Hello, I am Xiang Shuai.

Over the past two years, I have grown fond of spending time by the seaside. Especially at night, when the beach is empty and everything is silent, you can clearly hear the ebb and flow of the tide, like the sound of the sea breathing.

Today is September 17th of the lunar calendar. Amidst the rhythmic sound of the tides, I want to share with you the direction and trajectory of the flow of our times that I have observed this year.

Welcome to the "Co-Prosperity Xiang Shuai Annual Outlook."

I remember at the end of the year, I wrote an article titled "What the Year Changed." I recall writing in it:

“2020年，对全球和中国来说，都是一个巨大的拐点。全球思潮左拐，从更注重增长效率转向注重分配公平；全球经济的头部效应将更加突出，分化将更加严重；全球政治格局的稳定和平将被分裂与高度不确定取代。”

所以，文章最后我有点感慨地说，“2020年后的未来，最确定的是：如果你是一个40岁左右的人，那么你的前半生和后半生将完全生活在不同的世界格局之下。”

**真的是一语成谶。**And we will find that this "difference" is more intense than anyone expected.

When I wrote this sentence, it was a certain month and year, exactly one year has passed since then. The young middle-aged person who had just turned 30 at that time has now become a 31-year-old middle-aged individual.

At this age, I had an interesting experience this year: during a lecture for a group of entrepreneurs, I asked about the age structure of the audience. It turned out that my age was exactly the median, with the youngest being X years old and the oldest being Y years old. This means that half of the entrepreneurs present were born between 19XX and 19XX, and the other half between 19XX and 19XX.

66年到95年，这是个很有意思的年龄段，因为中国5500万多家民营企业老板或者管理层中，绝大部分属于这个年龄阶段。所以我在现场跟他们说，你们Private entrepreneurs in this age group are directly related to the quality of China's economy。

Because private enterprises contribute to .% of the national employment, .% of the enterprise taxes, and .% of the import and export... Your expectations and actions affect the employment of . billion people, trillions of , and trillions of import and export...

To be honest, these data actually support me, allowing me to remain optimistic about the microeconomic situation in China.

Why?

Because this group has accumulated knowledge, possesses experience, yet remains young, full of drive, and unwilling to settle for mediocrity.

Entrepreneurs not lying idle, businesses have hope; businesses having hope, China's economy has promise.

The question arises: standing at the end of the year, if a person does not choose to lie down (or does not want to lie down), what can they do in the future, and how should they do it?

This, truly is a soul-searching question.

So tonight I tried to join you, to find some clues related to the answer.

Year, if a person doesn't choose to "lie flat," what can they do in the future? I guess many people would blurt out without hesitation: go overseas.

This year, everyone is talking about going global, but "going global" is actually a typical Chinese expression with a very broad and vague meaning. Engaging in cross-border e-commerce is called going global; Anta's acquisition of Arc'teryx is also considered going global; BYD building factories in Thailand and Mexico, that's definitely going global; and even Mi Xue Bingcheng opening stores in Tokyo and Sydney, that's still going global.

These phenomena have distinct expressions in English. For example, cross-border e-commerce is --, Anta is overseas mergers and acquisitions (- &), and BYD is overseas capacity construction ( ) -- but in Chinese, they are uniformly defined as "going global."

Why are they all called "going global"?

Pondering it carefully, it's actually quite vivid. China is a continental civilization; "the ocean" for us is the distant horizon, the outside world. From Zheng He's voyages to the Western Seas to the million Chinese who ventured to Southeast Asia, the Chinese going to sea has always been an epic of distant journeys in search of new living spaces.

所以，今天The journey of Chinese enterprises going global is also one of Chinese products, production capacity, assets, human resources, and the Chinese supply chain seeking global markets and expanding their survival space.

解决了出海是什么的问题之后，我还有一个困惑。Why has "going global" become a nationwide topic at this time point in the year?

In my memory, in fact, enterprises going global began in the last century:

The first stage is the era, when some central state-owned enterprises purchased mines in South America, and in the same year, Haier built its first overseas factory in South Carolina, USA.

The second stage is the rise of manufacturing after China's accession to the WTO. Enterprises like Huawei and Shenzhou International expanded overseas, and their global market share increased significantly.

The next phase is after the Chinese New Year. Following the financial crisis, European and American companies were valued very low, and Chinese enterprises embarked on overseas mergers and acquisitions, such as Dalian Wanda's acquisitions and Sany's acquisition of Putzmeister, the global leader in concrete mixers from Germany, which were landmark deals. Many people say that this was when the presence of Chinese enterprises on the global stage began to strengthen.

The next phase is around the turn of the year, as domestic labor costs rise and trade frictions occur, many enterprises begin to set up factories in places like Vietnam.

这么一梳理就会发现，过去的几十年：Each stage of Chinese enterprises going global carries strong era characteristics, reflecting the political and economic environment of the time and the survival status of enterprises.

What about the present moment?

From year to year, the biggest problem faced by Chinese enterprises has been insufficient domestic demand.

This year, I've heard too many stories of bleakness and hardship. Shopping malls are deserted, restaurants are closing down one after another, graduate students are rushing to deliver takeout, and layoffs, job cuts, and salary reductions are daily occurrences... But no matter how many stories there are, in the eyes of macroeconomists, all of this boils down to four words: insufficient demand.

What is meant by insufficient demand?

If the products produced are not purchased by anyone, the prices will drop. Therefore, the core manifestation of insufficient demand in an economy is a decline in prices. In an economy like China, if the consumer price index falls below %, it is considered insufficient demand—China has been below % for months, with a total of months in the negative range. No matter how you calculate it, it is a persistent and severe case of insufficient demand.

So what if there's insufficient demand? Why do macroeconomists constantly call for solutions to the problem of insufficient demand?

因为Insufficient demand means insufficient opportunities, and insufficient opportunities lead to a more competitive market, resulting in lower corporate profits.。企业利润更低，员工收入更上不去，需求更不足……然后会进入一个负向的循环，整个经济从局部需求不足蔓延到全局性的需求不足。

This pain will be felt by everyone present. So, what should businesses do? They need to find new survival spaces, and if they can't find domestic demand, they look for external demand: among the over 5,000 A-share listed companies, % of them disclosed overseas revenue. The overseas revenue already accounts for nearly / of the total revenue of A-share companies.

In the present context, such high overseas revenue can be considered a salvation for businesses, right? However, at the national level, this may not be the case, as these overseas revenues stem from exports. Excessive exports can lead to trade imbalances.

Another new term, what is trade imbalance?

For example, two countries, Country A and Country B, engage in trade. Country A sells $100 worth of pork to Country B, which is called export, earning money. Country A then buys $100 worth of rice from Country B, which is called import, spending money. The difference between export and import is $0.

From the perspective of Country A, this is called a trade surplus, while from the perspective of Country B, this is a trade deficit.

The trade balance of a few dollars was not an issue, right? However, as the domestic pig farming industry has become increasingly developed, pork has become both affordable and high-quality. Domestic merchants are eager to purchase it, resulting in the country exporting a few dollars' worth of pork to the foreign country. Yet, the country still only imports a few dollars' worth of rice from the foreign country. Consequently, the country's trade surplus has now turned into a deficit of a few dollars, and conversely, the foreign country's trade deficit has become a surplus of a few dollars.

This is called trade imbalance, where the trade volume between the two sides is too large, resulting in a loss of balance.

But some might ask: The country earns foreign exchange, and its consumers enjoy cheap and good pork. Isn't that great?

This is true, but every coin has two sides.

Because the country's exported pork is too cheap, the country's pig farming industry is struggling to survive. Pig farmers, butchers, those who buy feed, and those who make feed are all out of work. They are very resentful and have complained to the government.

Then the government of Country X stepped in, imposing tariffs on pork imports, implementing quotas, engaging in negotiations, and waging trade wars... all in an effort to reduce trade imbalances and protect the domestic pork industry.

Trade imbalances have historically been a significant issue, and severe trade imbalances can even lead to wars. The Opium Wars and the Anglo-Dutch Wars, for instance, were both caused by trade imbalances, and trade imbalances were also one of the triggers of World War II.

A very interesting research report by Guo Kai from the Financial Forty Forum mentions that in the past, four major countries—the United Kingdom, the United States, Germany, and Japan—had significant trade surpluses during four different periods, representing typical large-scale trade imbalances.

那这几个大国的贸易失衡最后是怎么解决的呢？各有各的方法，但基本逻辑一致，就是Mutual benefit，将失衡变成平衡：

For example, the UK invested heavily in infrastructure in its colonies; the United States implemented the Marshall Plan after the war, providing substantial aid and infrastructure investment in Europe; Germany, needless to say, was the biggest financial backer during the Eurozone crisis, when the motto was "save the economy at all costs."

这三个国家主要是依靠国家力量让利，日本不一样，Japan relies more on companies for reciprocity—shifting from exporting to going global.

This event left a deep impression on me. I went to Canada to study in the early years, and when I first arrived, I stayed with relatives in a middle-class community in North York, Toronto. At that time, almost everyone in the community owned a Toyota. Many Chinese families chose bright red cars, saying that it was safer to be noticeable due to the frequent snowfall.

I thought they were imported cars, but no, they are all locally produced in North America. But my relative told me that before the year, that is, in the early 1990s, the situation was quite different. Back then, the roads were filled with Toyota cars made in Japan.

The data is also evident—

In the year, Japan's car exports to the United States were 1 million units; after a year, which is the year, Japan's car exports to the United States decreased to 1 million units, but the production of cars in the United States increased to 1 million units.

Look, it used to be Japan's "automobile exports," but now it's Japanese car brands, the Japanese automotive industry going global.

Hearing this, it sounds a bit familiar, right? History always has a similar face.

In the year, China's new energy vehicles accounted for % of the global export total, meaning that for every 100 new energy vehicles exported, one was from China. In the month of the year, BYD overtook Tesla to become China's largest exporter of new energy vehicles. Shortly after, BYD's overseas factory in Thailand began operations.

From exports to going global, the familiar taste, the familiar recipe. There's never anything new under the sun.

The sun is new every day.

Tell a story. In a certain year, Paul Volcker, the legendary financial figure in the United States, known as the "Father of American Economic Vitality" and the former Chairman of the Federal Reserve, visited the National School of Development at Peking University for a lecture. After the lecture, he went for a walk around Weiming Lake with a group of young professors. As they walked, Volcker suddenly stopped, turned to the professors, and asked, "Where did inflation go?" At that time, the United States had experienced a massive release of liquidity, yet inflation had not risen. Volcker had fought inflation his entire life, and this question undoubtedly came from the depths of his soul.

问题突如其来，这哥们又高（2米多），年轻教授们愣住了，当场没答上来。后来才醒悟过来，沃尔克的意思是，China's massive production capacity has suppressed global inflation.

Since the era when China became the world's factory, there has been no inflation in the world. This time, it wouldn't have happened if it weren't for the pandemic and the U.S. pushing for decoupling.

Moreover, the Federal Reserve's ability to bring down inflation over the past two years is also related to China. If it weren't for the poor domestic demand market in recent years, and Chinese enterprises aggressively competing in overseas markets with low prices, it's doubtful whether U.S. inflation could have been brought down so smoothly.

中国内需救了美国通胀，这个事，美国经济决策层不可能不知道。但是知道与否不要紧，In the great power political game, facts have always been binary.

今年4月的时候，美国的财政部长，也是前任美联储主席耶伦访华。老太太一路上跟各级政府官员专家见面会谈，都在谈**“China has overcapacity”**，说中国政府补贴导致产品倾销到美国，损害了美国本土行业利益，其中“新能源车”屡次被点名。

Where was Yellen's final stop? It was the National School of Development at Peking University, where her old colleague Volcker had visited. It was the same courtyard, discussing the same topic of China's production capacity, but this time it was different—no longer about how China's production capacity suppressed global inflation, but how China's production capacity hurt me...

“History is like a fried dough twist, constantly being flipped over and over again.”。这是我中学历史老师说的话。20多年过去了，我发现，他是对的。

But no matter how history changes, humanity must move forward.

Standing at the window of time, all Chinese enterprises that once experienced the rapid growth of blooming flowers and boiling oil have gradually come to their senses from that feverish love, deciding to explore the outside world.

Just as Liu Ruoying sings in her song, "Go, go, people always have to learn to grow up on their own."

Many people may have a vague sense that this wave of Chinese companies going global is somewhat different from previous ones.

The first time I felt this way was during my trip to Singapore this month. At that time, I was staying near the Merlion Park, and right across from the hotel was a huge advertisement for Haidilao, with the logos of Tencent and others not far away.

第二天我去老唐人街牛车水，进去看到的就是一个破旧的集市，里面商品散发着浓郁的90年代中国县城的气息，再想到昨晚看到的海底捞、腾讯和TIKTOK——脑子里突然闪过一个词，Xinxia Nanyang。

But at the time, I didn't fully understand what was so "new" about it. I just vaguely felt that there were significant changes in people, money, production, technology, and business models compared to before.

This confusion lingered in my mind for a long time, until I saw a Chinese retail store—Miniso—in London.

Many people may have seen Miniso in shopping malls. Its official definition is "a collection store for good life items." With a huge pink signboard that stands out, the store's interior is also decorated in shades of pink. It primarily sells small daily necessities such as aromatherapy, blind boxes, plush toys, lipsticks, and hairpins, all of which are cute and adorable. The prices are also affordable, ranging from . to . yuan.

Over the past few years, Miniso's overseas expansion has been particularly strong. As of the date, there are already over 1,000 stores overseas. In Indonesia alone, there are more than 100. Prominent pink Miniso stores can be found in locations like Singapore's Changi Airport, London's Oxford Street, and Paris's Champs-Élysées. In New York, a Miniso store is located just two blocks away, which looks quite amusing.

The overseas revenue of Miniso has accounted for % of its total revenue, a proportion similar to that of Huawei and Hisense.

However, compared to the globalization paths of these giants, Miniso's overseas expansion is strongly characterized by the present-day China.

First and foremost is speed. Miniso was founded in the year, and it has only been years since then. The large-scale overseas expansion began after , and in just the past one and a half years, it has opened overseas stores—this kind of overseas expansion can indeed only be described as Chinese speed.

Why is Miniso's speed so fast? Because it is the overseas expansion of the value chain with Chinese characteristics.

Let me briefly explain what the value chain is—

You see this book in my hand, originally priced at yuan, Jingdong sells it at a discount for yuan, and you bought it for yuan. How is this yuan distributed? Let me explain it to you.

First, there's my royalty in this—this is negotiated with the publisher, %, . yuan. The remaining . yuan needs to be distributed across the publishing industry chain: proofreading, manuscript review, cover design (whether it's gold-plated, soft or hard cover), prices vary greatly, printing, then warehousing, then to JD.com and Dangdang, then sales, and finally delivered to you by the courier... So many links, each link needs to get a share of the money.

你看，The distribution of Yuan throughout the entire sales chain of this book is the value chain.

其实出版行业算非常简单的行业，因为协作部门少，生产大部分是作者个人的事。但你可以想象，The more collaborative a product is, the more complex its value chain becomes.。

关于价值链很多人听说过一个词叫smile curve，就是说一个产品前端研发设计和后端品牌营销分得多，中间生产制造拿得少，形成一个凹陷，就像一个微笑。

We in China are a major manufacturing powerhouse, earning the hard-earned money from this niche: for example, Miniso hair clips, small accessories. These items are basically sourced from Yiwu or the Pearl River Delta, and they had already conquered the global market long before Miniso came along.

但当时他们有一个统一的名字，叫“中国制造”。"Made in China" occupies a low position in the value chain.

For instance, a keychain that costs a dollar, made in China, only earns a dime. What does that feel like? It's like working half a lifetime in a company, doing all the dirty and tiring work, yet still being an obscure low-level employee. So of course, I want to find a way to work hard for a promotion and a raise. Either become a "Teacher Xiang" with a million-dollar salary, or a "President Xiang" with tens of millions in stock options, right?

Because of names, there is identity recognition, and it also implies higher value.

So, Ye Guofu, the boss of Miniso, said, don't call me "Made in China," call me "Miniso." Besides the middle production and manufacturing, I want to get the money from both the front end and the back end.

How should it be done?

On the backend, for overseas store openings, directly facing users.**，塑造品牌形象。**

In the mid-range, maximize the advantages of China's supply chain.：首先是选了1000多家靠谱的前端供应商——如手机配件用苹果代工厂，化妆品用雅诗兰黛的代工厂，把货源和质量都稳住。然后直接下大订单到工厂定制，进一步压低成本。

Front-end is more interesting, using private domain, a very Chinese approach, to integrate sales, R&D, and design together.

这里解释一下，( ) called Key Opinion Consumer。在社交媒体时代，很多人有分享欲，也有创作能力，对于企业和品牌来说，这种消费者就是潜在的“自来水”。

Private domain is a term very familiar to Chinese businesses. Many companies have their own private domains, such as Miniso, which has tens of millions of private domain users. They have identified tens of thousands of key opinion consumers within this group to support them in product sharing.

For example, last year they were launching a new product called "Gong Zai" (doll), and Miniso sent them an experience gift package in advance. — This sparked their creativity and sharing desires, leading to various unboxing videos, second creations, and generating a lot of popular content, making this product a major hit of the year.

Additionally, there is one more point: due to the high-frequency interaction within private domains, launching new products has become a standardized process for businesses. They can introduce new products every month—for such small daily necessities, this pace of new product launches easily leads to higher user retention.

You see, R&D design, brand sales, have become an integrated whole. Coupled with control over the supply chain, the entire value chain, from front to back end, is fully covered.

Upon hearing this, what will you discover?

From the faceless "Made in China" to the well-known Miniso, Chinese enterprises have evolved from merely exporting products to the full-chain export of products, brands, R&D, and business models.

This is the new model for Chinese enterprises going global at present: value chain globalization.

In fact, from the export of products to the export of the value chain, there are two major driving forces behind it: the first is the well-known Chinese supply chain capability;

The second is China's digital capabilities, such as the private domain operations mentioned earlier, which are a manifestation of digital capabilities; additionally, the efficiency and resilience of the supply chain also rely on the digital service capabilities we have accumulated over the years in logistics and payment.

所以，Supply chain capabilities and China's digital capabilities就像两个巨大的基座，使得今天的中国企业出海的门槛降低，速度加快，模式也更丰富。

And, new types of globalized enterprises have also emerged—

Borderless Enterprises.

What is a borderless enterprise?

You see, traditional multinational corporations, like Microsoft, Panasonic, Huawei, and Haier, all grew strong in their home markets before expanding overseas.

But in recent years, some new small and medium-sized enterprises have achieved internationalization after just a few years of establishment, and many of these companies are unknown in their home countries but have a very high proportion of revenue from international markets, sometimes reaching %.

这些企业就被称作“无国界企业”，或者是“天生全球化（BORN TO GLOBAL）”的企业。

Why did the new species of borderless enterprises emerge?

It's because of digital technology.

Speaking of something off topic, have you noticed this year's Olympics? The post-Olympic champions generally have good English and are very sociable. Why? Because these kids grew up in an environment and training regimen that is more international.

The same goes for businesses; external environments influence internal evolution.

Over the past years, digital information technology has revolutionized the business environment in an all-encompassing manner, whether in logistics and transportation, employee management, payment transactions, or marketing outreach, the boundaries of physical space have become increasingly blurred. As a result, we observe an interesting phenomenon: while the political trend of deglobalization has been severe in recent years, global capital, goods, technology, and talent continue to integrate rapidly.

In a sense, this is digital globalization.

And if a company grows during the era of digital globalization, as long as it maintains an open system, it has the potential to transcend the definition of physical space and become a borderless enterprise.

China actually has many such borderless enterprises that are inherently global ( ).

Furniture is available in the market.

Let me just say this, the furniture market is huge, with global annual revenue exceeding $1 trillion. Just in the European and American e-commerce sector alone, it amounts to $100 billion, and the vast majority of suppliers are Chinese furniture manufacturers. After all, China accounts for 60% of the global furniture production capacity.

Zhi Ou is one of the Chinese furniture merchants.

Few in China have heard of this company, but it is actually the top seller in Amazon's furniture category. In the year, its total revenue was . billion, with % coming from Europe and the United States.

这是一个很有意思的现象，A company headquartered in Zhengzhou has a highly globalized value chain.——比如说它的销售渠道主要是亚马逊，以及几家德国和法国的电商巨头，2023年开始入驻SHEIN等中国跨境电商平台。

再比如说，它的广告和社交媒体营销中在Instagram、TikTok、Facebook这些海外社交媒体平台，而且全部是localized content。

那在供应链方面，也是彻底全球化的，它There are a large number of self-established positions overseas，像储存，拣货，派发，客户退换等一系列本地化服务，全部由海外仓来负责。国内自建仓主要是备货，组货，提高库存周转能力，尽量把中国供应链用到极致。

Have you noticed?

In a sense, the "borderless enterprise" is a microcosm of organizational model innovation in the era of digital globalization.

When I realized this, I was also very excited, dispelling the gloominess that had plagued me throughout the year, because I found that the greater the chance of creating such a borderless enterprise, the more a Chinese industry possesses two characteristics.

The two characteristics are:

**1.全球市场足够大；**China's supply chain is sufficiently robust.

Come, let's count together, which industries possess these two characteristics?

New energy vehicles, right? Household appliances, right? Mobile phones, headphones, these are the electronics industry, shoes, hats, bags, these are the light manufacturing industry, tires, water pipes, these are basic chemicals, excavators, machine tools, these are machinery and equipment... And many more, all these industry sectors have the potential to give rise to a large number of borderless enterprises.

Moreover, unlike the "born global" concept of borderless enterprises in the literature, I feel that this generation of Chinese borderless enterprises is closer to another state:

BORN TO CHINA，GROW TO GLOBAL。

Born in China, raised globally.

In fact, there are already many such companies that are born in China and grow globally: BYD in new energy vehicles, MINISO in daily necessities, Anker in power banks, Transsion Holdings in mobile phones, BOMESC in offshore oil and gas engineering, and Wuzhou Medical in medical consumables...

Yes, we have cultivated a group of borderless enterprises deeply rooted in China's supply chain and digital capabilities.

I believe that in the coming years, when I once again observe the direction of the tides, the list of "born in China, thriving globally" will grow even longer.

Of course, I also look forward to hearing from you or someone you know if there are stories of being born in China and growing up globally. Let's continue to expand this list together.

In fact, over the past few years, the term "digital capability" has been the answer to the question of "where the money comes from."

In recent years, I have been working on a book titled "Digital Capitalism," which explores the transformation of wealth forms through the lens of digitization. From agricultural capital, industrial capital to digital capital, we observe that the valuable assets have changed, the tools for making money have changed, the carriers of wealth creation—enterprises—have changed, the corresponding policy environment has changed, and even the very definition of money has changed, from paper currency to digital currency.

Therefore, this year, I will focus on this theme and offer two series: offline courses and a year-long online course. I aim to continuously track and discuss the characteristics and trends of macro policies, industry changes, corporate potential, and asset allocation in the current era of comprehensive digitalization.

Okay, getting back on track, there's a folk singer from America named Bob Dylan that I really like, and he once asked in a song—

“一个男人要走多少路，才能称得上男子汉？一只白鸽要飞越多少片海，才能安歇在沙滩上？”

I don't know, but I guess, the answer will be in the path this man has walked, in the ocean where the white dove has flown.

So, bless every one of you who refuse to lie down, to walk this thorny path, to cross this vast sea.

So, who exactly can find new opportunities in this wave of Chinese enterprises going global based on the value chain?

Economics has a theory of comparative advantage, which, in layman's terms, means you need to identify your strongest area to compete with others in order to achieve twice the result with half the effort. For today's Chinese enterprises, it might be the same; they need to first find their comparative advantage.

For instance, companies with supply chain advantages might be able to follow industry leaders in expanding overseas.

Over the past two years, the issue of decoupling between China and the United States has become increasingly severe, prompting many industry leaders to begin exploring opportunities abroad.

But can the leading enterprises simply set up a factory abroad?

**答案是，完全没指望。**It must be the supply chain going global.

Why? Let's look at Tesla.

The Tesla factory is located in Lingang, Shanghai. Within an area that is roughly a few hours' drive from Lingang, there are hundreds of upstream and downstream enterprises in the new energy vehicle industry, which collectively account for over % of China's production capacity in motors, battery control systems, and automotive electronics.

The batteries from CATL in Liyang, Jiangsu, can be installed on Tesla vehicles in less than an hour; Bosch's brake systems in Suzhou reach the Tesla factory in less than an hour.

What does this mean for Tesla?

It means extremely low inventory of components, and unparalleled collaboration between upstream and downstream, otherwise Musk wouldn't be able to maintain such high production efficiency at such low costs.

So, when Tesla was forced to set up a factory in Monterrey, Mexico, it must have demanded that its supply chain follow suit. Companies like Top Group, which makes chassis structural components, Lens Technology, which produces central control screens, Yinlun, which manufactures heat exchangers, and Anjie Technology, which specializes in charging modules, all followed suit.

But does the presence of these few companies mean that the entire supply chain has followed suit?

不是。拓普，蓝思，银轮，这些特斯拉链上的巨头也有自己的供应链，他们出海的时候也需上下游企业跟着一起，去填满供应链中间的缝隙——也就是说，Any industry leader's overseas expansion cannot be a solo venture; it requires the cooperation and coordination of numerous upstream and downstream enterprises.

So you see, the Chinese supply chain, layer by layer extending, is not a single chain, but a multi-layered, multi-dimensional, and intricately interwoven network.

Teacher Lin Xueping has a book titled "The Battle for Supply Chain." In this book, he refers to this complex network effect and synergistic effect as "connectivity." This "connectivity" is where China's supply chain is most resilient and efficient. More and more industry leaders are going global, and the enterprises within their supply chains will all face new opportunities.

Ocean voyages are a grand adventure, and boarding a giant ship is a relatively safe option.

What about the businesses that are not in the supply chain?

In China, there's an old saying, "Dragons and ants, each have their own glory," and the same applies to going global—enterprises each have their own way of thriving.

我认识一个义乌小饰品工厂的老板，他从2022年开始在TEMU和速卖通上开店，上面的售价差不多是国内的两倍，利润空间上升了不少。他说，自己一个不懂英语的初中生居然也赶上了出海的时髦，这种方式算是利用cost advantage进入电商平台生态去出海；

还有的企业是用product advantages去出海，比如说做家具的恒健，他们针对美国女性体形丰满这一特点，打造了丰满女性可以盘腿坐的单椅，再加上达人营销，很快就打成了爆款，迅速成为2023年TIKTOK SHOP美区前十名商家。

产品创新上，中国企业也很有优势，因为我们有庞大的熟练技工群体，在工厂创新这一块是领先全球的，所以Micro-innovation in the functionality of consumer goods is actually a potential strength of many companies。

Cost advantages and product advantages are our strengths, and now some enterprises are also showing their strengths in short video content creativity, especially projects led by young entrepreneurs.

For instance, a company producing action cameras has shifted away from the traditional practice of emphasizing technological features, instead focusing on content marketing to help camera users "realize their creativity and showcase their individuality."

Its first breakthrough was achieved by attaching its independently developed world's smallest 360-degree panoramic camera to an eagle, allowing viewers to see the panoramic scenery from the eagle's perspective, instantly gaining fame and becoming the first Chinese smart hardware product recommended by Facebook.

Later, a user in Japan, while holding the camera in their mouth and filming themselves running, unexpectedly achieved an effect reminiscent of "Attack on Titan," sparking a nationwide imitation craze. The official team quickly launched a "Mouth-Biting Panoramic Camera" campaign, once again going viral and becoming immensely popular.

在有些短视频创作上，中国领先全球其他地区超过一个身位，在全民社交媒体的今天，这种能力运用到海外市场，就变成了Advantages of creativity。

刚才这些可能还只是产品方面的出海，其实更多还是Shipping services，我记得当年美国西部淘金潮里一个经典笑话，就是淘金的人来来去去，起起落落，最后赚到钱的是卖铲子的。

Today's tide of going global also presents numerous such opportunities. A girl named Huang Zhen has developed a product for an e-commerce logistics company, specifically serving cross-border e-commerce in the Middle East, addressing their "last mile" issues. Within a year, it has expanded to cover several neighboring countries and become the top logistics enterprise in the Middle East market.

There are six Alibaba employees who founded a cross-border payment platform, which has become the number one platform for China's foreign trade finance within the year, serving over ten thousand foreign trade enterprises. Today, for every dollar we export, a portion is processed through this platform.

More: Providing enterprise brand operation services, relying on Cainiao for cross-border warehouse digital management...

这些项目看上去很不一样，但是你会发现，他们的创始人基本具备一些特征，要么是大厂出来的，熟悉数字平台技术或者商业模式，要么是在某一项具体的业务上有很强的专业背景，比如电商运营，线上支付，物流，甚至法务；要么就是有超强的本地经验。In summary, it means possessing a strong "specialized skill" that addresses a specific pain point in the process of going global.

You need to know, the pain points of going to sea are really too many.

We ordinary people face a multitude of issues when traveling abroad: problems with mobile phone signals, usage, currency exchange, and frequent issues with credit cards. As the saying goes, "Everything is fine at home, but difficulties arise when you step out the door." For businesses venturing abroad to conduct trade, it can be said that problems are everywhere and arise daily.

所以，As long as you can help solve one problem for a certain group, it's an opportunity, and the higher the commonality of this problem, the greater the opportunity.

For example, as mentioned earlier, the difficulty and slowness of opening accounts, coupled with high costs, make it challenging for small and medium-sized enterprises (SMEs) to engage in cross-border trade. Therefore, the provision of cross-border payment services to address this pain point has rapidly emerged and gained momentum.

A while ago, a colleague from the operations team at Xiaohongshu told me an interesting phenomenon: this year, bloggers providing various services for overseas Chinese have seen an increase in traffic. The types of services are diverse, ranging from small-scale tasks like garden maintenance and lawn mowing to more significant services, all of which have garnered considerable traffic.

对吧，还是那句话，**“龙与蝼蚁，各自风光”，**Find your comparative advantage, and everyone has a chance.

But at the end of the day, all opportunities stem from this difference.

不一样的地方在于，Today, the overseas expansion of Chinese enterprises is not a point-wise breakthrough in "production and manufacturing," nor is it the solitary struggle of individual companies; rather, it is a value chain expansion based on China's supply chain capabilities and digital capabilities.

Supply chain capabilities and digital capabilities are like soil and ecology. When "going global" is an ecosystem, it will give rise to a variety of new species, creating new opportunities.

说到新物种，就一定会说到进化，进化是基因复制和突变的共同产物。在商业模式上尤其如此，而这次出海潮里最显著的一个变化就是Business model goes to sea。

Originally, when discussing business models, it was always about "copy to China." However, after the era of mobile internet, China has emerged with a batch of native business model innovations. These models have undergone continuous iterations with hundreds of millions of users in China, and many business strategies have already achieved a leading position. Therefore, nowadays, many companies going global tend to replicate Chinese business models, referred to as "copy from China."

The cross-border "Four Little Dragons" are typical examples: full-service hosting, interest-based e-commerce, short video live-streaming e-commerce, as well as the previously mentioned WeChat private domain operations, and chain models like Mi Xue Bing Cheng and Luckin Coffee based on digital services, are now being massively replicated in overseas markets.

However, rapid and significant success often comes with pitfalls.

Because many people feel that our strategies and tactics have been honed in the domestic "battleground," whether in terms of organizational capabilities or product capabilities, we possess overwhelming advantages. Therefore, when going global, especially to markets in Asia, Africa, and Latin America, we often use the term "output replication."

But the word "output" itself carries a strong sense of condescension. In fact, as the saying goes, "A tangerine tree grows into a tangerine in Huainan, but into a medlar in Huaibei."

There is an interesting case.

Do you all remember the booming scene of domestic shared bicycles in China? Later, this model was replicated in the United States by a young man named Sun Weiyue.

Because of the challenges of living in big cities, the pain points of the first and last mile are evident. More importantly, he discovered that docked bikes could be ridden for a day at a price in US dollars, generating a daily income of - dollars, indicating a profit margin. Therefore, Sun Weiyue established the US version of shared bikes.

Initially, he replicated the domestic model overseas. But it didn't work. After more than a year, Sun Weiteng realized that for American users, pedal bicycles were not a "native" demand. The native demand of this generation of Americans is electric bikes and scooters.

So Sun Weiteng decided to adjust the strategy and launch shared electric scooters—this decision faced a lot of resistance at the time, as operations were initially going well in some cities, and at that time, domestic companies like Ofo and Mobike were at their peak. When you say their model is not good and needs to be changed, on what basis?

But Sun Weiteng withstood the pressure. In the year, the launch of the "shared electric scooters" was highly popular. This move solidified its position in the US market.

Several years have passed, and it has become a highly profitable company. In the year, their order volume increased by %, revenue reached a record $1.2 billion, and profits exceeded $10 million. At the beginning of the year, they announced plans to invest $10 million to expand the scale of their global fleet.

At this moment, turning back to look at Mobike, it already feels like a story from the last century, fading into the mists of time. "Right and wrong, success and failure, all turn to nothing in the blink of an eye," this phrase probably captures the essence of that sentiment.

The success stems from replicating China, combined with localization. However, "localization" has never been a new topic.

学术文献中有个词叫(Globalization), this term is a combination of (Globalization) + (Localization).

这个词出现，就是因为大家发现跨国企业在全球化的过程中面临着很多地理，文化，制度的摩擦。你必须进行本地化，而且这个Localization cannot be observing from afar while standing on the shore; it must be deeply integrated into the local society, close to the bones and flesh.。这两个词拆了，再重新组合成一个新词，就是这个意思。

In Liu Run's recent article, he mentioned that during his trip to Mexico, a company informed them that locals must sign documents with a red pen; otherwise, it is considered disrespectful. Why? He doesn't know.

But this small detail tells us that for a company to succeed in going global, it must immerse itself deeply, undergoing the process of being boiled in the "local" brine three times and soaked in lye three times, which is probably essential.

I had a chat with the young founder of CaiNiao, who is also an elder statesman, and we discussed this matter as well.

Cainiao is a global technology logistics company that has rapidly grown in the digital era. In the year, nearly half of its nearly eight billion in revenue came from international business, and this proportion continues to increase.

Tell me, it was also forced back then—because the domestic express delivery market was really too competitive at the time, forget it, let's just compete overseas, and now it seems we've made it.

I asked him, what are the biggest worries and insights now?

After pondering for a long time, he said, propping his chin, "Organizational structure and thinking patterns." He explained that, given the new market conditions and the new employee structure, determining how to construct an organizational structure that is suitable for a digital global enterprise is indeed a significant challenge.

在说到思维模式的时候，AWU用了一个词，Global Perspective (Local Perspective)。所有跨国企业都容易有“总部思维”，站在“我”的角度去思考“他”的问题，但不行，一定要站在全球角度去思考“我们”的问题。

But this matter is easier said than done, what should we do? He said that a meeting was just held today, where China was comprehensively referred to as the "China Region," and the Chinese market is a region within the global market.

你看，破我执，要Start by tearing down the walls in your mind。

At this point, I suddenly remember the question at the beginning—

"What is going to sea?"

The beginning of my answer is "Today's corporate expansion overseas is the journey of Chinese products, production capacity, capital, human resources, and the Chinese supply chain seeking global markets and expanding their survival space."

However, at this moment as I speak to this point, I feel that this answer can take a step further:

For more Chinese enterprises that are sailing far——

Going global means becoming a company that is globally localized.

Going global is not only about accessing larger product sales markets, but also about optimizing the allocation of talent, capital, and supply chains on a global scale.

BEING GLOBAL，BEING LOCAL.

More globalized to be more localized.

After all, gazing into the distance is for the sake of better safeguarding our homeland. Bless ourselves.

Now, let's turn our attention back to the domestic market. After all, the daily needs of a billion people—clothing, food, housing, and transportation—are undoubtedly the foundation of Chinese commerce.

This year, I had a fantastical experience, feeling the rush hour of a subway in a supermarket. It was no exaggeration. Chest to back, packed with people, every step felt like a battle. It was a shuffle, not a walk. I reckon many guessed where I was - that's right, PDL in Xuchang, Henan.

I went on the morning of the 10th, a very ordinary weekday, and it wasn't even the most popular online store, the Angel City flagship store, which is said to have had a peak daily foot traffic of over ten thousand, and now limits the flow during holidays.

说心里话，今年有段时间，胖东来这三个字火得有点让我发腻。但是后来转念想，There is no such thing as a social phenomenon becoming a hit out of thin air; there must be some mechanism or logic behind it.

It was quite a coincidence. In a certain month, a student mentioned that his father worked for the Commerce Commission of Xuchang and was very familiar with Pengdonglai. Upon hearing about this "acquaintance," I immediately booked a ticket and went to Xuchang, staying there for two days.

Upon arrival, I discovered that it was here where Cao Cao "held the emperor captive to command the feudal lords." At that moment, I was truly moved, as if in any corner of China, you might unexpectedly brush past history, and it was quite a poignant experience.

Let's talk about Peng Donglai again.

Pang Donglai is a supermarket, founded by Yu Donglai, a native of Xuchang. In the 1990s, Yu Donglai, along with his brother, opened a tobacco, alcohol, and candy store called Fatty's Shop, which quickly gained popularity in the local area.

How did this shop come to be? It's also a story that resonates with the times.

You know, back in the 80s and 90s, the market was flooded with counterfeit goods, and famous cigarettes and alcohol were the hardest hit. Yu Donglai insisted on one thing: not selling fake cigarettes or alcohol. His method of gaining trust was simple and straightforward: when a customer came, they could buy Hongtashan cigarettes and Moutai liquor, open the package and bottle on the spot, have a smoke, take a sip, and if they felt something was off, they could return it immediately. This approach gradually built his reputation.

In the later years, Yu Donglai started a supermarket and named it Peng Donglai.

Just like before, we guarantee no fake products, and if you're not satisfied, you can return them. At the time, a popular story in Xuchang was that a young man got married without buying a suit, as long as he kept the tags and labels, he could return it after the wedding.

But none of these are the ultimate.

My student's uncle shared his own experience. Once at a supermarket, he saw a ladder used by the staff for stocking that he particularly liked, so he asked the young lady about the price. The young lady explained that it was not a product for sale but a ladder used for their work. However, if he wanted one, she could ask the procurement department to try and get one for him.

A week later, Peng Donglai really called, saying that the goods had been transferred and delivered to his home.

The incident has passed for years, and the young Zhang back then has now become old Zhang, but when recalling these details, they remain vividly etched in memory.

At that time, I was dining with a group of old locals from Xuchang, an experience that almost everyone has had.

A female comrade mentioned her liking for a certain red wine that wasn't available at Pengdonglai. The sales staff then made arrangements to have the wine shipped from France, delivering it at the original price.

There are also stories about a family's air conditioner that had been purchased over a decade ago and broke down. They called Pang Donglai, who promptly provided free on-site repair and replacement of parts. Others mention going to the cinema, where if they feel dissatisfied halfway through the movie, they can get a refund.

What is the feeling of sitting there?

It's just that when everyone talks about Peng Donglai, it feels very natural, like hearing the daily lives of neighbors and relatives.

我意识到，街坊邻居这四个字准确地说出了胖东来的特别之处：他不是在服务作为上帝的顾客，而是在Accompanying your neighbors in a lasting way。说白了吧，就是自己人。

A strong "one of us" mentality can be felt in many details, whether towards customers or employees, Yu Donglai treats them as "one of his own."

The comrades from the Xuchang Commerce Committee told me a story. The mall I visited was built by Yu Donglai buying land, and the area had a high demolition cost, plus the real estate market was particularly hot at the time, but the Pengdonglai Mall only built a single floor.

He asked Yu Donglai, "Why don't you build it higher and construct a residential building? Wouldn't that make you a fortune?" Yu Donglai replied, "I'm afraid the mall might catch fire, and people upstairs wouldn't be able to escape. I'd rather not build it and not make that money."

He treats his employees the same way; employees of Pengdonglai all call the boss "Brother Donglai." In the traditional social order of China, the term "brother" carries some implicit meanings: acknowledging authority, expressing closeness, and seeking care. Brother Donglai has lived up to this title.

The average salary in Xuchang is less than 10,000 yuan, while employees at Pengdonglai, including cleaning ladies and security uncles, have an average salary of 15,000-20,000 yuan, almost double that amount.

Most supermarkets are open year-round, but Pengdonglai closes every Tuesday for rest, and is also closed from New Year's Eve to the fourth day of the Lunar New Year. Each employee receives 365 days of paid annual leave, plus 115 days of personal leave, 100 days of family care leave. What's more, paid leave is mandatory for traveling and enjoying life; otherwise, fines will be imposed.

在超市里，我们碰到一个员工，随口点评说，"Employees, like bosses, must live with dignity."。

“有尊严的活着”带来的是“"Professional Service with Warmth"。他们的管理人员很清晰知道什么时间段客流量多少；收银台处理100个顾客服务要多少时间，要怎么配置人员；任何员工看到推车乱放，马上会去归位，看到地上一个瓜子壳，就会马上捡起来......

These are seemingly trivial matters, but they reflect an extraordinary sense of belonging. As a result, their employee turnover rate is below %, only / of the industry average.

Have you noticed that?

Pang Donglai's business model doesn't have many flashy elements; it's all about building long-term trust.

Think about it, what does it mean for an ancient Chinese shop to be a century-old establishment? It means that my shop's brand is strong and trustworthy. Once this reputation is established, people will come back.

真正的商业从来不是一杆子买卖，是要做repeat customers的。

But over the past few decades, China's business environment has focused more on efficiency and scale, and hasn't paid as much attention to long-term trust mechanisms. I remember when I was a child, my mother would take a small scale when going out to buy vegetables, because there were too many cases of short-weighting.

So the rise of Pengdonglai lies in providing this extremely scarce long-term trust during a special historical period. This matter can be seen from the categories of goods that Pengdonglai makes money on.

What are the categories they make money from? Let me list them for you: gold, jewelry, ornaments; also their own brand of tea, honey, mineral water, edible oil, oatmeal, milk, ready-to-eat food, laundry detergent...

Have you identified the commonalities among these products? Either they involve significant information asymmetry, meaning goods that are difficult for the general public to judge as genuine or fake; or they are ultra-high frequency, strong repeat purchase daily necessities.

Gold jewelry goes without saying, information asymmetry is significant, and it's impossible to tell what's really inside. Tea, honey, edible oil... When we ask ourselves, can we be sure that the honey we buy is genuine? That the oil hasn't been adulterated? What exactly is the difference between one block of tea and another? Can we figure it out? To be honest, we can't.

但因为长期的信任关系，对于许昌人来说，「胖东来」三个字就相当于强信用背书，The greater the information asymmetry, the more closely related the product is to oneself, the stronger the credit endorsement becomes.。

Understanding these, you'll grasp why these counters always have long lines and why people from Zhengzhou drive or take high-speed trains to come here for bulk shopping.

而从胖东来的角度，有人流，有复购，有连单，就有稳定的销量，销售规模上去了以后，企业在整个供应链上就Have stronger bargaining power。

For instance, due to its substantial scale, many products at Pengdonglai can be "self-sourced" (self-procured), which saves on entry fees, display fees, and promotional fees, thereby reducing costs.

Additionally, due to the high traffic and large volume of orders at Pengdonglai, suppliers are willing to accept Pengdonglai's stringent selection and pricing. It is said that when the procurement volume is large, the prices Pengdonglai obtains may be %-% lower than those of its competitors.

Profit, derived from trust.

On the way back to Beijing from Xuchang, I kept thinking that the explosive popularity of "Pang Donglai" reflects some changes in the current Chinese business environment:

The first change is that business is increasingly returning to building long-term trust relationships.

Originally, during economic growth, everyone rushed to expand their territory, prioritizing efficiency; now, during economic downturn, everyone must focus on meticulous cultivation and prioritize trust.

The second change is that business is increasingly shifting from the "easy money model" to the "good people model," a requirement driven by changes in social sentiment and societal values.

I've always felt that the phenomenon of Pengdonglai's popularity on social media, becoming a trending narrative, is closely related to the current social mood.

Previously, the cake was growing, and everyone was sharing it. Although the pieces were of different sizes, everyone was making a profit. Therefore, the "easy to make money" model became the consensus foundation between bosses and employees.

But things are different now. The incremental gains are gone, stories of workers earning millions in annual salary and tens of millions in options, changing their fate against all odds, have disappeared. So what am I aiming for? Aiming to be a beast of burden for your boss, pulling the millstone to make money for him?

The public's mindset towards businesses is the same.

当增长的共识少了以后，Companies need a softer, more humane approach, which is the "good guy mode."，才能和这个社会情绪共振。

于东来说过一句话："A person who only focuses on making money will not make money."。意思是满脑子都是钱的时候，你就很难真的在顾客体验上花钱，在员工满意度上花钱，这样服务和产品就都上不去。

In fact, the operators and shareholders of the globally renowned discount supermarket Aldi once took similar measures. At that time, they slashed their own dividends by half in order to reduce the price of a can of beverage.

To put it bluntly, it still boils down to "giving up profits." The harder it is to make money, the more businesses need to give up profits. Because only when others make money can they spend money, and only then can everyone enter a positive cycle of the business ecosystem.

Any enterprise has two attributes: economic and social.

During prosperous times or when income inequality is low, people place more emphasis on economic attributes and recognize the pursuit of economic benefits by enterprises; however, during periods of recession or when income inequality is high, people place more emphasis on social attributes and recognize the pursuit of social responsibility by enterprises.

The current evaluation system and value orientation in Chinese society towards enterprises are clearly inclined towards "social attributes."

In plain terms, entrepreneurs who are "good people" are more likely to gain public recognition than those who are merely "awesome."

Among the trending searches related to Pengdonglai this year, there is also a term called "Explosive Transformation of Bubugao."

I am particularly sensitive to this term. As a Changsha native, I remember that the well-known local supermarket chain, BBG (Bu Bu Gao), had already spread throughout the city by the end of the decade. There were several branches near my home.

Talking about it, BBK and Pinduoduo can be considered products of the same era. Back then, BBK was probably much larger in scale than Pinduoduo.

But thirty years in the east, thirty years in the west, the annual revenue of multiple chain stores of Nian Nian Gao only reached several billion, with a loss as high as several billion. The two bosses are also of the same age, long-time acquaintances, hence the term "explosive transformation" came about.

As a curious Changsha native, I have asked myself a question: Could BBG achieve a successful transformation by doubling employee salaries and cutting half of its product categories?

作为一个经济学家，我发现这个问题的正确问法是：Can the credit construction model of Pengdonglai be replicated?

Some might say this statement sounds strange. If a business adheres to long-termism, excels in service, wouldn't it naturally build long-term trust relationships?

It's not really that.

你发现了吗？胖东来提供的是长期陪伴型服务，它更传统，更本地化，也更适合China style acquaintance society。

Let me give you an example. If you are not satisfied halfway through a movie, you can get a refund. This model can work in Xuchang, but it is unlikely to work in Beijing's Chaoyang District, because the population's mobility is too high. The cost of building long-term relationships is too high. Before the business can bear fruit, it has already shut down.

So there's no Pengdonglai in Beijing, and we can't get a refund for a movie halfway through.

However, there are four Sam's Clubs in Beijing.

Sam is actually a phenomenal trend this year.：2023年，在中国只有48家店的山姆，创造了800亿的营收，平均每家营收16.7亿，是盒马门店的10倍。现在据说香港TVB明星都去深圳山姆扫货，超市成了偶遇港星的圣地。

Like Pengdonglai, Sam's Club has also been the subject of repeated study by various parties this year.

For instance, Sam's Club employs a membership sales model to enhance customer loyalty; another example is its direct sales model, partnering directly with manufacturers to save on intermediary costs; additionally, they target the middle class, placing great emphasis on product quality and service optimization, and value member feedback.

You see, it's also about product selection control, trust building, and quality service. But when you put Sam's and Peng Donglai together, you don't need to explain—anyone can feel the difference.

Where is this difference?

很多。但我觉得社会结构是核心之一。

The social structure is related to the city. As of now, Sam has opened stores in cities across the country. Apart from the major cities of Beijing, Shanghai, Guangzhou, Shenzhen, as well as Chengdu and Chongqing in the west, and Changsha and Wuhan in the central region, the remaining cities are all located in the economically developed eastern coastal areas.

The so-called developed regions are those where the per capita income exceeds 10,000 yuan, and the majority of these areas have populations exceeding 10,000.

And Pinduoduo's location, Xuchang, is in Henan Province, with an average per capita income of 10,000 yuan, making it a typical fourth-tier city in central China, with a population of less than one million.

在去年的共潮生里，我讲过一个“Complex China”的故事，今年越发觉得，北上广深的中国和广袤腹地的中国，根本不是一个概念。

Moreover, this difference is far greater than what words like "consumption, income" can express. For instance, after years of large-scale migration, the small and medium-sized cities in the hinterland of China have gradually stabilized their population and social structures, becoming closer to the traditional Chinese society of acquaintances.

The so-called acquaintance society refers to a lifestyle, psychological state, family structure, and social network that are highly localized and stable.——于东来的商业理念，和这些特征密切相关。

相反，Beijing, Shanghai, Guangzhou, and Shenzhen, as well as other large cities along the coast and rivers, are closer to the modern context of an anonymous society. The social structures here are more diverse and more fluid.，和熟人社会的商业逻辑就有很大差异。

比如说山姆和胖东来，是同样的行业，也都注重品质，提供优质服务，做长期信任的生意，但是The game styles between the two societies are different。

山姆身处一二线城市的Stranger society, it is a game of rules, people pay for "standards."“标准”给予所有消费者稳定的预期——你可以简单、高效地买到高品质商品。

Ordinary supermarkets typically offer tens of thousands of products for customers to choose from, while Sam's Club selects only about a few hundred curated items for its members, eliminating choice paralysis and enabling the most efficient shopping, payment, and exit.

相反，胖东来爆火在四线城市的Acquaintance society, which tends to favor repeated games, sees people paying for "group identity and social relationships."

To some extent, the legendary after-sales service, employee salaries, and welfare benefits at Pengdonglai are all commercial stories unique to the sphere of personal relationships.

许昌两天，我能够很强烈的感受到，胖东来在和本地人的长期互动中，已经建立了一种social trust network：比如消费者和员工可能也都成了熟人；比如本地人信任胖东来没有假货，胖东来也信任本地人不会恶意退款，过分薅羊毛。

Mentioning a very small detail, I met dozens of people in Xuchang, and none of them had negative opinions about Pengdonglai. Many even developed emotional support and social value recognition beyond business. This should be a unique situation in a familiar society.

Having said all that. Let's return to the initial question: Can Changsha's Bubugao be successfully transformed?

I feel that this is related to what kind of city Changsha is.

In my childhood memories, Changsha was a typical society of acquaintances: the father of one elementary school classmate and the mother of another middle school classmate often came from the same workplace... Wherever you went, you could turn a corner and find someone you knew, and I actually quite miss that.

But I have been away from Changsha for many years. The flowing water takes away the stories of time and has also changed the city where we once lived.

From the current city size, population influx rate, economic development level, and urban industrial structure, today's Changsha is closer to a society of strangers.

So, if BBK wants to replicate the credit-building model of Peng Donglai, replicate his local success, or attempt a large-scale revival, I think it will be quite challenging.

But perhaps, in a certain urban area, a certain category, or a specific store, or a particular model, BBK will find its own rhythm in the explosive transformation? It's important to remember that the beauty of business lies in the "expected yet unexpected." As a Changsha native, I'm quite looking forward to it.

You remember, a couple of years ago there was a buzzword going around, called "folding." What it really referred to was the isolation that arises from differences.

Sometimes, we always forget that human joys and sorrows are not shared.

中国14亿人，People living in cities with a population of less than ten million exceed one billion. In many such places, the social structure is closer to the traditional acquaintance society of China.

The acquaintance society has its own business logic. For example, in an acquaintance society, once long-term trust is established, it is easier to form word-of-mouth communication, allowing for category expansion at a lower cost and creating a siphon effect. However, on the other hand, if one steps out of the acquaintance society, the cost of trust and management increases, and these advantages may turn into disadvantages.

Yu Donglai understands this.

So far, Pengdonglai has not ventured beyond Xuchang.，他只有13家门店，11家在许昌，两家在隔壁新乡。

On the other hand, Pinduoduo's annual revenue is 100 billion yuan, while the total retail sales of consumer goods in Xuchang City amount to 100 billion yuan. In other words, out of every 100 yuan spent in Xuchang across all industries, online and offline, approximately 10 yuan or more comes from Pinduoduo. Absolutely unrivaled.

有一天我跟孙权聊到这个事情，权哥忽然冒出一个英文单词，Local King。

These two characters are quite interesting: Tian Wang, but only locally.

So, Pengdonglai may not necessarily be a replicable "model," but the more "localized" business it represents may offer some inspiration to the current consumer market.

Oh, forgot to mention, Quan Ge's real name is Hu Xiaoming, who was the president of Ant Group and Alibaba Cloud.

Local giant, this term coming from the mouth of someone who has spent a lifetime in platform business, doesn't it carry a sense of history and destiny?

我特别想问个问题：Do you think there has been a downgrade in consumption this year?

Look, even the parking lots in Beijing are empty, and McDonald's has introduced a "poor man's meal"… These examples can be listed one by one, each one clearly stating the two words "no money."

Isn't it a downgrade in consumption when you have no money?

This judgment is definitely correct. However, tonight is the second time I'm saying this: every coin has two sides. The side you see is real, but the unseen side might also be real.

中国消费市场的硬币也有两面。**一面是收入下降，欲望降低。**What is the other side?

I won't reveal the answer just yet; let me show you something first.

This is a piece of beef. But not entirely accurate, it is a piece of beef called "beef shank," which is the meat from the outside of the shoulder blade of a cow, mainly composed of infraspinatus and deltoid muscles, with a tender texture, suitable for pan-frying and grilling.

How did I know? There's a story behind it.

Here's the story: There's a supermarket in Shandong called Hejie Fresh, and when they were looking for insights from consumers through Xiaohongshu, they discovered that the most searched item in their supermarket was "beef shank."

Remember, it's not beef, but beef shank.

The questions people search for include "What is beef shank? How to cook it? What is its texture like? What nutritional value does it have?"

The story has a perfect ending: after discovering the secret of searching for beef plate keys, they began to expand on it in their Xiaohongshu notes, conducting group tests through a series of notes, turning the beef plate keys from the box world into a hot-selling item on the platform, achieving a breakthrough of tens of millions within a month.

But my focus is not on that.

My first reaction to hearing this story was: What? Chinese consumers have evolved to this level now.

What consumers care about is not how much beef and lamb cost per pound? Where is the origin? But the different parts of the meat, taste, protein, and fat content?

If you pay a little more attention, you'll find that similar scenes and feelings are quite common.

In fourth-tier cities, salmon sold for a few yuan per box has sold thousands of copies. Ordinary wage earners from Chengdu, Sichuan, fly to Guangzhou to run marathons, and with just a casual search online, one can find professional posts about "cross-province marathon preparation lists."

Oh, and one more thing, a few days ago, a painter came to repair our balcony. He said his hometown was in a rural area of Henan. Seeing my son playing the drums, he told me that his granddaughter, who is also 7 years old, is learning drums in their hometown. She got her drum set from a second-hand market on Xianyu.

To be honest, these details have made my feelings about the "consumer market" quite complex. After pondering for a long time, I finally gave myself an answer.

**现在中国消费市场这个硬币的两面分别是：**Decline in Consumption Desire and Upgrade in Consumption Concept.

On one hand, declining income and shrinking property values lead to a decrease in consumption desire, resulting in more rational and restrained consumption behavior; on the other hand, aesthetic, quality, and personalized demands are rising, indicating an improvement in consumption concepts.

After figuring this out, it provided me with a framework to understand many phenomena I've observed over the past two years.

For example, "种草".

These past two years, everything seems to be about "planting grass": traveling to Harbin for a visit is planting grass, buying a Giant bicycle is planting grass, having a cup of Tea Master is planting grass. And recently, I, who never played games, bought Black Myth and even got an Alienware computer for it, which is a huge grass planted in me. No wonder they say, "The grass on the distant plain grows and withers with each passing year. The wildfire cannot burn it all, and with the spring breeze, it grows again."

What exactly does "zhongcao" mean?

Sowing seeds means planting them, nurturing, stimulating, while grass represents desires.

**所以，**Grass planting is about stimulating the desire to consume.

For someone who has lived through a time of scarcity, this statement might be a bit difficult to comprehend: Isn't the desire for consumption innate? How could it need to be stimulated?

But if you ask the young people of this generation on the spot, they can understand very well.

吃喝拉撒基本需求早都满足了，除了房子外，你说，有什么是非买不可的东西呢？When a society transitions from scarcity to abundance and even excess, its consumption观念 undergoes changes.

This change has already been experienced by Europe and the United States: after the golden development period following the war, Europe and the United States entered an affluent society in the years. The so-called affluent society, in layman's terms, is a society where the production and manufacturing capabilities far exceed the basic living needs.

When it is easy to have enough to eat and wear, human needs are less driven by practicality and functionality, but rather by non-material feelings. For example, is it beautiful enough? Is it unique enough? Is it able to fully express oneself?

著名社会学家英格尔哈特给这个变化起了个名字，叫做“Transformation from material values to post-material values”。

After the 1980s, most of the consumer brands that emerged in the European and American markets were largely related to this post-materialist value system: for example, organic food chains, the Beetle car, and the outdoor clothing brand Patagonia all align with the post-materialist values of personal freedom, environmentalism, and minimalism.

But have you noticed the problem here?

When the demand is concrete, businesses can provide products to meet your needs. When the demand is abstract, it can only be stimulated and cultivated through "planting grass."

This year, I have mentioned a case from my surroundings multiple times. A retired female teacher in her 70s booked a hotel package that included a complimentary "travel photography service." She went to try it out, got makeup done, had photos taken, and received professional retouching. Of course, the final step was to post the beautiful photos on WeChat Moments, waiting for likes and comments.

After a series of coordinated moves, this retired sister was completely captivated, and she successfully "planted the idea" in a group of her old friends. Subsequently, almost every outing with the group of old friends included travel photography.

这个大姐之前绝对不知道什么叫“旅拍”，更不会想到自己有旅拍的需求。但她有什么需求？Love beauty, self-identity, gain attention.

So the merchants did one thing: they found concrete scenarios, stimulated this abstract demand, and then turned it into consumption.

Everyone knows that the consumer goods industry has been struggling over the past two years. What used to be a field where a handful of seeds would quickly sprout into lush greenery now feels like endless effort with no sign of growth, making it seem like even planting grass is impossible.

但我从去年开始到今年，反而越来越觉得，对于民营企业，尤其是**对中小民营企业来说，消费市场可能就是国内最佳的机会。**Because China's supply chain is sufficiently robust, the market is sufficiently large, the entry barriers are relatively low, and the investment horizon is relatively visible to the naked eye.

Where is the problem?

The issue lies in the fact that over the past few years, the total market size has shrunk too severely, so the narrative of "downgrading consumption" has obscured the structural changes in consumption concept upgrading.

In reality, today's consumer market is a vast arena: it rolls downward, reaching the ultimate in cost-effectiveness, leading to battles among white-label products; it climbs upward, pursuing premium quality and aesthetic value, striving to build brands.

The driving force behind the upper half of this model is the upgrade in consumption concept that was just mentioned: In a Chinese city with a population of 100 million, where the per capita income exceeds $10,000, the consumption concept aligns with that of Japan and South Korea at this income level, where they pursue and showcase life with aesthetic appeal. Additionally, there are hundreds of millions of young people living in lower-tier cities with slightly lower incomes but not lower consumption concepts. They are also willing to watch and appreciate a good life.

Where the body cannot reach, the heart yearns for it.

And as long as the heart yearns for it, those latent needs can be awakened.

Almost all merchants and platforms are now engaging in "planting grass," but planting grass and actually growing grass are two different things.

著名投资人李丰说，现在的商品绝大部分都没有不可替代的功能，所以The feeling of consumption is far more important than the function。

Okay, let's pause here.

“消费的感受比功能重要”，这句话听上去像是一句结论，但并不是，这是现在种出草的前提条件。It means planting grass, and it must be planted in niche tracks, single products, and single functions. The more specific the scenario, the easier it is to succeed.

For example, everyone must have experienced power anxiety outdoors, right?

There's a guy who finds a few details in hiking trips like climbing mountains really annoying. When backpacking, holding a power bank in his hand is bothersome; the cord is so short, making it stick to the phone, which is incredibly clumsy and annoying.

What should I do?

This boy named Fan Junping opened his mind and created a "wearable power bank" with a hook that can be hung on a bag or attached to a waistband, featuring retractable charging cables. With its vibrant colors that stimulate dopamine, it is practical, fun, aesthetically pleasing, and novel—for many young consumers, this is indeed a must-have that justifies paying a premium.

To be honest, in terms of basic functionality, this power bank is not much different from other power banks. However, for a specific small scenario like minimalist travel, this small feature stands out, and coupled with its beautiful appearance, it has become a hot seller.

There are many successful examples of such "niche categories," single items, and single-function products being recommended. Last year, Casarte's "Hot Spring at Home" mini private hot water heater was a hit; this year, another brand has launched a washing machine focused on ironing that has also become popular.

There are also some products that are considered niche but actually have a significant market, such as fragrances, bath oils... Of course, there are even more niche ones, such as the "First Class Child Safety Seat" designed specifically for late pregnancy and family travel, and "Glamour Cat Food" that makes pets' fur smoother.

To me, these are products that I would never have thought of, but they have become hot sellers in the real world. Truly, there are no products that you can't imagine, only those that others can't create.

所以，需求是要激发的。But stimulating demand is only the first step; how to continuously stimulate demand is the crux.

从年初到现在，消费市场上我逐渐发现了一条很强的长期线索，Service and trust。

Pang Donglai, needless to say, its core competitiveness lies in its strong service with human touch, which builds long-term trust relationships, and on this basis, it grows into a local king.

The classmate from WeChat Work told me that in the process of providing services to enterprises, they realized that "trust is hard to build" is a super pain point for many service industries, especially in beauty, oral care, training, car repair... These industries have high trust costs, which can easily evolve into a "shearing the sheep" model.

Therefore, WeCom provides a toolkit that helps enterprises achieve efficient and low-cost deep communication. One case that left a deep impression on me at the time was Tuhu Car Maintenance.

Because the auto repair industry is so opaque, it's no secret that the money is made from the information asymmetry.

But Tuhu does the opposite, opting for full transparency. Before repairing the car, they inform you of the total cost of the maintenance, breaking down how much is for materials and how much is for labor; they also specify whether the oil used is Shell, Castrol, or Mobil, listing everything clearly. Those who have had their cars repaired can easily understand that knowing the exact cost is a great relief.

So it's easy to leave a good impression, and if the service staff are a bit more enthusiastic and maintain long-term communication, there's a high chance of returning for a second visit. Over time, it gradually becomes a fixed place for long-term maintenance.

With trust, a single transaction turns into multiple repurchases, revenue stabilizes, and businesses no longer need to resort to aggressive tactics for each customer. This makes it easier to adhere to long-term principles, and the business enters a virtuous cycle.

说到底，The essence of trading is trust; long-term business requires long-term trust relationships.

Long-term trust, which is also what impressed me most about the commercial ecosystem of Xiaohongshu.

The essence of business is trust, but different eras have different ways of building trust: in agricultural society, trust was built through word-of-mouth among neighbors; in the industrial era, with large-scale production and sales, word-of-mouth was too inefficient, so brands began to build trust by increasing awareness through widespread advertising.

数字时代，像小红书这样的线上社区，则是一个庞大的“街坊邻里”群体，更精准的以某些共性被联系在一起。而The "grass-planting" in the community, using modern technology and methods, returns to the most ancient yet fundamental way of building trust.

So, after going around in circles, it suddenly dawned on me that it all boils down to trust.

This year, this feeling is particularly profound; the future is a society that values trust through companionship. Therefore, I will use my research content for long-term companionship, hoping to always be with you, navigating the vast sea of change in this ever-changing world.

Finally, let me tell a little story.

Recently, my son has had a poor appetite, complaining of "food accumulation." It suddenly reminded me of my own experience with "food accumulation" when I was young. After a visit to the hospital, it was found that there was nothing seriously wrong, just an inability to eat, which quickly led to me becoming so thin that my cheeks were sunken. My mother then took me to a private clinic called Li Degong. The elderly man was the doctor, and the elderly woman was the nurse, both of them smiling warmly.

The old man used a needle to pick at my fingertips, a procedure called "tiao gan ji" — I don't really understand what it is, but miraculously, it worked. Then my mom told me that this old man is quite elderly now; he was her pediatrician when she was a child, and her mother, my grandmother, used to take her to see him for treatment.

You see, this grass has been planted for nearly a year.

Haier founder Zhang Ruimin once said, "There are no successful enterprises, only enterprises of the times."

到今年，我们会发现，The previous era of large-scale, large-platform, large-category, and large-track business opportunities characterized by collective upward movement is gradually fading, giving way to a more refined, heartfelt, and "small but exquisite" business ecosystem.

In this ecosystem, finding aspirations and creating needs in the mundane details of ordinary people's lives, I believe, is something that countless Chinese enterprises and entrepreneurs can still do, and can do well.

In an interview, Professor Xue Zhaofeng and Xiao Hongshu's Conan once said a classic phrase: "The greatest opportunities of the future lie in lifestyle."

我加两个字吧：The greatest opportunities of the future lie within the realm of a better lifestyle.

To all of you here, and to everyone in the live stream searching for opportunities, let us strive together.

Time flies quickly, and before you know it, several minutes have passed.

I remember the year when a talented student from Peking University named Zhang Wei wrote a phrase that became a popular saying that stirred people's hearts—"We will eventually change the direction of the tide."

Over the past two years, occasionally someone would jest, "Ten years later, we have finally been turned around by the tide."

但是，Have we truly been turned around by the tide?

Let's tell a little story instead.

The date is when the movie "Star Wars: Episode I - The Phantom Menace" was released in North America. At that time, I was still pursuing my Ph.D., and a group of my classmates and I stayed up all night to queue up for the premiere.

I remember that line was at least a meter long. The crowd felt particularly diverse, with people our age, fifteen or sixteen-year-old teenagers, and old men in their fifties, sixties, and seventies. There were also many ethnicities represented, including Black people, White people, Yellow people, those wearing headscarves, and those with small hats—in short, it was a scene of the great unity of people from all over the world.

A man in his forties and his son in his forties, dressed as a Black Knight, are together, with the father holding a lightsaber.

当时确确实实意识到，The power is so strong that in all outputs, culture must be the most formidable fortress.

This is also why, after the explosive popularity of "Black Myth: WuKong" this year, many people have been imagining: What if a foreign child had fought alongside Sun Wukong and Zhu Bajie from a young age? What kind of feelings would he have towards the values and underlying logic contained in the word "China" when he grows up? It is likely that he would naturally have a higher sense of identification.

Because of this matter, I had a chat with Xu Yiran.

Xu Yiran is a veteran in the Chinese gaming industry, having assembled the core team of "Tian Long Ba Bu" during his time at Sohu. Before founding Leyou Technologies, he left his mark at both Giant and Perfect World.

When we met, Yiran had been playing "WuKong" for a few days and was very excited. He said it was indeed a game of a high level, very enjoyable. But he also told me that in terms of "cultural output," there are others who have gone further than "Black WuKong," such as "Genshin Impact" by miHoYo.

The remarkable aspect of "Genshin Impact" lies in its creation of a secondary-dimensional gaming market. Previously, foreign players enjoyed games centered around zombie themes and high school campus topics. However, "Genshin Impact" managed to carve out a market for the secondary-dimensional genre.

Why? It's really too fun.

They have put a lot of effort into the user experience. There's a reason why foreigners are jumping into the game; Genshin Impact consistently introduces more attractive characters. What they sell is the experience, the content. It's like producing a TV series, constantly updated, season after season, with users eagerly following it like they would with series like "One Piece" or even "Friends."

This is called , in which users are easily influenced subtly.

After all, humans are nothing but animals of stories.

说到这里的时候，已经50多岁的怡然，明显兴奋起来，他像个孩子一样，眼里闪着光，说，“This is our opportunity to create a multitude of products like Genshin Impact, to cultivate a global audience and penetrate the overseas market.，绝对可以杀得他们屁滚尿流。”

Because he let slip a swear word, he felt a bit embarrassed and then added, "This is the real cultural export."

I looked at him and thought of Miniso, the cross-border four dragons, and also thought of Pinduoduo, the "brands of beautiful life" sprouting on Xiaohongshu, and remembered a second-generation entrepreneur from Foshan—his name is Xu Tenghui.

Xu Tenghui's family runs a traditional business in the piping industry, specifically Rifeng Piping. A few years ago, Xu Tenghui fully took over the business. Like many second-generation successors, after going through various integrations and digital transformations, he managed to elevate Rifeng to a new level.

A few days ago, he posted a sentence in his Moments:

“Going global is about global resource allocation, innovation is about enabling some people to use products that did not exist before, and going deeper into the market is about enabling more people to use better products.”

I asked him, is this a quote or an insight? He said it was an insight.

I felt quite pleasantly surprised, because this sentence perfectly encapsulated the theme of the entire evening.

Why do we sail far?

Why do we need to innovate?

It is to make oneself, and many others, live a little better.

所以，在这个意义上，我相信，不管潮水怎么起落，"We will eventually change the direction of the tide."。

Years are all the same.

At this moment, the moon has already risen high above the sea, thank you for spending this minute with me, may you be with me now as we share the sight of the moon rising over the sea, together in spirit, no matter the distance.

Thank you once again for attending the Xiang Shu Annual Outlook event titled "Year Together with the Tide."

Thank you, see you next year.