In conversations, Liu Yi always emphasizes that terms like 'define' and 'transform' are inaccurate. "Especially from the consumer perspective, once you define, you bring in subjective thinking. You need to feel and experience, rather than simply using limited traditional data methods or pie charts to study rationally." This dialogue concerns the digital upgrade of domestic pet brands. Liu Yi is very cautious with certain terms, which is related to the 'feel' developed through his involvement in the company's multifaceted digital upgrades. Liu Yi, CEO of BRIDGE, officially joined BRIDGE in October 2019. BRIDGE is a domestic pet food brand with 18 years of experience, engaged in the R&D, production, and sales of full-line cat and dog food. It currently owns three main brands: BRIDGE, Carefree, and Nourse, and also acts as an agent for the German brand LINGCUI.
-01- The Era of 'Comfortable' Profits Is Gone After Double 11 concluded, BRIDGE submitted its report card. Data shows that on November 11, BRIDGE's overall self-operated channel business across all brands grew 46% year-on-year. Among them, BRIDGE brand's Tmall flagship store business grew 120%; the staple wet food brand Carefree's single product 'Meat Cube' grew 204% on Tmall; and the LINGCUI brand's online channel sales grew 144%. Last year, BRIDGE took back its online flagship store from distributors to self-operation, running the store according to e-commerce principles. "E-commerce is a familiar field for me, so there's nothing special about it," Liu Yi said. Facing this growth figure, Liu Yi remained calm, largely because the early efforts and later harvest were expected.
Liu Yi said, "After more than a year of adjustments, the personnel structure and capability accumulation have basically been completed. Achieving a good number is a normal result." Liu Yi used a word: adjustment, not 'transformation'. Liu Yi said, "If it were transformation, everyone would definitely feel pain and trouble. The industry itself has its own logic and changes." Before joining BRIDGE, Liu Yi served as the head of direct-operated industry operations/imported pet industry at Tmall Global, and previously worked at LEGO (China) and Mars Foods, with over 15 years of internet brand operations experience. Summarizing the pet industry in one sentence, Liu Yi told reporters, "This industry really lacks data empowerment." After going deeper into the industry, Liu Yi found that compared to FMCG like food and beverages, beauty and personal care, the pet industry's digitalization process has been relatively slow.
Part of the reason is that the past days of 'lying down to make money' did not make the industry feel the urgency of digitalization. Liu Yi told reporters that the explosive growth of the domestic pet industry began around 2014-2015, mainly because 'pet ownership' gradually became a new lifestyle. With the increase in the number of cats and dogs, and the pull of the overall e-commerce market growth, the industry's momentum began to rise. Among these, companies enjoyed the dividends brought by the 'tailwind', so naturally there was no pain point to force digitalization. Another key aspect is that the consumer coverage and household penetration rate of pet products are relatively low, so the 'flood irrigation' operational approach has minimal effect, requiring digital operations to be relatively precise, which increases the difficulty of digitalization. Liu Yi gave an example: compared to the beauty industry, live-streaming to sell lipstick is normal, but what about selling a bag of dog food? With e-commerce operational tactics changing so rapidly and the backdrop of digital leapfrogging, the need for pet industry upgrades is increasingly urgent.
Difficulties mean opportunities. In Liu Yi's view, the pet industry's low digitalization level on one hand allows leveraging his solid e-commerce operations experience; on the other hand, the pet industry has its own particularities because services like washing, cutting, grooming, and deworming rely on offline scenarios, making it an industry where offline channels are bound to exist, potentially giving rise to new creative ideas and playstyles. These opportunities to showcase skills attracted Liu Yi and also a group of internet professionals with similar interests. On this point, Liu Yi thought very clearly: 'People' are the foundation of digital upgrade.
Therefore, when describing the adjustments over the past year in organizational structure, marketing promotion, and supply chain upgrades, Liu Yi told reporters that the key lies in personnel adjustment. Once the leadership team is set up, the operation of each link happens naturally. Liu Yi appointed multiple internet professionals to key positions because, "People from traditional enterprises know exactly what to do step by step, but when you give them a vague goal, they are at a loss." Liu Yi explained with an example: when building an offline new retail system, people with traditional IT backgrounds wait for the business side to raise requirements, then modify the system accordingly, but the front-end business people are also vague. In contrast, internet-background people not only set up the system but also contact suppliers and negotiate with clients, doing many things seemingly unrelated to IT and seemingly crossing departmental boundaries. However, Liu Yi pointed out that this mutual help and penetration between departments helps achieve the ultimate goal. "In traditional industries, you face clear goals, and departments follow routines, just repeating patterns. But when you face uncertainty, following routines is of no benefit."
-02- Offline Upgrade, Not Transformation After successfully building the leadership team, the highlight is the 'upgrade' of offline stores. The reason for disliking the word 'transformation' is that Liu Yi feels 'transformation' has an aggressive connotation, and accordingly, the process would not be pleasant or smooth. "Cooperate through a new data method." This is the precise wording Liu Yi provided. The cooperation method is driven by conclusions from preliminary observation and research.
First, "You need to understand the real pain points of the stores." Liu Yi summarized three points: First, the attack from e-commerce, especially during promotions like Double 11, where store prices are not competitive at all.
Second, a large number of consumers are migrating online, weakening the retail function of stores, reducing sources of gross profit, while costs like rent and utilities remain high.
Third, there is no communication between retail outlets and brands, resulting in severe information asymmetry. BRIDGE has a distribution system covering all of China, with 28 sales regions, over 60 offices, more than 100 wholesalers, covering over 2,000 cities and counties, and having over 20,000 terminal customers. The entire vast offline sales network was previously fragmented and 'islanded', with no system to connect it.
To address these pain points, BRIDGE solved them from three aspects: verification system, supply chain system, and marketing system. "Basically, it was built pain point by pain point." The new retail platform BRIDGE built directly connects offline stores to BRIDGE's platform and interfaces. To help reporters understand this move more directly, Liu Yi gave an example: "For instance, during this Double 11, the brand wanted to carry out online-offline integrated activities, but in the original system, the brand's intentions and resources could not be conveyed downward because you simply didn't know how much business each store did through distributors."
Furthermore, subsidies to stores had to be passed down through distributors, and after layers of transmission, the benefits that actually reached the stores accurately might differ greatly from the brand's original design. Now these problems no longer exist, and in terms of supply chain, stores can replenish goods as they sell, one order at a time, reducing inventory pressure and financial risk. After a series of 'upgrade' actions, BRIDGE's new retail team achieved monthly sales growth of 300%, with over 1,000 merchant partnerships; during Double 11, it empowered more than 20 stores, with average sales per store exceeding 10,000 yuan. Liu Yi summarized this system as: shortening the value chain and doing business directly with consumers.
-03- Precision Marketing Tests Deep Consumer Perception After solving the offline store connection, the next step is to consider digital upgrades in marketing.
Besides the aforementioned low consumer coverage, another characteristic of the pet industry is that the true targets of pet products and services are a group of 'consumers' who cannot speak (cats and dogs). Therefore, Liu Yi pointed out that pet products are very prone to homogenization, making it difficult to stand out in product alone. Thus, the opportunity lies in being the first to run ahead in the entire operational system. Among these, precision marketing is one of the key elements, which involves the issue of private domain traffic, and Liu Yi especially opposes the 'data migration' operational method.
The 'data migration' Liu Yi refers to is the common method of accumulating private domain traffic by diverting from public domain platforms to one's own platform. But Liu Yi believes that in reality, individuals have different characteristics and behaviors in different scenarios, and online consumers must have different labels on different platform windows. The same person has different characteristics on Bilibili and Douyin, so consumer data obtained from platform A may not be suitable for platform B. From this perspective, CRM, Liu Yi believes, is definitely not one-size-fits-all but a decentralized marketing arrangement. "This is a matter of the height of understanding on how to use digital assets."
In fact, the underlying logic of thinking about digital assets is still related to consumer perception. As mentioned at the beginning, Liu Yi opposes using words like 'define' to connect with consumers because he believes that once cold, rational analyses like data and bar charts are applied to warm consumers, deviations will inevitably occur. Because 'defining' itself places the brand and consumer in two different perspectives, while 'feeling' and 'experiencing' consumers is more accurate. "If you spend every day on Tmall and in private domains looking at consumer feedback, observing how they express themselves, you naturally learn," Liu Yi said bluntly.
Extending these consumer assets further, the development path of BRIDGE, a representative domestic pet food company, is clear. Through nearly a year of traffic accumulation, BRIDGE's private domain fans reached over 300,000, and BRIDGE's private domain sales during Double 11 increased 10 times compared to the average monthly sales.
Liu Yi stated that in the future, BRIDGE should be a multi-brand, multi-category, omni-channel company. The timeline for this plan is three years. "The sign of maturity is that my data can start making money," Liu Yi further explained, through the digital network of BRIDGE's flagship stores, physical stores, and private domains, information and data on all Chinese pet consumers and pet store operators will be accumulated at an increasing speed, and these data assets can further derive new businesses. Liu Yi is also looking forward to what form the new business will take.
Source: Jingguan News (ID: EEONews), Author: Ye Xinran
Tips will be paid 400-2000 yuan upon adoption.