villages and Thousand Towns Market Project' Adjunct Professor of Shandong Institute of Economics and Trade Famous FMCG retail expert Bao Yuezhong New FMCG, New Retail Innovation Practice Studio -END-