"SOIL" 92nd Forum -- the changes and developments of the fresh food industry

In the evening of June 4, 2019, Mr. Liu Cheng, the COO of Gfresh was invited CLGO SOIL of Antai College of Economics And Management, Shanghai Jiaotong University, and shared the practical and real experience with the students. Mr. Liu Cheng is a senior consultant of lean enterprise in China and an expert of organization and human resource reform. He is familiar with the organizational operation of IT, manufacturing, and internet industry and human resource management. He has served as the director of organization and development of human resource manager of Huawei, Shanghai General Motors, Youzu network and other companies. 

Mr. Liu Cheng firstly elaborated the present situation of fresh food industry comprehensively, analyzed the pain point of present industry directly and objectively, at the same time, also predicted the future development trend of the industry. Taking Gfresh as an example, he reviewed the organizational change that Mr. Liu had just experienced and achieved stage success, combined with his previous years of research and experience in human resources organizational development of Shanghai General Motor, and deeply discussed the change methodology with the students, as well as how to correctly view the cultural resistance in the change.

I  Fresh food industry status

Looking at the industry sales data of nearly ten years since 2011, there are mainly two major current situations: 1. the market volume is huge, rising steadily at the rate of about 1% per year. 2. The industry has no oligopoly, and the CR5 ratio is very low, far lower than the developed countries in Europe and America, and it is in perfect competition market. 

As for the fresh food industry, its essence is still inseparable from the consumption habits of the three elements of “people” “goods” and site”. The changes in population demand at both ends of the superimposed age group, which makes fresh food consumption convenient and urgent to improve. However, the fresh food “goods” are vulnerable to damage and the cold chain logistics equipment is not perfect, so the industry loss rate remains high. The change development of the “people” and “goods” directly affects the change of consumption “site”. The fresh food e-commerce extremely emerges in large number, which causes a strong impact on the original fresh food offline site.

II  The industry development trend of fresh food

For B2C, the business cooperation model of the”1+1>2” will become the mainstream, namely, viewed from the vertical direction, the online convenient service and offline experience consumption is vertical collaboration. Viewed from horizontal direction, it is supported by regional stores and is horizontal coordination with the home services of the community stores. 

In simple terms, it is to make “goods” closer to people.

For B2B, Mr. Liu Cheng took “Zhaogang” network and “7-11” as examples and proposed that some fresh food industry enterprises would gradually develop to industrial routers in the future. The essence of industrial router is a value sharing platform, which actively energizes through providing a series of supporting services; on the one hand, it increases efficiency of the upstream supply chain, and enjoys the cost reduction brought by the scale effect; on the other hand, it collects a large amount of traffic at the large B end and small B end, further aggravates the scale and forms a good value closed loop.  

III   The past, present and future of Gfresh

Since establishment in 2014, Gfresh has been adhering to the vision of facilitating global fresh food trade and committed to creating a “justice, fair and transparent” trading platform for global sellers and buyers. At present, it has connected with over 1000 sellers in 28 countries and regions, covering over 3000 +fresh food products, covering over 12000 +wholesale customers in China. Gfresh has three main businesses of “ABC”.  A- Gfresh services to seafood wholesalers. B-Gfresh storehouse distribution services to the downstream customers through the optimization of warehouse distribution network. C-Gfresh services C terminal customers. In the future, Gfresh will focus on four points of “control resources, establishing brand, expanding channels, strong technology” to build the “industry router” of fresh food industry.

IV  About organizational change

With the practical experience in organizational change of many years, when Mr. Liu Cheng recalled that Gfresh experienced two big changes in less than a year, he was filled with a thousand feeling and very excited. He divided the whole process of change into eight steps, provided a comprehensive and strong practical leadership change roadmap.

Culture – “people” in change

Mr. Liu Cheng used a formula to elicit the importance of “people” psychological factors and participation in the change process. T = Q * E, that is, Transformation = Quality of Solution * Engagement. In other words, if Engagement (degree of participation) is 0, the change will fail. 

However, psychological research shows that when people face the “disappearance of certainty”, they will reject and resist internally, and will produce two kinds of anxiety, that is “survival anxiety” and “learning anxiety”. Only by arousing stronger survival anxiety of the people and reducing learning anxiety can make the people in the organization truly participating in the change internally and continuing to be the leader of the organization. As the leaders of the organization, it is necessary for them to understand of knowing well psychologically and taking care of emotion of employees and to further convey the benefits of change. More importantly, they should start from the outside and provide various training opportunities, so that members can participate in the whole process from the change planning to the implementation, and finally make the organization advance towards the same vision.

Under the sharing of Mr. Cheng by explaining profound theories in simple language, a rich and interesting lecture soon came to an end. It is believed that through this forum share, the students not only had a deeper understanding of fresh food industry, at the same time, they can combine the theory and practice of organizational change, lay a solid foundation for career development of the students and help them to make the progress.