Billy: The ultimate in the supply chain is to standardize all non-standard services

Billy: The ultimate in the supply chain is to standardize all non-standard services

Who made the slogan of 618 buying all over the world without leaving home become a reality? How many hurdles will it take for a product purchased from overseas to travel across the ocean to the customer? From warehousing, cross-border payment, inter-warehouse transfers, local/cross-border logistics, customs clearance, distribution to after-sales service, the steps are interlinked. When there is a problem in any link of the supply chain, the receipt will become an uncontrollable event. 

As a global consumer goods supply chain service platform, Xingyun Group effectively matches front-end orders with back-end goods. In short, it is committed to making global trading simple.

In 2015, in the tide of consumption upgrades, Xingyun Global Exchange, which focuses on cross-border supply chains, was established. In the past 5 years, Xingyun has implemented a supply chain system in 42 developed countries around the world. This chain includes local warehousing, customs declaration, logistics, payment, marketing, and the establishment of a dynamic price and inventory system in a series of standardized processes. Every non-standard demand can be responded quickly, effectively and economically. 

Billy, the founder and chairman of Xingyun Group, said that the supply chain is a process of matching supply and demand. To interpret each demand is to simplify the complex information and pursue the essence.

This is what Billy and the Xingyun team are good at-doing a dojo in a snail shell, doing everything to the extreme. Before founding Xingyun, Billy was the head of ZTE's global project management, managing ZTE's 4000 projects around the world, establishing communication nodes, and sorting out standardized processes for complex management.

"Whether anything is valuable depends on three aspects-convenience, efficiency and planning." Billy said. This is the value provided by Xingyun in the process of commodity circulation to customers. Although it is difficult to see, it does not affect the important role of Xingyun team in improving the efficiency of the cross-border e-commerce industry.

This year, the key word of Xingyun Group is globalization. They are helping Chinese brands launch overseas business in 72 countries and 1 region around the world, and help Chinese brands build Proudly Made in China market influence in overseas markets.

In April 2021, Yunfeng Fund lead the investment of Xingyun Group's C2 round of financing to support Xingyun to consolidate its advantages in the digital supply chain of overseas consumer goods, and provide innovative services for online retail at home and abroad.

Yunfeng Talk invited Billy, the founder and chairman of Xingyun Group, to have a dialogue. Billy shared the overseas supply chain system that Xingyun is working hard to build, his understanding of the nature of the supply chain, and the precious experience that Xingyun has accumulated from his past entrepreneurial and management experience.

The following is a dialogue, enjoy:

Talking about going overseas: Go all out to establish overseas supply chains

Q: This year, Xingyun has made some new adjustments to its business. In April, it officially announced LinkieBuy's business, and it has just completed the latest round of financing. What are the key words of Xingyun in 2021?
Billy: The key word is globalization. Before this year, Xingyun's model has been around imports. Now Xingyun is developing from a purely import company to a global company. This year, we will see a large number of overseas (opportunities) and abroad.

Q: Why did you choose to promote overseas business at this stage, and what are the considerations for timing?
Billy: In the last stage, we paid more attention to the expansion of domestic small B businesses, and wanted to seize the dividends of consumption upgrades. In this wave of consumption upgrades, we have stood at the leading unicorn position in imports.

Another wave of bonuses is the supply chain going overseas, which is because of the rise of Chinese brands. Previously, Xingyun went to sea for products, and there was no brand to go to sea. This is also the reason why Xingyun has not made seas in the past. In the past two years, the number of Chinese brands going overseas has gradually increased, and we are making every effort to build our own overseas supply chain.

Q: What do you think of the development experience of Chinese brands and what role does Xingyun play in it?
Billy: It turns out that Chinese brands want to do everything. A good brand will actually pay more attention to brand power. We didn't pay much attention to brand power before, but paid more attention to sales volume and cost performance. But brand power is concerned with user mind, user perception, and user emotions.

We see that domestic brand awareness is on the rise, especially in 2020. Chinese consumer brands are rising domestically, and there will certainly be opportunities for them to rise globally. With so many emerging brands, in the next 3-5 years, it is impossible for every brand to do global landing, local service, and warehousing. Therefore, a one-stop service company will be particularly valuable.

Q: It is not easy to open a new overseas market. Which brands will Xingyun strategically choose as the stepping stone for overseas business?
Billy: We are currently cooperating with many brands such as Bull Electric, Xiaomi Eco-Chain Enterprise, and Cotton Era. These brands have more in-depth cooperation. These brands may not be well-known abroad, but they have achieved a good level in design, production, and user experience, and there is no quality problem. We want to help such companies go overseas and use Xingyun's local network to help These brands build brand awareness in overseas markets.

Q: For Xingyun, which categories have an advantage in helping to make the sea at this stage?
Billy: We currently start with standard products that are relatively easy to get started. The second is home life. During the epidemic, we will definitely focus on this category, home fitness, home appliances, and all products related to home, mother and baby, and more standardized. Some more complex products, such as large items, outdoor fitness and outdoor tourism, put them aside first.

Our strategic suggestions for brands in the overseas market are of great value for our existence.

Q: What is the value behind this service that can radiate to a wider range?
Billy: Xingyun is doing brand services. We do not do the brand itself. We want to change the world's perception of made in China.

Q: Now someone has put forward a new statement-Proudly Made in China, and some art designers will put the words "Made in China" very large.
Billy: In Japan, if "absolutely domestically produced" is written on the product, it means that it is the best. In the last century, Japan has changed from a global manufacturing plant to a top brand country.

Q: What inspires you from Japan’s past experience?
Billy: From the perspective of the path, the production quality of Japanese products is particularly good. After the manufacturing industry has developed to the extreme, a large number of Japanese brands have emerged. We are very alike. Now China is the global manufacturing center. We are very diligent, and we are no worse than others in terms of quality.

The second is that Japan has established many trading companies to help Japanese brands go to the world. Some of them are trillions of companies today, such as Mitsubishi Trading Company and Mitsui Trading Company. In fact, there are not many companies in China that specialize in helping Chinese brands go overseas. We want to be the largest of them.

Q: Xingyun connects domestic brands with overseas markets, persuading Chinese brands to go overseas and persuading overseas markets to accept Chinese brands. Which of these two things is more difficult?
Billy: The former doesn't need to be persuaded at all. You let Chinese brands go overseas. He said it's great. The most difficult thing is to convince overseas markets to build awareness of Chinese products and brands.

Q: In addition to cost and manpower advantages for domestic products going overseas, how to build brand advantages in the local market? Is there any specific way to change the perception of Chinese products in overseas markets?
Billy: Two systems must be done. One is the local marketing system. The Chinese do not do much in local marketing. The second thing is also the biggest advantage of Xingyun. Our biggest advantage is that we import first. Xingyun has 42 supply chains in developed countries. When we go to an overseas market, we will introduce Xingyun as a global company. Advantages of supply chain companies. For example, when we sell Philips, we will also bring bulls; when we sell other overseas brands of maternal and child products, we will bring China’s Babycare and Feihe. The level of brand awareness comes from several aspects, one is marketing, packaging, brand awareness, and the other is which brands you stand with determine the level of the brand.

Q: What is the impact of the new crown epidemic on the expansion of overseas business? So far, how many countries has Xingyun established?
Billy: We have established subsidiaries in 72 countries and 1 region this year. Xingyun's employees and team are now stationed there, taking the risk of the epidemic to do this. All managements want to complete all the localization services required for going overseas before the epidemic is over, including local warehouses, intellectual property rights, legal procedures, and branding and establishment of brand channels. The mission of this part of the business is to help Chinese brands go overseas. .

Q: Some people think that the export market will be larger than the import in the future, and some people think that the Chinese market is the best market. What are the stages of growth in the import market and export market have you observed from the perspective of the cloud?
Billy: These two sentences are correct. Exports must be far greater than imports. According to historical data, exports are three times that of imports, and may be even higher in the future. Our production capacity and manufacturing industry far exceed those of other countries in the world.

China will become the world's number one consumer market in the future, and China will also be the number one production market. This does not mean that it will affect China's imports (market). These two logics do not conflict. As the largest consumer congress, China will continue to make imports.

The rise of Chinese brands takes time, and we also need to refer to the design of overseas markets and the definition of high quality. We still have room for improvement in these areas. The trend we see is that the scale of exports will increase, the scale of imports will also increase, and at the same time, the domestic market for self-production and sales is also growing. These are three growths. In my opinion, the order of these three growths is that imports are greater than exports, and greater than self-production and self-sales.

After the consumption upgrade, some people will use imports, and some will use domestic emerging brands, but the size of emerging brands is still small. The first beneficiary of consumption upgrades is imports. If it were not the cause of the epidemic, imports would increase wildly in the past two years. In addition, China's production capacity has matched the needs of middle-class families in developed countries, and exports will definitely go upward. I don't think these three indicators will drop, but who will be faster.

Talking about efficiency: The supply chain is essentially a matching process of supply and demand

Q: In your opinion, what problems have cross-border e-commerce solved?
Billy: The word cross-border was invented in China. Cross-border e-commerce is our desire to establish an online, based on e-commerce global trade rules. Cross-border e-commerce has solved many productivity tilt problems caused by small packages, non-standard, and global supply imbalances. This is also the charm of cross-border e-commerce.

The form of e-commerce is constantly iterating, from platform e-commerce to live e-commerce, to community e-commerce, etc. Xingyun provides supply chain services around e-commerce. What do you think of the evolution of e-commerce?

Billy: When I first started my business, I made a point-whether it's e-commerce, live broadcast, micro-business, or traditional retail, it is a traffic business in itself. Even if you open a store offline, the main difference is traffic. The second is operation, which is about product selection, marketing activities, user experience, etc. The third is the supply chain. The traditional supply chain is procurement. In fact, procurement will bring many hidden dangers, such as inventory, warehousing and after-sales management.

The most economical approach is that everyone does not have inventory. Some people specialize in the supply chain. Some people sell goods. The sellers do not need to eat inventory. They specialize in traffic and operations. So traffic + operation + supply chain constituted the entire retail format, which was my theory at the time.

Based on this theory, no matter what form of e-commerce is, essentially there is no change. Xingyun is unswervingly engaged in the supply chain. No matter how the form of e-commerce changes, we will serve the supply chain well.

Q: In the e-commerce service system, Shopfiy starts from the front-end service, while Xingyun starts from the back-end supply chain. Is this because you are better at supply chain?
Billy: We are better at supply chain and systems, so we are supply chain + SaaS. You mentioned that our LinkieBuy has actually been done for several years, but there has been no official announcement. LinkieBuy will be my core focus this year and next year. SaaS tools.

We put forward the concept of digital new infrastructure. Many people think that payment, SaaS system, and logistics are tools. I think this is infrastructure. After these things are done, there are other things that can be done.

Many people want to be e-commerce businesses in Africa. I will ask how the infrastructure is doing, payment, cross-border logistics, local customs declaration, local warehouses, and local user habits. These must be dealt with and be able to handle goods, money, order information, and logistics. Put it together, this is the new digital infrastructure, which is difficult, but super valuable.

Q: Xingyun provides services at both ends. On the one hand, it empowers small B, and on the other hand, it helps brands to digitize and go overseas. How do you define the value of Xingyun?
Billy: Going deeper, we have improved the efficiency of the entire industry. To see whether a thing has value or not, look at three aspects: convenience, efficiency, and planning. The method of planning is digitization. Any format will be developed around these three value points, these three are essential values.

We will open every cross-border node, find the place where the node is not connected, and systematize it. Digitizing it, which originally required a lot of manpower, is essentially a process of digitization and standardization. I remember once chatting with someone, and he said what exactly Xingyun is doing, and the words that must be summarized are digitization and standardization.

Q: How does Xingyun match products and users efficiently?
Billy: Using the system to solve it, we need to calculate how to match better dynamic inventory of goods. We have a dynamic price platform. Faced with the prices of different suppliers, the model will perform the calculation of the transfer of goods in different warehouses. For the same product, many small Bs are sold out when they are sold, and the inventory is not unlimited. When switching to a second supplier, the price will change. How to adjust it automatically? This is the simplest. Some products still have the issue of shelf life, the choice of shipping place, full gift discount, various information and needs.

Many people don’t understand why a company like ours needs so many R&D and algorithm teams. Isn’t it a business? The supply chain itself is an algorithm. In essence, this is a matching process of supply and demand, because the demand is non-standard, and the supply is also non-standard.

Q: In addition to solving the efficiency problem, what problems does the algorithm solve in terms of cost?
Billy: I kept the cost to the lowest level. It turned out that I could just give what others wanted, but the cost was very high. We had to allocate the most economical inter-warehouse transfer cost based on the calculation of the order. We would do a lot of such balances. .

Q: When Xingyun was founded, it proposed not to increase the price of goods and only charge 2-3% of the service fee. Is this a bold decision for the traditional supply chain industry?
Billy: Subversion. The rate of increase in this industry is very high. Generally, each agent earns 20 points. It is normal to add 100% or 200% from overseas to domestic. I gave up the money I could earn and went directly from upstream to downstream.

Q: The supply chain is very difficult and requires patience. What do you think the people in the supply chain industry have in common?
Billy: Everyone who works in the supply chain has a characteristic, which is to pay more attention to the essence.

Q: You have always mentioned doing difficult and correct things. Other entrepreneurs who are doing the reintegration of traditional industries often mention the value of this sentence. How do you understand this sentence?

Billy: Every time you encounter a lot of difficulties, you will wonder if I should give up. You have to be firm and do the hardThe thing is to be firm.

Our partners, customers, and retail businesses have risen quickly. I can only tell myself that maybe I am not as smart as him, and I am not good at it. Our team often tells me that the boss is great, super profitable and very fast. I said no, if everything is done, the entire company doesn't know what it will become.

There must always be a group of people who do the hard and right things, not us but also others. We are very fortunate to be the number one in this industry, and it is necessary to be firm to this day.

Talking about management: doing a dojo in a snail shell, do everything to the extreme

Q: How did Xingyun start to build a global cross-border network from 0 to 1?
Billy: As a trading platform, we have to have enough overseas supply chains, we have to have enough small Bs, and we have to integrate the supply chain. How can it be possible to start a business at the beginning? It is super difficult to get started with two-wheel drive.

Now that we have supply chains in 42 countries sounds great, but you can take a look. The difficulty lies in getting started. To be rich, to get the goods, to find someone to help you sell the goods, you need to connect these links together, do the dojo in a snail shell, and do everything to the extreme.

At the end of 2017, we have about 4,000 SKUs. I can recite each SKU and know the price fluctuation of each SKU. Only in 2018 began to increase the volume, past the inflection point.

Q: As a start-up company, Xingyun has experienced any difficult moments?
Billy: The Xingyunrong Angel round is very fast. Before the A round, due to the external environment, the cross-border industry as a whole was not favored by capital.

Q: What supported you to tide over the difficulties?
Billy: When I was in the most difficult time, I sold two of my own houses and also my favorite car. The company didn't have enough money. Before I sold the house, the hardest time was two months' wages.

Our starting team ran very fast. At the most, there were more than 120 people. At the most difficult time, the entire company added up to 40 people, and more than 40 people were willing to work together without receiving wages.

I told my Lianchuang that we must understand a little bit when we die, and we must believe in the power of belief, so at that time I pulled a group named Believe in the Power of Belief, and this group will remain until now.

Q: What does this experience mean to you?
Billy: It's too important, setbacks make people grow. Moving forward in difficulties will make people grow very fast. I am compliant myself. Before that setback, I felt that my life was basically open.

I am now more in awe than before. Before, I felt that there was nothing I could not do. At that time, difficulties and setbacks made me slowly give up being smart and think about what wisdom is. I am still learning, and I feel that I have not yet mastered many things and are not in place.

Q: What changes have been made to the entire company and team?
Billy: They reinvented themselves with me. The advantage is that they eliminated those who are really unsteady, and the ones who stayed have hardly gone so far. In the past, people said that you see the truth in adversity, but I think they are people with the power of faith. It is difficult for me to judge who has the power of faith in the company. Everyone has the power of faith in front of me.

Q: What is the experience that the twists and turns left for you, and is still in use today?
Billy: I often do some simulation exercises in management. The simulation scenarios are given to the management. If you have to cut half of the people now, you tell me which ones to keep and which ones to go. Many people can't make this decision. I said you have to do it. If you don't do it, you will be gone.

After doing it, I realized that many things don't need so many people, and some things don't need to be done. If you don't do these drills, you will always feel that there are not enough people, and you will work overtime every day. If you cut half of it, you will find that you may not need to work overtime.

People tend to lose themselves when doing things, and feel that everything is important. In fact, you find that 90% of things are not important. So when asked him to think about how to cut down half of the people and do things well, he will think about how I should do it.

Q: What is the real effect of this exercise?
Billy: I believe that even if we encounter such difficulties every day, we can survive the same, and the company may be better. There is one thing in the values ​​of our company partners, to face all difficulties optimistically. When you encounter difficulties, you have to face them with a smile.

Q: What else is included in the values ​​of partners?
Billy: The values ​​of partners will be a bit lower. The first is to know your mistakes and be able to correct them, to face problems optimistically, to deal with the wrong people, and to recruit people who are better than yourself. The fifth is to always only look for your own problems.

Q: They are all very anti-human values.
Billy: All things against humanity can help growth. The core of education is three things, one is knowledge, the other is skills, and the last is xinxing. We treat the enterprise as a school, and the core training is the character, not to shrink from difficulties, to be self-disciplined, and to accept the truth from others. The other two things don't need training, knowledge is enough to learn; skills, 99% are not needed. On the other hand, when looking at recruitment, many people will appreciate the person’s skills and knowledge, but I particularly look at the centrality.

Q: What is your previous experience as the head of global project management at ZTE, which can be reused in the current company management?
Billy: Past experience is particularly helpful, especially in corporate governance. I was in charge of the system and process of ZTE’s global project management. ZTE is a global group with more than 4,000 projects. The management is very complicated. I do a lot of process sorting and SOP work. This is a good way for my current governance. This kind of enterprises with relatively high management complexity is of great help.

Q: As a founder, what is your management system and framework?
Billy: My own theory is called "Three Huai and Five Powers". Three Huai talks about care, mind and feelings. The essence of management is to treat people and not things. How the Five Forces judge people refers to the ability of reaction, understanding, analysis, memory and your ability to express. I will model a person, and I need to know the person's model to make good use of him.

Q: You said that the supply chain is a dojo in a snail shell. You and the Xingyun team have also been doing standardized and digital processes. From the team's point of view, will you reject out-of-control situations?
Billy: There is one part of our partner culture, which is to face problems optimistically. For example, if we find a place that is wrong or out of control, we ask everyone to say that it is too good, and we have encountered a problem, and we solve it together.

You can correct only if you make a mistake. Anything that goes wrong is an opportunity to correct yourself. This is a mode of thinking. After the correction, you will find it cool.

Q: So you have a relatively high tolerance for making mistakes.
Billy: Very strong tolerance.

Q: Where does the driving force of the Xingyun team come from?
Billy: Because of the process, not because of me. My personality does not have that kind of particularly aggressive driving force. My team can only rely on the system to drive. They can't see me in the company, and the company is very efficient.

Q: The number of Xingyun teams has reached a certain size, and there are also scattered local teams all over the world. How can you improve management efficiency?
Billy: There are two types of management, one is called information acquisition and the other is called information transmission. My information transmission is small, but my information acquisition is relatively large. The so-called management limit is 7-9 people, which refers to the completion of information acquisition + information transmission + Sanhuai. I am also 7-9 people at most. If I only ask for information acquisition, I can simultaneously acquire more than 100 people, as long as the reading speed is Just fast enough.

Q: How much time do you spend on information acquisition every day?
Billy: All middle-level and senior executives will send me daily reports. The more may have a few thousand words, and the few hundred words, I will read it, and I will reply to important information. Do as little as possible for the issuance of management orders, and adjust SOP as much as possible. Do as much information as possible, because the boss can easily do two things because it is not enough to get enough information.

Q: In the process of processing this information, what do you think is the most important principle?
Billy: To get enough information, and give them enough space to reject me.

Q: What is the most important thing for Xingyun now?
Billy: The company itself looks at three data, which we call scale, cash flow, and profit. Generally, the profit is the first, the cash flow is the second, and the scale is the third. There are also many companies that are inverted. This is called performance display. There is also a classification called internal power and external power. Xingyun has been cultivating internal strength in the past two years, and we have found that internal strength is more important than anything else for fast-growing companies.

Values, organizational strength, internal promotion and evaluation system, the way employees convey their voices to the company, and the way the company conveys their voices to their employees, these things have been my crazy focus in the past two years. No matter how good the scale, cash flow, and profit are, if the internal strength is not repaired, sooner or later, it will become obsessive and die in culture.

Q: What criteria do you use to measure the level of fine management necessary for Xingyun?
Billy: The ratio of the number of people to the type of business. For example, if the employees of a food delivery company reach tens of millions, they may not be most concerned about values. For example, factories with fewer levels will have lower management difficulties. But for our complex operation-type enterprise, we have a long number of links for information transmission, and the complexity of the entire information transmission within the company is very high. If the difficulty of transmitting information is as difficult as ours, management will be even more difficult.

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