C2M

Fosun Group: Leverage on the C2M Trend

Resource:

CCTV

 

Interview

 

China’s Buffett:

 

C2M Model-The Way of the Future

 

  At the recently held China Green

Companies Summit, Guo Guangchang, Chairman of China’s largest privately-run

group, was interviewed by China Central Television (CCTV). During the interview,

Guo Guangchang introduced global positioning in respect to his investment

strategies and talked about other topics.  

 

  Guo Guangchang: China is now the

second largest economy in the world. To pursue development, companies are

required to integrate global resources. It is very common for Chinese companies

to go global. But Fosun has its own investment strategy, which is the

combination of China’s growth momentum with global resources. Recently, we have

made many investments related to the demands of Chinese middle-class families.

In the past, we were going global. Now, we are instead in the process of

bringing those overseas portfolio companies back home – returning to a focus on

the Chinese market, and combining the companies with China’s development

momentum. For instance, we recently established the fourth Club Med resort in

Sanya, Hainan. We will continue to invest in overseas markets at the same time

as we pay greater attention to developing nations, such as India, Russia, and

Brazil.  

 

  CCTV: The US Federal Reserve

will progressively pursue rate hikes this year, and it is expected that more

capital will flow out from emerging markets. Why have you chosen to enter

emerging markets now?

 

  Guo Guangchang: First of all, in

terms of market development, China is more developed than certain emerging

market countries. In terms of mobile Internet, our performance is better than

that of India, Brazil or certain nations in Southeast Asia. As such, there are

more visible opportunities from where we stand. Secondly, due to interest rate

increases in the United States, capital outflows, and the plunge in commodity

prices, the markets of certain emerging economies have been substantially

undermined. As a sophisticated, patient, long-term value investor, Fosun has

always been capable of pursuing development in spite of strong headwinds, and

inherent opportunities are presented by undervalued assets. Investors tend to

hold a negative view toward developing nations, even including China, despite

the fact that over the past three decades we have never stopped growing against

such negative views.

 

  CCTV: Fosun invests in various

industries, including the pharmaceutical and real estate sectors. What type of

synergy can be achieved by Fosun through its investments in such an array of

enterprises?

 

  Guo Guangchang: Fosun’s

investment logic is underpinned by its “twin drivers” - we have indeed derived

this from Buffett’s ideas. Scattered around the globe, our insurance companies

constitute the positioning from which our most significant capital flows arise.

This, together with our existing capital, can be used toward investments. The

key logics behind our investment strategies are, firstly, the combination of

China’s growth momentum with global resources and, secondly, the happy, healthy,

and wealthy lifestyles of Chinese families. All of our investments are made with

these three aspects in mind.

 

  CCTV: How do you think the

Internet could change the manufacturing industry?

 

  Guo Guangchang: Moving forward,

Fosun will create a comprehensive mobile Internet platform in order to connect

customers with manufacturers. This does not imply that customers will purchase

products from manufacturers directly, but that they will become involved in the

design of those products themselves. As such, the final products will be able to

satisfy personal needs and will only require cost levels associated with

industrialization. This is C2M - the customer-to-maker model.

 

  What is C2M?

  At the recently held “2016 China

Green Companies Summit”, our Chairman Guo Guangchang noted that, “this is the

trend that I perceive for the next three to five years, and Fosun Group is set

to leverage on the C2M trend for future positioning over the entire industrial

chain.” So what exactly is C2M, and what can C2M bring to our lives? And which

enterprises can be classified as C2M?

 

  ◆What is C2M?

  Conventionally speaking, C2M is

the abbreviation for “Customer-to-Manufactory” which highlights the connection

between the manufacturing industry and its customers.

 

  Assuming a wider perspective,

the C2M proposed by Fosun is the English abbreviation for “Customer-to-Maker”.

The concept represents a seamless connection between customers and product

manufacturing where emphasis is placed on customer participation in the entire

process, involving products, services and content, from initial design through

to final presentation. Its core business logic lies in the formation of a direct

link between customer and product manufacturing by eliminating the intermediary

sector and enabling product manufacturing to respond and cater to the tailored

needs of customers in a rapid, industrialized manner, at a low cost and based

upon a scaled model. This enables the realization of “unique” products with the

“wow” factor and the realization of a seamless O2O connection that is devoted to

creating of value for customers. As such, the C2M model presents to enterprises

the advantage of allowing customers to be fully engaged throughout the

manufacturing process of final products, and achieving a stronger established

relationship is established between enterprises and their customers. For

customers, the C2M model allows for their personalized needs to be satisfied in

a more efficient manner and even facilitates their better understanding of the

manufacturing process, including the awareness of where each penny they spend

ultimately ends up with.